£23.7K Debt - SOA - Plan Needed

EssexHebridean

How are things going @lixhul ? 

lixhul

Hi all thank you for the information I have read it all and have readjusted my budget which will post. You're all correct there are leaks somewhere.

Work is naffing me off. Went to Ireland for this apparent big opportunity, did the work, no new terms, they want me back next week. Wipes out my days for hotels. I feel like saying I'd go but I need new terms? 

I'm doing "okay" for now but everything will get worse. My biggest fear is the mortgage, I am with Halifax and the tracker rate is at over 7%, with my current mortgage being 2.6%. I am looking at an extra £250 a month end of 2024! There is no way I'd be able to get a new fixed mortgage with all these upcoming defaults.

My other big fear is my car. I bought it new, cash, back in 2017. When it's time to get a new one, I doubt I'll be able to get the finance plan which I'll now need.

I am now also getting tons of calls and letters, with default notices. Am I right in assuming my best course of action is to let it all default, so that the interest stops, then start a DMP with the third-parties it gets sold to? I think this is really important for me to understand the game plan.

Thanks all. I've read and actioned everything. A lot is riding on this promotion, it makes the balance much easier, and without it I think I am done for. I am using spare time to learn new skills within the data analyst area to expand my horizon. I've been at my company 2 years and had a 15% increase year one due to performance but I'm looking for more now.

SusieT

If you stay with the current mortgage provider, and continue to pay on time every time, you will be able to do a product change by logging into the mortgage account and clicking a few buttons. They normally just go through with no credit checks, and being an essential payment you always pay this even when you ignore other loans/cards. 
Are the letters default notices, as it normally takes a while for them to arrive. Perhaps post the actual wording or a photo with no personal details showing, and someone will help. 
You are right that the default will stop interest and then it may or may not be sold to a 3rd party. However from that point you will have a set date that 6 years later will remove the default and the account (regardless of it being paid, part paid or unpaid), and it will not return, whereas if you start a dmp prior to defult it can stay on your credit file for 6 years after you have finished paying it off. 
Good luck with the promotion, hopefully it will work out for you and help get you debt free.

enthusiasticsaver

You want the defaults to happen so yes you  will get lots of letters etc.  Some may be sold on to third parties but some might not.  The important steps next are to let the defaults happen and check interest is frozen and save up for emergencies as you have no access to credit now.  Opening a clean bank account with no overdraft is a good next step especially  if you have overdrafts as those can be included in the DMP.  Just make sure the new bank account is not with a bank you owe money to. 

Rob5342

SusieT said:

If you stay with the current mortgage provider, and continue to pay on time every time, you will be able to do a product change by logging into the mortgage account and clicking a few buttons. They normally just go through with no credit checks, and being an essential payment you always pay this even when you ignore other loans/cards.

I can echo this, I have four defaults and 3 payment arrangements on my credit file and I switched my Santander mortgage to a new fixed rate with no trouble at all. As I was staying with them there was no credit check, so it just took a minute to choose my new one in my online banking.

TheAble

Your car's still fairly new surely? Look after it well and it could last you years yet. I wouldn't say it's something you even need to think about, let alone fear.

EssexHebridean

+1 for theAble's post - you've likely got 10 years before you are likely to need to replace a car that was purchased new just 5 years ago. Take care of it, drive it sensibly, keep it maintained and put it to the back of your mid for now. In 5 years or so you need to get a plan in place to start saving for a replacement - but that replacement will easily be able to be a 2nd hand option around 2 - 6 years old, which will then give you a further good many years motoring. definitely not anything to be even slightly concerning yourself with right now while you need to be focusing on clearing the debt.

You are also catastrophising about the mortgage - you can push that one onto the back burner until this time next year if your current deal runs until the end of 2024 (by the way - is that correct? You said 2025 previously?). None of us have anything other than the vaguest idea where mortgage rates will be in 6 months, never mind in a year or 18 months! 

Deal with one thing at a time - right now your focus needs to be on tracking down that apparent surplus on the SOA and getting your budget properly in place,. Alongside that, you need to be making savings where you can, and starting to build your emergency fund by saving everything that is left over after the bills you are still paying - so NOT the unsecured debts. 

Try not to fret about the promotion either - your SOA shows that without it you aren't "done for" at all - so whilst I wish you luck with getting it, you need to lose the mindset that if you don't get the promotion the world is going to come to an end. Keep the end goal - being debt free - in sight and remind yourself that it's achievable with time and effort. 

lixhul

Thanks guys. I've had a dormant bank account and I'm adding £100 a month in there. I will do an SOA again. I have a feeling I spend more than I realize. I have also downloaded a tracker app where every variable spend I log.

Yeah work is messing me around. I'm doing stuff that they said is a good opportunity, I'm doing it, and getting nothing. A big meeting on Thursday and I think I'm just going to make my case.

EssexHebridean

It takes a while to get the SOA - and from that the budget - all straight and working for you. A great idea to track all spending for the time being as that will help you to work out exactly what you do spend and in which areas.  

The £100 a month to start building an emergency fund is brilliant - when money is tight knowing you have that little cushion behind you if things go wrong is excellent - look at it this way, even that first £100 means that should a necessary small appliance go bang tomorrow, you will be able to replace it outright. 

RAS

Well done for getting the emergency fund going. If you are in the right area and have the stuff and capacity, it might be worth looking at anything you no longer use and trying a car boot sale or similar to give it a little boost?

And you're right. Tracking the spends and finding the leakage is key to getting SOA sorted. A Greggs breakie 5 days a week is about £700 a year. Most days that money could be reducing you debt, or adding to your emergency fund.