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Drowning in debt, please help with next steps.

ineedhelp_91
ineedhelp_91 Posts: 8 Forumite
First Post
in Debt-free wannabe
Over the last 15 years I have made bad decisions which has led me to nearly £90k worth of unsecured debt. Huge chunk of this has come from investing in a business which did not do well at all, I am now struggling to meet the minimum payments. I have around £90k of unsecured debt spread over 8 credit cards ( 5 of them are RBS) they are all on some kind of promotion ranging from interest free to low 5.9% APR for the next 12-36 months. I have never missed payments so my credit is decent and maybe that's why I have managed to secure soo much credit but I cannot seem to make a dent in the debt as I am just paying the minimum payments every month.

My salary is currently £42k and I make average around £3k a month with commissions. 
I have a £300k property, 20% is owned by help to buy and I have around £30-£35k equity in the property due to cost of the property most likely reducing.
At the end of the month I have maximum a few hundred remaining. This is on top of my partner helping me out aswell.
My partner can only work part time due to the care of my non verbal severely autistic son, it also limits the roles I can do due to being needed be more home based to help out. 

I need assistance with the next steps and what I should do, I cannot lose the property due to having 2 toddlers and also my son does not deal well with change at this moment of his life.

The options I am looking at are IVA or Bankruptcy. I would prefer bankruptcy but the thought of losing my home is something I cannot deal with due to my children.
I have seen other saying default on your credit cards but I don't know what that means going forward, I know my credit is going to be trashed with whatever option but I just cannot lose my home.
«13

Comments

  • kimwp
    kimwp Posts: 3,518 Forumite
    Sixth Anniversary 1,000 Posts Photogenic Name Dropper
    Hiya! It always seems bleaker at the start. First thing to do is put together your statement of affairs (link in my signature)- this should be an accurate account of your spends, so use your bank statements to populate it. Average annual spends into months and select the option to format for MSE
    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • fatbelly
    fatbelly Posts: 23,730 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    Well rule out bankruptcy if you want to keep your house.

    Now take a breath

    You say that you are meeting the minimum payments, not missed any, and you have a few hundred pounds remaining at the end of the month. All the cards are zero or low interest.

    It's not immediately clear that you need a draconian solution. Do a soa as Kim suggests and let's have a look at the detail.

  • ineedhelp_91
    ineedhelp_91 Posts: 8 Forumite
    First Post
    [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................ 3000
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 3000[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 1175
    Secured/HP loan repayments.............. 92
    Rent.................................... 0
    Management charge (leasehold property).. 220
    Council tax............................. 187
    Electricity............................. 150
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 20
    Telephone (land line)................... 0
    Mobile phone............................ 25
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 7
    Groceries etc. ......................... 700
    Clothing................................ 0
    Petrol/diesel........................... 200
    Road tax................................ 17
    Car Insurance........................... 70
    Car maintenance (including MOT)......... 20
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 8
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 30
    Entertainment........................... 100
    Holiday................................. 50
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 3101[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 300000
    Shares and bonds........................ 0
    Car(s).................................. 10000
    Other assets............................ 0[b]
    Total Assets............................ 310000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 200000...(1175).....4.75
    Secured Debt.................. 60000....(92).......0[b]
    Total secured & HP debts...... 260000....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    MBNA...........................21000.....580.......4.9
    MBNA...........................18600.....550.......4.9
    Lloyds.........................14000.....350.......5.9
    Halifax........................2500......30........5.9
    Virgin.........................5400......53........0
    Natwest........................7400......74........0
    Tesco..........................4700......46........0
    Barclaycard....................7900......80........0[b]
    Total unsecured debts..........81500.....1763......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 3,000
    Expenses (including HP & secured debts). 3,101
    Available for debt repayments........... -101
    Monthly UNsecured debt repayments....... 1,763[b]
    Amount short for making debt repayments. -1,864[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 310,000
    Total HP & Secured debt................. -260,000
    Total Unsecured debt.................... -81,500[b]
    Net Assets.............................. -31,500[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • ineedhelp_91
    ineedhelp_91 Posts: 8 Forumite
    First Post
    Like I said my commission fluctuates so some months I can make around £3200-£3400.  My wife sometimes helps out which averages around £400 extra a month
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,919 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    No child benefit?

    How old are the children.
    If you go down to the woods today you better not go alone.
  • ineedhelp_91
    ineedhelp_91 Posts: 8 Forumite
    First Post
    Grumpelstiltskin said:
    No child benefit?

    How old are the children.
    My wife gets the child benefit, that is part of the contribution she sends me. She can only work minimal hours due to my son's condition.
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,919 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    ineedhelp_91 said:
    Grumpelstiltskin said:
    No child benefit?

    How old are the children.
    My wife gets the child benefit, that is part of the contribution she sends me. She can only work minimal hours due to my son's condition.
    Where  are you showing your wife's contribution on your SOA?

    I asked the ages of the children as the grocery spend is high.
    If you go down to the woods today you better not go alone.
  • ineedhelp_91
    ineedhelp_91 Posts: 8 Forumite
    First Post
    [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................ 3000
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 400[b]
    Total monthly income.................... 3400[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 1175
    Secured/HP loan repayments.............. 92
    Rent.................................... 0
    Management charge (leasehold property).. 220
    Council tax............................. 187
    Electricity............................. 150
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 20
    Telephone (land line)................... 0
    Mobile phone............................ 25
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 7
    Groceries etc. ......................... 700
    Clothing................................ 0
    Petrol/diesel........................... 200
    Road tax................................ 17
    Car Insurance........................... 70
    Car maintenance (including MOT)......... 20
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 8
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 30
    Entertainment........................... 100
    Holiday................................. 50
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 3101[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 300000
    Shares and bonds........................ 0
    Car(s).................................. 10000
    Other assets............................ 0[b]
    Total Assets............................ 310000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 200000...(1175).....4.75
    Secured Debt.................. 60000....(92).......0[b]
    Total secured & HP debts...... 260000....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    MBNA...........................21000.....580.......4.9
    MBNA...........................18600.....550.......4.9
    Lloyds.........................14000.....350.......5.9
    Halifax........................2500......30........5.9
    Virgin.........................5400......53........0
    Natwest........................7400......74........0
    Tesco..........................4700......46........0
    Barclaycard....................7900......80........0[b]
    Total unsecured debts..........81500.....1763......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 3,400
    Expenses (including HP & secured debts). 3,101
    Available for debt repayments........... 299
    Monthly UNsecured debt repayments....... 1,763[b]
    Amount short for making debt repayments. -1,464[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 310,000
    Total HP & Secured debt................. -260,000
    Total Unsecured debt.................... -81,500[b]
    Net Assets.............................. -31,500[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • ineedhelp_91
    ineedhelp_91 Posts: 8 Forumite
    First Post
    Grumpelstiltskin said:
    ineedhelp_91 said:
    Grumpelstiltskin said:
    No child benefit?

    How old are the children.
    My wife gets the child benefit, that is part of the contribution she sends me. She can only work minimal hours due to my son's condition.
    Where  are you showing your wife's contribution on your SOA?

    I asked the ages of the children as the grocery spend is high.
    ages 6 and 5, my son can only have certain foods due to his condition. 
  • ManyWays
    ManyWays Posts: 2,168 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    could you show a complete SOA including your wife's income and benefits. I hope you are getting DLA for your son?
    £700 is a perfectly reasonable amount to spend, but at the moment your expenses are larger than your income...
    Obviously your wife is covering a lot (clothes, child expenses etc) but without a full picture its hard to say anything. 
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