High salary, high equity, high historic debt

JReacher1

Would you be able to help me provide some advice for a friend. They have found themselves in a tricky situation which I think should be relatively easy to get out of but unsure of what the best options for them are. 

Situation is 

1) high salary of £70k a year 
2) Three Mortgages on a house that totals £80k but the house is worth £240k so they have £160k of equity 
3) historic old debt of £45k which is spread across numerous high interest loans and is costing £2k a month to service minimum payments.

the issue is the historic debt which is becoming hard to manage (even on a large salary).  

Best solution seems to be to remortgage to release some of the equity in the house to pay off the high interest debt. The issue is that credit history is so poor the mortgage company won’t allow them to remortgage. 

Does anyone have any suggestions? I’m thinking they may be best seeking advice from a debt management charity. 

Thanks. 

Hoenir

Sell the property and rent for a period. By releasing the equity. A reset can be achieved. 

fatbelly

JReacher1 said:

Situation is 

1) high salary of £70k a year 
2) Three Mortgages on a house that totals £80k but the house is worth £240k so they have £160k of equity 
3) historic old debt of £45k which is spread across numerous high interest loans and is costing £2k a month to service minimum payments.

Best solution seems to be to remortgage to release some of the equity in the house to pay off the high interest debt. The issue is that credit history is so poor the mortgage company won’t allow them to remortgage. 

Thanks. 

Probably the worst 'solution'

Just transferring debt to a more dangerous place

Get your friend to post on here and give us a statement of affairs

ManyWays

Three mortgages suggests that they may have previously shifted unsecured debt to secured, if they did, look how well that has worked!

How "historic" are these loans, when does the next one end? If this is soon, then they are in a tight situation that may improve reasonably soon?

Could you list them, lender and amount? Some of them may be "unaffordable" so they may be able to get the interest removed then they will go even faster. 

JReacher1

ManyWays said:

Three mortgages suggests that they may have previously shifted unsecured debt to secured, if they did, look how well that has worked!

How "historic" are these loans, when does the next one end? If this is soon, then they are in a tight situation that may improve reasonably soon?

Could you list them, lender and amount? Some of them may be "unaffordable" so they may be able to get the interest removed then they will go even faster. 

I will try and get more details.  The three mortgages are due to a break up so first mortgage was ported over from their previous house, second mortgage was the extra funds she needed for the new house and they then unwisely added a 3rd relatively small mortgage of £10k to pay for a bathroom.

The debt is all historic from personal issues in the past.  They are relatively young (31) and based on their salary and equity it seems they are not in a terrible position really.

kimwp

JReacher1 said:

ManyWays said:

Three mortgages suggests that they may have previously shifted unsecured debt to secured, if they did, look how well that has worked!

How "historic" are these loans, when does the next one end? If this is soon, then they are in a tight situation that may improve reasonably soon?

Could you list them, lender and amount? Some of them may be "unaffordable" so they may be able to get the interest removed then they will go even faster. 

I will try and get more details.  The three mortgages are due to a break up so first mortgage was ported over from their previous house, second mortgage was the extra funds she needed for the new house and they then unwisely added a 3rd relatively small mortgage of £10k to pay for a bathroom.

The debt is all historic from personal issues in the past.  They are relatively young (31) and based on their salary and equity it seems they are not in a terrible position really.

You are better to say to them to post here with an SOA if they want to sort their debt situation. 

enthusiasticsaver

I would not advise remortgaging or selling. 

Best way forward would be to budget and set an affordable repayment amount. If this is less than minimums a DMP could be the way forward.