Unsustainable debt and long term relationship breakdown. Any advice welcome.

SpireCaptain

Good morning 

I've been burying my head and pretending everything was sustainable the past 5 years or so but it's getting to the crux. 

Currently in £56k of debt across credit cards and my 18 year relationship is over. We live together with a joint mortgage and 3 children. We don't have any other debts together or joint accounts. 

I've spoken with Citizens Advice last month to discuss  options. I've also read and read and read these forums for years thinking that snowball or avalanche etc could work in my situation but life events, house and business expenses have made that unachievable.

2015 I had 3k of debt
Moved house, bigger mortgage and twins came along. 
2020 27k of debt
Moved house back to original town, bigger mortgage to renovate house. 
2025 56k of unsecured debt. 
No missed payments, moved debt around on 0% existing deals but this year they all start to revert on to standard APR and the payments will double. 

I'm self employed and also own a single rental house. I had 2 but sold one 2.years ago after tenant trashed it and left me with £14k to get it saleable condition and so that's where a big chunk of debt came from. I gave my partner £10k from the sale for her debts and living expenses. 

It's looking like I will have to go down the DMP route and rent for the foreseeable. My partner doesn't think she can afford to keep the house upkeep so we would sell up and split proceeds. I would let her stay in so the boys had continued familiar surroundings and sell when the youngest is 18 but it may not be viable for her. 

Any initial thoughts welcome. 

I'll post my SOA as it stands now. And card debt also. 

SpireCaptain

[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......... 3

Number of cars owned.................... 1[b] (I own my work van, ex partner owns 2 cars. I pay road tax for all 3. She pays insurance for 2 cars. I pay insurance for the van.)

Monthly Income Details[/b]

Monthly income after tax................ 2050

Partners monthly income after tax....... 0

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

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

Total monthly income.................... 2050[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 860 (£580 residential and £280 BTL)

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

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

Management charge (leasehold property).. 0

Council tax............................. 174

Electricity............................. 70

Gas..................................... 70

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

Water rates............................. 65

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

Mobile phone............................ 16

TV Licence.............................. 0

Satellite/Cable TV...................... 62

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

Groceries etc. ......................... 130

Clothing................................ 20

Petrol/diesel........................... 80

Road tax................................ 32

Car Insurance........................... 30

Car maintenance (including MOT)......... 30

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

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

Childcare/nursery....................... 0

Other child related expenses............ 100

Medical (prescriptions, dentist etc).... 20

Pet insurance/vet bills................. 0

Buildings insurance..................... 10

Contents insurance...................... 6

Life assurance ......................... 13

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

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

Haircuts................................ 15

Entertainment........................... 20

Holiday................................. 20

Emergency fund.......................... 20[b]

Total monthly expenses.................. 1913[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 400000 (Home and Rental property)

Shares and bonds........................ 250

Car(s).................................. 3000 (my van)

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

Total Assets............................ 403250[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 175000...(860)......4[b]
(£112,000 Halifax residential + £63,000 BTL)

Total secured & HP debts...... 175000....-.........- [/b]

[b]Unsecured Debts[/b]

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

Tesco CC.......................13730.....141.......24.94

PayPal ........................900.......80........23.9

Lloyds.........................2300......60........18.65

Bounce Back Loan...............5000......109.......2.5

Barclaycard 2..................11434.....145.......23.1

Barclaycard 1..................8397......85........29.3

MBNA 2.........................600.......60........17.94

MBNA 1.........................16297.....270.......29.62

NewDay Pulse...................4454......64.78.....25.72[b]

Total unsecured debts..........63112.....1014.78...- [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,050

Expenses (including HP & secured debts). 1,913

Available for debt repayments........... 137

Monthly UNsecured debt repayments....... 1,014.78[b]

Amount short for making debt repayments. -877.78[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 403,250

Total HP & Secured debt................. -188,000

Total Unsecured debt.................... -63,112[b]

Net Assets.............................. 152,138[/b]

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

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

SpireCaptain

A few things to clarify on the SOA. (These are figures I worked through with a Citizen's Advice advisor before Christmas)

The minimum payments on the CC are for the promotional balances as they are now. These will gradually fall off this year I til October when the debt repayments on the current balances would double to £1600 approx. 

My ex/partner owns 2 cars but I pay the road tax for them. She pays the insurance for them. 

She also pays the TV licence. 

The mortgage payment is for the property we jointly own together and a buy to let property that's on an interest only mortgage currently. 

Home address mortgage is £580

Rental Mortgage is £280 on a rental income of £500

I've included the money from rental income in the income. That income is my income after business expenses and tax have been accounted. I'm self employed and bad weather/van issues can affect my earnings. 

The £3000 vehicle is my work vehicle. 

SpireCaptain

Current card balances, interest rates and payments.

PayPal 23.9%

£1000 Limit

£850 Balance

£80 per month (£36 minimum)

Pulse 25.72%

£6000 Limit

£4395 Balance

0% until 20/03/2026

£80 per month then £140

Lloyds 18.65%

£2500 limit

£2300 Balance

£80 per month

Tesco 24.94%

£15000 Limit

£13280 Balance

£390 

(was 0% for 13.months just finished paying £150 a month)

Barclaycard 29.3%

£9000 Limit

£8314 Balance 

0% until 01/09/2026

£90 per month then £241

Barclaycard 23.1%

£13000 Limit

£11903 Balance

0% until 01/07/2026

£150 per month then £300

MBNA 29.62%

£18000 Limit

£16328 Balance

6.9% until 01/11/2026

£270 per month then £503

MBNA 17.94%

£10000 Limit

£600 Balance 

£50 per month

ManyWays

How does your income breakdown between your business and the BTL rental?
What is the BTL worth and is this in joint names?
Is the 403k in assets your share? all shared 50/50 with your partner? or more complicated? 

Brie

Nice loads of details - this should help us to help you.

Question - why are the minimum DDs increasing on your cards?  I've never seen that before unless it's to cover the increased amount of interest being charged?

And if you helped ex with her debts is there any reason she can't help you with yours?

And any chance of the mortgage going interest only?  I'm not sure it's a really good idea but if it got you through the next couple of year perhaps it's worth considering??   Happy to hear back from some of the experts here on their thoughts on this.

ManyWays

Brie said:

Question - why are the minimum DDs increasing on your cards?  I've never seen that before unless it's to cover the increased amount of interest being charged?

This always happens. FCA CONC 6.7 says " a firm must set the minimum required repayment under a regulated credit agreement for a credit card or a store card at an amount equal to at least that amount which repays the interest, fees and charges that have been applied to the customer's account, plus one percentage of the amount outstanding"  

During the 0% period, you only pay the 1% or whatever % the card sets. After the 0% ands, this will typically more than double, sometimes more than triple.

fatbelly

The big decision here is whether to sell the main house and split the equity or try to continue funding the mortgage while you find alternative accommodation.

The credit cards etc should not be a huge factor in that decision as they are nonpriority and can go without payment if needed.

However, you say 'till the kids all reach 18'. How many years is that?

SpireCaptain

ManyWays said:

How does your income breakdown between your business and the BTL rental?
What is the BTL worth and is this in joint names?
Is the 403k in assets your share? all shared 50/50 with your partner? or more complicated? 

Hi, thanks for responding. 

The BTL contributes about £200 per month. Self employment is 2500-2700 before coats of 500-700 a month but varies with weather or childcare over holidays etc. My partner works 2.5 days a week as perimenopausal symptoms are affecting her quite badly at 52. I'm 38m. 

The BTL is solely in my name. 63k mortgage on a purchase price of 83k. Valued recently at 100k. Purchased in 2015. 

Our home address now more complicated. 
Purchased for 205k
Mortgage of approx 127k but 50k of that was cash to renovate. 
We both contributed to the deposit as we pported a mortgage over from a joint mortgage in 2016 that I initially took out in sole name in 2012 when she had no deposit and a CCJ. 
We're cohabitating. I've got an appointment with family law on Thursday to delve into options when selling as I'll have the paperwork showing who contributed what. 

SpireCaptain

Brie said:

Nice loads of details - this should help us to help you.

Question - why are the minimum DDs increasing on your cards?  I've never seen that before unless it's to cover the increased amount of interest being charged?

And if you helped ex with her debts is there any reason she can't help you with yours?

And any chance of the mortgage going interest only?  I'm not sure it's a really good idea but if it got you through the next couple of year perhaps it's worth considering??   Happy to hear back from some of the experts here on their thoughts on this.

Hi, thanks for taking the time to contribute. I've read many if your posts over the years.

The minimum payments will increase as the promotional periods end. I'm paying around £750 and by November it'll be £1800. I'm making just above minimum but using what I pay off for groceries, school meals etc. I loathe paying cash as I need to bank it to pay card payments and bills.

I paid council tax and water bill on credit cards last year to try and keep head above water. I've switched to direct debits and paid for 3.months by selling things on eBay but that's not sustainable. 

My partner says she's checked out of the relationship 4 years ago and I'm finally realising I can't change her mind. She's deeply unhappy I don't earn enough/in so much debt and the house hasn't been renovated. The children are 11 and twins are 9. 

I have always paid the utilities and mortgage and Aldi food shop and the boys cricket and rugby and scouts subs. Partner pays for main food shops and boys clothes. 

She resents me for being in so much debt but I've got nothing to show for it, no gambling or drinking etc. just making ends meet and keeping a roof over their heads.

 I had 6 months unemployed when twins were born to help as 3 under 19 months. Then joined a franchise that cost £6k a year for 3 years so that's where a lot of debt came from 2017-2020 when I left franchise and set up by myself. 

We lost UC when they moved us from working tax credits to UC and you can't be a landlord with assets over 15k so we lost 900 a month in 2020 so partner went to work in shops then in admin work. 

SpireCaptain

ManyWays said:

Brie said:

Question - why are the minimum DDs increasing on your cards?  I've never seen that before unless it's to cover the increased amount of interest being charged?

This always happens. FCA CONC 6.7 says " a firm must set the minimum required repayment under a regulated credit agreement for a credit card or a store card at an amount equal to at least that amount which repays the interest, fees and charges that have been applied to the customer's account, plus one percentage of the amount outstanding"  

During the 0% period, you only pay the 1% or whatever % the card sets. After the 0% ands, this will typically more than double, sometimes more than triple.

Thank you for your reply. That's exactly the reason. 1% on all of them now Barclaycard dropped the 3.5% minimum a couple of years ago that "helped" me keep repayments affordable. 

I've just been paying £5 over minimum but using what I pay for school dinners or school trips/motor Expenses etc. not sustainable when the full apr takes hold.