Feels like im going under!

NiteEyez1980

Hi Guys,

i posted in July but cant find the topic.

I could give you the reasons but it'd be a long write, and the content of the issue would be the same.

Bottom line started a new job and by the time I did everything had changed (had to give 4 months notice in old one):

NI increase
Energy bill doubled
fuel (petrol) increase (now drive 100m a day for work)
imposed parking payment at work (which wasn't on the cards before)
cost of living etc etc.

+ my olf job cocked up and i ended up being overpaid for a few months. i paid it back however HRMC thought i was on like 200k a year and so i was mega taxed and had to use cc to live etc.

long story short this added to spiralling debts we have incurred over the years to do our house, replace cars, fix storm damage etc etc.

the debts are 50k accross 2 loans and a few credit cards (unsecured)

the intention was to re-mortgage in October and we were there until everything collapsed and now the interest rate is untenable versus our current interest rate.

we have 4 children under 12, 1 at Uni and the debt has become unmanageable.

i actually woke up last night in a cold sweat, like i was having an anxiety attack and its all ive been thinking about 24/7.

i earn 58k a year and have a mortgage that's weighing in at about £950 a month.

ive spoken to my wife and shes convinced if we write to the credit companies we will ultimately lose our house/mortgage.

it sounds mad, but im struggling to hold rationale thoughts over how to manage this. its almost paralysing me with worry and stress

I think someone before recommended a debt chart and writing to the companies to ask them to reduce payments etc. 

any help will be greatly appreciated as this is making me ill

EssexHebridean

Your previous thread was here: https://forums.moneysavingexpert.com/discussion/6371277/sinking-faster-than-the-titanic-debt-has-become-all-consuming#latest

Let's deal with the biggest worry first - I take it you are actually paying your mortgage at the moment? And all your debt is unsecured? Then as long as you continue to make the mortgage payments - and it doesn't sound like you are planning to stop - then nobody will be taking your house away. 

The good news is that your income is good, and your mortgage although not *that* low, is also not that high allowing for the amount you have coming in. You do have to allow for the fact that your payments are going to increase though assuming you are now at the end of a fixed rate term which I assume you were as you say you were going to remortgage - originally your plan was to remortgage to clear the debt - is that what you mean? Only a low of folk explained to you why that was a poor idea when you posted last time. That hasn't changed.

Ultimately - right now you are in a position where you could stop paying all your credit cards tomorrow, and nobody can take your house as long as you keep paying the mortgage. If you consolidate the current debt in to your mortgage, your mortgage payments go up, and you won't have "been through the process" of clearing the debt - so what is to stop you building it up again? Next time the urge for something - whether that is work on the house or whatever strikes and you decide to borrow rather than save for it, or you need to replace another car and realise you haven't budgeted for it...it all goes on cards, then you get another loan, and before you know it you have the higher mortgage payments AND more debt...where do you think you go from there? Or quite simply - and possibly at the moment - you reach the end of the fixed rate mortgage period and your monthly payments go through the roof as a result of higher interest rates and you simply can't pay the amount any more....and THAT is when they come along and take your house. I can't stress strongly enough - do NOT consolidate debt - preferably at all, but definitely not by risking the roof over your family's heads. 

You need to start budgeting, learn to live well within your means, and then take steps to get the debt cleared - possibly by way of a debt management plan, possibly just by chipping away at the debts in the right order and making use of 0% balance transfers. The budget is key though - going forwards that informs what you spend where, and whether you can afford "this" treat, or "that" takeaway. 

Put together your SOA (Statement of Affairs) - you will find the link in my signature - make it accurate and honest, and reflecting your position financially right now, warts and all. Then "format for MSE" and post it into this thread and we'll take a look and see what looks like the right course of action for you. 

Try not to stress too much - you've taken the first step now by asking for help, and that IS the hardest thing. It's all fixable. 

MalMonroe

Hello, I'm so sorry to hear all this. Just reading your post I felt I had to do so in a rush because it's obvious you wrote it in a rush and are feeling very panicky.

However, help is available. Two things I will suggest and you can, of course, ignore one or both, as you think fit.

Before writing to creditors, you could -

Try to make time to sit quietly and write down all the household income and expenditure.
(also referred to as Statement of Account)

Once that's ready, do find time to phone one of the free debt help agencies -

They are - StepChange, National Debtline and Citizens Advice. Links below.

https://www.stepchange.org/

https://nationaldebtline.org/

https://www.citizensadvice.org.uk/

They are non-judgemental and they can help.

I always recommend StepChange as they helped me so much a few years ago when I felt exactly as you do now. Even if you don't accept their advice, you can talk to them and they can offer you some solutions and great advice. If they do advise writing to your creditors, then they also have template letters you can use. 

I would also go and see my GP because you may find it really helpful to talk to someone about all your worries. I'm not saying that medication will be the solution but sometimes, I am able to just visit my GP and talk over my worries and he is always very reassuring, without handing me prescriptions. You could be referred for some counselling, if you think that would be helpful for you.

Don't forget, these are just my own ideas, though. I've been through similar and I know how your mind can sometimes appear to close down so you don't know which way to turn. The panic can be really disabling.

But there is help available, you just have to ask for it, as per the links I have given. All the very best to you and your family.

ColdPensioner

Sound advice. I can only add, that you set some quiet time aside to do the sums without distraction.

Work out what you earn, what you need to spend, what you don't need to spend and what's left over.

 Stick hard with the job too, you earn decent money! 

Good luck - let us know how you get on. 

NiteEyez1980

Thanks Mal

Really appreciate it. 👍

It's all just snowballed and suddenly cost of living etc increases by £500 a month and now your in trouble.

I will do the SOA and post here 

I suppose my worry is "what if the creditors tell me to do one" 

I haven't had a decent night's sleep for 4 months worrying about this. 

I haven't missed a payment on anything yet! 

enthusiasticsaver

The creditors except for your mortgage have very little power to do anything. Focus on essential bills and mortgage initially. Defaulting on cards will affect your credit record but little else. A DMP may need the best option if you are unable to pay minimums. 

foxgloves

Try to breathe......& follow the good advice you've been given in the previous replies. Spending some time on putting together an SOA will be worthwhile because it should throw up any areas where you can reduce your outgoings. Yes, energy costs are double what they were this time last year, but we have done an audit around our home to look at where we can cut down usage. A key one for us has been to re-programme the thermostat for evenings. when we used to have the heating on higher than during the day, & turning it right down at night. We are in bed then & can always have a blanket if we feel cold. Your energy costs are only double what they were last year if you use exactly the same amount - it's surprising just how much can be saved. 
Do you have subscriptions & memberships you could get rid of just while you sort out your debts? Is your grocery/food/household shopping well-planned & under control budget-wise? You have a good income. I'm thinking that a couple of years of 'needs not wants' & cutting back generally ought theoretically to make a decent inroad into your debts. You are definitely in a better position  than someone on average or below average UK wage. Lying awake at night worrying is awful, I know. I find myself doing that over all sorts of things which wouldn't bother me during the day when I'm thinking rationally. Then the lack of sleep interferes with being able to think & plan properly. I agree with what others have said, that if you are able to keep up your mortgage payments, then your house shouldn't be at any kind of risk, but I do understand that worry snowballs over time.
It would be worth you doing a full SOA if you feel up to it. getting anything down on paper will feel like a positive start. Fresh eyes can often see an opportunity for cutting back. My partner also gets clobbered with work parking. His commute isn't as long as yours at 52 miles per day, but the all-day parking 5 days a week adds up. When the weather is fine, he sometimes find street parking on the outskirts of town & walks in, simply because it annoys him so much that the organisation's best paid senior managers all work next to a free car park while everyone else seems to have to pay!
Slowly but surely get a plan in place & you will start to feel you are in a better headspace to deal with this.
F

Andyjflet

By the grace of god you havent been able to re-mortgage and consolidate. Now do your SOA and look at actual expenses vs income and see if you really are in a deficit. 
You can then decide or not, to speak to Stepchange and sort your life out now. 

RobM99

To sum up my thoughts   Don't panic! You're not alone in this (although that's no help, I know).

As said, look hard at your spending. Initially, cut out all "want" but keep "need". Essential spending only. OK so it might dampen the 'fun' in life but sadly, needs must.

I think you need the whole family to buy into this. Listen - don't feel ashamed by this. 

Most folk will tell you the financial side - I'm trying to help with the psychological side.

Now breathe...and don't panic!

MrsBunny

Please do not worry there is help out there and they will not take your house if you are still paying your mortgage. 

I have been there, done that and still getting the t-shirt! 

10 years ago, although I rent (& still do) I was in a right pickle. Debts nearly double my income on credit cards and loans. One day, I had a moment like you. I no longer could afford the monthly repayments. I stopped and wrote to the debt companies explaining my situation. Most gave me a 3-month payment 'break', one just 1 month. In this time I studied my finances and sort advice from StepChange.  I went with a DMP and it was a huge relief lifted from my shoulders. 

My creditors defaulted on my accounts and my credit score took a dent. However, it was not as bad as I thought it would be. Those debts are now wiped from my credit score and I am showing an 'above UK average' score. I am still on the DMP and repaying as much as I can each month which is not alot as a Single mum on one income - hence why it has taken so long!

I would certainly seek some advice. I can highly recommend StepChange. The best solution for me was to go bankrupt or IVA but I can not have this on my file for my employment hence why I went down the DMP route. DMP has not affected my employment. 

I just wanted to say you are not alone. Talk to your wife, discussed your finances, make her aware that things will have to change etc Do not hide it from her. 

It is scary but it can be sorted.  

Goodluck and let us know how you get on. 

NiteEyez1980

Hi guys

I'm drafting my SOA and its:

Mort=1094
Council tax: 146
Cc/loans: 1578
Energy 340
Road tax: 65
Water:41
Diesel/fuel: £300
Car insurance: 70
Tv/mobile/broadband:100

My take home is about £3,400

Leaves about 300 for a fam of 6 a month

This is excluding any luxuries or clubs or anything for kids etc

If I wrote to all my creditors and offered a 50% payment, what do you think, any templates about?