Could I lose my home.

Mum2Boys_2

I’m currently paying 1.3% on my nationwide mortgage which is very good and 7.8% on my second, they are not very forthcoming when I asked for help. I asked if I could carry the debt over another 5 years to have smaller payments, they said I could not do this unless I borrowed more... the minimum would of been £3k so I decided against this route, I didn’t think I’d get it anyway. 

Babybelles

Do what you can to keep your home as like you said it’s not worth losing it over a £17k debt.

It’s really important you don’t run up anymore debt now & concentrate on paying it off.

You can always make a little more money by selling stuff on auction sites or FB.

A lot of people use the snowball method so you either tackle the smallest debt first, or the one with the highest interest. I’m tackling my highest interest debt first & am finding it really motivating to see those numbers come down.

The debt free wannabe boards are also great for cost cutting & have lots of advice from meal planning to cutting down energy bills so it’s worth having a read & seeing if there is anything you can cut costs down on.

Good luck with getting it sorted x

sourcrates

You can`t do a DRO unfortunately as you are a homeowner, don`t do anything in haste, debt collection is a very slow process, that can take years, there are ways and means of doing things, you may be able to challenge the enforceability of some or all of your debts, especially so given your house may be at risk.

Mum2Boys_2

so in the absence of doing a soa (will log on and do one after dinner or tomorrow morning after time with my boys) i have looked at my step change budget plan, spoken to family and can now see where I can cut costs so I am able to do a DRO or a IVA. 
pocket money- My sister is going to gift my sons pocket money, she has no children and feels that she would like to contribute to the household so we can keep our property, this saves me £65 per month. 
School meals- the boys have school meals once a week costing £32.50 a month, this will be covered by their Dad now. 
hobbies, leisure and sport- since the lockdown we have been cooking more at home as a fun thing to do so these will be cut in half to £45 per month. 
household repairs and maintenance- myself and stepchange had this at £33 per month, I have fully renovated my house so i feel that this could go down to £10 per month for at least a year. 

In feb 2022 my car will have finished being cleared so this will save me another £170, I don't need a new one, its basic but a lovely cheap reliable car and does me well.  
so taking all of those costs in to account I will be saving around £165.50 which is actually pretty substantial. 
That will mean i have £204 to pay towards my debts (until feb 2020 when it will turn to £374). 
I could also work bank at a care home or nhs or something but i can not earn over £2500 per year as this will then affect my tax credits. 
I will also be looking to cut my childcare out in september saving me a further £47 per week. 
I feel much better now doing all of that! 

sourcrates

See my post above, you are a homeowner, so can`t do a DRO.

Mum2Boys_2

is a DRO the same as a DMP?

fatbelly

A DRO is an insolvency strategy for someone (currently) with

debts under 20k
assets under 1k (separate car asset limit 1k). A house is classed with its gross value and therefore excludes you from a DRO
surplus income under £50 per month

A DMP is where you continue to pay your priority creditors (like the mortgages) but the non-priorities just get whatever is left over.

That's why I didn't understand your earlier statement 'A dmp is not right for me at the moment as I don’t have the £55 after all of my outgoings to do this although I may be able to budget for this and with the token pp may manage to clear them sooner. '

If Stepchange are saying you must have £55 left that is an internal rule (£5 per creditor?). You can do this yourself if need be. There is no minimum to this informal debt strategy.

Options that involve you losing your house to deal with 17k of non-priority debt are, in my opinion, not good options.

Mum2Boys_2

Thanks Fat Belly 
I have just completed a SOA on the debt free wannabe, it was a rude awakening, my unsecured debt is not the 17K i thought but in fact around 26k. 
I am wishing I had done this sooner now to be honest as I think it would of been a massive wake up call and possibly prevented me in getting further in. Cant change it now though and just have to learn from my mistakes and move forward so I can have a fresh start. 

MrFrugalFever

Hi @Mum2Boys_2, I am not completely certain on the involvement of your house within all means of debt management solutions but I do know that if you decide to go down the IVA route both your house and car will be taken in to account. The IVA arrangement would possibly accept your car on a HP agreement as it is under £250 but don’t be surprised if you are asked to sell the car should it achieve equity and the proceeds injected in to the agreement. A £1,000 value threshold is normally set with car ownership in IVA’s.

reading your posts, I would suggest a DMP sounds better, £17,000 worth of debt isn’t a staggering amount and with the right mindset and cut backs I reckon you could get it back under control informally. 

Step change will be your best place for expert advice on that

if you want anymore info on Iva I can possible help from my own experience.
i am not a financial advisor and can’t say what would be your best option.

Mum2Boys_2

Hello Mr Frugalfever. 
I have placed an SOA on debtfree wannabe and it was then when I realised by unsecured debt was actually £26k. My car has no equity but my house granted does have alot. I do require my car and it is part of my job description, it is a basic ford focus no thrills, not even a heated windscreen but it is economic and reliable. My brother has suggested he gets me a car on finance but it would likely be a brand new one and I am quite excited at the thought that this one will be paid off in Feb 2022 so I would prefer to keep the basic one I have and try and use it until it literally dies on me.