Stuck in new house debt (Scotland)

WackyWhiskers

Hi, I've been getting stressed about debt for a while now, and even though I've been subscribed to the MSE newsletter for ages, somehow didn't even think about checking here for advice!

I moved into my first house a few years ago, and as I'd only rented furnished places before, owned basically nothing, and that combined with work needed to do things around the house led to a lot of credit card debt building up.

I've not actually added any new debt (luckily!), and seem to be essentially making ends meet almost exactly, but the actual total amount of debt doesn't seem to be going down, and I don't have enough to actually pay more than basically the minimum repayments.

Earlier this year, I tried to consolidate some CC debt onto loans, which after reading more have realised that it wasn't actually a good idea at all, even though it seemed to be at the time! The interest rate is obviously much lower than the CCs and because I've not actually been using any of the cards since the initial build-up on them a few years ago, I'm luckily not spiralling by spending more and more, but seem to be stuck completely still with no progress at all. My credit utilisation is like 45%, so I've got loads of available credit that I've not had to use at all, so my day-to-day spending is basically completely within my means, it's just the repayments that are making finances difficult.

I've read quite a few threads on here and the general advice seems to be to essentially cancel my DDs to all the cards and loans and let them default, then start paying them gradually?

I've also read about complaining about unaffordable loans - would this be worth trying first before going down the defaulting route? It seems bad that they let me take out two quite big loans basically back-to-back when I was already barely making ends meet, but I earn quite a lot so I'm not sure if that'd work against me? If I did this and the complaint was accepted, what would actually happen to the loan amount? Would it be reduced or just cancelled entirely?

I've read about starting a new bank account, moving pay over to that etc etc to stop my main bank taking money to pay debt - my main accounts I use are with Halifax/Bank of Scotland, would it be possible to not have to do this and just keep paying the Halifax credit card as normal, as in can I essentially default on some debt and not others, or do I have to choose to default on all or none?

My fixed rate is up next May, but if I've read stuff right, I should be able to re-fix with my mortgage provider without them having to do a credit check, right? I'm not too worried about my credit score outside of that because I've already got the mortgage, and don't need any more credit anyway!

The house is all-electric (the boiler needed to be replaced when I moved in and the government had the big grants for green energy so I got a heat pump, solar, batteries installed - that's what the Energy Saving Trust payment is for, and it's interest-free so I'm not worried about that as long as I keep paying it!), and I live in Scotland, so pay water through my council tax, that's why I don't have anything for them lines. I don't even own a TV or watch anything on my computer so I don't have to pay for a TV license either. Medical is for monthly therapy rather than prescriptions etc (as they're free here!). I've not filled in any of the other spending, but it's basically super minimal. I work from home full-time so don't need to pay for commuting, don't really buy clothes very often, groceries are probably the only main expense but they're also probably pretty minimal, so I don't think there's enough there to cut down on to balance things.

Any help/advice/anything would be super appreciated - I've not spoken to anyone about this because honestly it feels super embarrassing that I've ended up this way! Sorry for the pretty long post, just wanted to hopefully get all the details anyone would need.

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

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0[b]

Monthly Income Details[/b]
Monthly income after tax................ 3211.46
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 3211.46[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 856.3
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 131
Electricity............................. 113.68
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 8
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 36
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 60
Pet insurance/vet bills................. 0
Buildings insurance..................... 14.32
Contents insurance...................... 0
Life assurance ......................... 27.42
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 1246.72[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 180000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 180000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 156018...(856.3)....0[b]
Total secured & HP debts...... 156018....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Fluid..........................976.......10........0
Paypal.........................1208......38........21.9
Virgin.........................2611......118.......0
Energy Saving Trust............0.........120.......0
This Bank (Loan)...............9451......166.......0
Novuna (Loan)..................18270.....321.......22.4
Admiral (Loan).................31937.....415.......10.8
Barclaycard....................3650......136.......0
MBNA...........................3164......142.......21.8
MBNA...........................740.......50........28.5
Halifax........................5052......236.......0
Natwest........................1079......17........0
Vanquis........................4075......41........0[b]
Total unsecured debts..........82213.....1810......- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 3,211.46
Expenses (including HP & secured debts). 1,246.72
Available for debt repayments........... 1,964.74
Monthly UNsecured debt repayments....... 1,810[b]
Amount left after debt repayments....... 154.74[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 180,000
Total HP & Secured debt................. -156,018
Total Unsecured debt.................... -82,213[b]
Net Assets.............................. -58,231[/b]

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

Contents insurance is through my building insurance.

Fluid - interest-free until 26/02/2027
Natwest - interest-free until 18/05/2027
Vanquis - interest-free until 23/01/2027
This Bank (Loan) - 120 months - taken out 15/05/2024
Novuna (Loan) - 60 months - taken out 05/05/2026
Admiral (Loan) - 84 months - taken out 15/01/2026

ArtyJ931

When I started I redid my SOA with what things actually cost rather than what I was spending. Eg clothing isn’t 0 because however infrequently - you will need to buy some! Likewise entertainment, haircuts, gifts, holidays, a house repair/maintenance fund, emergency money.

I was also stuck in the same loop as you for many years - paying the minimum and shuffling credit card debt from one 0% to another (adding on associated fees of course), consolidating when I could and then hit the brick wall earlier this year. It will be ok. You should be able to afford and enjoy some quality of life.

elsien

Welcome to the forum.

Your SOA is only showing as part complete. At the moment you aren’t eating, for example! I know you say those costs are minimal but they may still be relevant depending on which debt solution might work best for you - they do add up.

It would still be helpful if you fill it all in as best you can and format for MSE. That will then show the amount you theoretically have left over for debt repayments and give those who know whaf then are talking about a fuller picture.

RAS

You've got enough enough missing from this budget to suggest you're actually in negative territory most months, if not all.

You've also not used the standard format so a lot of information is missing. So head to lemonfool or stoozing.com. You need to add the interest rate for all debts, the length of any deal, duration of loans etc.

Before that you need to get together your statements, certainly for the last 3 months, ideally the last year and work out what you've actually spent.

Even if you dumpster dive and use community pantries, you eat. You need shoes and knickers even if you are wearing your clothes into the ground. Do you never visit friends and relatives, or have appointments? Even a bike needs some consumables. You need contents insurance, as if makes no sense to pay interest on stuff you bought and not protect it.

And as a home owner you need to budget for some maintenance or repair. Just to keep the value of your house.

If this property is 2 bedroom, can you use the rent a room scheme to earn up to £7500?

If you check on MSE, a soft check will suggest if you could get any sort of 0% deal.

ManyWays

I agree we need to see a realistic long term SOA, including groceries, clothes, replacing things around the house, transport, emergency fund etc etc

It seems bad that they let me take out two quite big loans basically back-to-back
what were the dates of your three large loans?

If I did this and the complaint was accepted, what would actually happen to the loan amount? Would it be reduced or just cancelled entirely?
In terest is removed from the balnce so you just have to pay the in total the amount you borrowed, no interest.

WackyWhiskers

Hi, I've updated the SOA to (hopefully!) be in the right format, and added in the interest rates. I'll find some time to go through bank statements to fill in the rest of the things it's asking for! Thanks so much!

WackyWhiskers

https://forums.moneysavingexpert.com/discussion/comment/82154834#Comment_82154834

It is a two-bedroom but one is set up as my home office as I work from home full-time.

I've just checked and there aren't any 0% deals available unfortunately!

I do have contents insurance, it's just in with my building insurance - added a note to the main post too.

https://forums.moneysavingexpert.com/discussion/comment/82155560#Comment_82155560

I've added the dates to the bottom of my top post!