Serious debt

needhelp1980

got myself in to a mess, have about 70k across 7 credit cards, 1 loan and 2 payday loan and overdraft. Got a mortgage with the same company that does one of my credit cards. Now behind with payments on most. Not sure what to do or where to start, we have equity in house but can’t get a remortgage due to missed payments. Any advice? These debts are all my name and have joint mortgage with partner.

MattMattMattUK

https://forums.moneysavingexpert.com/discussion/6661203/serious-debt

Can you complete an SOA so we can have a proper overview please.

https://www.lemonfool.co.uk/financecalculators/soa.php

PM22

Try not to worry. You'll get some responses soon. You've come to the right place to get this sorted. Hold tight

needhelp1980

https://forums.moneysavingexpert.com/discussion/comment/81936479#Comment_81936479

do I just post it on here? Or send it somewhere?

ManyWays

Please post the SOA here.
Put as realistic expenses as you can, not what you hope to be able to reduce them too.
It helps if you include the lender names (not CC1) and also the house value (no we are not going to suggest selling it)

can’t get a remortgage due to missed payments
Just checking, that is missed payments on the other debts, not missed mortgage payments?

fatbelly

Yes, post it on here

You seem worried about remortgaging. Why is that? Are you coming to the end of a fixed deal or were you thinking of borrowing to pay down credit card? If the latter, please forget it. The strength of your position is that your debts are all nonpriority.

The one thing you should consider is moving your banking to somewhere that you do not have debts, unless the overdraft is small and can be cleared easily

If you can no longer afford the contractual payments on the debts, then you stop paying them. You do not stop paying the mortgage or bills that would cause problems like elec/gas, council tax, car tax and insurance, tvlicence, .If you have arrears on these things they are priority debt. Chalk and cheese.

needhelp1980

https://forums.moneysavingexpert.com/discussion/comment/81936527#Comment_81936527

yes up to date on mortgage and can afford it comfortably. It’s just the unsecured debt that got out of control as I tried to hide it and keep head above water.

needhelp1980

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

Household Information[/b]
Number of adults in household........... 3
Number of children in household......... 1
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 3100
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 3100[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 540
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 171
Electricity............................. 150
Gas..................................... 45
Oil..................................... 0
Water rates............................. 65
Telephone (land line)................... 0
Mobile phone............................ 100
TV Licence.............................. 12
Satellite/Cable TV...................... 29
Internet Services....................... 44
Groceries etc. ......................... 750
Clothing................................ 50
Petrol/diesel........................... 250
Road tax................................ 10
Car Insurance........................... 50
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 60
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 50
Pet insurance/vet bills................. 0
Buildings insurance..................... 30
Contents insurance...................... 30
Life assurance ......................... 70
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 40
Entertainment........................... 100
Holiday................................. 75
Emergency fund.......................... 40[b]
Total monthly expenses.................. 2811[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 330000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0[b]
Total Assets............................ 331500[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 120000...(540)......2[b]
Total secured & HP debts...... 120000....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Credit card....................10000.....300.......22
Credit card....................3700......150.......22
Credit card....................14000.....550.......24
Loan...........................7000......376.......9
Pay day loan ..................800.......200.......1000
Pay day loan...................1000......250.......100
Overdraft .....................1000......50........35
Credit card ...................9800......300.......22
Credit card ...................5000......150.......24
Credit card....................10000.....300.......22
Credit card ...................10000.....300.......22[b]
Total unsecured debts..........72300.....2926......- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 3,100
Expenses (including HP & secured debts). 2,811
Available for debt repayments........... 289
Monthly UNsecured debt repayments....... 2,926[b]
Amount short for making debt repayments. -2,637[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 331,500
Total HP & Secured debt................. -120,000
Total Unsecured debt.................... -72,300[b]
Net Assets.............................. 139,200[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

needhelp1980

I’m on a long term fix on the mortgage which is good. I’ve seen that I should let the credit cards and loans default and then look at either a DMP or an IVA. Just really nervous about it all and doing the wrong thing

MattMattMattUK

Having a very quick look through your SOA, are you the only person who works of the three adults in the household? A lot of the figures are very round, have you guessed at these? It is really worth looking through a full year's expenditure to find out where the money is really going.

Electricity............................. 150 You can probably bring this down by £50-80 as your current usage is high for a houseold with gas.
Gas..................................... 45
Water rates............................. 65 - You may be able to save a small amount, up to £15 by moving to a meter, if not then your usage is probably quite high.

Mobile phone............................ 100 - This is very high, move to a SIM only contract, plenty of deals around £10 a month or less that will save you a significant amount.
TV Licence.............................. 12 - Get rid of this and stop watching live TV
Satellite/Cable TV...................... 29 - Get rid of this and just use streaming
Internet Services....................... 44 - You should be able to find a cheaper deal, £30 would be more reasonable.
Groceries etc. ......................... 750 - You can probably save a small amount here, but as it is for three adults and a child you will struggle to make significant headway, maybe £200 max.
Clothing................................ 50 - Is this every month? You can probably cut this down by buying cheaper.
Petrol/diesel........................... 250 - On the high side, but for three adults not out of the normal range.

Car maintenance (including MOT)......... 50 - A bit on the high side.

Medical (prescriptions, dentist etc).... 50 - This is high, have you looked at Prescription Prepayment?

Entertainment........................... 100 - Keep this in for sanity, and for your kid.
Holiday................................. 75 - In the short term probably need to scrap this
Emergency fund.......................... 40[b] - When you start defaulting this should be every spare penny you have.

You can probably save around £500 a month, whilst significant is not a solution to the debt which almost certainly requires a DMP or IVA, others can advise better on which.

The key however is going to be getting the other two adults working and contributing, is there any reason why they are earning nothing and not in receipt of benefits?

ManyWays

When does your low mortgage rate end? because it will be going up several hundred.

No child benefit? How old is the child?

The other adults, one is your partner? the other?
Does your partner also have debts?

if that is what the energy bill has been, it is very likely to be going UP in the next year
£750 for groceries 3 adults and a child is very low.
£50 for clothes for 3 adults and a child is impossible. Are the other adults covering their own costs here?

There is no "normal" for petrol, it costs what it costs, which is quite a bit more than a month ago.

Can you list the names of the lenders please. And for the payday loans, can you say if you have had previous loans from that lender.

Neither car is on car finance? Have you previously had cars on finance?