28k in debt - totally stuck but want turn it round…

Sadbutneedtoturnitround

Hi,

I’m very sad to say over the last few years I’ve run up a stupid amount of debt - I feel so ashamed. I think there’s some underlying reasons behind this but I essentially have spent way over my means and then started gambling to try and get it back…

I have a wife and two young kids and I basically want to sort this out for them and myself.

Here’s some further info and breakdown of the debt and situation:

Who I owe to:

Vanquis £840

MBNA card -£3450

PayPal £4504

Admiral loan £13761

Overdraft £3400

Zopa £1406

Lendable £905

Payments out monthly currently are £735

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I earn 2.1k per month

_____________

I have a joint mortgage with my partner :

Mortgage £114,000 balance - Valued at 190k

I pay the mortgage on this every month : £608

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After all other life expenses, travel, food, clothes, phone etc, this basically leaves me next to nothing left….

EDIT - for further clarity - the £1343 is mortgage and all loan payments. Over and above that I give my partner £500 per month towards food shopping, kids expenses + £150 of that going on a joint loan we took out. I’m basically currently left with the £257 which needs to pay for travel, food, clothes etc for myself now….

________________

Whatever I do from here, I’m worried for our mortgage and don’t want to affect my partners credit rating. I’ve told her everything and understandably, she’s really upset and angry…

I will be getting help for my gambling and underlying issues and just want to sort my life out for everyone’s sake.

Any advice or help massively appreciated.

Thanks 

____EDIT - somebody has mentioned a DMP that lasts for 6 years and after that you are debt free? Any advice or experience with these appreciated.

Thanks again.

sourcrates

Morning, as a homeowner, whose almost 40k in debt, you have only two options when you can no longer afford your contractual repayments.

(1) Debt management plan or (DMP) an informal approach that takes as long as it takes to complete, where you repay what you owe at an affordable rate, with (hopefully) all interest stopped.
A very popular choice, you can either get one of the debt charities to run this for you, or you just do it yourself with advice from this forum.

Never pay anyone for this service, it should be free.

(2) Individual voluntary arrangement or (IVA) a formal insolvency solution designed for homeowners who cannot go bankrupt, your home is legally protected from further action by your creditors, the downside is the budgeting is quite strict, and any extra money you get must be paid to the arrangement. If your circumstances improve, you may end up repaying the whole debt, with no write off at the end of it.

Can last 6/7 years on occasion.

Whichever one you opt for, all should go smoothly, as I said, DMP is informal, IVA a more formal solution.

Lots more detail for each solution is available, as you will have a lot of questions no doubt.

First thing to do is complete our SOA so we get a better idea of your income/expenditure, the link (stoozing.com) is in my signature.

Naomim

Well done on taking two hugely important steps.  Telling your partner and coming here.

Yes your partner is undestandbly upset and hurt, but this debt isn't insurmountable and by working together as a team, supporting each other it makes it much easier.  I hid £33k debt from my husband and was scared to tell him, but once it was all out on the open it was a weight lifted off my shoulders.

Do complete the SOA. Try and gather at least 6 months - 1 year of bank statements.  An aspirational SOA isn't helpful.  ie; saying you put £50 a month away in an emergency fund but then have zero to show for it.

Keep coming here, reading the threads and diaries and you will get through this.

Naomim

Brie

You asked somebody has mentioned a DMP that lasts for 6 years and after that you are debt free? Any advice or experience with these appreciated.

I don't think anyone has said that, not on this thread and I don't recall seeing this elsewhere.  A DMP can last as long as the creditors need to be paid.  So 2 years or 20.  For the longer time it's possible that a creditor might agree to write off a portion of the debt for a one off "full and final settlement" from you. 

Typically a debt stays on your credit history for 6 years and then drops off, even if it's still being paid.  But if you are NOT paying the debt and manage to avoid admitting in writing that you owe the money for 6 years then the debt would become statute barred and the creditor could no longer chase you for the ££.

So a DMP will be admitting that you owe the money so that won't become statute barred until 6 years after you stop paying.  

All of which may sound scary but if, as already suggested you post a SOA (see the link in my signature below) and post it back here then people will do their best to help you.  I would suggest that even though the debts mentioned are yours that you include everything for the household including your partner's income.  This is particularly important as you say that you have a joint loan as well as the mortgage.  And it's much easier to deal with debt as a household issue rather than trying to split bills etc.  

You're doing well to have started to deal with this, it can be a long journey but hopefully it won't be too difficult.  Oh and just to put our backgrounds into perspective - I have just last week paid off all the "borrowing from Peter to pay Paul" debts (stoozing!).  Think that's taken about 20 years but I have managed to also pay off the mortgage at the same time so not doing too badly.  I do still have 1 loan taken to redo our kitchen a year back and I've got the cash to pay that too but the loan is at 0% so I'll just let it run.  It's a big relief.  

sourcrates

Brie said:

You asked somebody has mentioned a DMP that lasts for 6 years and after that you are debt free? Any advice or experience with these appreciated.

I don't think anyone has said that, not on this thread and I don't recall seeing this elsewhere.  A DMP can last as long as the creditors need to be paid. 

I think the OP has either got mixed up with an IVA, or they are in Scotland, and are referring to a "trust deed".

Grumpelstiltskin

I do hope someone hasn't been pushing an IVA, if so ignore them.

Don't believe 'all your debts written off, no problems'

RAS

Mortgage, you can choose a new fix with your current provider 3-6 months before this one ends with no credit check. Lots of folk have done that, takes less than 10 minutes.

Overdraft, is this a sole or joint account?

Joint loan, this a going to affect your partner's credit records even if between you, you keep paying it. If you do an IVA, AFAIK it will not be included on your budget as your wife is jointly and severally liable, so she has to take sole responsibility. Do check this with a debt charity not an IVA provider.

Sadbutneedtoturnitround

Hi RAS, the joint loan was in her name only but I pay half….

the bank account overdraft is in my name only.

hope that helps and thanks for your help too.

Sadbutneedtoturnitround

Also, I was thinking of setting up a new joint account with my partner - so that my wage goes into there and everything is then visible to her too and it keeps me accountable. Is this a good idea?

RAS

Sadbutneedtoturnitround said:

Hi RAS, the joint loan was in her name only but I pay half….

the bank account overdraft is in my name only.

hope that helps and thanks for your help too.

So the loan not a joint account. If you do a DMP yourself you can continue to contribute. If you do an IVA, the OR will not allow anything in your budget for this debt. 

As the OD is solely your name need a new basic bank account (no credit check) and to transfer your income to that along with essential DDs. Do not use the Switch mechanism as that transfer the DDs to your creditors and you'll spend months trying to sort out your account every time they reinstate the DDs.

RAS

Sadbutneedtoturnitround said:

Also, I was thinking of setting up a new joint account with my partner - so that my wage goes into there and everything is then visible to her too and it keeps me accountable. Is this a good idea?

Absolutely not.

Any joint account with your wife creates a financial association and damages her credit record. The mortgage does that anyway but doesn't seem to be as problematic.

You guys need to schedule a date with your statements and credit records every month so you can account for what you are doing and plan the next few months.

Do you need to save up for something you know needs replacing, or some repair on the house etc. Look at it together and agree your plans.

Set up your DDs to go out as soon as your income comes in. Transfer the money for your emergency fund immediately as well. If you are scared that you might gamble that money, you need to get extra help with your situation. 

And maybe consider both meeting more regularly and paying the emergency fund into an account in her name?