SOA & Nuclear Option...remortgaging to pay off debt?

katsu

I don't think your SOA is quite right. No cash but £50 a month emergency fund? Where does that go? £600 a year going somewhere. Start by checking your base again and trying to reflect your life in it. I think you can maybe have 6 focused months of cutting spend and making some cash to get yourself some breathing room if you cut right backbut you need your start to be clear and accurate.

Mum2Nan

I logged in the other evening to update my debt figure and progress but was interrupted and have been either too busy or too tired to get back on here.  Life has been anything but normal recently but I do like a challenge.

Progress was slow last month and it’s even slower this month so debt repayment in two weeks will be similar to last.  For the first time, I blew my fuel budget last month and have done again this month and still have another 10 days to go.   Apart from the rising cost, I have been using my car nearly every day, sometimes twice.  Lots of trips back and forth to DD’s mainly but also to see Mum & Dad every weekend.  I have dipped into my ‘everyday’ savings to make it work.  This is a temporary blip so won’t be adjusting my budget for the longer term.    

I had to take some more holiday from work to help out with my DGS and have spent a small fortune keeping him occupied and just generally spoiling him for a while, not excessively but definitely a lot more than usual.   I did pack us a few snacks on our days out including a flask of coffee for me initially but I must confess there is nothing like the smell of a fresh coffee to perk you up (as we walked past Costa) so the coffee I made remained in the flask.  I tried to justify it to myself as I was pouring it down the sink when I finally got home,  I was helping to save jobs and help the economy.  It must have worked as I didn’t bother with the flask on our next day out!

DD is feeling so much better than a few weeks ago.  Still a few down moments but my DSIL has been fantastic.

I am still loving my secondment role.  I am now a whizz on their systems and dealing with enquiries.  My main boss called me via Teams to tell me he had received positive feedback so looks like my PO could be extended for another 6 months (fingers crossed).  I am still working  some weird hours but this should also settle down by the end of the month.

I still managed to repay my EF by the B/C amount of £320. 

My balcony is blooming again.  The colours are so vibrant and rich.  I love sitting out there when the weather is nice, especially early morning with a brew and Laurel and Hardy.

We have our little family trip in 1 week and 5 days.  I’m not really counting… this is another reason why my repayment will be lower this month.  I don’t want to spend my time away worrying about money.  I am still keeping my spending diary and as long as I don’t need to use my EF, I will consider that a win.

enthusiasticsaver

lunaspend said:

@fatbelly I'm in Scotland yeah, so I don't pay for water as it's included in Council Tax rates, and my other half also contributes separately to groceries so household budget is more like £200.

I wasn't sure a DMP would work for me given the amount of equity I have in my house? It is something I had briefly looked into before. Interesting though that you think a DMP would be an option, thanks. I will see what options the StepChange broker comes back with and possibly also discuss the implications of a DMP with them as an alternative.

@flipflopflo I have fallen into the trap of consolidation before, and I think tried to do this with terrible interest rates which have made things worse. Not sure if I am being naive in thinking that because I have done this already, I understand better how easy it is to end up worse off for doing it, which would help avoid that pitfall again moving forward?

@enthusiasticsaver My credit rating is 'Fair' at the moment... (798/999 Experian; 398/700 Equifax; 569/710 TransUnion). Like I say, I pay everything! Just my affordability is shot and as you've said, I'm not making any sort of dent in it with the small changes I can make.

@TheAble I'm just not sure what incentive they have to agree to that, while I'm regularly making all their minimum payments with interest 🙈 Maybe if I called them and told them I was speaking with StepChange? But I'm not sure if that is advisable in advance or not!!

You can do a DMP with equity in your house.  If anything it is more flexible than an IVA although I am not sure how that works in Scotland.  The credit score is quite honestly irrelevant and rarely translates accurately one way or another when making applications.  I think though when in a hole the general advice is stop digging and I don't think more borrowing would help you.  Consolidation has not worked for you in the past and yes while you might be aware of the pitfalls the lack of urgency in dealing with the core issue (too much debt to income ratio) may lull you into a false sense of security and encourage you to carry on spending.  If you are looking for savings the cable tv and entertainment can be reduced and possibly a second job may help.  Is the £500 your partner paying sufficient considering it is not only to cover monthly outgoings but also help to repay the debt which presumably was taken out for the benefit of both of you? Is all the debt in your name and does your OH have other debt?  If you are wanting to buy in the future you will need a deposit and realistically no or little debt or much higher income.  I would focus on the debt and getting rid of that first even if it means delaying buying a house as it does not seem that will be possible in the forseeable future anyway. 

As I see it the critical thing is making sure the debt does not go higher so ensure that soa really is correct.  Where is the £50 emergency savings going or is there an emergency each month?   The next issue is the interest so you can really make an impact on the debt rather than more than half your repayments going on interest.  If you had £1000-£1200 spare to go to a DMP it would be gone in 3 years. Yes your credit file would be affected for 6 but if it takes 3 year to clear the debt you then have 3 years to save up a decent deposit. 

fatbelly

A DAS appears to be a dmp with bells on. Pretty much designed for people in your position

https://www.citizensadvice.org.uk/scotland/debt-and-money/help-with-debt/what-options-are-there-for-dealing-with-debt/the-debt-arrangement-scheme-in-scotland/

There's something similar in the pipeline for England - called a Statutory DMP

Sncjw

Has your partner benefited from your loans and debt if so I would pool your money together it would help clearing the debt. 

anon_2020

Your partner contributes £500/month for 'his share of the bills' but your total household bills (mortgage, council tax, utilities, internet) come to less than £700. The house is your name alone so I'd suggest he's getting a very raw deal here, and despite his very generous contributions you're still overspending and have accrued enormous debts.

You are going to have to fundamentally change your lifestyle and your attitude to money.