I am cursing my self each day to be in a such a mess!

chullbulla

TheAble said:

Are you really only paying back £400/month on 72k of unsecured debt? Sorry if I've missed something but I'd have thought it would be way more.

Your annual interest on the MBNA is £5k for example so it's barely even covering that. Seems like there's a miscalculation somewhere.

I have stopped paying since this month, if I add what is the minimum payment each month, it will be well over in the negative. 
I did SOA on the basis that to see what I am able to pay my creditors and where I can reduce some expenses or if I am missing any important.

chullbulla

Rob5342 said:

Holidays and days out are all about creating a sensible budget and sticking to it really. A modest amount on holidays and days out is fine as long as overall you are making some serious changes to address the debts. Children will still enjoy cheap holidays, and you can get free tickets to Legoland etc with the Sun.

I'll re-iterate that you should tell your wife about everything including the full amount, it will be hard but you need her to support you as much as possible to make it work. If you don't tell her now then at some point she is going to find out how much it is. 

My parents are abroad so I need to visit them at least once in two year time, that's where the main cost of holidays is.

If you see my other costs, you can see how simple life we are living now, no big mobile contracts, no TV packages, nothing paying towards an expensive car, not spending a lot on branded clothes and games or anything else.

Only thing which I believe I have already put small amount is towards holidays which is actually cost to go and see my family every couple of years.

[Deleted User]

Hi @chullbulla I've read your thread with interest. Your last post interests me; one thing I find concerning is that you're not prepared to make the changes you need.  If you haven't made a commitment to the holiday then yes, I would consider cancelling it. It could prevent you from defaulting and having the stress of calls, texts and letters - then do it or at least put it in an emergency fund pot so you don't need to rely of CC's etc.  You say your daughter is 6 years old - you have plenty of opportunity to do things with her.  At that age they are not going to remember every single detail of where they went on holiday, just what they did with her parents. They'll remember times they spent doing things with you such as; trips to the beach, park, long walks, picnics, go crabbing, ice cream on the rocks, fishing in rock pools - that's what she'll remember, not flights, hotel, food etc.  If you don't make the changes now, what will change?  In six years, you can be in a completely different situation - you could be still dealing with debt but in a manageable and liveable life or not face your debt and be in further debt - you cannot quick fix debt, just delay it - unless you win the lottery of course!  

I'm not out to have a go at you.  I've been where you've been - it's taken me 12 years.  Yes, I do feel guilty that I have only managed to take my children abroad once and believe it or not they only remember being able to order their own drinks, the swimming pool and eating ice cream - it cost us a fortune!! Last 8 years, we have had holidays in this country or had family days out when times have been hard.  They remember the time with you, not how much you spent on a holiday. or which country.

May be have a rethink - you and your wife are in this together, you are a family.  Don't keep anything from her - I know, it almost broke my family.  It's better to be honest.

chullbulla

@[Deleted User]: please look at my SOA and try to find any item where I should cut other then £100 a month I kept for holidays and these are not really holidays as I mentioned in my last post, may be you did not see.

TheAble

chullbulla said:

TheAble said:

Are you really only paying back £400/month on 72k of unsecured debt? Sorry if I've missed something but I'd have thought it would be way more.

Your annual interest on the MBNA is £5k for example so it's barely even covering that. Seems like there's a miscalculation somewhere.

I have stopped paying since this month, if I add what is the minimum payment each month, it will be well over in the negative. 
I did SOA on the basis that to see what I am able to pay my creditors and where I can reduce some expenses or if I am missing any important.

I think the idea is to put the actual contractual minimums in there, to get an accurate picture of what the shortfall is.

[Deleted User]

@chullbulla I have read your SOA - you're missing your minimum payments for each of the credit agreements or have you already stopped paying them?  Have you spoken to your creditors to freeze/cancel the card and arrange a payment plan yet? I do think it may be doable - is this all our finance agreements? Or just the ones your wife knows about?

enthusiasticsaver

There are some economies you could make re groceries etc but whether you do this as a DMP for yourself or joint you clearly don’t have a huge amount to pay towards the DMP monthly. I am not even sure if this is what will be recommended by stepchange or any other free debt charity. As you say maybe in the future F and Fs may be accepted. 

I think for now do as you are doing. Default and set up a clean bank account and move to priority bills only. I am a bit concerned about the Business CC and the guarantee and whether this will affect the house equity but others may be more informed about whether they will consider a 2nd charge. The others won’t bother. 

As you say it looks like the investment was a bad decision but you can only live and learn from mistakes. I do understand why this has been a stumbling block though if your wife was unhappy with that. Is there any chance you can get redress through financial ombardsman or small claims court? 

kimwp

It's a bit confusing that you haven't put the contractual minimums or have put some money against some of the debts and not others. But I think you are saying dmp is the only option due to your job. In which case it's the usual - open unconnected bank account and stop paying to get the accounts defaulted, saving that money for emergencies and full and final offers.

Something which may sound a bit harsh, but is part of the mindset that you must achieve- the 35k debt that went on an investment - it's not your debt because it didn't get paid back - it's your debt because you invested money that you didn't have.

enthusiasticsaver

I think for your mental sanity you need to leave the self castigation behind now. Yes you made a mistake investing money you didn’t have and are paying the price now and for a few more years until you are back in control. It is not the end of the world, you have a roof over your head, your family and a good job. 

You have a plan so just finesse that for now. In normal situations we would advise defaults first by stopping payments which you have already done. Save for emergencies and set up clean bank account with a bank you don’t owe money to. You can write and ask them to do everything in writing so you don’t get phone calls but they may not all comply. Are you going self managed or will you go through stepchange? I personally would do the DMP in just your name and continue to try and clear your wife’s cards as you have been doing. 

I would focus my efforts on trying to get that investment money back alongside the DMP. On the positive side except for higher than normal groceries for a family of 3 the soa shows a relatively frugal lifestyle. As you say the holiday is to visit family abroad so I wouldn’t beat yourself up over that. In most cases creditors will sell the debts on especially the credit cards but rarely do they take court action so they can only accept what you are in a position to offer. That will be minimal to start with given the small amount left after your substantial mortgage. Obviously if mortgage rates increase or you come off a fixed rate the DMP would have to be adjusted. Don’t mention inheritances or any other money you may come into beyond the failed investment. 

The only concern would be the £19k business loan threatening court action to get a charging order. All that means is a 2nd charge so the debt would have to be repaid when the house is sold. They can’t force you to sell though. I don’t know if they would do that but am just warning you. 

chullbulla

Thank you everyone for your input I must appreciate, and yes I did make a mistake a very big mistake for which I am going to pay for coming years.
We have agreed the timeline of July with the guy to repay me before I take any action, but based on his previous commitments, I am not very hopeful but lets see.
I will try to see if I can reduce spending on groceries.
@enthusiasticsaver thankyou for understanding about holidays pot, as mentioned not really holidays and when we go we dont pay for hotel or anything as we have parents home and sametime we save what we spend on groceries utilities petrol here for time we are there.
Now I am very worried about 2nd charge is it different then charging order?you said then cant force to sell but then you said they may do?
What do you recomend should i treat them seperately then personal debts and setup payment plan without waiting for default?