Newbie here - advice needed for clearing up our joint debt

Abundancetome

Hey everyone,

I am new to this forum so any help or advice will be more than appreciated. My wife and I have got ourselves into debt (just short of £50K) on cards and really struggle to make it all meet each month. We have not faulted yet but are currently getting deeper. Some personal changes are due (me a pay rise in January and her qualifying as a firefighter in April = more income) but that is a way off.

We have a business together (online retailer and at markets) that is getting better year on year but not able to pay any of us wages yet although it does pay for our mobiles and the odd diesel payment for our van.

Below is our SOA:

[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......... 

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

Monthly Income Details[/b]

Monthly income after tax................ 1910.9

Partners monthly income after tax....... 961

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

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

Total monthly income.................... 2871.9[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 987

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

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

Management charge (leasehold property).. 0

Council tax............................. 191

Electricity............................. 60

Gas..................................... 50

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

Water rates............................. 40

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

Mobile phone............................ 0

TV Licence.............................. 15

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

Internet Services....................... 34.99

Groceries etc. ......................... 300

Clothing................................ 20

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

Road tax................................ 30

Car Insurance........................... 35

Car maintenance (including MOT)......... 35

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

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

Childcare/nursery....................... 0

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

Medical (prescriptions, dentist etc).... 60

Pet insurance/vet bills................. 25

Buildings insurance..................... 8

Contents insurance...................... 8

Life assurance ......................... 54.45

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

Presents (birthday, christmas etc)...... 35

Haircuts................................ 30

Entertainment........................... 10

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

Emergency fund.......................... 0[b]

Total monthly expenses.................. 2228.44[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 315000

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

Car(s).................................. 15000

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

Total Assets............................ 330000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 149000...(987)......4.68[b]

Total secured & HP debts...... 149000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Capital One C Card.............3244.51...60........30.34

First Direct C Card............1784.34...56........16.9

Virgin Money C Card............3131.6....86........21.66

MBNA Wife......................4601.79...115.......28.6

Halifax Wife...................7006.88...175.......29.62

Virgin Money Wife..............8561.09...155.......20.01

Virgin Money Wife..............6877.56...184.......20.01

Co-Op Wife.....................3530......81........18.2

Vanquis Card Wife..............5502.69...254.......23.64

Sainsburys C Card..............1168.33...26........0[b]

Total unsecured debts..........45408.79..1192......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,871.9

Expenses (including HP & secured debts). 2,228.44

Available for debt repayments........... 643.46

Monthly UNsecured debt repayments....... 1,192[b]

Amount short for making debt repayments. -548.54[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 330,000

Total HP & Secured debt................. -149,000

Total Unsecured debt.................... -45,408.79[b]

Net Assets.............................. 135,591.21[/b]

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

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

Thanks for reading this far and it is amazing to see so many people coming out the other side - well done to each one of you !!!

Abundancetome

Forgot to add:

I have looked into a secured loan via Ocean Finance and have been accepted for a 50K loan over 10 years which is a monthly payment of £650 - whilst this is certainly more favourable than the amount we are paying now is this a wise road to go down. We have never defaulted in our mortgage and it is always paid first so it seems the right thing to do so we can clear the cards and cancel 10 of the 12 cards leaving two as the emergency cards until we have saved some funds

RAS

Consolidation rarely works because the debtor hasn't addressed the reason they are in debt. 

Your current joint monthly spends are less than your joint income.

How have you accrued this much debt? You don't need to tell us but you do both need to fully understand how this situation has occurred and acknowledge your personal responsibility for your share of the debt.

And to have robust strategies in place to resolve this that allow each partner an exit strategy if the other doesn't deliver.

Annisele

Abundancetome said:

We have a business together (online retailer and at markets) that is getting better year on year but not able to pay any of us wages yet although it does pay for our mobiles and the odd diesel payment for our van.

I don't see anything that stands out as majorly expensive, but I do wonder how realistic your list of expenses is given the amount of debt you're in. I also wonder about the business - did any of the debt arise because of things you bought / money you borrowed for the business? I ask because sometimes people forget to take account of the full costs of their business, and end up with an unrealistic view of their position.

fatbelly

Your position has three strengths:

• You have loads of equity in the property

• All your debt (apart from mortgage) is nonpriority

• You have surplus income

All those advantages go if you just move your debt to a more dangerous place. I would not want to touch Ocean with a bargepole.

See how much of that you can transfer to 0% cards

https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/

If the answer is 'not much' then your credit history is already a problem and you need debt management

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps-to-take -are-here-please-read-then-ask-questions

agentblackcat

Hi. 

Welcome to the forum. You have already had some good advice. I would not take a secured loan. This would be against your home and puts it at risk. It also is then tempting to run up the debts again. If you can't pay all your unsecured borrowing stop and take stock. If you did a DMP you could be debt free in around 5 years according to your SOA. 
Definitely read the sticky threads they helped me when I first joined 

Rob5342

Consolidation rarely works, and if you have £643.46 available then you cant afford £650 a month for the loan. 

How accurate is your budget. Do you really only spend £75 a week on groceries including the spending between shops? You dont have anything listed for an emergency fund either. If you rely on credit to cover emergencies which seems to be your plan then you are just going to end up getting even further into debt.

You need to bw brutally honest aboit what you can afford and decide if debt management is necessary. 

RAS

Neither of your pay increases are "way off". January is 2-3 months away, March only 6 months. What difference is that going to make to your calculations?

And if you are running a business, all and any diesel you use to run it needs to be accounted for by the business, as does any usage of the van. 

sourcrates

Secured loans tend to have variable interest rates which can skyrocket if the rates go up, you would be extremely unwise to accept a loan offer on those terms, and I urge you to look at more sensible alternatives that have been mentioned already.

The consolidation game is well known on these boards, my question to you is this, what happens next time you need to consolidate, because unless you change the way you deal with money, this is going to happen again, and next time bankruptcy might be your only choice.