Seeking advice for my disastrous debt

EssexHebridean

Ok - I’m going to gently challenge you on the car thing. Do you “need” a bigger car, or is this a want? Does the current car have sufficient seats for the people you need to put in it, and can you manage with things like getting child seats in and out and that sort of thing, even if it’s not 100% ideal? It can be a really useful exercise with purchases - and particularly bigger ones - to stop and build in a pause, to ask yourself whether the item is needed or just wanted, and if a need, whether there is a cheaper method of getting the thing you are looking at buying. For context, your 4 year old car is substantially newer than mine - which will be staying with me for a good many years to come.( My previous car was bought brand new back in the days when I too thought nothing if just getting a loan - but I had my lightbulb moment shortly after that, cleared the loan in 13 months rather than the planned 30, and then kept the car to 12 years old and 150,000 miles! The current one was bought outright at 3 years old - for well under half the price it would have cost brand new) 

it might be that your current car is a small 3 door hatchback bought when you were single, and you now have a couple of children and so that small car really isn’t practical any more. Even in that scenario though - look at something older and let someone else bear the cost of the depreciation just for it being driven off the forecourt. 

In terms of the fine detail of self managing a DMP I’m not the right person to help on that one. Plenty of others here who can though - and there is a DMP mutual support thread where you would almost certainly find lots of advice too. 

DebtFreeWannabe27

@EssexHebridean I had this exact thought earlier this evening. We don't NEED to change the car. We will own it outright by the time September comes around, and that's a great position to be in. 

Do you have a link to the DMP mutual support thread you've mentioned please?

DebtFreeWannabe27

@grumplestiltskins I will be keeping track of letters. I read on another thread that the person was shredding them - is that what's recommended once you've checked over them? If I get a letter before action, I assume that means I can do something about the situation before a CCJ happens? I've thought about when might be an OK time to talk to my husband and I plan to tell him before the end of the month.

DebtFreeWannabe27

@emmell Thank you for sharing. Would you be open to sharing how you told your OH, maybe over a private message? I was thinking of writing a letter, and then having a PPT to cover off the financial plan (my husband would hate to see a spreadsheet!). I'd rather have the materials like that so that he can go off and digest things on his own if he needs to. 

DebtFreeWannabe27

To clarify where I'm at, I've applied for a new bank account not linked to any debts. It's in the process of opening. Once opened, I'll be contacting payroll to have my salary paid into it. Tomorrow, I'll be taking a huge step of cancelling all my direct debits to lenders. That means from next week, I'll have missed my first payments. Then there is no going back and I'll have to come clean to my OH. 

A question I'd like some advice on please....
My mortgage deal runs out in a couple years and we'll just remortgage with the same provider, so I don't think a hard credit search will be needed. One of my credit cards is with this provider though. Should I keep repaying that credit card in order to maintain a good relationship with them? If I default on that credit card, I worry they will use that against us when we renew our deal. 

enthusiasticsaver

Someone else on the forum was asking the same question earlier.  Tbh I am not 100% certain but as you are planning on self managing (is that correct?) I think I would lean towards maintaining payments on that one. Others may know for sure if it will be an issue if you have a defaulted credit card and renew an existing mortgage deal with the same provider. 

It sounds like you have put plans in motion.  Keeping to a budget will be crucial and saving for emergencies.  Have you done a recent soa?  I know you have separate household finances so I assume you split your salary between a personal and joint household account? Are you getting support with the gambling addiction? 

EssexHebridean

DebtFreeWannabe27 said:

@EssexHebridean I had this exact thought earlier this evening. We don't NEED to change the car. We will own it outright by the time September comes around, and that's a great position to be in. 

Do you have a link to the DMP mutual support thread you've mentioned please?

The DMP thread is the top pinned post at the top of the board - https://forums.moneysavingexpert.com/discussion/5897083/dmp-mutual-support-thread-part-13#latest - I think you will find that very useful. 

On the car aspect, the sustainability angle alone gives a great reason to keep and use the current car for a good while longer, although I’d be wary of using that as a line until your OH knows about the debt! 

Emmel

DebtFreeWannabe27 said:

@emmell Thank you for sharing. Would you be open to sharing how you told your OH, maybe over a private message? I was thinking of writing a letter, and then having a PPT to cover off the financial plan (my husband would hate to see a spreadsheet!). I'd rather have the materials like that so that he can go off and digest things on his own if he needs to. 

I shall PM you now

DebtFreeWannabe27

@sourcrates Do you have any advice on my question above (repasted here)

A question I'd like some advice on please....
My mortgage deal runs out in a couple years and we'll just remortgage with the same provider, so I don't think a hard credit search will be needed. One of my credit cards is with this provider though. Should I keep repaying that credit card in order to maintain a good relationship with them? If I default on that credit card, I worry they will use that against us when we renew our deal. 

I should add, I've started to try create a budget for spending, emergency fund and settlement fund, and trying to make minimum repayments to that credit card at the same time is going to be super difficult. It's also on an insane interest rate, so ideally, I want to default on that credit card to get a DMP in place. Will the bank hold that against me on mortgage renewal?

DebtFreeWannabe27

enthusiasticsaver said:

Someone else on the forum was asking the same question earlier.  Tbh I am not 100% certain but as you are planning on self managing (is that correct?) I think I would lean towards maintaining payments on that one. Others may know for sure if it will be an issue if you have a defaulted credit card and renew an existing mortgage deal with the same provider. 

It sounds like you have put plans in motion.  Keeping to a budget will be crucial and saving for emergencies.  Have you done a recent soa?  I know you have separate household finances so I assume you split your salary between a personal and joint household account? Are you getting support with the gambling addiction? 

Thanks for your comment. Hopefully someone can help answer my question as I really would prefer a DMP on that credit card.

I'm actually really good with my spending and budget well for our finances. The problem that has gotten me into this position is the addiction, which was obviously never included within previous budgets. When I speak to my OH, I'm going to propose bringing all of our finances into one pot and managing it all together as that would be easier and the debt could be tackled much quicker too. It depends how he feels about the situation though. In terms of support, it's almost an after thought that I need to address that as I've been so focused on the financial plan. I think I need to access some counselling to understand why i've developed this addiction and my triggers, but I don't know whether a charity could help me with that.