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29 and in £38,900k debt. Should I take out secured loan please?!
Thewannabedebtfree
Posts: 17 Forumite
As the title suggests, I’m in ALOT of debt due to stupid mistakes. These are all unsecured debts and a HP agreement. Currently these are costing £810 a month, including priority debts inc mortgage is £2100 (my wages exactly) leaving no money to live on.
I’m going through freedom finance secured loan, however I’m having second thoughts as ideally I don’t want to make these secured loans and risk losing my family home with a one year old.
My wife is due to receive money from a house sale next year and she has told me she will pay this debt off (all in my name but she uses cards occasionally etc)
I’ve looked at DMP but concerned as looking for buy a bigger home once she gets the money and to be honest scared about bailiffs etc.
would someone please help with some advice as my mental health is suffering due to all this stress.
I’ve looked at DMP but concerned as looking for buy a bigger home once she gets the money and to be honest scared about bailiffs etc.
would someone please help with some advice as my mental health is suffering due to all this stress.
Thank you
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Comments
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It would be complete and utter madness to take a secured loan in the current uncertain financial climate.
These type of loans generally come with a variable rate of interest, so your repayment can fluctuate wildly, and just now the only way its going, is up.
Please think about what your doing, because currently, if you can`t afford your debt repayments, nothing substantial will happen, you can go into debt management and pay the debt off at a lower rate, over a longer period of time, interest free, as most creditors stop interest once you enter into a DMP.
You won`t get bailiffs involved in such matters, please do your research, and don`t listen to scare stories.
Debt management is a very well trodden path to paying back unaffordable debt, the creditors accept what you tell them, there is no further action, no bailiffs no court action, you are way overthinking this.
You have an escape route here with the money your wife will get next year, yet you want to saddle yourself with a secured loan, just to bridge that small gap ?
Don`t do it, its like taking a sledgehammer to crack an egg, go on a DMP instead if need be.
Do not take the loan.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-letter8 -
Thanks for your reply, we have decided to cancel the secured loan, I guess the ‘one manageable payment’ sounded good. But on the grand scheme of this would have been an awful decision.sourcrates said:It would be complete and utter madness to take a secured loan in the current uncertain financial climate.
These type of loans generally come with a variable rate of interest, so your repayment can fluctuate wildly, and just now the only way its going, is up.
Please think about what your doing, because currently, if you can`t afford your debt repayments, nothing substantial will happen, you can go into debt management and pay the debt off at a lower rate, over a longer period of time, interest free, as most creditors stop interest once you enter into a DMP.
You won`t get bailiffs involved in such matters, please do your research, and don`t listen to scare stories.
Debt management is a very well trodden path to paying back unaffordable debt, the creditors accept what you tell them, there is no further action, no bailiffs no court action, you are way overthinking this.
You have an escape route here with the money your wife will get next year, yet you want to saddle yourself with a secured loan, just to bridge that small gap ?
Don`t do it, its like taking a sledgehammer to crack an egg, go on a DMP instead if need be.
Do not take the loan.Think we will plod along like most and see if next year changes things 😃3 -
Well done! You will not regret this very wise choice!Thewannabedebtfree said:
Thanks for your reply, we have decided to cancel the secured loan, I guess the ‘one manageable payment’ sounded good. But on the grand scheme of this would have been an awful decision.sourcrates said:It would be complete and utter madness to take a secured loan in the current uncertain financial climate.
These type of loans generally come with a variable rate of interest, so your repayment can fluctuate wildly, and just now the only way its going, is up.
Please think about what your doing, because currently, if you can`t afford your debt repayments, nothing substantial will happen, you can go into debt management and pay the debt off at a lower rate, over a longer period of time, interest free, as most creditors stop interest once you enter into a DMP.
You won`t get bailiffs involved in such matters, please do your research, and don`t listen to scare stories.
Debt management is a very well trodden path to paying back unaffordable debt, the creditors accept what you tell them, there is no further action, no bailiffs no court action, you are way overthinking this.
You have an escape route here with the money your wife will get next year, yet you want to saddle yourself with a secured loan, just to bridge that small gap ?
Don`t do it, its like taking a sledgehammer to crack an egg, go on a DMP instead if need be.
Do not take the loan.Think we will plod along like most and see if next year changes things 😃2 -
I think it's a very good decision not to turn your unsecured debt into secured. In terms of plodding along, if you do your SOA (link in signature), you may find there are areas where you can cut back. If you post your SOA on here, we can help you look.Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.phpFor free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.2
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One payment seems attractive but you'd be mad to put unsecured debt into secured debt.
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Hi, My wife may not be getting any money now. Please could my SOA be reviewed and advised on any cut backs I can do?Household Information[/b]Number of adults in household........... 2Number of children in household......... 1Number of cars owned.................... 2[b]Monthly Income Details[/b]Monthly income after tax................ 2150Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 2150[/b][b]Monthly Expense Details[/b]Mortgage................................ 777Secured/HP loan repayments.............. 295Rent.................................... 0Management charge (leasehold property).. 5Council tax............................. 142Electricity............................. 60Gas..................................... 60Oil..................................... 0Water rates............................. 20Telephone (land line)................... 0Mobile phone............................ 40TV Licence.............................. 12Satellite/Cable TV...................... 35Internet Services....................... 29Groceries etc. ......................... 0Clothing................................ 0Petrol/diesel........................... 120Road tax................................ 15Car Insurance........................... 51.22Car maintenance (including MOT)......... 0Car parking............................. 0Other travel............................ 0Childcare/nursery....................... 0Other child related expenses............ 50Medical (prescriptions, dentist etc).... 30Pet insurance/vet bills................. 12Buildings insurance..................... 12Contents insurance...................... 0Life assurance ......................... 40Other insurance......................... 0Presents (birthday, christmas etc)...... 0Haircuts................................ 40Entertainment........................... 0Holiday................................. 0Emergency fund.......................... 0[b]Total monthly expenses.................. 1845.22[/b][b]Assets[/b]Cash.................................... 2700House value (Gross)..................... 0Shares and bonds........................ 0Car(s).................................. 0Other assets............................ 0[b]Total Assets............................ 2700[/b][b]Secured & HP Debts[/b]Description....................Debt......Monthly...APRMortgage...................... 192000...(777)......3.75Hire Purchase (HP) debt ...... 12000....(295)......13.9[b]Total secured & HP debts...... 204000....-.........- [/b][b]Unsecured Debts[/b]Description....................Debt......Monthly...APRSainsbury’s CC.................5063......135.1.....26.48Halifax .......................5045......121.8.....29.89Admiral........................13665.....212.......10.5Zopa...........................2600......47........8.86[b]Total unsecured debts..........26373.....515.9.....- [/b][b]Monthly Budget Summary[/b]Total monthly income.................... 2,150Expenses (including HP & secured debts). 1,845.22Available for debt repayments........... 304.78Monthly UNsecured debt repayments....... 515.9[b]Amount short for making debt repayments. -211.12[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 2,700Total HP & Secured debt................. -204,000Total Unsecured debt.................... -26,373[b]Net Assets.............................. -227,673[/b][i]Created using the SOA calculator at www.LemonFool.co.uk.Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]0
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Just to add, my wife pays for the food and childcare so this cost doesn’t exist. ThanksThewannabedebtfree said:Hi, My wife may not be getting any money now. Please could my SOA be reviewed and advised on any cut backs I can do?Household Information[/b]Number of adults in household........... 2Number of children in household......... 1Number of cars owned.................... 2[b]Monthly Income Details[/b]Monthly income after tax................ 2150Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 2150[/b][b]Monthly Expense Details[/b]Mortgage................................ 777Secured/HP loan repayments.............. 295Rent.................................... 0Management charge (leasehold property).. 5Council tax............................. 142Electricity............................. 60Gas..................................... 60Oil..................................... 0Water rates............................. 20Telephone (land line)................... 0Mobile phone............................ 40TV Licence.............................. 12Satellite/Cable TV...................... 35Internet Services....................... 29Groceries etc. ......................... 0Clothing................................ 0Petrol/diesel........................... 120Road tax................................ 15Car Insurance........................... 51.22Car maintenance (including MOT)......... 0Car parking............................. 0Other travel............................ 0Childcare/nursery....................... 0Other child related expenses............ 50Medical (prescriptions, dentist etc).... 30Pet insurance/vet bills................. 12Buildings insurance..................... 12Contents insurance...................... 0Life assurance ......................... 40Other insurance......................... 0Presents (birthday, christmas etc)...... 0Haircuts................................ 40Entertainment........................... 0Holiday................................. 0Emergency fund.......................... 0[b]Total monthly expenses.................. 1845.22[/b][b]Assets[/b]Cash.................................... 2700House value (Gross)..................... 0Shares and bonds........................ 0Car(s).................................. 0Other assets............................ 0[b]Total Assets............................ 2700[/b][b]Secured & HP Debts[/b]Description....................Debt......Monthly...APRMortgage...................... 192000...(777)......3.75Hire Purchase (HP) debt ...... 12000....(295)......13.9[b]Total secured & HP debts...... 204000....-.........- [/b][b]Unsecured Debts[/b]Description....................Debt......Monthly...APRSainsbury’s CC.................5063......135.1.....26.48Halifax .......................5045......121.8.....29.89Admiral........................13665.....212.......10.5Zopa...........................2600......47........8.86[b]Total unsecured debts..........26373.....515.9.....- [/b][b]Monthly Budget Summary[/b]Total monthly income.................... 2,150Expenses (including HP & secured debts). 1,845.22Available for debt repayments........... 304.78Monthly UNsecured debt repayments....... 515.9[b]Amount short for making debt repayments. -211.12[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 2,700Total HP & Secured debt................. -204,000Total Unsecured debt.................... -26,373[b]Net Assets.............................. -227,673[/b][i]Created using the SOA calculator at www.LemonFool.co.uk.Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]0 -
You say your wife pays for food and childcare, what about clothes, presents etc.?
What income does she have? wages? child benefit?
Just showing what you pay for doesn't give the full household picture.If you go down to the woods today you better not go alone.1 -
If I’m honest I use credit to fund clothes & presents and odd things. I would say around £150 a month for all of us.Grumpelstiltskin said:You say your wife pays for food and childcare, what about clothes, presents etc.?
What income does she have? wages? child benefit?
Just showing what you pay for doesn't give the full household picture.She gets £1200 PCM, £380 food, £120 petrol, £120 parking, £500 childcare.Thanks0 -
Bare truth appears to be that you need to magic just over £200pm to even start to address the debts. Trimming satellite TV and haircuts won't even come close. Do you need two cars? That's the only potential saving I can see, unfortunately. Others will provide fuller advice if debt management is your only remaining option1
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