Huge debts and mortgage increase...

Grumpelstiltskin

Making token payments is just kicking the can sideways  when you don't have an emergency fund. That is vital going forward, as you say what will you do if one of your cars goes bang in a big way?

sourcrates

On paper your income is great, but your mortgage, HP, and general living expenses eat into that considerably.

No amount of budgeting is going to cut the mustard, you are living well beyond your means here, something has to change, you either move somewhere cheaper, or cut back on the travel costs, a token payment plan is only ever a stop gap strategy, never a solution.

With only £193 per month available for debt repayment, debt management would take far too long, an IVA might be a possibility, but on these figures its unlikely to be accepted, you simply don`t have sufficient disposable income to do anything to change your situation.

How long is left on the secured debt? as that would release more funds.

EssexHebridean

I’m not entirely convinced that you can afford to move at the moment anyway - I know there is also a question of whether you can afford to stay - but moving IS expensive. Removal costs, solicitors fees and disbursements, stamp duty on your next property, and more costs besides. Some of the money will be needed up front, and the remainder is going to eat so far into your equity from the sale that by the time the debts are cleared and the mortgage paid off, you’re going to be left with a ludicrously ow deposit level and allowing that your credit files aren’t going to look the best, I would question whether you are going to be able to get the required mortgage for a new property. 

The reason why we are saying that the Stepchange proposal of a token payment plan isn’t ideal is that this means that you will be given arrangement to pay markers by your creditors. These stay on your credit file for a full 6 years after the debts are cleared - and in your case that could be a long while. A default is different in that it stays on your file for 6 years from the date of default - so a debt defaulting in say July this year will drop off your file in July 2030. That same debt, given an AP marker and then finally cleared in 2028, let’s say, stays on your file until 2034. See the difference in effect? 

Grumpelstiltskin

EH You have just beat me to what I was going to say.

You know living relatively close to London a) Finding somewhere cheaper and b) costs involved in moving. is virtually impossible.

This problem hasn't built up quickly and it won't be solved quickly.

NeverendingDMP

Step change are good in that once it's set up you can just have a direct debit come out once a month's and  not have to think about it again till review time. If you'd rather have more control and aim for a long term goal of full and final settlement or cca requests then self managing makes it easier. Either way cancel the unsecured debts as tbh your not gonna be able to pay them,  then save anything you can into an e fund. It's okay to miss a few payments before you set up any token payment or plan. Just keep an eye on your letters and if anything looks none standard post on here and someone will interpret it for you. 

Your budget is tight. The numbers are high but it's the day to day budget you need to focus on now. Whatever you decide and even you if aim to sell up you need to get through the here and now. My dmp started with an estimated end date of 24 years. The folks on here told me of other options but my equity and family circumstances meant a dmp was the route I chose. I will have finished in less than 10 (with some new debts silly me!)  Initially they will accept a long dmp if you say your circumstances may improve in another 3-4 years.

Your circumstances will change again in 12 months after football academy, then again when you move up north in a few years and also as children start to work, practice paying board,bills into the household etc. the kids might also do dog walks in summer so you can save there and the tutor won't be a cost forever. Some places have lend my dog for a walk schemes but I don't know enough about that other than to mention the idea.

In the immediate future find anything you can put into the e fund. 190 into an e fund could be 500 by summer which is a car repair or new washer. Anything to sell might bump it up quicker. Also make your money work for you. Do you have all the loyalty cards for your travel/petrol costs and food shops. Can you use a separate account to track spends. I use chase (other cards available) they pay cash back for first 12 months. 400 a month on petrol is 4 cash back a month. 400 food shop is another 4. I know, I know that all this sounds small but it will also round up your spends and it will eventually add up and at this stage anything helps right. That cashback would pay your token payments for twelve months  -all for free or it will put nearly 100 in a e fund by the end of the year..  I know your numbers are very big but daily round ups and small stuff will help along the way.

Bigger ideas include council tax is it spread over 12 months or 10, can the gas and electric be lowered even just by a unit a day. Track it and make a game of it. If your out at work more it may even go down by itself ?? 

Hopefully you are off for the long weekend so you have chance to rest and recoup and then have a chat with each other about what's right for you.  
Sorry my post has been shockingly long. Theres a way forwards you just need to decide which way is best your you. Good luck with it all. 

kimwp

I think you should seriously look at moving house - not because I am recommending it as an option, but for you to understand whether it is an option. You need to think about what the costs of advertising and moving will be and when you would need to fund them and the amount that would remain.

Then whether you would need a mortgage to buy a house in the area you want. To get a mortgage, you need to have a good credit history, so you'd need to keep up your payments until you moved house. The amount that you would be loaned would take into account (be reduced by) your debt as well as taking into account your income.

enthusiasticsaver

I assume your husband has lost his freelance work?  That essentially removes your buffer.  I would cancel the direct debits for all non essentials today (including the unsecured debts) If you are out of contracts on phones and satellite tv find cheaper deals. I think you do now need to do something drastic but selling will take too long and you won't be able to service the debt in the meantime so your credit record will soon be so affected getting another mortgage will be tricky.  If you have just gone onto a decent mortgage deal for three years there will be a penalty to pay too so that in my opinion is an option for 6 years time when the kids are older, you can maybe move up north and your record will be wiped clean of defaults.  

Save every spare penny into emergency funds and really think before spending on anything.  It won't be easy but in your position after presumably decades of debt there is no easy solution. Prioritise the mortgage.  Nothing else matters and living without credit will help your mental health as juggling all that cannot be easy. 

benbenandme

Assuming the kids are off school for Easter I would set a family challenge to raise £1000 over the next two weeks. Each of you needs to go around and find things you can sell. With two kids there must be things they've outgrown or no longer use that could be sold. Tell them it is to start decluttering with an eye on a new house one day, You need to check all areas of the house and don't just go for obvious things like tech gadgets, you'd be amazed at what people will buy on marketplace, the garage is a treasure trove for things for this - does your hubby have some old tools he never uses? Old camping stuff? Any hobbies that have fallen by the wayside but you still have the stuff for them? It will clear some space, keep you occupied and make some money. Vinted is another great place, with 4 of you in the home there are bound to be clothes that aren't worn anymore that could make some money. It might only be a few pounds here and there but will soon add up. Can you switch bank accounts? An easy £100-£200 to be made here for very little work.