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Debbiesmith99 said:He’s only missed one bill so far, but we are having to put all our food shopping and petrol on credit cards, so we can pay our bills. But this is only making the debt worse.
Post up an SoA and the guys and girls on here will provide some solid advice. You may well end up having to default on all your unsecured debt, which will stop further interest, and put a self-managed debt management plan in place with repayments that you can afford.0 -
DMP is just one option. There's bankruptcy and IVAs (individual voluntary arrangements) and DROs (debt relief orders) but there's good reasons why he and you might not want to have any of those. (A DRO is an immediate no as you can't own your own home.)
But a DMP can be done without the use of a debt agency, basically you can DIY it which might make it easier to manage so that the amounts paid could be varied when necessary.
But the SOA is essential to get a proper look at how things might work.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe and Old Style Money Saving boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
"Never retract, never explain, never apologise; get things done and let them howl.” Nellie McClung0 -
Debbiesmith99 said:We have a house with around £120k collateral, as well as a flat, that we bought with an inheritance a while back that has about £20k in. The flat is currently up for sale.Mark_d said:Selling the flat is most likely a good idea.badmemory said:Do not take out a secured loan to clear debts. However running 2 properties when you seem to be struggling to pay for one does seem a little less than a good idea.
Do not transfer unsecured debts to secured debts / mortgage.Brie said:
I agree with the others - sell the flat - if nothing else that will make things less complicated. And may buy some breathing space.
Also DON'T remortgage to pay the debts.
I fully agree with others that running two properties seems to be a luxury in the circumstances and the obvious thing here is to sell the flat given that is not your principal private residence.
I am going to challenge that "obvious" thing.
The flat has £20k equity.
You also have a house with £120k equity.
You have not said how many of you there are in the family, but would you be able to live at the flat rather than the house? This would mean you can then raise £120k now which is enough to clear your debts and leave you an emergency fund / basis from which to build.
Living in the flat might just be cheaper on an ongoing basis also. Is the remaining mortgage lower on the flat? Are the monthly running costs (energy) of the flat lower? Is the Council Tax on the flat lower? etc.
Just putting that challenge to the obvious "sell the flat" as a point for consideration if "sell the house" works out better overall.
You also need to do an SoA (statement of affairs).
Probably one SoA for "today" - right now
A second SoA for "one property sold" - future state that you may be able to get to relatively quickly.
Forum members in the DfW (debt free wanabee) part of the forum will be useful resource to review the SoA's.2
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