£117,000 in debt.

inhotwater

Hester - what a lovely post. It's certainly made me feel a bit more hopeful about my situation. £37k in 2 years - very impressive. As I'm on my own, I'm not sure I can get to that level, but it's very inspiring.

nearlyrich

Board Guide Note

I have split off the posts about Ember's sad loss and posted them in The Moneysavers Arms as a new Thread to keep this thread on topic which is to help Purple Octopus with her debt problems...no offence intended to anyone:)

Please can everyone think about other people's feeling when posting on this board, if it is a nasty comment it won't help anyone and this board is a place of mutual support to help people get out of debt... Thanks

dell_2

Hester wrote:

Dear Ms Purple O,


On our modest income, we've paid off £37,000 of debt in two years, by pruning back every unneccessarily paid pound...............

........Also, having a baby limits the amount you can go out so that helps you spend even less!...........

........If your priorities are to be a parent and to get rid of debt, then you'll do it. You simply have to choose what your big goals are and then subordinate every thing to those aims
Good luck.

One word really, - GOBSMACKED!

Such determination - Hester - one post only or in disguise?

Brill post - too good for "just" a thanks button in my view

purple_octopus

cash4oldrope wrote:

I'm intrigued why you have to have a house equivalent to the one you are in now? Seriously, short of winning the lottery, you have to make some BIG changes to be able to get back on an even keel. What is preventing you from moving to a smaller place, such as a flat for a few years to get your debt sorted? Not only would that ease the mortgage pressures, but the bills on a smaller place can be noticeably smaller too - heating, council tax etc.

You had the right idea to consolidate your credit cards, but you just chose the wrong company, and I feel for people who find themselves in more trouble from using companies such as First plus.

I agree with some of the others that 10 years to sort out debt isn't so wild. You owe a lot of money, and given that you're earning £2300 a month (not a bad wage!), even if you had absolutely NO outgoings, that's still just over a third of what you owe First Plus, not taking their interest rates into account.

Instead of going to a company that will charge you for their services, have you spoken to the Citizens Advice Bureau? Forgive me if you already have and haven't got anywhere, but I know someone who works there, and they can be a great force not just for advising you, but for helping get debts frozen while you sort yourself out. Just another option.

You do sound like you are trying to help yourself, just remember that Rome wasn't built in a day! Good luck and all that.

Hi Cash4oldrope,
I take your point that we don't need to have a house equivalent to the one we are in now, but the mortgage is quite small £650/month and to to get anywhere for less than that (rental or owned) would not be easy. We are staying here while we consider the best option.
I have only talked to the CCCS so far but am open to free advice from any organisation and the CAB is one I would consider. When I talked to CCCS they did not know what the best option was for me re the secured first plus loan and said it may be better if I got advice from someone more experienced in secured loans.
I haven't yet done anything about getting my debts frozen because once the creditors know about my situation I won't be able to apply for any more 0% credit cards, which are helping me to pay my debt off sooner. I don't use them for purchases, only balance transfers.I suppose I want to maintain the financial options as long as possible whilst myself and Mr Purple O decide what we are doing with our properties.

Thanks for your good wishes,

Purple O

Pal

Question: Could your partner afford to buy a house by himself? Does he earn enough to be able to get the mortgage you would need? I see that you mention him buying your house as a possibility?

If so, then why not go bankrupt? Bankruptcy is not something to be taken lightly, but you can be discharged now in a year, and it falls off your financial records in about 5 years or so you can start getting credit cards etc again (not that you are going to fall into that trap again, are you! )

So that only leaves the problem you would have getting a mortgage in the future, where you would have to declare your previous bankruptcy. But if your partner could afford to buy a house for you both to live in, then it isn't a problem, is there?

My wife declared herself bankrupt before I met her in the mid 1990s (clobbered on mortgage payments by interest rate rises). When we got together we bought a place on the back of my earnings alone, but put her name on the mortgage as well. Her bankruptcy was discharged in 2000 and since 2003 her credit files have been clean so she is now able to get credit cards etc.

In theory we might have problems getting a mortgage when we next buy (we are renting at the moment), but if that is the only problem then I don't see why more people don't just bankrupt themselves, especially when their debt servicing cost is obviously so much more than their income.

While many people try to avoid bankruptcy (understandably), it is there for a reason - to enable those with debts they cannot service to start again. Seems like Purple Octopus might be in this position and should consider this option carefully. Speak to the CAB about it.

Just a thought.

purple_octopus

Pal wrote:

Question: Could your partner afford to buy a house by himself? Does he earn enough to be able to get the mortgage you would need? I see that you mention him buying your house as a possibility?

If so, then why not go bankrupt? Bankruptcy is not something to be taken lightly, but you can be discharged now in a year, and it falls off your financial records in about 5 years or so you can start getting credit cards etc again (not that you are going to fall into that trap again, are you! )

So that only leaves the problem you would have getting a mortgage in the future, where you would have to declare your previous bankruptcy. But if your partner could afford to buy a house for you both to live in, then it isn't a problem, is there?

My wife declared herself bankrupt before I met her in the mid 1990s (clobbered on mortgage payments by interest rate rises). When we got together we bought a place on the back of my earnings alone, but put her name on the mortgage as well. Her bankruptcy was discharged in 2000 and since 2003 her credit files have been clean so she is now able to get credit cards etc.

In theory we might have problems getting a mortgage when we next buy (we are renting at the moment), but if that is the only problem then I don't see why more people don't just bankrupt themselves, especially when their debt servicing cost is obviously so much more than their income.

While many people try to avoid bankruptcy (understandably), it is there for a reason - to enable those with debts they cannot service to start again. Seems like Purple Octopus might be in this position and should consider this option carefully. Speak to the CAB about it.

Just a thought.

Hi Pal,
Thanks for your suggestions. We have talked about various house buying options, but don't have much idea yet about what is the most sensible. We are quite restricted in that I owe £224k on the house (made up of mortgage £135k and first plus loan now at £89k). The house is worth about £190k so I have £34k negative equity.

Mr Purple O may have something like £60k (just a rough guess) to put down on a further house when he sells his (this is not straightforward and won't happen quickly). He is very worried about the housing market and is not willing to take out a large mortgage.He asked if it was feasible to buy my house at £135k and then the equity in the house would be his.Problem is, he won't have £89k to pay off the first plus loan and that would have to be paid off if I sold the house to him as he does not want to take over my debt .(understandably). I though about maybe putting £25k of the £89k onto an unsecured loan with someone else, then if Mr Purple O could raise £64k we could get rid of first plus (what a day that would be).

Also, I can't sell him the house and then go bankrupt because first plus won't let me sell the house unless I transfer the secured debt to another property.(Let me know if this is wrong). I can't just sell the house (at below market value to Mr Purple O) and leave the secured debt unattached (okay First Plus may occasionally let you sell and go into rented for up to 6 months, but you must be able to prove that you intend to buy again). If I said I was going into rented and then went bankrupt that would be deception, I think.
I take your point that it would sort things out much quicker if I went bankrupt after he took over the house, but I have read the forums involving other bankrupt MSE members and at the moment can't imagine being in their positions. I have considered it, many times, and I'm not saying it won't lead to that, who knows at the moment. Thanks for your suggestions. :T

Purple O

bullspeaking

Sorry to read your predicament have got a simmiler problem also have a firstplus loan on my house & i still got a IVA on all of my other depts so this has helped me remember you only need 75% of your other creditors to agree
can you advise me your intrest rate with firstplus i took out 41K at 13% now at 15% & if i continue for the full 20 years they would of had £116k of me not good news i know

In_Search_Of_Me

Looking at the above realise that purple octopus hasnt posted for ages...anyone know how she is? If you're reading this please let us know hoe you are. My heart goes out to you & I hope you are doing OK & getting things sorted....

oops_a_daisy

Hi Purple O - well done on posting here and sticking with it - it cant be easy Im sorry but I am not experienced enough to give any advice. Just wanted to wish you good luck and some of the posts on here seem to give good advice so all I can say is keep posting here and everyone here will help to support you through it all :grouphug:

LookingAhead

I want to know how Purple O is as well!

And Hester's post took my breath away.

Wow, what a story.