Age 50, in debt, aspergers, bad investments.

lifemistakes

I have for the past decade been struggling massively, post divorce with metal health and emotional struggles (although very rarely to never visited the GP, as much of the time my children were young and I was simply terrified of any knock on effects).

However to cut to the chase I've increasingly made some terrible speculative "bets" on long term investments all with borrowed money, and in addition to spending thousands and thousands on my kids and trying to juggle life, I find myself in around £50,000 of unsecured debt on top of my £50,000 mortgage, and £11,000 car on HP which is essential for work.

I owe money to about 10 different credit card companies with amounts ranging from £3000 to £10,000 each, and since withdrawing some losing money recently (stupidly using leverage this time) I have approximately £13,000 in the bank. I have £8000 remaining still in speculative investments.

I earn around £555 per week basic, and yes do overtime but it very taxing but for the past 3 years I've regularly earned £44,000 per year after overtime but it's not in any way guaranteed and health wise very taxing. So my basic earnings of around £34,000 is what Id prefer to work with.

Yesterday I changed 4 of my direct debit instructions on 4 different cards to "full payment" totalling about £10,000 and thought if I clear them, then sell the rest of my investments and clear another £8000 leaving around £33,000 of debts plus car finance, I may be able to manage somehow with maybe a consolidation loan after.

But now I'm doubting myself and thinking I'll change the direct debits back to minimum and re-think. Without overtime, even doing after that, I simply won't be able to manage.

I feel at a dead end completely hate myself.

I have contacted Stepchange and completed their online forms and they actually recommended not to pay anyone anyway as could be seen as unfair treatment, but I just want all this to go away. I suppose I was thinking of the snowball debt method.

So, I could theoretically sell the remainder of my investments and have £20k in the bank. Stepchange said this could, alongside a DMP be used as "savings". No idea how the creditors would react to that. I don't want to pay any more interest which is why I thought about paying some off straight away.

I'm also worried that if I go into a dmp I won't actually be any better off and have a bad credit rating to boot (so far I've not missed a single payment on anything by juggling things around).

So Initially should I use the money in my bank to pay down as much as possible or not ? Very confused at this point.

lifemistakes

I meant £80,000 mortgage (£50,000 mortgage, and £30,000 secured loan). House worth about £110,000

sourcrates

Stepchange are creditor funded, as are PayPlan to some extent, so in order for them to receive that funding, they must have their clients conduct themselves in a certain way, and that includes treating all creditors fairly.

If you self manage your own DMP, there are no rules, only those you set, so what you have in savings is no ones business but your own, and least of all your lenders.

When you`re in a financial hole like this, your credit rating should not be your top priority, one possible strategy would be too allow all your debts to default, by not paying them, defaulted debts usually get sold for around 10-12% of their face value, so when they have had your debts on their books a while, they may well be open to settlement offers, which your savings/investments may be able to cover.

Any lender that chose the legal route you may be able to settle with before hand using the same savings.

Or there is the standard DMP route with monthly payments and no interest, you certainly have options here, and are in a much better position than most having nearly 20k in savings you can use.

Grumpelstiltskin

Have you read this article?

Free Mental Health and Debt booklet - MSE

Brie

https://forums.moneysavingexpert.com/discussion/comment/81933052#Comment_81933052

There's this as well.

Debt and mental health | National Debtline

The thing that I would like to highlight that your mental health and debt are intertwined. For some this means that their mental health (or lack thereof) pushes them to get into debt, make bad decisions, overspend etc. That's why it's a good idea to let your creditors know about what you are facing by getting your medical professional to complete a Debt & Mental Health Evidence form. (on the link above, free if you are in England) Then you send your creditors a copy and ask for a bit of time to reorganise your finances. You do sound like you're astute enough to get things under control if you take the time to do so, not feel rushed into making any quick decisions.

Yes it's all overwhelming right now but it does get better with a bit of work. Many of us here have been through similar.

fatbelly

I think I would move the speculative investments to cash and keep your savings in a place where you do not have debt. You do not want the left hand to know what the right hand is doing.

Similarly you need to be banking where you do not have debt.

Those are just the initial steps. What you do next would be clearer if we could see a statement of affairs - links are in people's signatures

lifemistakes

Thanks for all initial comments.

I have read before about the self managed dmp's. However I'm concerned about a few initial areas : 1).Wouldn't my.interest just climb and climb during a period of defaulting, eating away at any possible future full offer opportunity by raising my debt ratio Vs "savings" even higher, (and the same effect if I revert to minimum payments).

And 2) won't at least one of my creditors ask to see my bank statement and / or if it came tonight that I had cancelled my payment direct debits (I suppose that's what I'd need to do to initially default now I've cashed out most of my investments and the money is now in my current account, unless I re-invest it so that my bank account is lower again). . . .(citing a "gambling" problem if found out which lets face it is part of the problem here, although I'm not wanting to go down that rabbit hole yet as most of my investments were doing ok until this Iranian situation.

I'm just asking for advice on the next steps. Yes I will be able to give my full breakdown of debts in the next few days I'm doing some very long shifts tonight and tomorrow night though.

As things stand right now, the money I have in the bank is going to 4 of my credit cards as full balance payments next month, unless I cancel those direct debits or alter them.

I can't form the life in me decide if that's a mistake or not..My "savings" would then be half of that £20k if I do so, and 5k of those other savings are illiquid, as precious metal.

Totally confused and worried and stressed that I've ruined my life.

Thanks

Grumpelstiltskin

It doesn't matter if anyone asks for your bank statement ( unlikely ) you just say no.

You have to realize you are in control not your creditors, it means a change of mindset.

lifemistakes

PS for now I've just gone and changed my direct debits back to minimum payments. I can always decide if I so wish next month to pay those balances in full through internet banking anyway.

One of my main concerns is needing a car for the future which if I don't have one, I don't have a job as the commute is too long and public transport wouldn't suffice at the times In work and distance.

Also I'm concerned that I could be evicted and lose my home. After all.50k.(60k with car finance) is a LOT of debt. If just one creditor decided to pursue court action and Tom charge of my home in some way I could become homeless with a destroyed credit rating and no car.

Obviously that is a SERIOUS consideration. It certainly feels that way anyway .

Off to work. Thanks again.

Grumpelstiltskin

Please stop thinking that you will lose your home, it won't happen for unsecured debt.

The car, you will be able to work out a budget where you will be in a position to keep an emergency fund and add to it, that would cover a car purchase, OK perhaps not a brand new one but it would be bought for cash.

sourcrates

"Also I'm concerned that I could be evicted and lose my home. After all.50k.(60k with car finance) is a LOT of debt. If just one creditor decided to pursue court action and Tom charge of my home in some way I could become homeless with a destroyed credit rating and no car.

Obviously that is a SERIOUS consideration. It certainly feels that way anyway" .

Which is why I suggested in my earlier post, you keep some savings liquid, just for instances such as this.

Its quite rare, despite what you might read, for unsecured lenders to opt for legal action, but like most things, it doesn't just happen, there is a process they must conform too called the "civil procedure rules" and without going into too much detail now, you can avoid it going to court either by settlement of the debt, or a payment arrangement, there is always a way to avoid it.

But, to quell your fears about your home, I`ll give you this example, worst case scenario, say you missed all previous correspondence, and ended up with a CCJ, and the lender also opted for a charging order at the same time, there is a 2 step legal process to obtain a charging order, which can be challenged, lets say it was granted, as long as you keep up with the court designated payments, no further action can be taken against you.

In the vast majority of cases a CO just sits on the title deeds until its either paid off or the house gets sold at a much later date, a court will do everything in its power to keep you in your home, an order for sale is a very last resort, less than 40 are granted yearly, out of roughly 24,000 charging orders granted, so that should not be a worry for you.