High interest mortgage

MarieQG

 High interest mortgage

fatbelly

Yours is the sort of story we hear a lot.

Let's try to help you through it. It's good that you have learned how hire purchase works, and variants of it.

You will also know that personal loans are non-priority so you can stop paying if need be. Is it with your bank? You may need to open a new account somewhere else.

Nice of the Christian school to send a statutory demand. Doesn't surprise me. How much is the alleged debt to them?

Don't rush to sell the house or do anything major without running it past us.

Can you do a statement of affairs so that we can see the full picture?

https://www.lemonfool.co.uk/financecalculators/soa.php

RAS

OK, if worst come to worst, you'll probably be able to re-mortgage with your current provider as long as you pay the mortgage rather than the other debts. That give you time to work out other strategies like buying a cheaper property, relocating somewhere cheaper .

Do not make swift decisions based on fear.

fatbelly

A soa will give us a snapshot and save us from asking 100 individual questions and having to scroll back to see if they've already been answered.

Put the income you've received in the last month. Best approximation for expenditure and debt details, values etc.

Don't worry if it's not exact.

We're dealing with the present. 

EssexHebridean

Hey Marie - it’s absolutely natural to be scared and panicky - reading other threads you will see that almost everyone turns up that way first off, you are in mighty good company. 

The first thing to do is literally take a breath - a nice deep one. You have, believe it or not, taken the hardest step. You have acknowledged that there is a problem, that you need help, and you have asked for that help. 

The SOA is ideally going to be your second step, but I can see that it’s tricky without knowing the income. Once you have completed it use the “format for MSE” option, then copy and paste it into this thread. Fatbelly has given good advice above on just using what income there has been - if that is “none” and there is nothing you can call in from anywhere, then that is how it is. 

Do you have anyone out there right now who owes the company money who you can chase for payment? If so that needs to be priority. Second priority I would say is to call your mortgage company and let them know that you may struggle to make the payment this month coming. It may be that they can shift your payment date to a little later in the month, or it may be too late for them to stop the payment for this month being taken - but you won’t know until you talk to them. You also need to stop the payment to the loan I would suggest - the money just isn’t here for it anyway, and right now, it’s not important. 

Have a think - what money can you get together from anywhere right now - any savings at all? Anything you can sell? Your priorities right now are to feed the family - but not on an £800 budget, more on that below - to pay your council tax and to pay as much as you can afford towards the mortgage. Anything else, bluntly, can wait. 

Groceries then - £800 is a massive monthly budget assuming you are feeding a small football team! That’s good in a way as often a high spend means there is plenty of food in - and as your aim for February is going to be to give the supermarkets as little of your hard earned as possible, that’s going to be useful. Start a list of everything in your freezer, everything in your fridge, and everything in your cupboards. Then write a meal plan using those items with as little extra stuff added as possible. If you usually shop at M&S or Waitrose, then it’s time to look at Lidl or Aldi. If there is one of those around then Asda, Tesco or Morrisons. Do you have any supermarket loyalty vouchers to use which will bolster your budget? You need a meal plan that simply needs fruit and veg, bread and milk added really, rely on what you have in for everything else. 

Edit to add - if you pay your council tax over 10 months remember there won’t be a payment to make until April now. 

enthusiasticsaver

Any action taken by mortgage lenders or schools to recoup fees takes months and they need to go to court which is expensive for them so in all likelihood nothing will happen quickly.  I would be inclined to speak to your mortgage lender and explain the situation and see if they can put you on to interest only for now. Stress that you are suffering with your mental health and they should put your payments on hold to give you breathing space.  In the long run though if your business has taken a permanent hit then selling may be the only thing you can do but I don't think doing that after not even missing one payment is the way to go. The cars most definitely will need to be sorted and you can default on the loan.  £800 is a large amount for groceries. I personally would have prioritised your mortgage payment over school fees.  They cannot bankrupt you just like that. They have to go to court as I said and I sincerely doubt that a judge would order that.  

The soa will help us advise further. How much is the house worth and what is the capital outstanding on the mortgage and interest rate? 

In the long run your husband may have no option but to sell and better you do it than it be repossessed.  Banks are loath to do that these days and as you are currently up to date I do not think you need to worry about that now. Why is the electric bill so high? 

EssexHebridean

Marie - nobody is disappointed in you, and they would be horrified if they realised the state you were in over that possibility, I promise you that. 

While you’ve been fortunate with a large income, it is all proportionate - someone with a mortgage payment a quarter of the size of yours and an income a quarter of the size of yours too could have found themselves where you have just the same. You will come out from:this position “ok” - and in fact better than OK, because you’ll never forget that you have been in this situation and so in the future you’ll have better knowledge about budgeting, and saving for “just in case” - we only know these things when we are taught them though. 

A thought on the school thing - is there a priest you may be able to approach to explain the situation and ask for leniency  and for the to intervene with the school on your behalf? It currently isn’t getting “Christianity” a terribly good name, is it! 

Your husband is probably right - and aside from anything else, you know you will be able to catch up on the bills you miss now when that refund comes from HMRC, yes? Once that happens this will all seem like a bad dream but regardless, this is your cue to get the finances sorted going forwards. 

TheAble

Has the work dried up for any particular reason or just more of an economic downturn?

If cyclical - periodic ups and downs are probably normal for most businesses, hence the necessity to keep healthy cash reserves to weather these.

I think it's important you take a close look at the probable cause to assess the outlook for the business and understand if there might be some problems somewhere.

Re. the debts, I wouldn't be putting any at a higher priority than your mortgage. Paying 3k towards school fees at the expense of not being able to meet your mortgage payment is not the way to go.

Btw you can't just be "made bankrupt". Certainly a bankruptcy application can be made against you, but you will have the opportunity to be heard in court, and the court will decide. Citizens Advice and similar organisations provide free legal advice which may help ease your concerns.

fatbelly

There's another version of the calculator here, not sure if it's much different

https://stoozing.com/soa.php

It's poor form by the Christian school to fire off a SD without a ccj. I'd like to advise further but don't have the info and don't want to ask 100 questions

Grumpelstiltskin

Seeing as your husband is self employed you should contact Business Debt Line for advice.

Business debt advice | Free debt help | Business Debtline | Business Debtline

Does your daughter get all the benefits she is entitled to?

Do you claim Carers Allowance?

EssexHebridean

I definitely think talking to a priest is a good option - at the least you have little to lose.

Also agree that you MUST prioritise "priority bills" ahead of the school right now - sadly that amount you have paid to them would have covered your council tax, some basic groceries and a good part of your mortgage payment. I'm going to differ a little from the usual wisdom here as I think because of the amounts involved if you DO have a CT payment this month coming, then I would make that a top priority to pay - partly because it is a small amount in the scheme of things while also being super important, but also because Local Authorities can be shocking for being incredibly heavy-handed over a single missed payment, and your mental health doesn't need that right now!