Is My Situation Completely Hopeless?

cheexy

Hi All,
It has been almost 10 years since I was last on this forum and I am back here looking for a way out. So basically, I have found myself in around £47,000 worth of personal debt all in credit cards. There are 5 credit cards in total. 

I owned a business which which did really well for years and I employed staff members, had an office etc. In the past 2 years, the business has struggled and I tried to rescue it and ended up racking up the amount above in personal debt. I also had a breakdown last year due to stress and lack of sleep.

All my efforts did not yield sufficient fruit and as a result, I had to let go of my staff in January this year after I could find no way out of the company's financial situation. This was very painful to me and I am doing everything I can to not get depressed.

I also had a baby in November last year, so I am now without income which led me to claim Universal Credit which barely covers the mortgage. I am able to just about cover all my priority bills for the month. I have contacted the credit card companies to tell them of my situation and they have put 30-60 days freeze on my accounts but these will soon come to an end. The only company that has not replied is American Express who have not responded to any of my emails and letters but continue to write to me asking me to get in touch despite me doing just that. They have continued to add £350+ interest every month on to the initial debt which was around 14,400 in January and has now ballooned to £15,600+

It is important to state that about £8000 out of the debt is interest free due to them still being in the balance transfrer free interest period.

Is there any way out for me?
Thanks for your helpful contributions.

enthusiasticsaver

A good start is to fill this in. 

https://www.lemonfool.co.uk/financecalculators/soa.php

WinterWarrior

There is always a way out. It must be a terribly stressful situation and the way out might not be the way you’d choose, but honestly you can come out the other side stronger and happier. It’s a lot of debt with no income at the moment, which makes me think DMP, but as I’ve not done one I don’t really know. Someone more knowledgeable will come along soon. I just wanted to drop in and say you are doing the right thing by working out your options. 

Lonelygambler

Well done for starting this. I’ve found it useful for my mental health to just be accountable on a log. 

My first advice is to have a S.O.A 

Good luck. 

cheexy

Lonelygambler said:

Well done for starting this. I’ve found it useful for my mental health to just be accountable on a log. 

My first advice is to have a S.O.A 

Good luck. 

I have something similar which I completed with Stepchange but I have gone ahead to complete the SOA with estimates and it doesn't look good.

cheexy

WinterWarrior said:

There is always a way out. It must be a terribly stressful situation and the way out might not be the way you’d choose, but honestly you can come out the other side stronger and happier. It’s a lot of debt with no income at the moment, which makes me think DMP, but as I’ve not done one I don’t really know. Someone more knowledgeable will come along soon. I just wanted to drop in and say you are doing the right thing by working out your options. 

Thank you so much for your kind words. I will google DMP and see what my options are. I really hope it works out as it is weighing me down a lot.

2021rdsunshine

Hi! There is definitely a way out! We are all just a reference number for the bank industry. I think you would benefit in posting this on the debt free wannabe board, there is a lot of knowledgeable folks that have been through the same or similar experiences and can advise you further. Read as much as you can about it, the more knowledge you have the better to start any debt solution . The mainly thing is doing something about it asap so you can enjoy your life with your new baby without the stress and anxiety that comes with paying unsecured debts that you can’t afford to pay. 

Good luck x

enthusiasticsaver

cheexy said:

Lonelygambler said:

Well done for starting this. I’ve found it useful for my mental health to just be accountable on a log. 

My first advice is to have a S.O.A 

Good luck. 

I have something similar which I completed with Stepchange but I have gone ahead to complete the SOA with estimates and it doesn't look good.

Can you format for MSE and post up here?  If you cannot cover minimums and the essential outgoings are not too outlandish either bankruptcy or DMP may be a suggestion of a way forward but without seeing the soa we don't know. 

cheexy

2021rdsunshine said:

Hi! There is definitely a way out! We are all just a reference number for the bank industry. I think you would benefit in posting this on the debt free wannabe board, there is a lot of knowledgeable folks that have been through the same or similar experiences and can advise you further. Read as much as you can about it, the more knowledge you have the better to start any debt solution . The mainly thing is doing something about it asap so you can enjoy your life with your new baby without the stress and anxiety that comes with paying unsecured debts that you can’t afford to pay. 

Good luck x

I have posted it now on the debt free wannabe board. Thank you.

joedenise

I think you need to speak to Stepchange about a DMP!  You don't even have enough coming in to pay your mortgage so it's no wonder you're in debt.

2021rdsunshine

In my opinion you need to look at a few things: 
At the moment all your income is not enough to pay your mortgage so: 
1 - have you looked at your benefits entitlement and check if you are eligible for something else? 

2 - is your situation regarding income going to change in the next 6 months? Bearing in mind you have a little baby is an income from work a possibility in the very near future?
3 - according to your SOA your benefits are not covering your mortgage, how are you dealing with your living expenses like food and utilities? 

4 - you mentioned that you are on a breathing break with your unsecured creditors. Taking into account that your income is not enough for your living expenses, unsecured creditors are definitely not a priority at all and even if you want to do a DMP , you don’t have any spare money for it at the moment.
5- have you considered a DRO as a debt option for your unsecured debts ? Under the new law you can apply for it if your unsecured debts are under 50.000. Navigate the board to find information about it and all the implications involved. The value of your car might be an obstacle to this. 

I would definitely be thinking about what you can do to improve your income and allow to service your mortgage and living expenses. Definitely look at the benefits entitlement. 

Your situation is not hopeless, you just need a plan going forward .