Redundancy & 44k unsecured debt - the perfect storm

kimwp

confidencewoman said:

elsien said:

Why do you have a life assurance if it’s just you? What is the other insurance for?

Sorry - it's my life insurance plan - cover is for if I cannot work due to illness etc. Vitality call it a "Life Plan", I guess I should put this under "other insurance"

Best just to edit the line to say it's illness cover, otherwise you'll get questions about what your other insurance is

kimwp

Emmia said:

confidencewoman said:

Emmia said:

If the property isn't currently liveable in (and won't be for a while) would you be better selling it now, using the cash realised to pay your debts and then using money left over to buy somewhere where you can service a mortgage on your current income?

The property renovation is a millstone dragging you down, carrying on is likely to make your debt worse, not better.

I hadn't thought of that but I feel like it would be a very backwards step when I am so close to finishing it and have added significantly to the value, but I have to consider that option - yes - thanks for pointing it out. 

Your risk if you carry on as you are could be repossession by the Bank. 

Small, given that the OP has enough to cover their essential outgoings with a decent buffer?

RAS

You need to go over to the Housing Forum here, DIY section and ask for help there. 

Is it watertight, with essential electrics and other utilities?

You may well get some flak from the perfectionists but could also get some useful advice on budget options, what to prioritise. 

To sell you need some sort of kitchen. Not a quality one or even new budget units, a sink and cooker meet the requirements for a mortgage. And some sort of bathroom, again, a toilet and basin, not sure if you need a shower or bath?

You are quite lucky you haven't been hit by a non-occupation CT penalty, so need to check your local council's rules.

Emmia

kimwp said:

Emmia said:

confidencewoman said:

Emmia said:

If the property isn't currently liveable in (and won't be for a while) would you be better selling it now, using the cash realised to pay your debts and then using money left over to buy somewhere where you can service a mortgage on your current income?

The property renovation is a millstone dragging you down, carrying on is likely to make your debt worse, not better.

I hadn't thought of that but I feel like it would be a very backwards step when I am so close to finishing it and have added significantly to the value, but I have to consider that option - yes - thanks for pointing it out. 

Your risk if you carry on as you are could be repossession by the Bank. 

Small, given that the OP has enough to cover their essential outgoings with a decent buffer?

Not if they keep spending on the renovations and plunge themselves further and further into debt...

enthusiasticsaver

How did you get a mortgage on a property which was unlivable?

You are digging yourself into a bigger hole by using credit to live off and borrowing more should not be an option when you are already massively over leveraged. 

What is the other insurance if the life insurance is income protection? As a single person with no dependents you do not need life insurance. Cancel anything which is not needed and restrict outgoings to as little as possible. 

I think you have no option but to default on the unsecured debt and make the house livable as cheaply as possible.  Make sure you focus on essentials like a working kitchen and bathroom. Do not rush into a DMP but wait for defaults and save for emergencies and getting your house livable.  Selling it might be necessary but the problem is not really the mortgage but the unsecured debt.  If you have gone through a generous redundancy payout plus taken on £43k debt the renovation sounds like it was not costed out or planned properly. 

enthusiasticsaver

confidencewoman said:

Emmia said:

If the property isn't currently liveable in (and won't be for a while) would you be better selling it now, using the cash realised to pay your debts and then using money left over to buy somewhere where you can service a mortgage on your current income?

The property renovation is a millstone dragging you down, carrying on is likely to make your debt worse, not better.

I hadn't thought of that but I feel like it would be a very backwards step when I am so close to finishing it and have added significantly to the value, but I have to consider that option - yes - thanks for pointing it out. 

If the house is unlivable you cannot be close to finishing it? 
You have only added to the value by borrowing. I agree this is a millstone around your neck and I doubt a house which is unlivable can be made so with just £7k. 

If you live in London can you do without the car? 

Purplelady65

Is there any prospect of you earning more money? You say your salary is half what it was now you are in a different job. If you could earn more you would have more money to continue with the renovations. 

katsu

Are you sure you really need this insurance? I would try and get some lower cost insurance for illness only for eg. If you are single then you don't need life cover.  What is the current "other" insurance? 

Spending over 200 on insurance feels like a place you can save.

katsu

Can you reduce or eliminate the £40 medical/ dental? 

Can you reduce your phone?

Do you really watch live TV or could you bin off  the TV license? 

What are you subscribed to? Can you cancel all or some? Or cover them from the 80 on entertainment? 

Things like clothes, gifts, entertainment.... I think the good news is that if you cut some of these things it's not going to be too hard to free up maybe half of the deficit you have. More if you cut hard. 

You've got options that can help make the problem smaller at least. 

Good luck to you.