Help with debts!

UTT12

Hello,

I'm new to the forum but have read a few threads and have a much better understanding of debt. I still have a few questions though if anybody would be greatful to answer for me. Apologies if they have already been asked an answered but I haven't been able to find any answers.

A bit about me... I have had a gambling problem for several years which I've finally managed to get under control. ( feels nice to finally type that) unfortunately that problem has got me several thousand pounds in debt through credit card and personal loans.

These are my current debts:

Drafy credit line £1500- around £160 pcm

PayPal - £6850

Paypal credit £2800- around £100pcm

Admiral - 10k loan amount owe 11300-195pcm

Updraft - 10k loan amount owed 14k-280pcm

Zopa - 5k loaned amount owe 5700-140pcm

Zopa - 8k loan amount owed 7800-180pcm

Mbna - 7k loan amount owed 5100-136pcm

Halifax - 5k loan amount owed 4300-140pcm

Marbles credit card - owe 5300. Maxed out

118 loan - 1k loan amount owed 800-110pcm

All these bills come to approx 1500 a month. 

My income each month is approx £2700

All of my monthly income goes on my loans and then my important bills such as car, mortgage, gas/ electric, nursery and so on and I have very little to no money left over each month.

I have submitted everything into step change and they have recommended a DMP but I have not agreed to this yet as everyone seems to suggest to default on the loans first.

In relation to defaulting a loan. Do I get letter confirmation when this is done?

I'm married with 2 children and my wife has no idea that I am in any debt at all and I am not ready to disclose this to her. If or when the loan gets passed to a dca do they attend my home address? Or would all contact be made via phone/ post?

One of my personal loans is with Halifax. Our joint mortgage is also with Halifax. If i stop payments on my loan would it have an affect on my mortgage? This is due for renewal next May and we were going to product transfer so would this still be possible?

Also as I've read that different providers default on loans at different times would I be best to self manage setting up a payment plan with each one as they default? And then once they have all defaulted would it be best to use step change so It goes out as one payment each month?

I have set up a new basic account where my salary goes into and no loan payments go out of. I have no emergency fund behind me at all and  I'm scraping by every month as I have been for several months. After reading posts on the forum it's give me some courage and confidence to be able to default the loans and take control to give me some of my life back but, as probably expected I'm still very nervous about what's happening and what's to come. 

Apologies for all the information in one hit and I hope it all makes sense

Thanks in advance for your help with this

Rob5342

You should get a letter telling you what action you meed to avoid a default, and then when you do you should get a letter telling you the account has defaulted. You can also check your credit report to see when they have applied a default. 

Most DCA’s operate by phone, email or post, but some use people like Resolve call who can come to your house. They habe no powers whatsoever and you can deal with them in the same way you would deal with a double glazing pest. I suggest that you do tell your wife though, she WILL find out at some point so it's best to deal with the inevitable now so you can work together on it instead of putting all your efforts into keeping it from her. This come up a lot here and in most cases when people tell their partner it's never been as bad as they thought it would be (including me).

The loan shouldn't affect the mortgage, and if you move to a new deal then a credit check isn't required. I have four defaults and switched to a new deal with Santander with no trouble at all, it.took two minutes in their online banking.

It's up to you how you manage it, some people find Stepchange helpful when dealing with the administration etc but managing it yourself is very easy and I found that having Stepchange involved just complicated what is really a very simple process. They are most useful if you want to follow their approach of paying a proportionate share to everyone, if you want to pay different amounts or stop some while you wait for cca requests then managing it yourself is better. Aome people start off with them and switch to doing it themselves when they are more confident. Whatever you do, don't use them until you have defaulted as that is far better for you in the long term. Also don't involve them if you want to make a settlement offer further down the line as they will want you to pay the whole lot to everyone where you could settle a few of them at reduced amounts. 

You've made a great step in facing up to it. It took me a long time to do that and I was very apprehensive about it, but it's all gone very smoothly and nothing i was worried about actually happened. 

Grumpelstiltskin

Do you have any joint bank accounts with your wife?

If so she will be affected  so you need to get your own bank account which is firstly with a banking group you don't owe money to and secondly a basic account with no overdraft.

Mortgage, you should stick with Halifax then there is no credit check, don't try and move it anywhere else.

When you do open a new bank account don't use the banking switch service but manually transfer vital direct debits yourself.

As long as you realize marriage is a partnership and you should share both good and bad and your wife will think much better of you if you are open with her, as others have said she will find out.

RAS

Well done for tackling the gambling. And now looking at the debt.

The stark fact is that sooner or later, you wife will find out. I'm astounded that she hasn't done so thus far. Where does she think your income goes? Does she understand why you can't fund nicer things? Or have you been funding that by getting more debt? 

So often partners know something is not quite right. Many are just so grateful it is just debt and not A N Other.

The damage is often because the debtor hasn't trusted their partner and it takes time to recover that situation. You'll need to be prepared to be transparent on an on-going basis. It's good practice anyway but even more so to have your main cheer leader rooting for you.

And you might just want to check out affordability claims on some of these debts, once your missus knows.

UTT12

Thanks for the replies. It is really appreciated. Yes I do have a joint account with my wife with barclays. We put a set amount in each month and our important bills go out of there. Mortgage, gas/electric, council tax and so on. Do you suggest we get a new joint account as I have a loan with barclays?

I have set up a new basic account with monzo where my wages go into. 

I'm relation to me stopping my direct debits. After 1 month of not paying my loans I would be in a position to pay my 118 loan off. Would you recommend I do this or build my emergency fund up? 

Thanks again

UTT12

RAS said:

Well done for tackling the gambling. And now looking at the debt.

The stark fact is that sooner or later, you wife will find out. I'm astounded that she hasn't done so thus far. Where does she think your income goes? Does she understand why you can't fund nicer things? Or have you been funding that by getting more debt? 

So often partners know something is not quite right. Many are just so grateful it is just debt and not A N Other.

The damage is often because the debtor hasn't trusted their partner and it takes time to recover that situation. You'll need to be prepared to be transparent on an on-going basis. It's good practice anyway but even more so to have your main cheer leader rooting for you.

And you might just want to check out affordability claims on some of these debts, once your missus knows.

I've funded it by getting more debt. Yes I will look at telling my wife it just feels very dusting at the prospect at the moment. In relation to the affordability claims. How would I approach/challange that? And when would it be best to do this?

Thanks

RAS

You need to make sure that any joint account is closed and you cannot open a new one. That helps to protect your wife's credit record. And disassociates her from the large amount of debt you have.

Concentrate on building your emergency fund, maybe an instant access ISA, for emergency savings. As you won't be accessing credit again.

In the short-term Monzo pots for house maintenance, travel, holiday etc would be a good idea. I'm guessing you haven't been saving monthly for annual costs like Christmas and birthdays, or holidays either? Holidays might seem optional but that needs to include stuff like family visits.

UTT12

RAS said:

You need to make sure that any joint account is closed and you cannot open a new one. That helps to protect your wife's credit record. And disassociates her from the large amount of debt you have.

Concentrate on building your emergency fund, maybe an instant access ISA, for emergency savings. As you won't be accessing credit again.

In the short-term Monzo pots for house maintenance, travel, holiday etc would be a good idea. I'm guessing you haven't been saving monthly for annual costs like Christmas and birthdays, or holidays either? Holidays might seem optional but that needs to include stuff like family visits.

Thanks. Can I ask why I need to close the joint account. So all my important payments I should change to come out of a single account now? 

Rob5342

UTT12 said:

I'm relation to me stopping my direct debits. After 1 month of not paying my loans I would be in a position to pay my 118 loan off. Would you recommend I do this or build my emergency fund up? 

Your number 1 priority should be to get yourself into a sustainable position where you are living comfortably on your income, have money put aside for annual expenses and have enough in your emergency fund to cover anything unexpected. Once you are there you could look at using any speare money to clear some of your debts earlier. Depending on how big they are you could either pay more off directly, or save the money to make settlement offers later. 

Grumpelstiltskin

It has been explained that if one person on the joint account has debts it will affect the other person even though they don't have debts in their name.

So separate accounts, you will have to sort this out with your wife so sooner rather than later.

Rob5342

RAS said:

So often partners know something is not quite right. Many are just so grateful it is just debt and not A N Other.

In my case she was more upset that I hadn't turned to her when I needed help than she was angry. It was a hard conversation to have and things were difficult between us for a long time, but actually I needed her help when I thought I could handle it myself, and it was only then that I started to get anywhere with it.