Seriously in debt, this forum looks like it might help?

shadowfortress

EssexHebridean said:

Is the £8k actually a gift or is there an expectation of it being paid back? You can't borrow your way out of debt. 

Be really careful negotiating effective "payment holidays" on accounts too - that can lead to AP markers, which you want to avoid. 

Yes, I will not have to repay it.

shadowfortress

londoner2019 said:

How were the debts accrued? Overspending on family stuff? Gambling? Personal spends? (No shame here, but it will impact how you can cut back on things). If it's for household stuff, she'll need to know those things won't be available any more. 

Same thing on mortgage renewal - what if she finds a better deal elsewhere? What's the plan for convincing her to stay with current provider and paying more?

+1 to pretty much everyone on this board. Tell your partner. I had the same fear, but my partner was fantastic and really helped me out.

I lost my job due to the pandemic, that was the main reason. I don't gamble except for the odd £10-£20 on National Lottery.

TheAble

MattMattMattUK said:

shadowfortress said:

Update: Update: I will be requiring a £8k gift from a family member in a few weeks. Due to the high interest rate, I will pay off the Amex card. I will also pay off the Barclays card since my bank account is with Barclays. Does this sound like the best initial plan of action? Finally, I rang Sainsbury's bank last night and they have given me a 30 day breathing space period.

Are you planning on defaulting on any debts?

If not then those would probably make most sense and put £800 into an emergency fund, but if you are planning on defaulting then that is different.

Can defaults even be avoided in this case though? I'd also suggest hanging onto the 8k if in reality defaults are inevitable.

NeverendingDMP

Does your wife also have debts? Also does your wife pay towards food, gifts,clothing, entertainment? These are the ones that stand out as not having enough money allocated to them compared to what I would write in my family soa for example. I'm worried your budget in those areas may not be accurate. 
If you used the 8k for those two debts you still wouldn't have enough to pay minimums for the rest of the debt unless you reduced the amount you save and donate. Is reducing those amounts to zero for 6-12 months just to get the minimums down an option or does that take you to the realms of having to discuss with your partner. Does your partner know you are being gifted the 8k -that in itself could cause issues as it's not an amount that is easily explained away and is a huge secret to be keeping.
I would encourage you to consider telling your partner - I'm different circumstances and am dealing with debt with a partner who isn't fussed about paying-it is mentally quite tiring doing it alone as well as very unproductive not working as a team!
I think a dmp/defaults may be hard to avoid but you need to run some numbers and scenarios I think to see whether avoiding defaults is even possible. There's an app called debt pay off planner and a website called what's the cost.com that will let you put in debts,payments and then work out what would happen if you paid less/extra. There's one on lemon fool as well I think but I don't have a link. Someone else may be able to help you find it. 
And lastly-sorry for long post. All these may will be completely dependent on your new mortgage costs if you are on a fixed rate?? As it will go up when the rate ends. 

1stTimer

That AA loan is a lot for what you earn, is 30k what you still owe on it?

MattMattMattUK

TheAble said:

MattMattMattUK said:

shadowfortress said:

Update: Update: I will be requiring a £8k gift from a family member in a few weeks. Due to the high interest rate, I will pay off the Amex card. I will also pay off the Barclays card since my bank account is with Barclays. Does this sound like the best initial plan of action? Finally, I rang Sainsbury's bank last night and they have given me a 30 day breathing space period.

Are you planning on defaulting on any debts?

If not then those would probably make most sense and put £800 into an emergency fund, but if you are planning on defaulting then that is different.

Can defaults even be avoided in this case though? 

No idea, we are still lacking enough information to establish that. I strongly suspect that they cannot and that the best course of action would be a DMP (self managed or via a charity), but we need the questions asked by the previous posters about the partners earnings, what they pay for etc. answered before we going to be able to establish things properly.

TheAble said:
I'd also suggest hanging onto the 8k if in reality defaults are inevitable.

I agree if the defaults are going to happen, it would make a comfortable emergency fund and help sticking to payments over the DMP period. I would also suggest that they potentially hold off on receiving the gift until they have figured out their course of action if that is possible. 

EssexHebridean

OK - so the debt was accrued through household expenditure after you lost income - is that correct? If that is the case, it needs to be viewed as household debt, not just "yours" - as in reality it's not just your debt, is it, it just happens that it went into your name!  So the first thing is to explain to situation to your OH - "you know back when we were so far down on income after my job went? Well there wasn't enough coming in to make ends meet, so I borrowed a fair bit so we could carry on as we were. With hindsight it was a bit daft, and we should have talked about this sooner, but this is the situation, and this is the plan to deal with it" - that sort of thing. 

The SOA needs to include all household income and expenditure. Only then can you get a proper picture of how IS best to deal with it. It might be that once your OH's income is added in, and their share of the spending, there will be enough surplus to make a straightforward snowball plan (where you pay just above minimum's on all debt bar the one with the highest interest rate, throwing all surplus at that debt until it's gone, and then move on to the next highest. If that's not the situation though, and you are still "in the red" across your full household budget, that a debt management Plan will be right for you. If you do go forwards with a DMP then the best approach is to let all unsecured debts default first, using that time and any money that is saved in the meantime goes towards building first an emergency fund, and then a "fighting fund" for future full & final settlement offers. Only once you have confirmation on your credit files that a debt has defaulted do you inform the creditor of what your monthly payment to it will be, and start making that payment. 

shadowfortress said:

MattMattMattUK said:

shadowfortress said:

Update: Update: I will be requiring a £8k gift from a family member in a few weeks. Due to the high interest rate, I will pay off the Amex card. I will also pay off the Barclays card since my bank account is with Barclays. Does this sound like the best initial plan of action? Finally, I rang Sainsbury's bank last night and they have given me a 30 day breathing space period.

Are you planning on defaulting on any debts?

If not then those would probably make most sense and put £800 into an emergency fund, but if you are planning on defaulting then that is different.

I have no idea what I'll be doing, that's why I am here! I thought I could, once my Statement of Affairs are looked at, get some advice on what the best practical step is.

at the moment your SOA isn't really telling us (or you!) anything useful, because it only has your income and some household spending on it. So for example, £100 a month is clearly not enough for groceries, but that's also not a 50/50 split because you're not feeding a family of 4 on £200 a month either - so we have no idea whether your contribution is adequate, (for example if your partner puts in £200 - £300  a month that might add up to enough) or inadequate (If your partner does only think they put in £100 as well, then you are massively underestimating your spend). You are showing nothing for contents insurance - maybe that is in with buildings? Maybe your partner pays it? Or maybe your partner thinks YOU pay it, and you actually don't have that cover at all! This is why it needs to be adjusted so it shows the real situation - it's not possible to tell whether savings can be made anywhere. The £65 for mobile phones is a good example too - is that is for 4 phones you are overpaying, but not by all that much. If it's for 1 or 2 phones though you are absolutely overpaying by a lot! 

shadowfortress

1stTimer said:

That AA loan is a lot for what you earn, is 30k what you still owe on it?

I took a £24k loan, but £30 is about what I owe

RAS

shadowfortress said:

1stTimer said:

That AA loan is a lot for what you earn, is 30k what you still owe on it?

I took a £24k loan, but £30 is about what I owe

Interest front loaded?