£100k unsecured debt!!!!!!!!!!!!

degzy

I am 32, married with 2 children and expecting third next year, my debt has gone bonkers , I dont know where to turn. My wife has to stop working soon and I only earn £1200 a month, My mortgage is up to the max ( 105k) and my wife doesnt know the extent of my debt. I have just been able to take new loans for 25k and used the money to make the monthly payments, stupid I know but it was a solution at the time, it has nearly caught up with me ,what should I do? I work in the financial industry so I am sure to lose my job when the sh*t hits the fan! cant see a way out, I need help...v quick!

Debt_Free_Chick

There are no magic solutions, I'm afraid. As you've experienced, swapping debt doesn't help unless you have a plan to actually pay it off. Usually, there are only two options - to reduce your expenses and increase your income.

In your case, it seems that your household income is about to reduce at the same time as your expenses are about to increase  :o

Do you have a household budget for all your necessary expenditure? This is vital as there are certain priority bills, eg Council Tax - you really don't want to miss paying that one. Other bills, we may be able to make suggestions to reduce them eg by switching utility suppliers, shopping for food differently etc if you post your budget here.

Start here - but don't just dive in. Read the whole article and do the budget first

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1094132767,59163,

You need to take a hard look at your budget - cut out the unnecessary eg gym membership, broadband and look to reduce all necessary expenses to the bare minimm. Having trimmed your expenses, you should find a little more to help pay off your debt.

If you need more practical help with debt management, try here

https://www.nationaldebtline.co.uk

This is a free and confidential service from a charity that helps people with debt. Your employer will not be informed and will not know, if you use them.

Think about telling your wife. I know that might cause difficulties, but it will be very hard to cut back on your household expenses if she's shopping like Imelda Marcos  ;)

Good luck

Reaper

Try as I might I don't feel a shred of sympathy for you. To run up a £100,000 debt in addition to your mortgage when there were 2 people in the house bringing in an income says you haven't been overspending slightly, you have been amazingly irresponsible.

I think you have only posted on here because you have run out of quick fixes and are rather hoping we might be able to suggest another. If you could get another short term loan I bet you would. You MUST face up to the debt and accept it in the same way an alcoholic must admit his addiction. Only when you are serious about fixing it will you be able to start.

I suspect that to have that much debt you must have been living the life of a high roller. I'm afraid it is not a case a trimming your spending, it is changing your lifestyle. You can not possibly hide it from your wife. She is going to have to do the same. You will be buying second hand clothes from charity shops for the kids and comparing the prices of tins in the supermarkets to save pence. You just can't hide that.

As for your Financial Servcies job, well if it involves giving advice to the public, such as an IFA, you are clearly unqualified to do it and should be stopped. However if it is more of a back room administration task then I don't see that admiting you have debt will necessarily mean you losing your job.

While I have no sympathy for you I have lots for your wife and kids. You need to tell your wife. However to avoid stressing her as much as possible I suggest you don't just tell her you have a problem but instead you wait a couple of days (no more) until you can tell her the solution. Speak to the Citizens Advice Bureau or National Debtline and they will go through your finances in detail (for free) and tell you what you should do. It might even involve declaring yourself bankrupt as it has got so out of hand. However that is not something to do lightly. Once you have the solution worked out present it to your wife. You are in this together.

There are no quick fixes this time and the debt is going to be with you for a very long time.

Woby_Tide

As for your Financial Servcies job, well if it involves giving advice to the public, such as an IFA, you are clearly unqualified to do it and should be stopped. However if it is more of a back room administration task then I don't see that admiting you have debt will necessarily mean you losing your job.

A lot of jobs in financial services/banking often have a clause in contract about 'maintaining your own financial probity'. I assume it's as there is probably some link/suggestion that people may abuse position if they got in trouble(note:I'm not suggesting for one minute that the original poster has or would do, just that their contract of employment may make this a dangerous situation if not managed correctly)

katglasgow

Please dont keep this from your wife any longer she had a right to know about anything that affects her.
I have just found out about the true extent of my partners debts - it has come out very slowly over the last year. Yes I was upset at being in a debt I hdnt created and didnt deserve, but I was more upset to know my partner had been shutting me out of as major part of his life for the part year.
We arent married but have a child and a joint mortgage so anything he does effects me and our son too. We have £8,000 loan now in my name that will take 4 years to pay off and my partner has nothing to show for the money - he has basically being borrowing and borrowing to try top make their repayments, We havent even had a night out since June this year!
Go to the SAB they have help get the interest rates capped and negotiate betwqee the different companies but you must tell your wife the truth or it will destroy you both. Be strong.

Pal

How on earth does someone manage to spend £100k without their wife finding out? As Katglasgow says, your wife is going to be more upset about the lying and secrets than the debt.

Phone the CAB immediately and arrange an appointment. They will no doubt recommend bankruptcy unless you can increase your earnings significantly. Nasty though bankruptcy is, it is something that, when it is inevitable, you would probably want to arrange as soon as possible, rather than continuing to struggle for another 6 months just to end up bankrupt anyway.

mini

Whilst you are at the CAB get them to check whether your tax credits are correct, you can get help with this, personally I'd wait til after seeing the CAB before you tell your wife, you will better informed as to what you are dealing with, I don't think you would necessarily lose your job just for being in debt ???, get advice & support with this as soon as you can

eleanorchang

Hi Degzy,

You are not alone out there, I had my bf confess to me that his spending has got completely out of control. I had alway known of his spending habits and financial difficulties when I first met him four years ago, he was was in 40k of debt, and promissed me that it will be cleared up by 2005 to set up a home and get married. Within that time I was always on this site and he used to snigger at me for being "money mad" when all I was trying to do was sort out my own finances. I had always encouraged him to talk. but he never did and got angry at me.

Some day I know he will come running to me for help, unfortuneatly it happened yesterday. He said he was on 80k in the red, but when I ended up doing all the calculations it was 109k!! ( on 4 loans and 15 credit cards!!!) He lives at home and has min responsiblilities and overheads. I was so flabberghasted, I didn't know what to do, but i didn't yell nor slap him, but leant a sypethetic ear. I was the shoulder to cry on and encourage him that he can sort all this out, with strick disciplin. I hardly slept all night.

I have somehow started to take control now and try to apply all I have learnt on this site to help him out and making him understand and learn along the way. If all fails then we just have to take a trip to our local C.A.B.

All I can say is that people around you, will understand if you are in financial difficulties, never be afraid to talk especially with your partner. Some how its sooner rather than later.I felt abit let down that my bf cannot come openly to speak to me about his problem, yet i know for a fact that for him to confess now takes alot of courage. Don't bury your head in the sand, a problem shared is a problem halved. I have much sympathy for you, and I can thougherly understand what pressures you are going through. At the end of the day, it is you that have to have the determination to see it through, with the encouragement of family and friends.

Good luck and all the best

Elli.

roadrash

Yey I am not alone...

I have been thinking about putting a post of here for a while now, as they say, a problem shared is a problem halved.
Basically, I am in debt, and have admitted this to myself and am now doing everything I can to pay it back.

I am 24, and was chucked out of home at a young age, anyway, being 18 and no place to live, my father was always very strict with my spendings, I just kept on spending!!
I was not aware that I had to be on the electrol roll to apply for credit either, so done lots of credit applications at a young age!

Anyway! At 20 yrs old, I was earning £20k, and decided to buy a house.
Then got off the property ladder last March, rented for 6 months and brought a new house back in August. I brought the house for £115k, with a mortgage of £108k, the deposit I got from using credit card cheques and transfering the cash to my bank account. This is why my credit card debts are now so high.

I now earn £29k.

Here is a break down of my debts:

HSBC - £20k loan - I talked to HSBC and they have cut my interest rate. I pay them £245 a month.

Egg - £6k loan. I pay £108 a month.

Northern Rock - £7.5k loan - I pay £86 a month

Ford Credit - £15k on PCP for my car - I pay them £287 a month

Mortgage - £450 a month

Credit cards - I owe £15k on these - I pay about £300 a month

Take home - £1778
Outgoings - £1276
Leaving - £502 a month for food, petrol etc.

The car I have is a two seater sports car, so am thinking of selling this for a small diesel car, as I work £25 miles away from home.

My partner gives me rent of £500 a month too.

I am looking into taking out a secured loan of £30,000 to pay off NR and Egg loans, and all my credit cards. This has been approved in principle with Freedom Finance, I am just waiting for some paper work...

Anyway, I thought I would let people know my issues, to try and relieve myself of some pressure!

Thank you for reading.

westernpromise

roadrash,

It's good that you've got a grip on this but you still need to be careful here.

I make your outgoings £1,476 a month, not £1,276. In that case, you have about £300 a month to live on, not £500. You are basically heavily exposed to the goodwill of your other half here.

At 24 I assume you pay at least £1,000 a year for car insurance. If it's included with the car deal, think ahead to what it will cost when that deal expires. Chuck in servicing, MOT if applicable, and road tax, and you are probably looking at £150 a month for your car before petrol. If you do 50 miles a day round trip to work, that's another £30 a week, I would guess, so probably another £150 a month in petrol.

Your car is thus costing you £300 a month to run, i.e. your entire remaining income after loan repayments. Selling it may not be easy - you have to settle the finance first before you can offer it for sale, so you can't use the sales proceeds to fund paying off the credit. You'll have to repay them first.

So you are, in effect, living off your other half. Without the £500 s/he coughs up - which effectively is paying your mortgage off for you - you would be in trouble.

Have you estimated what your other expenses are? Gas, elec, water, and council tax are typically going to be another £250, £250, £150 and £1,000 respectively a year. Do you have a mobile phone? Another £20 a month at least. Landline? Another £20 at least. Internet? Probably yet another £20. Buildings insurance? Say £300 a year. TV licence? Another £120 I think.

Add those up and you get another £230 or so per month.

Your actual residual income for food, clothing, and contingencies is thus about £270 a month. You can probably just about live on that, but as I say, you are a bit exposed to your other half deciding to move out and pay £450 toward a mortgage of his / her own rather than £50 more than that towards yours. The relationship needn't founder for that that to happen.

Be careful with Freedom Finance. Just going by the name they sound like a loan shark.

roadrash

Hey WesternPromise

Thanks for you comments ;D
Much appreciated.

Im not sure they need commenting on, but I will anyway.

My partner has had debt trobules in the past so can not get a mortgage due to being 21, he moved up from Luton to be with me, so thats a nice thought at least.
Though I am paying £700 a year insurance with Egg.com as I have 3 yrs no claims and the car is in my garage during the night.

Somehow or other I have jept on top of bills, and have never been late with payments or anything bad so thats good in a way.
But I am very aware that I am practically living off my partner, though he is not aware of this as he is not very money wise.

He has just got a new job paying £16k a year, his outgoings are ust £100 a month. He has said he will transfer all his cash to me every month if it would help. But I wont do this

Freedom Finance are a company off tv! The one with the little phone that talks! lol
Anyway..

Thanks..


I am thinking of selling the car, as nice at it is.