What is my best option going forward - over £120,000 in debt

thebigajd

Hi All

This is my first post, so please accept my thanks for reading and providing any guidance you can offer. NB I'm also hoping I've posted this in the correct area.

I'm currently over £120,000 in debt, this is mainly due to a gambling addiction that I have recently take ownership off, I have banned myself from the gaming sites and also signed up to GamStop for a maximum 5 year period.

All the debts are unsecured loans and credit cards.

I have enough money for April and potentially May to cover the loans / credit cards, but after that I don't know what I'm going to due. I'm currently out of work, I've been looking since December 2022 for a new contract (I work within Information Technology).

I have spoke to PayPlan and they have advised they are currently unable to put me under a IVA (or something similar) as I don't have any income coming in.

I've also looked at Bankruptcy, we have plenty of equity in the family house, but as this is my issue I don't want to be selling the home as this is totally unfair to my wife and son. 

Unsure if I've provided enough information, but any help would be welcome.

Many Thanks

Emmia

Is your wife aware of the gambling, and the level of the debt? Does she work / have her own income?

How much equity do you have in your property, could it be sold, your debts paid and somewhere else purchased?

born_again

Have a word with
https://www.stepchange.org/

Or one of the other debt charities. 

thebigajd

Emmia said:

Is your wife aware of the gambling, and the level of the debt? Does she work / have her own income?

How much equity do you have in your property, could it be sold, your debts paid and somewhere else purchased?

Hi, Yep wife and son are aware, my wife works part time, earns roughly £240 per week, there is enough equity in the property to be sold and potentially pay the debts, and purchase another house, although this hasn't been discussed with my wife or son, I can only imagine their reaction if I was to bring it up, and to be honest I don't think it would go down to well

sourcrates

No point doing anything when you have no income to offer any kind of payment plan with.

The best thing to do to limit collection activity is to write and tell your creditors your situation, and don’t make any more payments to these debts from what you do have, it’s better in your pocket than theirs.

Struggling financially to keep up the pretence is silly.

How much do you owe to individual creditors ?

Because as you own a house with a large amount of equity, unsecured debt or not, that house could be at risk.

fatbelly

At some point an IVA may be appropriate as this is effectively bankruptcy for people with large debts who have an asset to protect.

As things stand, I agree with sourcrates. These are non-priority debts. Your priorities are elsewhere - getting on top of the addiction and finding steady employment.

You could do token payments in the meantime but they don't serve any useful purpose and just acknowledge the debt for no good reason. I wouldn't bother.

For info to others Payplan are as reputable a source of advice as stepchange. Technically they are not a charity but they have a policy of not charging for advice or debt management.

thebigajd

sourcrates said:

No point doing anything when you have no income to offer any kind of payment plan with.

The best thing to do to limit collection activity is to write and tell your creditors your situation, and don’t make any more payments to these debts from what you do have, it’s better in your pocket than theirs.

Struggling financially to keep up the pretence is silly.

How much do you owe to individual creditors ?

Because as you own a house with a large amount of equity, unsecured debt or not, that house could be at risk.

How much do you owe to individual creditors ?

Zopa combination of £39K with 4 loans
Novuna combination of £33K with 2 loans

7 credit cards totalling £47K

So what you're saying is to write to all of the above, and cancel the direct debits?

Thanks

theoretica

You probably need two financial plans - one for the next little while until you find a job and then the other for a more stable long term.

For the short term you need to accept that your credit record will suffer.  Stop paying your debts, including April and May - you may well need that money more yourself.  Are you getting any benefits?  Have you checked what you are eligible for? 

For the long term, once you have a job, you can then work out if an IVA is right for you, or some other solution.

RAS

Another one here who thinks your priorities are getting support for your gambling, paying secured debts and CT and putting food on the table.

Save the credit card payments to cover another month's essentials. Talk to your wife (and son if appropriate) about the need to  cut back on discretionary spending and prune what they consider necessary.

Also start looking at limiting the number of joint accounts with your wife, to reduce the damage to her credit record.

Finally, get a new basic bank account organised that is not associated with any of the groups with which you currently bank, so when you get work, there's no risk that your salary being off-set to pay debts elsewhere in the group.

Have you organised help from GA or similar? I know it's embarrassing but trying to go it alone will be harder. 

thebigajd

RAS said:

Another one here who thinks your priorities are getting support for your gambling, paying secured debts and CT and putting food on the table.

Save the credit card payments to cover another month's essentials. Talk to your wife (and son if appropriate) about the need to  cut back on discretionary spending and prune what they consider necessary.

Also start looking at limiting the number of joint accounts with your wife, to reduce the damage to her credit record.

Finally, get a new basic bank account organised that is not associated with any of the groups with which you currently bank, so when you get work, there's no risk that your salary being off-set to pay debts elsewhere in the group.

Have you organised help from GA or similar? I know it's embarrassing but trying to go it alone will be harder. 

Hi,

No joint accounts with the wife, so fingers crossed there won't be no damage to her credit record.
I applied for a basic bank account with Monzo a couple of days ago that has been approved.
In regards to GA, I attended my first meeting last Tuesday, will be going again this coming Tuesday.

thebigajd

theoretica said:

You probably need two financial plans - one for the next little while until you find a job and then the other for a more stable long term.

For the short term you need to accept that your credit record will suffer.  Stop paying your debts, including April and May - you may well need that money more yourself.  Are you getting any benefits?  Have you checked what you are eligible for? 

For the long term, once you have a job, you can then work out if an IVA is right for you, or some other solution.

Hi
I have checked for benefits via the "entiltledto" website, and nothing they can offer at the moment