Help for a newbie

Sncjw

Has your wife benefited from. These debts.. I imagine so.

I would combine all your I come and outgoings to show a true picture. 

DayDreamerandGeneralWaster

Does your wife know?

TKDPhil

Thanks again for all of the replies. My wife does indeed know and has benefited from the debt (she doesn’t know the full extent but that’s only because I didn’t until I put the SoA together). A good chunk of it is house related and another chunk is lifestyle (but not as much as you may think, no elaborate holidays, no fancy clothes, just general living costs and wanting the best for my two daughters). 

She does have some debts of her own but nothing close to the main ones (a Next store card, a small credit card and an overdraft). I’ve talked to her about having to get a handle on all of this but I genuinely think she’s scared of what the outcome will be. I’ll speak to her tonight and we’ll combine both of our debt and finances into a new SoA, then go from
there. 

Our combined income (pre-tax) is around the 52k to 55k mark (depending on my overtime and bonuses) so I don’t believe we are eligible for any benefits. 

Thanks for all of your replies, I’ve been worried sick over this for months now. I was furloughed for 9 months which really exacerbated things and I’m really struggling to see a
way out of this. 

fatbelly

If your joint budget still shows that you can't afford the contractual payments then we do not advise trying to raise money from the equity in your house. We recommend a debt management plan with someone who does not charge a fee.

Stepchange and Payplan are the two main ones.

You can also do-it-yourself but a lot of people use one of those two firms first to get things set up

TKDPhil

Thank for that FatBelly.  I dont know much about debt management plans but from a quick bit of googling they look like something we might have to look at.  They just sound a bit scary, I suppose there's no harm in speaking to Stepchange to see what are options are.

I was considering switching to an interest free only mortgage and then seeing if I could transfer the 17500 home improvemement loan to my mortgage which along with some budgeting could free up £1000 a month (very rough estimate I know) to assist with paying off the other unsecured debts.  But sounds like its against the general advice for people in my situation?

TheAble

You're entitled to child benefit if your combined income is 50-55k.

fatbelly

TKDPhil said:

Thank for that FatBelly.  I dont know much about debt management plans but from a quick bit of googling they look like something we might have to look at.  They just sound a bit scary, I suppose there's no harm in speaking to Stepchange to see what are options are.

I was considering switching to an interest free only mortgage and then seeing if I could transfer the 17500 home improvemement loan to my mortgage which along with some budgeting could free up £1000 a month (very rough estimate I know) to assist with paying off the other unsecured debts.  But sounds like its against the general advice for people in my situation?

Is the home improvement loan just an unsecured loan with a bank?

Yes, we would not advise transferring unsecured non-priority debt to secured priority debt as it moves that debt to a much more dangerous place.

Your first step is to put together a joint budget with accurate income and realistic expenditure and see how much money you have available for non-priority creditors. That will dictate the way forward for you.

TKDPhil

You're absolutely right Fatbelly, its just a normal unsecured loan with the Post Office.
I'll speak to my wife and we'll put together a 'warts and all' budget planner, post it on here and see what the general consensus is.
Thanks very much for your quick and knowlegable replies.  Its great just to be able to speak to someone about it.

Naomim

Are you on a fixed rate mortgage? Rather than going interest free, can you remortgage with your existing lender to a better rate?  We did this recently and although only shaved about £60 off the monthly payment, it all helps.

TheAble

Difficult to get interest-only mortgages now anyway - the bank will ask what plan you have in place to pay off the balance.