Action is the antidote to Anxiety...

sourcrates

You should never turn unsecured debt into secured, no matter how sweet the deal may appear.

The very worst that can happen with unsecured debts is a CCJ repaid at an affordable monthly rate.

When secured debt becomes a problem, you could lose your house, increasing the risk of that potentially happening makes no sense whatsoever.

There are better ways to reduce bad debt.

HenryMSingh85

I dont think you're out of options. Here are some thoughts:

1) A DMP is a tool that could help with unaffordable debt , but not always the best route - especially if your debts aren't in arrears and you're managing payments. The advantage to this is that you could potentially lower monthly payments, you dont have to juggle multiple debts and it would stop any potential creditor pressure. The disadvantage to this of course is that it could hurt your credit score, impact mortgage options and I dont think it will cover your HMRC debt
2) For the mortgage renewal - agree switching lenders might be tricky, would about extending the term say from 15 years to 25 years - that could help you keep payments manageable. I would say get in touch with a mortgage broker asap so you could get some early due diligence done
3) Car finance balloon payment - could you sell the car privately and downgrade to a cheaper one? You could potentially net yourself a small lump sum there
4) Issue around debt consolidation - you have 385k equity but HMRC debt is blocking traditional consolidation - could your husband take a loan against the house instead? Since your finances are separate, could he borrow against his income? That could be a potential option to explore.
5) Freeing up or adding to spare cash - Any side hustle you could engage in to make some extra money? perhaps raise your rates to your clients? Or identify non essential expenditure (completing a SOA would be helpful) and cut these costs

In all, I think you have some options and you just need to be strategic about it. Hope this helps.

Henry 

ManyWays

HenryMSingh85 said:

I dont think you're out of options. Here are some thoughts:

1) A DMP is a tool that could help with unaffordable debt , but not always the best route - especially if your debts aren't in arrears and you're managing payments. The advantage to this is that you could potentially lower monthly payments, you dont have to juggle multiple debts and it would stop any potential creditor pressure. The disadvantage to this of course is that it could hurt your credit score, impact mortgage options and I dont think it will cover your HMRC debt
2) For the mortgage renewal - agree switching lenders might be tricky, would about extending the term say from 15 years to 25 years - that could help you keep payments manageable. I would say get in touch with a mortgage broker asap so you could get some early due diligence done
3) Car finance balloon payment - could you sell the car privately and downgrade to a cheaper one? You could potentially net yourself a small lump sum there
4) Issue around debt consolidation - you have 385k equity but HMRC debt is blocking traditional consolidation - could your husband take a loan against the house instead? Since your finances are separate, could he borrow against his income? That could be a potential option to explore.
5) Freeing up or adding to spare cash - Any side hustle you could engage in to make some extra money? perhaps raise your rates to your clients? Or identify non essential expenditure (completing a SOA would be helpful) and cut these costs

In all, I think you have some options and you just need to be strategic about it. Hope this helps.

Henry 

I dont think you appreciate the scale of @NotMyStrongPoint's problem. On a very skimpy SOA (not enough for clothes, no entertainment, no emergency fund) they do not have enough to make the current repayments without more borrowing, and this is going to get massively worse when their mortgage fix ends and their mortgage probably doubles at least. 

This is very bad time to suggest someone gets a secured loan, even if it was possible. 

tigergambit

NotMyStrongPoint said:

@EssexHebridean and @tigergambit A HUGE THANK YOU - honestly from the bottom of my heart. You are too kind with your comments.  I am 46, and I really feel as though I should know better but I have never really been in debt until it snowballed in the last 6-7 years so I had no idea how to manage my way out of it whilst protecting my credit file.  Taking a 6 year hit when you are 46 still seems like a counter-intuitive move BUT I think my stress levels will settle if I feel as though I have a path out, even if that means taking said hit.

Another question, if you don't think i'm taking the proverbial p***! As I have substantial equity in my house, do you think it would be advisable/possible for me to take a lump sum out when I remortgage to pay back some of the debt (I appreciate that would mean a credit check, hence the question!).  For example: if I stopped paying all creditors apart from my priority debt but from the money saved I managed to pay off the HP accounts and smaller balances in full so I just had the larger credit cards outstanding (but they would be in arrears), do you think this might be viable/sensible? The interest rate would certainly be less!!!

I tell you, my children will never be in this position. Not because they will be provided for but because I am going to educate the hell out of them about what a unnecessary stress and waste of money this all is!!      

46 isn't that old - I was 52 when it all went to hell, helped by a mental breakdown and the Post Office - you never know what's round the corner.

DO NOT take money out of your house equity to pay unsecured debt. Once debts default interest and penalties stop. I still have £18k outstanding and no chance of paying it off, so it's basically an interest free loan that I'm paying off at £22 a month. Cheap money! I will keep offering a low f&f until they accept but it's their loss and I paid lots of interest over the years so I'm not feeling too guilty.

Looking at your S O A it would appear the HP payments only have 6 more to go which should then  make repaying family easier. You have a bump coming up but you will survive. Can I ask how come you have 2 car loans?

NotMyStrongPoint

@tigergambit thank you, that makes perfect sense and is very reassuring. I’m so sorry to hear you were caught in the post office scandal… what a beep show that all was. I hope you have some light at the end of the tunnel.

I have two car loans because one is mine, one is my husband’s (both previous cars died at exactly the same time - when it rains it really rains and all that!). He pays for his most months, I’ve made it sound like he’s useless and doesn’t contribute but he does, that’s the reason I keep my head above water - his money pays for miscellaneous spending/food etc. But, the SOA I completed was a worst case scenario and because all the debt is in my name… but then so is the house! 

Tbh, even on a good month, when he pays for his car, contributes to everything else, we still struggle because the kids need new shoes or school uniforms or something else that we’ve delayed sorting because we couldn’t afford it. 

It’s all a bit mess but I think it’s only a mess because I’m trying to please everyone and meet all the payments. I think you’re right, I need to protect my limited assets and tell everyone else they’ll have to wait. Clear down the HPs which only have a few months left, then get rid of HMRC and suddenly everything will right itself!!