This is it, rock bottom. Advice please

Sweet_Girl_x

I have finally got to the stage where I've sold everything, my savings have run out, and I've used all available credit card funds on shopping, fuel etc.

I now have nowhere to go except not pay.

I have filled in a stepchange form and it says a DMP is the best way to go.

Debts are 
5k Lloyds card, 4k Lloyds card, 3k Capital one, 1.8k Barclaycard, 4k Virgin and a 1.5k overdraft.

I am married and my husband has debts however they are well managed. He has 2 credit cards 6K HSBC, 1.5K MBNA and a loan. HSBC is 0% and MBNA was on a low transfer offer. The loan is fully paid off by May next year.

I was going to set up the DMP with Stephchange but I need some advice.

Is it best to close my joint account with my husband? I don't think he needs to get a DMP as we have his stuff under control. The mortgage is still in both our names though?

I've seen it is best to not pay, have defaults and then set up a DMP? I am afraid of all the threatening letters and demands where as if I set up a DMP won't it be quite quiet?

Is a DMP definitely the best option? As above my husband and I keep all our finances together. Next year we will have a bit of spare money when the loan is paid off. Could I keep them hanging until then? Payment holidays? I still wouldn't have a quality of life but im thinking about my credit report.

Any advice with what to do or what to say? I have seen people claiming for unaffordability it is best to do that before or after defaulting?

I am gutted as I would love to have moved house but I know that's off the cards now for 6.5 years 🙃 

Any advice would be appreciated as I feel like I am going back on everything I've tried for past however many years, just trying to keep my head above water paying minimum amounts but not getting anywhere.

Sweet_Girl_x

Just to add I also bank with Lloyds. Am I best to start a new bank account? Same for my husband so they we don't have a joint account anymore? Do I shut it down? 

Thank you

RAS

Before you do anything, please speak with your husband. Does he realise how difficult your debt situation is? And that if you default, it's going to affect your joint ability to buy a new house for the next 7 years? Obviously you'll be able to get new deals with your current mortgage provider by fixing on-line

Can you do a joint SOA so the pair of you can see what your finances look like, please.

No need to share but you both need to work out what you need to cover essential costs and then the more important discretionary ones like clothing, medical and dental, visiting friends and relatives. Then look at the debt situation.

ManyWays

When does your current mortgage fix and at that point is the interest rate likely to go up or down? You will still be able to get a new fix in a DMP or after defaults, but if your household situation is going to improve then or get a lot worse is an important factor. 

If everything is joint, your husband knows about your problems? 

Sweet_Girl_x

RAS said:

Before you do anything, please speak with your husband. Does he realise how difficult your debt situation is? And that if you default, it's going to affect your joint ability to buy a new house for the next 7 years? Obviously you'll be able to get new deals with your current mortgage provider by fixing on-line

Can you do a joint SOA so the pair of you can see what your finances look like, please.

No need to share but you both need to work out what you need to cover essential costs and then the more important discretionary ones like clothing, medical and dental, visiting friends and relatives. Then look at the debt situation.

Hiya, yes he is aware.
He used to the be the one who wasn't in a great financial position, he used to get so so stressed about it. So I would use my own credit cards etc so he didn't feel burdened. This was fine but then we had both of our children close together, i was on reduced income during mat leave and all of my 0% deals on my credit cards ended plus the additional cost of children just created a perfect storm for a rubbish situation.

We have always clumped our money together in a joint account (he earns a lot more than me) if we didn't put our money together I prob although would have dunk a while ago.

I will post a SOA this evening.

Thanks for replying

Sweet_Girl_x

ManyWays said:

When does your current mortgage fix and at that point is the interest rate likely to go up or down? You will still be able to get a new fix in a DMP or after defaults, but if your household situation is going to improve then or get a lot worse is an important factor. 

If everything is joint, your husband knows about your problems? 

My mortgage has been on a variable rate for about a year. I was worried with my additional credit card debt that they wouldn't approve me for a new deal so im just on a variable amount.

Our house is shared ownership so we don't have many companies we can get a mortgage with anyway so I'd want to stick but I was worried if they said no if I could still stay on the variable rate or if I'd be left with no mortgage?

Thanks for replying

ian1246

OP, i think you need to take a step back and evaluate your position from a view of your expenses as a couple, rather than individually. From what you've just said - your partner used to struggle financially so you've then taken on additional debt, buying him a respite period at the cost of yourself sinking.

Now your debt is maxed out, that respite ends and your husband may well in a short space of time find his finances crumble as well (with it sounding like he's barely keeping his head above water currently).

Any solution you need to approach as a couple, rather than individually. First step should be plotting all of your expenses down to the last penny so you can identify non essential-spending you can cut - it sounds like between the two of you your outgoings are exceeding your income.

Sweet_Girl_x

ian1246 said:

OP, i think you need to take a step back and evaluate your position from a view of your expenses as a couple, rather than individually. From what you've just said - your partner used to struggle financially so you've then taken on additional debt, buying him a respite period at the cost of yourself sinking.

Now your debt is maxed out, that respite ends and your husband may well in a short space of time find his finances crumble as well (with it sounding like he's barely keeping his head above water currently).

Any solution you need to approach as a couple, rather than individually. First step should be plotting all of your expenses down to the last penny so you can identify non essential-spending you can cut - it sounds like between the two of you your outgoings are exceeding your income.

Hello,

Thanks for replying.

Yes we are very much united in all of this, however because his credit cards etc are pretty well under control (0% fixed payments etc) it's not too bad so was thinking if I can go down in flames alone it would be better.

I had planned to pay my 0% off my credit cards but I had my 2 children which then left me on less income then normal whilst on mat leave. Now I am back to work but only for 30 hours and nobody will offer me credit let alone at 0%.

Sweet_Girl_x

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 1450

Partners monthly income after tax....... 2150

Benefits................................ 174

Other income............................ 0[b]

Total monthly income.................... 3774[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 427

Management charge (leasehold property).. 0

Council tax............................. 220

Electricity............................. 41

Gas..................................... 41

Oil..................................... 0

Water rates............................. 30

Telephone (land line)................... 0

Mobile phone............................ 52

TV Licence.............................. 15

Satellite/Cable TV...................... 56

Internet Services....................... 0

Groceries etc. ......................... 400

Clothing................................ 50

Petrol/diesel........................... 280

Road tax................................ 23

Car Insurance........................... 43

Car maintenance (including MOT)......... 25

Car parking............................. 0

Other travel............................ 44

Childcare/nursery....................... 163

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 50

Pet insurance/vet bills................. 45

Buildings insurance..................... 0

Contents insurance...................... 7

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 40

Haircuts................................ 40

Entertainment........................... 50

Holiday................................. 0

Emergency fund.......................... 0[b]

Total monthly expenses.................. 2142[/b]

[b]

Assets[/b]

Cash.................................... 1800

House value (Gross)..................... 90000

Shares and bonds........................ 0

Car(s).................................. 1000

Other assets............................ 0[b]

Total Assets............................ 92800[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 573......(0)........0[b]

Total secured & HP debts...... 573.......-.........- [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Lloyds.........................5000......175.......0

Lloyds.........................4000......100.......0

Lloyds overdraft...............1500......50........0

Loan...........................2000......260.......0

HSBC...........................4500......150.......0

Barclaycard....................600.......50........0

MBNA...........................2000......113.......0

Virgin.........................4500......110.......0

Capital one....................2550......110.......0

Barclaycard....................1800......85........0[b]

Total unsecured debts..........28450.....1203......- [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,774

Expenses (including HP & secured debts). 2,142

Available for debt repayments........... 1,632

Monthly UNsecured debt repayments....... 1,203[b]

Amount left after debt repayments....... 429[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 92,800

Total HP & Secured debt................. -573

Total Unsecured debt.................... -28,450[b]

Net Assets.............................. 63,777[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

ManyWays

How much is the mortgage?

Find out asap what fix you can get.  If you dont have mortgage arrears you should be able to get new fix with no credit checks.

Which of those debts are your husbands? 

Sweet_Girl_x

ManyWays said:

How much is the mortgage?

Find out asap what fix you can get.  If you dont have mortgage arrears you should be able to get new fix with no credit checks.

Which of those debts are your husbands? 

Mortgage is £573 a month (shared ownership) and we pay £427 rent for the bit that isn't our share.

My Husband's debts are
HSBC 4500 (0%)
Barclaycard 600
MBNA 2000 (5% low Apr transfer)
Loan 260/mo (5 year loan only had 8 months left will be fully paid by May)

Thanks for replying