17 years on

Looneybird

In 2004, my husband was suddenly made redundant which caused him to suffer a mental breakdown. He did not tell me that he had been made redundant and subsidised his lack of earnings by getting a secured loan on our house. The first I knew that he had been made redundant was nearly 6 months after when our house was about to be repossessed. He was the main breadwinner and paid all the household bills from his wage, and my wage (which was less) paid for all the food, clothes, haircuts, etc.

It was at that point that I found out the full extent of the problem. He had borrowed over £25000 + interest on a high interest secured loan. He had stopped paying all bills (mortgage, council tax, utilities, the secured loan, all his personal loans, credit cards, graduate loan, etc.) and  we were now in arrears with everything. 

My personal credit was good and I had an excellent credit rating. So, here I was with a very ill husband, who had been pretending that he was going to work each day and had even been given a rise, and facing repossession on my home, legal proceedings on council tax, our utilities being cut off, etc. I contacted National debt line and they gave me advise on putting a debt consolidation plan together. They told me to concentrate on the high priority debts like mortgage, council tax, utilities and then contact the rest of my husband's creditors and offer token payments with what was left. To do this I had to default on my own personal debts. This meant that both of us were now considered poor credit risk.
I managed to save the house, stop us going to prison and not having our utilities cut off but all I was left with after living costs was £1 for each creditor.

This was 17 years ago and we are still being punished for my husband's mental breakdown. We have built up a credit rating but it is still poor. All credit offered to us is at silly interest rates that are over 40%.  We have paid ridiculous amounts of interest on credit since, and because we hit rock bottom and it took over 2 years for my husband to be well enough to work again, we have never really recovered. 
So, this is where I need some advice. How do I get us out of this hole? I am tired and it is relentless. Sometimes I wonder if we would have been better off if he had declared himself bankcrupt and we had lost the house and started from scratch. I would have kept my credit rating and maybe by now things would be easier for us. 
Is there a way out of this? Or is this it for the rest of my life now?

Adam_1999

Thanks for sharing and I’m really pleased to hear your husband is now better. With regards to your credit file, information is stored for six years from the date of submission, so any defaults etc from circa 2004 will have been long gone. For you to be offered credit at high rates suggests there could be more recent adverse entries on your credit file, or your history is limited since the previous adverse entries were removed. When you say you’re in a hole, is this because you’re still paying interest/still paying off the debts accrued around this time? If so, have you considered speaking to a debt charity such as StepChange or seeking advice from Citizen’s Advice Bureau? 

Batesy1976

Adam_1999 said:

Thanks for sharing and I’m really pleased to hear your husband is now better. With regards to your credit file, information is stored for six years from the date of submission, so any defaults etc from circa 2004 will have been long gone. For you to be offered credit at high rates suggests there could be more recent adverse entries on your credit file, or your history is limited since the previous adverse entries were removed. When you say you’re in a hole, is this because you’re still paying interest/still paying off the debts accrued around this time? If so, have you considered speaking to a debt charity such as StepChange or seeking advice from Citizen’s Advice Bureau? 

Their debt is a high interest secured loan.  There's not a lot they can do with that as if they default on it, chances are the house goes.

cymruchris

How much remains on your mortgage - secured loan - in comparison to the value of your property?

Looneybird

We don't have enough equity at the moment to renegotiate the fixed term loan to a lower interest rate. Its just that once you have a bad credit record you are stuffed to get any decent rate credit . If we had been given credit at half the interest we are paying now, which would still be 20%, we would have paid things off much quicker. 
Since his breakdown and having to default on our original debts at that time we have not missed any payments on anything. We have also not defaulted but these interest rates are crippling.  It means we have to rob Peter to pay Paul even though we both have relatively well paid jobs. 
The reality is that credit is favourable for those that don't need it. They lure you in with offers and good rates and if anything happens in your life that you have no control over, like redundancy or ill health, they whip out the rug from under you and leave you to pull yourself up from the floor. 
There should be a fairer system for those that have tried to be responsible but who have had life happen to them.

cymruchris

I don't know your circumstances - but is there an option to downsize or relocate to a lower cost property?

Batesy1976

Looneybird said:

We don't have enough equity at the moment to renegotiate the fixed term loan to a lower interest rate. Its just that once you have a bad credit record you are stuffed to get any decent rate credit . If we had been given credit at half the interest we are paying now, which would still be 20%, we would have paid things off much quicker. 
Since his breakdown and having to default on our original debts at that time we have not missed any payments on anything. We have also not defaulted but these interest rates are crippling.  It means we have to rob Peter to pay Paul even though we both have relatively well paid jobs. 
The reality is that credit is favourable for those that don't need it. They lure you in with offers and good rates and if anything happens in your life that you have no control over, like redundancy or ill health, they whip out the rug from under you and leave you to pull yourself up from the floor. 
There should be a fairer system for those that have tried to be responsible but who have had life happen to them.

Interest rates are determined by the risk you pose.  It's not really a matter of what's fair, but the only way to offer credit and cover the costs of those who default (and some always will.)

You posed a certain risk of default, a risk that appears to have been realised.  If you'd been offered interest at half the rate it's unlikely the company could even cover their costs, let alone turn a profit. Lowering the interest rate won't magically lower the risk.

I know you've acknowledged this but your husband was the one who borrowed this money, and did so in a rather silly way (secured on the house.) You should be blaming them rather than the lender.  But it's a bit late for all that now so perhaps you should just move past looking to blame.

Outside of selling the house and starting again I don't see a solution other than to keep plodding along.

Adam_1999

Batesy1976 said:

Adam_1999 said:

Thanks for sharing and I’m really pleased to hear your husband is now better. With regards to your credit file, information is stored for six years from the date of submission, so any defaults etc from circa 2004 will have been long gone. For you to be offered credit at high rates suggests there could be more recent adverse entries on your credit file, or your history is limited since the previous adverse entries were removed. When you say you’re in a hole, is this because you’re still paying interest/still paying off the debts accrued around this time? If so, have you considered speaking to a debt charity such as StepChange or seeking advice from Citizen’s Advice Bureau? 

Their debt is a high interest secured loan.  There's not a lot they can do with that as if they default on it, chances are the house goes.

Whoops, overlooked that bit, thanks for pointing that out. 

MalMonroe

Looneybird said:

In 2004, my husband was suddenly made redundant which caused him to suffer a mental breakdown. He did not tell me that he had been made redundant and subsidised his lack of earnings by getting a secured loan on our house. The first I knew that he had been made redundant was nearly 6 months after when our house was about to be repossessed. He was the main breadwinner and paid all the household bills from his wage, and my wage (which was less) paid for all the food, clothes, haircuts, etc.

It was at that point that I found out the full extent of the problem. He had borrowed over £25000 + interest on a high interest secured loan. He had stopped paying all bills (mortgage, council tax, utilities, the secured loan, all his personal loans, credit cards, graduate loan, etc.) and  we were now in arrears with everything. 

My personal credit was good and I had an excellent credit rating. So, here I was with a very ill husband, who had been pretending that he was going to work each day and had even been given a rise, and facing repossession on my home, legal proceedings on council tax, our utilities being cut off, etc. I contacted National debt line and they gave me advise on putting a debt consolidation plan together. They told me to concentrate on the high priority debts like mortgage, council tax, utilities and then contact the rest of my husband's creditors and offer token payments with what was left. To do this I had to default on my own personal debts. This meant that both of us were now considered poor credit risk.
I managed to save the house, stop us going to prison and not having our utilities cut off but all I was left with after living costs was £1 for each creditor.

This was 17 years ago and we are still being punished for my husband's mental breakdown. We have built up a credit rating but it is still poor. All credit offered to us is at silly interest rates that are over 40%.  We have paid ridiculous amounts of interest on credit since, and because we hit rock bottom and it took over 2 years for my husband to be well enough to work again, we have never really recovered. 
So, this is where I need some advice. How do I get us out of this hole? I am tired and it is relentless. Sometimes I wonder if we would have been better off if he had declared himself bankcrupt and we had lost the house and started from scratch. I would have kept my credit rating and maybe by now things would be easier for us. 
Is there a way out of this? Or is this it for the rest of my life now?

I do think that it would be a good idea to speak to someone at StepChange or Citizens Advice, as suggested by Adam_1999 earlier in the thread. 17 years is a long time to be struggling, with still no end in sight. No wonder you are feeling tired and at the end of your tether. I do feel for you both, having been in a very similar situation a few years ago.

I turned to StepChange and they really stepped up (no pun intended) and helped me to get out of a terrible financial mess. They are kind, friendly and most important of all, non-judgemental. If, at the end of your conversation you feel that they cannot help you (but I'm sure they could at least point you in the right direction) then you have lost nothing as phone calls are free.

Here is their link : https://www.stepchange.org/

Among other things, they say, "We support you while you deal with your money worries, for as long as you need our help" and "We also campaign on your behalf to reduce the risk of problem debt and the harm it causes".

I do hope you can get something sorted - at least you have taken the first step by asking for some help.  

Looneybird

Batesy1976 said:

Looneybird said:

We don't have enough equity at the moment to renegotiate the fixed term loan to a lower interest rate. Its just that once you have a bad credit record you are stuffed to get any decent rate credit . If we had been given credit at half the interest we are paying now, which would still be 20%, we would have paid things off much quicker. 
Since his breakdown and having to default on our original debts at that time we have not missed any payments on anything. We have also not defaulted but these interest rates are crippling.  It means we have to rob Peter to pay Paul even though we both have relatively well paid jobs. 
The reality is that credit is favourable for those that don't need it. They lure you in with offers and good rates and if anything happens in your life that you have no control over, like redundancy or ill health, they whip out the rug from under you and leave you to pull yourself up from the floor. 
There should be a fairer system for those that have tried to be responsible but who have had life happen to them.

Interest rates are determined by the risk you pose.  It's not really a matter of what's fair, but the only way to offer credit and cover the costs of those who default (and some always will.)

You posed a certain risk of default, a risk that appears to have been realised.  If you'd been offered interest at half the rate it's unlikely the company could even cover their costs, let alone turn a profit. Lowering the interest rate won't magically lower the risk.

I know you've acknowledged this but your husband was the one who borrowed this money, and did so in a rather silly way (secured on the house.) You should be blaming them rather than the lender.  But it's a bit late for all that now so perhaps you should just move past looking to blame.

Outside of selling the house and starting again I don't see a solution other than to keep plodding along.

Batesy1976 said:

Looneybird said:

We don't have enough equity at the moment to renegotiate the fixed term loan to a lower interest rate. Its just that once you have a bad credit record you are stuffed to get any decent rate credit . If we had been given credit at half the interest we are paying now, which would still be 20%, we would have paid things off much quicker. 
Since his breakdown and having to default on our original debts at that time we have not missed any payments on anything. We have also not defaulted but these interest rates are crippling.  It means we have to rob Peter to pay Paul even though we both have relatively well paid jobs. 
The reality is that credit is favourable for those that don't need it. They lure you in with offers and good rates and if anything happens in your life that you have no control over, like redundancy or ill health, they whip out the rug from under you and leave you to pull yourself up from the floor. 
There should be a fairer system for those that have tried to be responsible but who have had life happen to them.

Interest rates are determined by the risk you pose.  It's not really a matter of what's fair, but the only way to offer credit and cover the costs of those who default (and some always will.)

You posed a certain risk of default, a risk that appears to have been realised.  If you'd been offered interest at half the rate it's unlikely the company could even cover their costs, let alone turn a profit. Lowering the interest rate won't magically lower the risk.

I know you've acknowledged this but your husband was the one who borrowed this money, and did so in a rather silly way (secured on the house.) You should be blaming them rather than the lender.  But it's a bit late for all that now so perhaps you should just move past looking to blame.

Outside of selling the house and starting again I don't see a solution other than to keep plodding along.

As I said previously, prior to my husband being made redundant which resulted in him having a mental breakdown, our interest rates were low and our credit rate was high. Also again as I previously mentioned, since then I have never missed a payment and have not defaulted on any other agreements. I think it is very unkind to blame someone for having suffered from mental illness. I married my husband and promised to be with him through sickness and in health. He and I don't need your judgement, so please in future be kind and think before you write something about blame. The system is not fair to those that have fallen on hard times or have become ill. I have worked every day since I was 18 and have only been out of work for a total of 3 weeks. All I have done is stood by my husband when he was so ill he was contemplating suicide. I have never knowingly borrowed money I knew I would not be able to pay back. I have been honest and tried to do the right thing by everybody, my husband, our family and our creditors.
I sincerely hope that you never find yourself in such a position.

Batesy1976

Looneybird said:

Batesy1976 said:

Looneybird said:

We don't have enough equity at the moment to renegotiate the fixed term loan to a lower interest rate. Its just that once you have a bad credit record you are stuffed to get any decent rate credit . If we had been given credit at half the interest we are paying now, which would still be 20%, we would have paid things off much quicker. 
Since his breakdown and having to default on our original debts at that time we have not missed any payments on anything. We have also not defaulted but these interest rates are crippling.  It means we have to rob Peter to pay Paul even though we both have relatively well paid jobs. 
The reality is that credit is favourable for those that don't need it. They lure you in with offers and good rates and if anything happens in your life that you have no control over, like redundancy or ill health, they whip out the rug from under you and leave you to pull yourself up from the floor. 
There should be a fairer system for those that have tried to be responsible but who have had life happen to them.

Interest rates are determined by the risk you pose.  It's not really a matter of what's fair, but the only way to offer credit and cover the costs of those who default (and some always will.)

You posed a certain risk of default, a risk that appears to have been realised.  If you'd been offered interest at half the rate it's unlikely the company could even cover their costs, let alone turn a profit. Lowering the interest rate won't magically lower the risk.

I know you've acknowledged this but your husband was the one who borrowed this money, and did so in a rather silly way (secured on the house.) You should be blaming them rather than the lender.  But it's a bit late for all that now so perhaps you should just move past looking to blame.

Outside of selling the house and starting again I don't see a solution other than to keep plodding along.

Batesy1976 said:

Looneybird said:

We don't have enough equity at the moment to renegotiate the fixed term loan to a lower interest rate. Its just that once you have a bad credit record you are stuffed to get any decent rate credit . If we had been given credit at half the interest we are paying now, which would still be 20%, we would have paid things off much quicker. 
Since his breakdown and having to default on our original debts at that time we have not missed any payments on anything. We have also not defaulted but these interest rates are crippling.  It means we have to rob Peter to pay Paul even though we both have relatively well paid jobs. 
The reality is that credit is favourable for those that don't need it. They lure you in with offers and good rates and if anything happens in your life that you have no control over, like redundancy or ill health, they whip out the rug from under you and leave you to pull yourself up from the floor. 
There should be a fairer system for those that have tried to be responsible but who have had life happen to them.

Interest rates are determined by the risk you pose.  It's not really a matter of what's fair, but the only way to offer credit and cover the costs of those who default (and some always will.)

You posed a certain risk of default, a risk that appears to have been realised.  If you'd been offered interest at half the rate it's unlikely the company could even cover their costs, let alone turn a profit. Lowering the interest rate won't magically lower the risk.

I know you've acknowledged this but your husband was the one who borrowed this money, and did so in a rather silly way (secured on the house.) You should be blaming them rather than the lender.  But it's a bit late for all that now so perhaps you should just move past looking to blame.

Outside of selling the house and starting again I don't see a solution other than to keep plodding along.

As I said previously, prior to my husband being made redundant which resulted in him having a mental breakdown, our interest rates were low and our credit rate was high. Also again as I previously mentioned, since then I have never missed a payment and have not defaulted on any other agreements. I think it is very unkind to blame someone for having suffered from mental illness. I married my husband and promised to be with him through sickness and in health. He and I don't need your judgement, so please in future be kind and think before you write something about blame. The system is not fair to those that have fallen on hard times or have become ill. I have worked every day since I was 18 and have only been out of work for a total of 3 weeks. All I have done is stood by my husband when he was so ill he was contemplating suicide. I have never knowingly borrowed money I knew I would not be able to pay back. I have been honest and tried to do the right thing by everybody, my husband, our family and our creditors.
I sincerely hope that you never find yourself in such a position.

I'm not being judgemental but you need to accept the reality of it. He took out the loans, they were not forced on him, so blamng the loan company isn't helpful. I did say (something you appear to have skimmed over) that blaming anyone at this point is rather a waste of time.

Your interest rates went up because his risk increased when he lost his job.  As I already explained to you, high-interest rates are reflective of the risk you pose. They're not "punishment" and you're not doing yourself any favours by continuing the play the victim card.

Life is tough, we just need to do our best and try to get through it.