Over 100k in debt due to Gambling Addiction.

DodyGeo

Hi 👋 all,

I recently got myself cured from a very severe gambling addiction.I praise GamCare for the work they do and help people get out of this vicious addiction.

Now I found this lovely community and looking for some advice in hoping I can find a way out with all the debt I accumulated .

The 108k debt which is between me and my wife (all of it is because of me , she never gambled, she just went into debt to keep up with all our expenses since I was gambling all my salary).
We never missed a payment so far.

Montly household income 4500£-+ depends on overtime availability 

Debt:
me - 60k(6 unsecured loans ,1 payday loan and 2 credit cards)
wife - 47k (3 unsecured loans and 2 credit cards)

mortgage(joint with wife):
house value - 285000
balance - 188.660 ( 30 years left)
fix term - 708£/month, 2.09% , 3 years , term end 2nd February 2025.
( mortgage set to mortgage charter from next month and will pay only the interest 329£ until February when the mortgage term expires)

Secured loan( 2nd charge mortgage):
I went this route and loan.co.uk secured (in principle) a loan 95%LTV (includes their 6000£-+ fees and charges ) which will still leave us with 2 loans (570£/month)
Interes for the secured loan 12.925%
Monthly payments: 1042£ (15 years term) .
They seem very pushy with this and are replying back to any of my further messages with (Have you decided yet?)
I’ve asked for a different LTV% and longer term maybe I’ll get a better deal (reply: ….we’re not opening up any new lenders )
I just ran away from them.

Remortgage (borrow more to consolidate):
I’ve tried Fluent Money and Mojo (very helpful and seems like they have your best interest at heart but couldn’t find anything due to my payday loan and gambling history) and then went back to loan.co.uk and they found 7.34% , 2 years fixed , 1.777£ month . (Around 1500£ all fees and charges)

My wife is very supportive (as long as I’m done forever with gambling) and she agreed to use our equity to pay what debt we can but I can’t stress enough how scared I am to take any of these offers.
she is very against a DMP, that would be my first option and I already filled out everything on StepChange ( works about 1400£ /month for 6.7 years to clear the debt) but she won’t accept to live for 6.7 years with bare minimum as the lenders will try to squeeze everything they can (she says).
What would you do, are there any options that I’m not aware?
If the DMP is the right choice (this is my opinion,it may well not be) how do I convince her to go this route?

What other broker are out there that can help me out ?

any advice it will be massively appreciated.

MFWannabe

I think you’ll get better advise on the Debt Free Wanabee board rather than the diary board 
@admin should be able to move this for you 
Sounds like a DMP would be your best option; definitely do not secure any unsecured debt against the house 😟 

DodyGeo

Thanks for your advice. I apologise if I posted in the wrong sub forum. I would greatly appreciate if an @admin can move it where it belongs.

MFWannabe

Absolutely no need to apologise
Lots of people have been in your situation and hopefully someone will be along soon to help 
@sourcrates are you able to help? 

fatbelly

Consolidation is a no, and consolidating using secured lending is a big NO. You are moving the debt to a dangerous place.

A dmp makes sense if the repayment timescale is realistic, say up to 6 or 7 years. Beyond that you may want to look at an IVA, which is designed for your sort of situation.

RAS

A big NO here. You've got negatives from one of the most experienced and knowledgeable debt experts on MSE, listen to them.

Securing your debt removes all flexibility from your future. What might be affordable now could well be crippling if circumstances change. Your intended provider know that your are (jointly) an ideal target from which they can make £££££, which is why they are so keen to earn their commission.

You risk losing the roof over your heads, for consumer debt, and that roof is far more valuable than anything else. 

You don't need a new mortgage provider, you choose the best deal from your current provider, and do that on-line without a credit check. Whether you do this now or wait a bit longer, you'll pay more than now but less than a secured loan.

It would really help if your wife could come here, look at budgets and understand how DMPs work long term. 

And I do wonder at the logic of refusing to consider a DMP where there's a decent chance you'll settle for reduced full and final payments, with a budget that can flex to support crises, when the alternative is increasing stress over 15 years from high inflexible secured payments as cost of living increases make funding ordinary living costs more and more difficult.

fatbelly also suggests an IVA. I'm not a big fan and the budgets are less generous and not flexible but at least it would be over in 6-7 years. 

We probably need to see your SOA, with an indication of what the likely mortgage repayments would be on the best deal you can get from your current provider. 

fatbelly

Thanks, RAS. For the record I'm not a big fan of IVAs either, because they are poorly regulated and widely missold to people with small debts, little income and/or no asset to protect.

But for someone with 100k debt, a property to protect and some surplus income, it's an option. The slight complexity here is that it would technically be a pair of interlocking IVAs. They get done all the time so it's not a problem.

RAS

fatbelly, know you aren't a fan of IVAs either but they have a function sometimes.

My concern here is that the wife doesn't want live "with bare minimum whilst creditors squeeze the maximum they can." Given the inflexibility of IVA payments (no decrease exceeding 15% etc) and that their budgets are less generous than BR or DMP, am confused as to how easy she would find an IVA. 

OP, really do need the SOA, linked in sourcrate's signature by the way.

ManyWays

An IVA would be about the same monthly payment as a DMP and you would have to try to release equity in the last year. Also they are inflexible compared to DMPs and too many fail. 

As you have had payday loans, you may have had other expensive debt. This is a situation where you may be able to win a lot of affordability complaints that could take years off a DMP so talk to your wife about this. (This wouldn't be possible in an IVA.)

DodyGeo

Thank you all for the recommendations.

The payday loan (which a mortgage advisor told me I have ) might actually not be. 

What I have is a line of credit from Drafty.
They don’t advertise it as a payday loan , they say it’s an alternative to a payday loan(I don’t have enough financial knowledge to tell the difference) . 

It’s the last money borrowed (I was already 60k in debt when I was accepted) so I don’t understand either if an affordability complaint it’s something I can do.
Tomorrow is my first pay to them 138£ which I will pay.( I have never missed a payment so far neither my wife , which unfortunately will change very soon if I don’t do something.

I’m carefully reading all your messages and try to take as much Information as I can to present it to my wife … she sees all the equity we have as a way out but I need to convince her to understand that equity is for 20+ years not 6.8years like the DMP.

I’m very lucky she is still supporting me after all this but I want to go for the best solution possible so she doesn’t have to suffer 20 years because of my actions . 

Any more info that can potentially change her mind will be massively appreciated. 

Thank you 🙏 

MFWannabe

I think it would be good to show your wife this thread and to listen to the experts 
Also read other people’s threads and diaries that have been in the same situation as yourselves 
It’s incredible your wife is standing by you; you’re a very lucky man x