Terrified and need advice on debt

VAP_Driver

torgirl21 said:

VAP_Driver said:

As enthusiastic saver has pointed out, usually if you remortgage with the same provider, then another credit check isn’t carried out. So, it’s entirely possible you could go the DMP route to deal with your unsecured debts, and still successfully remortgage to a lower rate in October when your current rate expires.

Without being able to scour and cherry pick the whole market, it mightn’t be the most competitive deal around. But it’s likely to be better than 6.1%. Combined with the DMP, that might give you the financial headroom to get back on your feet properly and sustainably.

That would be a real relief as the thought of the remortgage is the only thing stopping me getting the DMP. Will arrange a call with Stepchange asap to see if they can help with this. Thank you for taking the time to comment.

That’s very nice of you to say, but the credit goes to @enthusiasticsaver, I really only repeated their advice!

I really hope you get the help you need, and things start to look up for you. Having a good plan and a direction to follow will be a load off your shoulders, no doubt.

RAS

Let's start with the fact that 6 months before you are due to re-mortgage, you can pick the best option from your existing supplier's web-site and fix without a credit check. You're the second person in two days whose mortgage advisor doesn't know the basics. That may not be brilliant but it's doable.

Please do yourself a favour and don't go near that advisor again (the other person spent a lot of time back and forth with the advisor which was unwise). 

You may also need to start thinking a bit more widely about renovating. Did you pick up your kitchen sink of freecycle? Consider getting your units for nothing? OK, you've learned the lesson now, but just hold off panicking.

We really need to see your Statement of Affairs to make sure that you can afford the mortgage and your essential bills.

Beyond that, you'll have to stop paying the consumer credit, wait for defaults and then pay what you can afford, even if it's a fiver a month. The sky will not fall in, you'll get some letters and texts but can ask them only to write. They do have to write because some notices have to be in writing by law. You may need a new bank account.

Now you just need to sleep.

Themoneyshot

It's not that the mortgage brokers aren't aware of the mechanics of remortgaging with existing lenders, it's that they do not stand to benefit from the commissions for moving you to a new lender and try to discourage it. 

fatbelly

torgirl21 said:

enthusiasticsaver said:

Do you qualify for any benefits due to your health condition?

When you say debt repayment plan do you mean a DMP? This is an informal debt solution and if you stay with your current mortgage provider they normally do not do a credit search so being on a DMP should not impact on you remortgaging. 

Unfortunately you do seem to be between a rock and a hard place in that you have over committed with the cards on top of the mortgage.  Consolidating on to the mortgage, even if allowed, is not recommended.  If you cannot make minimums I suggest letting the debts default and then doing a DMP through stepchange or self administered and then just get the best mortgage rate you can in October with your current lender. 

I have tried to get PIP multiple times but always been refused which has been a very frustrating experience on it's own.
I didn't know that about a retention mortgage, my broker said they would run a credit check for those as well but I will seek a second opinion. If that's correct then I think a DMP would be the best thing if it doesn't affect my remortgage. Thank you very much for your advice, much appreciated  

have you tried a PIP application recently? With the help of CA Cornwall?

EssexHebridean

You might also post on the benefits board here for help with the PIP application - as I understand it a lot of the likelihood of a successful application is down to how you answer the questions, how solid the supporting statements etc are and knowledge of how best to present things. For example when applying you need to answer questions from the perspective of how you manage/cope with things on your worst days, not on a good day. For many folk with debilitating health conditions which they are determined to not allow to define them this is a completely alien approach - you spend so much time downplaying how bad things are you just default to doing that! 

I would agree that although there are situations in which case renovation costs being added to a mortgage are OK, yours sounds like it doesn't fall into that category as by the sound of it you didn't massively underpay for the cottage in the first place. That said, your home does sound lovely - it's in one of my favourite parts of the country for a start, I love Cornwall, and it just sounds charming already! 

Take a breath, and relax a bit. Nothing dreadful is going to happen, and by posting and acknowledging that you need to deal with the situation you have just taken back control. 

EatingBeans

Hi @torgirl21 I just wanted to say hi as I felt I could relate to your story. I too have a health condition that limits my ability to take on more work, and I too bought a house that turned out to need a lot more work than first thought. I rapidly went from no debt in 2022 to £39k debt, all by putting the work it needed on 0% interest CC. Now deals are coming to an end, and minimum payments are rising rapidly, I too panicked and joined the MSE forum 10days ago.

So, whilst I can’t be the person who shows you that it can all be done, (because I have only been at this just over a week), I can say that in those past few days these wonderful people on here have significantly improved how I feel about it all. The advice I would give is dive in and get reading - the diaries in particular made me realise I wasn’t the only one and are a great source of information. I feel like I have learnt lots about Debt Management Plans from other stories and even though I am still not wishing to go down that road, it has at least made me a lot more reassured about what might happen should it come to that.

If you can, I also recommend sharing your SOA to help people tailor advice.

Wishing you all the very best!

ManyWays

Who is your mortgage lender? It is often possible to simply put your mind at rest about a DMP but it sounds as though you may be with a bad credit lender?

Hazelnutty

@EssexHebridean 's advice on PIP is spot-on and I'd second the suggestion to get help filling in the forms in from CAB or other charity (Mind is very good too where mental health is involved). It's a terrible and deliberately cruel system; these charities know how to navigate it so you can present your case as effectively as possible in the terms the system can recognise. You can also get someone to sit in on your assessments, which can be really helpful in terms of advocating for yourself. 

torgirl21

Sorry it's been awhile since I posted but I wanted to thank everyone who took the time to comment..it was much appreciated. I realised my broker had been less than helpful so I found another one who has been brilliant. I've managed to secure a new mortgage deal which incorporates my credit card debt and the monthly payment is less than my old mortgage. I feel a real sense of relief and plan to overpay my mortgage as often as possible to bring down my debt as quickly as I can.

The vital lesson I learnt from this forum is that there is always a path out of debt one way or another. I came here panic stricken and feeling hopeless but the helpful comments made me realise I had options and gave me the confidence to go and explore what those were.

Many thanks for all your help

VAP_Driver

If you look back at your original post, and then your latest one, then the difference in your world from then to now is huge. Really pleased that you’ve got your situation sorted out, and are in a good place to move forward from. And also that you’ve (re)learned some valuable life lessons about exploring options, etc.

Of course, rather than learning the lessons about how to get out of debt, the best one to learn is not to get into debt in the first place. But this is the real world, and unless you have millions in the bank or inherit a free home in top working order, for most of us that’s unlikely.

The biggest truth I’ve learned is:

‘If I was rich, I’d give most of my money to the poor. But I’m poor, so I give most of my money to the rich’.

Thanks for coming back to update. Good luck for the future!