Got myself in a right mess!

baaaalocks

Hello all,

I've got myself into approx £45k worth of unsecured debt over 1 loan and 5 credit cards. I'm not currently in any arrears, and 3 of the 5 are on 0% interest at the moment. Due to some changes at work, I can see this spiralling out of control.

I've entered all my details into stepchange who advised a DMP over 8 years.

I currently have a joint mortgage with my wife, which is fixed until next year, if I choose to go down the DMP route, how would this affect the mortgage? Would we be able to fix again or would it just roll over to the standard rate? We also have a joint bank account, which is just used for household bills, our salaries are paid unto our own accounts. How would this be effected?

Any help/advise would be much appreciated.

Brie

Well done for taking action!

Easiest way for us to help is to start out by posting a statement of accounts (SOA, see below in my signature). This should be pretty easy if you've already got the details together for StepChange. It will be helpful to include your wife's income and all the household expenses or if not explaining if she pays for certain things - just so we don't start asking silly questions.

My understanding of mortgages (happy to be corrected) is that your bank will offer you something but maybe not the best deal available to those without your level of debt. It may be that waiting until you have a renewal offer before defaulting and starting the DMP might be a better idea than starting things too soon.

As for the bank accounts….are any of the debts with banks where you have accounts? You will likely want to get a new account(s) with unrelated bank(s) and manually moving income and expenses rather than doing a "switch".

edited to add: Am I correct in thinking your wife is fully aware of the situation? If not it's time to talk.

baaaalocks

thank you for the reply, I'll post my soa shortly. My wife is aware. We share the household bills equally, do I enter the full amount or just my half? Would I also include any debt that she has?

I currently have a current account with Lloyds and joint account with Santander, I have a debt Lloyds so I will open a new account with Monzo or Chase.

RAS

It's probably best to do a household SOA. Is quite hard to see full values if they are halved and it's also frustrating to query zero entries when the spouse pays a small bill eh insurance.

And the situation may be different if you have debt bit your partner has none and when you've both got a lot of debt.

Do give us the names for creditors as they have very different approaches to debts, the current APRs, dates deals end and APRs they revert to.

And well done for looking at this now rather than when SHTF.

Scariest SOA was a couple whose spends were £7.5k monthly and he'd just been made redundant. They'd never earned more than £6.5k and she'd lost her job nearly a year previously. They'd made no adjustments when she lost her job shortly after they bought a more expensive house.

ManyWays

Would we be able to fix again

Yes, (ignoring the cases where you have mortgage arrears or you are a mortgage prisoner, with a lender who nolonger offers fixed rate mortgage).
With those exceptions, you will be offered the same choice of mortgages as anyone who did not have a DMP will be offered.
If you want to borrow more, or argue you now have a higher amount of equity, or change the names on the mortgage, then this will be a full remortgage, but just a new fix does not involve your affordability or credit record being looked at.

i agree with the others suggesting that you would get more help here if you post a SoA.

Rob5342

If you stay with your current lender you can switch to a new fixed rate deal with no credit check. I'm on a Dmp with four defaults and I got a new fixed rate deal with Santander with no problems at all. I just logged on to my Internet banking and chose my new deal, it took about two minutes and I had the same options that were available to anyone else.

A statement of affairs would be useful to see.

itsthelittlethings

You can fix with only the same lender because they don't ask to see your details again allegedly (fingers crossed). DMP for 45k.

baaaalocks

Thank you for the reply and encouragement. I'm glad I'll still be able to fix our mortgage with our current provider once our deal ends in September 2027

I've put my SOA below, my income is an average of the last 5 months, but is likely to reduce by £400 from the end of June due to shift allowance and overtime stopping.

All the debts are in my name apart from the joint mortgage, HP, Sainsbury's Loan & CC and NatWest CC.

Any help and advice will be much appreciated.

baaaalocks

every time I try and post my SOA I get a suspicious thread alert, is there a way around this?

baaaalocks

here is my SOA, any help/ advice would be appreciated

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household 2

Number of children in household 1

Number of cars owned 2

Monthly Income Details

Monthly income after tax 2752

Partners monthly income after tax 2640

Benefits 0

Other income 0

Total monthly income 5392

Monthly Expense Details

Mortgage................................ 829

Secured/HP loan repayments.............. 371

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

Management charge (leasehold property).. 0

Council tax............................. 231

Electricity............................. 70.01

Gas..................................... 51.56

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

Water rates............................. 58.47

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

Mobile phone............................ 59.59

TV Licence.............................. 15

Satellite/Cable TV...................... 87.74

Internet Services....................... 29

Groceries etc. ......................... 500

Clothing................................ 30

Petrol/diesel........................... 460

Road tax................................ 19

Car Insurance........................... 54

Car maintenance (including MOT)......... 56

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

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

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

Other child related expenses............ 97

Medical (prescriptions, dentist etc).... 86

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

Buildings insurance..................... 19.32

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

Life assurance ......................... 23.23

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

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

Haircuts................................ 30

Entertainment........................... 120

Holiday................................. 150

Emergency fund.......................... 40

Total monthly expenses.................. 3536.92

Assets

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

House value (Gross)..................... 280000

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

Car(s).................................. 15000

Other assets............................ 0

Total Assets............................ 295000

Secured & HP Debts[/b]

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

Mortgage...................... 154172...(829)......2.25

Hire Purchase (HP) debt ...... 22979....(371)......5.13

Total secured & HP debts...... 177151....-.........-   

Unsecured Debts

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

Lloyds Platinum CC.............4929.27...126.......0

AMEX...........................2883.39...104.......33.2

MBNA...........................1274......31........23.11

NatWest CC.....................1500......40........0

Sainsbury CC...................3500......50........0

Sainsbury Loan.................8700......725.......0

Barclays Partner Fina..........757.81....58.29.....0

HSBC Loan......................9800.56...227.9.....7.9

Barclaycard....................9574.13...96........0

Virgin Money...................13710.8...157.......0

Total unsecured debts..........56629.96..1615.19...- 

Monthly Budget Summary

Total monthly income.................... 5,392

Expenses (including HP & secured debts). 3,536.92

Available for debt repayments........... 1,855.08

Monthly UNsecured debt repayments....... 1,615.19

Amount left after debt repayments....... 239.89

Personal Balance Sheet Summary

Total assets (things you own)........... 295,000

Total HP & Secured debt................. -177,151

Total Unsecured debt.................... -56,629.96

Net Assets.............................. 61,219.04

Sunbakedscobble

Well done on taking action. I have 1 payment left on my DMP (owed 34k). It was the best thing I ever did making the call I went managed, as trying to do it myself just got me in more debt and mess. It was such a relief making that call and that was it. I didn't have to do anything else other than open a new bank account. I have thought nothing else about it for the past 4.5 years, and ended up better off than before. No advice on the mortgage to offer, as we were mortgage free. The only shared bills I included were food, council tax, gas, electric, water, tv licence. I also included his car payment. Good luck