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Sinking Faster than the Titanic! - Debt has become all consuming
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NiteEyez1980
Posts: 150 Forumite

Hi Guys,
Things started off so well. Bought a rundown house 10 years ago on a cheap Mortgage (£350) a month on an income of 26k p.a.
My wife and i were newly married, shed just had a baby and given up work (to save on childcare) and id took on her 2 boys (7-10, with no maintenance from 'dad'), and though things were a struggle we got by.
Gradually as i progressed and got promotions we borrowed more and done a loft conversion, Every pay rise accounted for this so we never really saw the financial benefit of this.
I did my degree at open university (4 years) and gave up nights out, drinking and anything really as i did 7am-6pm and then my uni work from 8pm-2-3am...whatever it took.
again more promotions and income meant more stuff done to the house (new kitchen, bathroom, cladding, carpets etc).
we welcomed 2 more children and everything was ok. we didn't buy lavish things, didn't smoke, i worked out at home, didn't buy jewelry etc.
Unfortunately about 3 years ago everything started to go VERY wrong.
My car 'died' so i had to get another one. I did with a loan, however within a year that literally blew up, and i had to get another, again with a loan
Storms in 2 out of 3 years decimated our garden and fences which i had to finance 2 complete new sides to be installed (total complete post, fence, gate re-do) , then there was the new gutters etc and during Covid the price of everything tripled.
given the time the kids had over covid i couldnt leave them gardenless so it had to be done.
Suddenly we were living on credit cards to get by each month, and it only got worse, and worse, with no discernible improvement in our position.
I accepted a new job over Xmas (better pay_ however by the time i started the economy had gone to ruins. My energy bill increased by 50%, fuel costs doubled as i now had to drive far further for work and then to top it off my old job didn't tell the HRMC id left. I got overpaid, for 3 months (which i've paid back), which meant HRMC thought I was on about 150k a year, i was hit with crippling tax hits on my wages by about £400 a month (this still hasnt been sorted) to to pay bills and live ive had to go into credit cards , meaning ive now got about 40k+ of debt over the last 3 years.
as it stands my mortgage is about £1100 and my debts another £1000
Unbelievably this new car now has issues, and i am feeling like i am cursed.
I cant sleep at night, my wife isn't the greatest with understanding this and i feel like i'm now downing in debt.
If i had lavish things id understand, however i don't smoke, go out, have hobbies, expensive clothes, flash toys or anything. I work 12hr+ days 5 days a week and financially i'm going backward.
I've contacted a mortgage broker as hoping to re-mortgage and consolidate it all into 1 (excluding the cc debt i have a mortgage of about 175k on a 375k property).
I know people will say "sell and clear" however the kids were born in the house, go to the school next door and its all they know. To afford a property the same size as ours (5 beds) in our area would be impossible and if we had to would likely be a marriage ender
I truly don't know what i'm expecting from posting on here, but I had to tell someone. My wife is not the most supportive in these circumstances (as the income person, its seen as my responsibility).
Not sure what my other options are?
Given my income though is 63K pa surely a mortgage company would allow full consolidation would it not?, i've, never ever missed 1 bill ever???
any advice would be great
Things started off so well. Bought a rundown house 10 years ago on a cheap Mortgage (£350) a month on an income of 26k p.a.
My wife and i were newly married, shed just had a baby and given up work (to save on childcare) and id took on her 2 boys (7-10, with no maintenance from 'dad'), and though things were a struggle we got by.
Gradually as i progressed and got promotions we borrowed more and done a loft conversion, Every pay rise accounted for this so we never really saw the financial benefit of this.
I did my degree at open university (4 years) and gave up nights out, drinking and anything really as i did 7am-6pm and then my uni work from 8pm-2-3am...whatever it took.
again more promotions and income meant more stuff done to the house (new kitchen, bathroom, cladding, carpets etc).
we welcomed 2 more children and everything was ok. we didn't buy lavish things, didn't smoke, i worked out at home, didn't buy jewelry etc.
Unfortunately about 3 years ago everything started to go VERY wrong.
My car 'died' so i had to get another one. I did with a loan, however within a year that literally blew up, and i had to get another, again with a loan
Storms in 2 out of 3 years decimated our garden and fences which i had to finance 2 complete new sides to be installed (total complete post, fence, gate re-do) , then there was the new gutters etc and during Covid the price of everything tripled.
given the time the kids had over covid i couldnt leave them gardenless so it had to be done.
Suddenly we were living on credit cards to get by each month, and it only got worse, and worse, with no discernible improvement in our position.
I accepted a new job over Xmas (better pay_ however by the time i started the economy had gone to ruins. My energy bill increased by 50%, fuel costs doubled as i now had to drive far further for work and then to top it off my old job didn't tell the HRMC id left. I got overpaid, for 3 months (which i've paid back), which meant HRMC thought I was on about 150k a year, i was hit with crippling tax hits on my wages by about £400 a month (this still hasnt been sorted) to to pay bills and live ive had to go into credit cards , meaning ive now got about 40k+ of debt over the last 3 years.
as it stands my mortgage is about £1100 and my debts another £1000
Unbelievably this new car now has issues, and i am feeling like i am cursed.
I cant sleep at night, my wife isn't the greatest with understanding this and i feel like i'm now downing in debt.
If i had lavish things id understand, however i don't smoke, go out, have hobbies, expensive clothes, flash toys or anything. I work 12hr+ days 5 days a week and financially i'm going backward.
I've contacted a mortgage broker as hoping to re-mortgage and consolidate it all into 1 (excluding the cc debt i have a mortgage of about 175k on a 375k property).
I know people will say "sell and clear" however the kids were born in the house, go to the school next door and its all they know. To afford a property the same size as ours (5 beds) in our area would be impossible and if we had to would likely be a marriage ender
I truly don't know what i'm expecting from posting on here, but I had to tell someone. My wife is not the most supportive in these circumstances (as the income person, its seen as my responsibility).
Not sure what my other options are?
Given my income though is 63K pa surely a mortgage company would allow full consolidation would it not?, i've, never ever missed 1 bill ever???
any advice would be great
1
Comments
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Don`t re-mortgage, all you need is to go into a debt management plan, if things are that bad that payments are becoming a problem, as a homeowner, your options are limited, but one thing you can do is a DMP.
You first stop spending money you do not have, learn to live on a budget, then do one that is workable, you then separate essential debt (mortgage/council tax/utilities/food etc) from non essential debt (credit cards/loans/any other unsecured credit you may have).
You then deduct your essential spending from your monthly income, and what`s left is your disposable income with which to pay your non essential debts.
Then its just a case of writing and explaining your situation to your creditors, tell them what you can afford to pay and when, ask them to stop interest etc, its then a case of making monthly payments to your debts, but at a more affordable rate, over a longer timeframe.
You can get one of the free to use debt charities in my signature to do this for you (never pay for this service though) or you can easily do it yourself.
Yes your credit file will take a hit for a few years, but borrowing more money to repay existing debt seldom works out, you just increase what you owe, and are never free of debt, as there will always be something that crops up that needs paying, as you have unfortunately found out.
Time to draw a line in the sand, stop your bad money management habits, and take a more sensible course of action that will actually deal with your issue, not sweep it to one side.
I was once in your shoes with a 57k debt, now I`m debt free, live within my means, and never use credit.
I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter1 -
I was in a similar sort of position. We lived together for 11 years with no problems with money at all, then we had a baby and moved house and things started to slide downwards. We started using cards for things, and the pay rises I got only seemed enough to cover the increasing card bill so we had to keep using card and things just got worse until I had £40k on credit cards.I started a debt management plan last year and that turned things right round. With a combination of that and refunds from complaints about affordability I've now got the total balance down to less than £30k, and I've just made some CCA requests and only £5k of that is actually enforceable.It's harmed my credit report but instead of being down about our situation we are now looking ahead to when we'll do when it's cleared.I think you need to get your wife involved, she might not be the income person but she'll still be involved with all the outgoings you have.0
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Definitely agree that borrowing more money to throw at your debts is self-defeating. It's unlikely to mark the end of the problem. We consolidated our debts 3 times. Thankfully the lightbulb moment struck me with a major epiphany just around the time my partner was starting to consider a 4th. Taking on more debt to pay off existing debts rarely works because it frees up those streams of credit again & unless there has been a significant change in financial habits/teamwork, it will begin to build again. You've had some bad luck with your cars & storm damage, but this is why a decent emergency fund is essential. This kind of event happens to us all at some point & if emergency funds are not there to absorb the costs, each disaster is instead added to credit cards.
I do think you need to work as a team with your partner. You may be the wage earner, but you both spend it. If your partner is running the home while you are working, does she work to a budget? Plan your family meals? Do all the usual grocery budget 'wins' like downshifting brands, batch-cooking, etc? My partner got on board the debt-busting process a bit later than me but once we got into it, we started working as a team. I took on the practicalities of budgeting each month & setting up savings pots, emergency fund, etc, as I emerged as the stronger budgeter of the two of us, but we make all financial decisions together & he understands that if the budget for say, July, is £X, then he needs to play his part in sticking to it to avoid a drift back into debt.
Like you house-wise, we also bought a doer-upper. We took on extra debt initially to get work done, but when we became debt-averse, we slowed down the process & saved for a new kitchen, then a bathroom. We moved in nearly 20 years ago & only completed our final renovations this Spring.
Anyway, this is a bit of a long way round of saying I think further borrowing is not a sensible way forward. You earn a good salary & all is definitely not lost if you budget properly & tackle this as a team.
Good luck,
F2025's challenges: 1) To fill our 10 Savings Pots to their healthiest level ever
2) To read 100 books (36/100) 3) The Shrinking of Foxgloves 5.9kg/30kg
"Life can only be understood backwards but it must be lived forwards" (Soren Kirkegaard 1813-55)1 -
0
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I agree with sourcrates, as ever.
Do not re-mortgage, or consolidate into a loan.
Given the situation with your wife, I'd advise doing a DMP with a debt charity initially, then once it's running well, take control if you wish.
Start with a shared phone call to one of the debt charities sourcrates lists in her signature, sometime when the kids are quiet, asleep, out. It might only be that that encourages your wife to understand that the finances are not looking good.
Assuming that all the children are in school or nursery, or could be, the single most effective means of increasing your family income will be for your wife to take part-time work. Given the difficulty of getting staff, some employer's will take staff who can only work term-time, school hours. Her income will probably be untaxed and she is unlikely to pay NI.
You'll need to do an SOA (budget) anyway for the debt charity. You might want to do this beforehand, or you might want to wait until your OH has an inkling there is a problem. Then you take a half day, or day and together go through the last 6 months' statements to work out what's been spent.
Sometimes its £50 a week wine habit, other time every supermarket trip includes a few bits (clothes or toys) for the kids.
SOA link here SOA Calculator (lemonfool.co.uk)If you've have not made a mistake, you've made nothing2 -
It was quite shocking to us just how much some of our habits added up....
takeaways at least weekly, endless lunches out (even in supermarket cafes & chain coffee shops this adds up), 5 DVDs for 'only £X', etc, & then the realisation we were spending around £2k a year on workday food because we couldn't be bothered to make packed lunches. Bank statements don't lie though, so we had to suck it up & get on with debt-busting. But it does need to be a team effort & I think you will start feeling less stressed about it if you can work on it as a joint endeavour.
F
2025's challenges: 1) To fill our 10 Savings Pots to their healthiest level ever
2) To read 100 books (36/100) 3) The Shrinking of Foxgloves 5.9kg/30kg
"Life can only be understood backwards but it must be lived forwards" (Soren Kirkegaard 1813-55)0 -
I got overpaid, for 3 months (which i've paid back), which meant HRMC thought I was on about 150k a year, i was hit with crippling tax hits on my wages by about £400 a month (this still hasnt been sorted)I run payrolls in my job, and post-covid, we've had huge problems with HMRC taking a very long time to update information. I've had clients where it's taking 5-6 months to get it sorted out at the moment.HMRC seem particularly slow updating employees individual records/tax codes when employers correct mistakes. What you can do is1) try and make sure the employer has sent the correct information.2) You can also try calling HMRC (it won't let me post links but search "income tax general enquiries hmrc" for the helpline details). They might say they don't have the updated information on your record yet even if your employer has sent it). It's worth checking when you phone them that HMRC hasn't issued a tax code that your employer hasn't updated. But it's more likely that the delay is at HMRC's end.
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Hi everyone,
Well don't know what to say. I'm so touched and flabbergasted and touched by the comprehensive, thoughtful and quick responses.
I am worried about my mortgage though. Could Nationwide pull my mortgage due to credit rating?
Luke0 -
Two options.
If you are due to re-mortgage very soon, speak to a financial advisor who can do the soft checks and see if you can get a good fix before defaulting.
If you will be re-mortgaging later, you will be able to transfer over to another Nationwide mortgage without a full check. Won't be the best rate, but you can adjust your SOA and payments to take that into account, and then re-mortgage when you've got a few years clear of defaults.
That is why halting payments is essential in this scheme. Most of your creditors will default you within 6 months, so in three years time your access to better rates will improve. If you go straight on to a DMP without waiting, they will mark your account as arrangement to pay (AP). That stays on your account for 6 years after the debt is paid, so does a lot more damage for a LOT longer.If you've have not made a mistake, you've made nothing0 -
If you're just switching deal with the same lender and not borrowing more then no credit check is needed. I've been on a debt management plan for a year and have just switched my Santander mortgage to a new fixed rate with no problems.I was very apprehensive about starting a debt management plan and put it off for a long time as I was worried about the consequences. Now I've done it it was so straightforward I wish I'd done it earlier. Remember that while it seems like a big thing to you, for the lender it's a routine thing they deal with all the time.1
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