Please help £75k debt!

Lighthouse81

Hello everyone, I found this forum and have been reading different stories the last couple of  weeks because find myself  at breaking point, 35/M I have a history of gambling addiction which is the root cause and for the first time in my life ( it has been  approx 2 months where i feel in control of it and honest with it to both my partner and myself ) but i have finally had enough, due to this and overspending and lack of budget by me and my partner i find we are in 75k worth of debt, I have been looking at secured loans, borrowing money from my existing mortgage company but ultimately i don't want to put my house at risk and just feel with the rates being offered i am only putting myself into further debt. Apprehensively, as i have never confronted a situation like this before and usually bury my head in the sand, i am writing this as I really want advice on how to deal with it as we are struggling to make monthly payments living on all credit available to us and it's only mounting up and i want to tackle it head on now and finally sort my and my family's lives out.

The big worry we have is we own our house which like everyone we worked really hard to get especially with my addiction and the mortgage ( Natwest) is due for renewal around April 2027, like others have said I don't want to lose my house but importantly want to make sure i will be in a position to have an affordable mortgage offer when the time comes.

I have for today while i was waiting to get approved for the forum completed the first items that i can see people are doing, opened a new bank account to use that to get control of my money going in ( not with an existing creditor) plus to be able to prioritise bills that need paying.I also emailed an affordability complaint to Monzo, mentioning my addiction and how i don't feel that i should have had access to substantial credit because of my situation, i went with this first as it's the biggest payments we have and the largest creditor.

I have completed the SOA to the best of my ability and it was really eye opening, if there are questions on any of it please ask.

[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................ 3777.88

Partners monthly income after tax....... 689.57

Benefits................................ 0

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

Total monthly income.................... 4467.45[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 1067

Secured/HP loan repayments.............. 262.5

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 191.5

Electricity............................. 145

Gas..................................... 30

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

Water rates............................. 84.17

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

Mobile phone............................ 66.74

TV Licence.............................. 11

Satellite/Cable TV...................... 0

Internet Services....................... 40.75

Groceries etc. ......................... 600

Clothing................................ 25

Petrol/diesel........................... 100

Road tax................................ 14

Car Insurance........................... 59.48

Car maintenance (including MOT)......... 0

Car parking............................. 10

Other travel............................ 0

Childcare/nursery....................... 87.5

Other child related expenses............ 200

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 20

Buildings insurance..................... 22.84

Contents insurance...................... 0

Life assurance ......................... 40.52

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

Presents (birthday, christmas etc)...... 50

Haircuts................................ 0

Entertainment........................... 140

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

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

Total monthly expenses.................. 3268[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 360000

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

Car(s).................................. 5000

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

Total Assets............................ 365000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 289324...(1067).....2.35

Hire Purchase (HP) debt ...... 5514.13..(262.5)....13.9[b]

Total secured & HP debts...... 294838.1.-.........-   [/b]

[b]Unsecured Debts[/b]

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

Loan 1.........................20701.....376.......18.9

Loan 2.........................23424.1...557.7.....12.9

Overdraft 1....................1500......35........0

Monzo Flex 2...................901.96....195.6.....29

Monzo Flex 1...................6709.06...309.3.....0

C/C4...........................2534.27...100.......36.9

C/C3...........................891.14....41........24

C/C2...........................5627.43...220.......22.44

C/C1...........................8487.04...150.......21.94

Very...........................1064......50........0

Novuna.........................1278.69...32.81.....16.9

Ikea (0%)......................700.......100.......0

Sofa ( 0%).....................740.7.....61.7......0

Overdraft 2....................1500......35........0[b]

Total monthly income: £4467.45

Expenses (incl. HP & secured debts): £3268

Available for debt repayments: £1199.45

Unsecured debt repayments: £2264.11

Surplus (shortfall if negative) £-1064.66

Personal Balance Sheet Summary

Assets: £365000

Secured & HP Debt £-294.838.13

Unsecured Debt £-76059.39

Net Assets £-5897.52

ManyWays

Borrowing secured is very risky and in your case it would also be extremely expensive as you dont have very large amounts of equity. I think you should rule this out as an option and most people here will agree with that. 

Natwest will give you a new mortgage fix in 2027 no matter how large your debts and how bad your credit score as they will not make affordability or credit record checks (see https://www.natwest.com/mortgages/switch-mortgage-deal.html#promise)

You have made the best start by being honest with your partner. And also by getting a new bank account and making the first affordability complaint.  The next step is to stop making all the payments to your debts. 

Hire Purchase (HP) debt ...... 5514.13..(262.5)....13.9
Is this car finance? HP or PCP?  

No child benefit? 

Lighthouse81

Thank you, just them small steps feel like a weight lifting from me!

We were claiming child benefit, however i did get a large bonus back in June, which i used to clear some debt and it wasn't long before i gambled it again. This took me over the threshold so i decided to just stop it to make sure we didn't get penalised with a big tax bill, 

My partners wage is made up with carers allowance, and a 5 hour a week job ( she will soon be working 20 hours a week so this will increase the amount she brings home, though we will lose the carers allowance)

The car is HP, it is my partners car with approx 2 years left of payments, I have a company car for work, which I charge at home.

Grumpelstiltskin

Your new bank account, it is a basic one with no overdraft?

Are you getting help with your gambling?

Have you blocked yourself from gambling websites?

Water rates look high, are you in the west country?

Clothes spending is too low.

As is TV licence.

Lighthouse81

Yes it is a basic one, joint one for transparency, with no overdraft
.
I am not getting professional help currently but i am at a stage in my life where i cant afford to lose anything anymore, and complete honesty, transparency are the way i need to tackle the problem, something before i haven't done, the difference for me now is i want to be clean ,for my own sanity, for my wife and certainly for my kids before they are old enough to understand, whereas over the years I've said it because it was the right thing to do and i had been caught. I have contacted gamstop so i can no longer use the websites.

We aren't on a water meter so not sure on the rates, it's just the monthly DD amount? Based in East Anglia.

To be fair we buy a lot of clothes second hand so i was just trying to estimate a figure but will change it thanks.

TV License is quarterly so should be approx 15 a month.

RAS

You need to take your wife's name off the basic account, because any joint financial consumer account will damage her credit record more than a mortgage.

Transparency needs to be proactive. Pull your bank statement and discuss weekly to start with. You need a full monthly planning meeting with all statements regard next month's spends as well, just prior to the salary being paid in.

Lighthouse81

Thanks RAS, this is something we have just done for the first time in 15 years sat and gone through finances because I’ve always been so defensive, I like the idea of weekly statements and monthly meetings.

So with the finances above, Loan 2, Monzo Flex 2 and the sofa are in her name everything else is in my name. So if we are to default should we have seperate bank accounts, or should we keep paying her debts ( I was going to make an affordability complaint with Monzo for her too)  and default just mine?

Grumpelstiltskin

You need to have separate basic bank accounts, how you decide which account to pay debts from ( when you pay them ) is up to you.

If you have read through threads you will know our advice is to stop paying all unsecured debts and use the money you would have spent to build up an emergency fund, you need one as you will be living without taking any more credit out and when the washer  breaks down the same week as the car fails it's MOT you need the backup of the emergency fund.

I do think that with an addiction you do need to have help so you don't relapse and end up in an even worse position.

At least you have your wife onside, keep working together.

Lighthouse81

Thanks you for the replies, so we currently have a joint account as we have all our wages and bills go into and come out of this and a joint mortgage so are financially linked anyway but we should open seperate new bank accounts now? 

So as I bring home the main wage I pay her loan and Monzo flex anyway, would I be better to continue to do this and not default on hers to keep her credit rating intact? Or would it be better to default on all debts and build up an emergency fund and arrange payment plans together?

Is it better to just stop paying or do a DMP through say step change as I worry about all the calls, letters and people coming to my house, what is the difference?

Sorry I have a lot of questions I’ve just never really dealt with it before so don’t know how to approach it.

RAS

You need to separate your financial records.

So the day (if predictable) your income comes in, the amount necessary to pay your wife's debt goes into her account. If there's not enough time, you need to pay her the previous month.

Lighthouse81

Thanks RAS so do you think it’s better if I continue to pay her debt as per the agreements to keep her credit score intact, as the amounts are also quite high approx £750 a month payments for her loan and Monzo flex (Loan 2 and Monzo Flex 2) on the SOA or do you mean to stop paying her debts now so they default the same as mine and pay when we make an arrangement with the DCAs?