Struggling with debts

Jellyman23456

Hi everyone,

I'm currently really struggling with debt and don't know what to do..I earn 2200 per month and have two children. With all of the debts listed below I am having very little income to pay for anything - all priority bills are shared with my wife so I just send over half to a joint account which deals with that..mortgage is purely in her name not attached to me. 

I have read about going into defaults and was thinking if I did that by not paying the larger debts to aa and Zopa I could pay more off the smaller ones to get rid of them is this a good idea?

Couple of snags I foresee

My wife doesn't know about my debt and it would be marriage ender so can this be done without her discovering I am not paying so got example do the companies I choose to default with send big red letters with final notice etc written on or is it generally a more discreet envelope?

I know some might say tell her etc but long story short I developed a gambling addiction (Gamstop registered and gamble free for almost a year now so no longer an issue)  looking for dopamine whilst we went through a bad patch due to something that was my fault.. she forgave me but any other lie etc like this would break us.. this is my main worry with defaults etc is she might see a marked letter. She doesn't open my mail but if it is big red letters on the outside etc that makes me nervous for doing this

The other is my job I work for a bank and they always said bankruptcy Iva cifas markers (are these even relevant to debt I don't understand them tbh) etc would impact my employment..I am guessing defaults constitute none of these things really?

AALoans balance 18000 - 460 per month

Zopa loan balance 7800 _ 245 per month

Sainsbury credit card 2200 [1300 on 0 percent into April 2025] currently pay 60 per month

Zopa Credit Card 2000 pay minimum which is usually 80 to 100

Aqua credit card 1350 currently pay minimum or boosted which is 50 to 80 per month

Mbna credit card 1300 currently pay 25 per month

Natwest overdraft 650 (reduces each month by 50 as part of prior agreement)

Vanquis 600 currently pay minimum

Paypal credit 500 currently pay minimum

Barclaycard 400 currently pay minimum

Credit spring 500 currently pay 87 per month - took this one recently to try and "stop the rot" then realised I've just been taking more and more debt and making it worse. 

By choosing to ignore aa and zopa both credit card and loan I would be freeing up nearly 800 per month which I could use to whittle down the smaller ones to reduce my overall debt load..I've heard talk of emergency funds etc too and honestly it all feels a bit complicated and overwhelming which is why I am reaching out for advice.  

At the moment the cards end up maxed back out as I need to use what little comes off them to supplement living costs so some of that 800 would go towards petrol food and small treats for the kids etc if that makes sense. 

Any help appreciated

Did an soa and factoring in birthdays etc I am in negative so bit unsure if I've done it correctly?

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 2200

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 2200[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 0

Electricity............................. 0

Gas..................................... 0

Oil..................................... 0

Water rates............................. 0

Telephone (land line)................... 0

Mobile phone............................ 65

TV Licence.............................. 0

Satellite/Cable TV...................... 0

Internet Services....................... 45

Groceries etc. ......................... 350

Clothing................................ 50

Petrol/diesel........................... 200

Road tax................................ 0

Car Insurance........................... 65

Car maintenance (including MOT)......... 45

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 50

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 0

Buildings insurance..................... 0

Contents insurance...................... 0

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 50

Haircuts................................ 10

Entertainment........................... 40

Holiday................................. 0

Emergency fund.......................... 200

All bills covered to Joint Account (elec gas mortgage etc) ................ 350[b]

Total monthly expenses.................. 1520[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 0

Other assets............................ 0[b]

Total Assets............................ 2000[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Aa loan........................18000.....460.......17

Zopa loan......................7800......245.......27.6

Sainsbury credit card..........2200......50........17 (1300 on 0)

Credit spring..................500.......87........0 (14 pound monthly membership fee)

Barclaycard....................400.......20........14.9

Paypal credit .................500.......20........23.9

Vanquis .......................600.......30........39

Natwest overdraft .............650.......50........0

Mbna...........................1300......25........11.94

Aqua credit card...............1350......50........41.2

Zopa Credit card...............2000......80........29.9b]

Total unsecured debts..........35300.....1117......- [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,200

Expenses (including HP & secured debts). 1,520

Available for debt repayments........... 680

Monthly UNsecured debt repayments....... 1,117[b]

Amount short for making debt repayments. -437[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 2,000

Total HP & Secured debt................. -0

Total Unsecured debt.................... -35,300[b]

Net Assets.............................. -33,300[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/ ]

sourcrates

Collection letters are mainly plain white envelopes, any jointly held accounts will be affected by defaults from your other borrowing, it will be hard to keep this a secret.

Collection activity will be in the form of letters/calls and texts, some creditors may engage doorstep collection agents, who may come knock on your door, they are as harmless as the postman, no power whatsoever, but are quite visible, again, it will be hard to keep this a secret if they are engaged to call on you.

Work wise, many folk have defaults on file, I suspect your work will only be affected by insolvency or fraud of some kind, neither of which this is.

To keep this as far under wraps as possible, my advice would be to go to one of the debt charities and start a DMP straight away, it avoids collection activity, defaults may come later on, there will still be a risk to joint accounts, but it avoids debt collectors, and will give you the smoothest ride, I still advise being open about this, but that`s your prerogative.

Grumpelstiltskin

OK Good for posting but the first thing I am going to say is if you have a joint account with your wife she could find out.

Which would you prefer telling her or her finding out and realizing you hadn't told her?

That is something you need to address before you decide what to do.

Jellyman23456

Than you both fit some great words.. can you explain a little more about how a joint account would be impacted in all of this.  None of the debts are joint and none get paid from the joint account.  Can you explain this further as this is now a major worry?

Also going straight to stepchange for example before any defaults happen what would this look like..I had a mess around on their site and it suggested 500 pounds a month to a dmp which still sounded like a lot

sourcrates

If you are linked by a joint account to another person, usually your spouse, then any bad credit on either side will reflect on the other party, if or when an application for credit is made by either party.

The decision making of creditors going forward may be impacted by this.

Debt management payments are decided by your available disposable income, which is why budgeting is so important here, by placing restrictions on who you can and can`t tell, you make it harder to implement the actions you need to take here, as hard as it may appear, you need to start with an honest approach to this.

Jellyman23456

I understand.. would it maybe be a better option to get in touch with the two largest ones aa and zopa and try and arrange to pay a smaller amount for a couple months to give breathing space to knock down a couple of the cards then pick up again paying normal payments on those.. id that something that sounds possible

sourcrates

You can play it any way you choose, anything that works better for you is a surely a good thing.

Just keep in mind card companies/loan companies will only do short term payment arrangements, any longer and they will just refer you to the debt charities.

itchyfeet123

If you know your wife finding out would be a relationship ender, you're effectively tricking her into being with you by not telling her. 

Stateofart

35k of debt with an income of just £2k, there is no doubt in my mind you are going to get caught. It will take years and it'll be an impossible task (and impossible burden) to keep that away from your wife. It takes a new driveway, or roof or windows or a planned fancy holiday and you're stuck.  My advice is to fess up now.

Andyjflet

Morning, you can try and keep this a secret, its up to you, but you need a solid plan to get this debt gone or default totally, which will involve, letters phone calls and will show up should you need to obtain credit (not advisable)

Who pays the rent? are all your finances seperate. 

Highlanddream

Jellyman, how long have you had your Zopa loan ? I had one running for six months, then checked on here whether I could get a cheaper loan, purely out of interest. It came up with a cheaper Zopa one, so I applied and they gave me another for 7% , although I had paid six months at a high interest rate I am still saving a large amount of money overall and lowering the payments considerably.