Advice needed

nickhe

I am new to this site and was looking for some advice

I am having some major debt problems and wondered if it was best to remortgage and consolidate the debt or write to my creditors and tell them I can't pay and look at seting up a DMP.

What is the downside of going down the road of not paying my credit debts. (Will it destroy my credit rating and stop me getting a mortgage again)

Don't want to sell the house and hoped the remortgage would tie me over for a couple of years until we got back on our feet and got a better rate.

Don't know what is for the best

thanks

tifnstav

not paying your credit cards will get you a bad credit history, maybe even ccjs and restrictions on your property.
why not look at snowballing on whatsthecost.com before consolidating? it is not very often on here that people will recommend consolidating - its daft to secure unsecured fdebt against your house.
do a statement of affairs showing all your ins and outgoings and some wise owls will pop over to pick at were you can save big moolah...

millionaire_in_training

I agree with Tifn. Don't make unsecured debt into secured. Those of us who have done that live to regret it. The problem with consolidating is that you always promise yourself 'no more debt' and the credit cards start getting flashed again. Much better to post your SOA and let folks have a look to see if there are savings to be made for you. Good luck

nickhe

OK - Statement of Affairs (go easy on me, I know I've been stupid!!!)

Salaries 2,838
Benefits 162
3,000

Mortgage -868
Secured Loan -614
Council Tax -218
Utilities -122
Insurances/Pensions -58
Shopping -390
Entertainment (days out, kids activities etc) -177
TV Licence -12
Travelling Expenses -230
School meals and meals at work -33
Clothing -70
Phone and Mobile Phone -68
Prescriptions/health costs -13
Satellite TV -45
-2,917
Total for creditors 83

Household is 2 adults and 2 kids

Unfortunately unsecured credit is 76k and min repayments are £1341

I am concerned that if we go down the route of not paying creditors then we will be forced to sell our home as there is enough equity to clear the debts if it was sold or they could force us to sell our car

My idea was to remortage, clear secured loan and consolidate but this would take mortage up to 270k - but it would tie us over for 2 years until our income went up and we could get a more favourable interest rate. If we do not pay creditors then I may not be able to get a mortgage in the future (it is an interest only just now)

poorandindenial

nickhe wrote: »

OK - Statement of Affairs (go easy on me, I know I've been stupid!!!)

Salaries 2,838
Benefits 162
3,000

Mortgage -868
Secured Loan -614
Council Tax -218 (is this over 10 months or 12, 10 months will reduce your monthly paymets and get rid of the 2 month payment holiday)
Utilities -122 (can you break this down into each utility - gas and leccy compare providers and then switch through quidco)
Insurances/Pensions -58 (what exactly is this - can you break it down more)
Shopping -390 (just food etc???, you might be able to reduce this - check out the old style board for ways to feed a family for less)
Entertainment (days out, kids activities etc) -177 (this is quite high, what does it cover)
TV Licence -12
Travelling Expenses -230 (what is this broken down, what mode of transport and what used for)
School meals and meals at work -33
Clothing -70
Phone and Mobile Phone -68 (can you break this doiwn for, how many phones, contract payg, landline etc)
Prescriptions/health costs -13
Satellite TV -45 (this has GOT to be cut back or ideally got rid of)
-2,917
Total for creditors 83

What about occasional expenses - birthdays, going out, haircuts etc

Household is 2 adults and 2 kids

Unfortunately unsecured credit is 76k and min repayments are £1341

I am concerned that if we go down the route of not paying creditors then we will be forced to sell our home as there is enough equity to clear the debts if it was sold or they could force us to sell our car

My idea was to remortage, clear secured loan and consolidate but this would take mortage up to 270k - but it would tie us over for 2 years until our income went up and we could get a more favourable interest rate. If we do not pay creditors then I may not be able to get a mortgage in the future (it is an interest only just now)

Well done for taking this first step, could you give us a bit more info on the above and also could you break down ALL of your debts including the current balance, the APR and the minimum repayments.

millionaire_in_training

Alot of people on here swear by CCCS for their advice. Give them a call before doing anything rash. You're not doing anything we havent all done which is live beyond our means. There are a few people on here who have large debts and they are mega inspiring. Have a read of Hypno's diary qas she is one who will show you how to get things sorted out. There are loads of ways to make extra money but you have to be prepared to tighten your belt and make some sacrifices. Not too bad to be honest once you get into it and kids always see it as a challenge. Again good luck to you.

neverdespairgirl

nickhe wrote: »

OK - Statement of Affairs (go easy on me, I know I've been stupid!!!)

Salaries 2,838
Benefits 162
3,000

Mortgage -868
Secured Loan -614
Council Tax -218
Utilities -122 - this sounds very high to me. Have you checked whether you could cut this significantly? Firstly, check the comparison websites, then go through quidco to change (money back!) and turn the thermostat down, turn lights off, dry without a tumble dryer, etc. I'm sure you could knock £40 a month off this.
Insurances/Pensions -58 - what type of insurances?
Shopping -390 - food for 4? This is an awful lot. THere are people on the old-style board who feed 4 for £100 a month, but that is tough. But £250 a month is easy, plan meals, be careful, etc. This would save £140 a month
Entertainment (days out, kids activities etc) -177 - to be blunt, you can't afford this. Can you cut £100 off it? You have to, I think.
TV Licence -12
Travelling Expenses -230 - can you cut this down?
School meals and meals at work -33 - packed lunches, and save £20 a months.
Clothing -70 - wear what you've got, and have a budget of £20 a month for the moment, for children's clothes etc. Save £50 a month
Phone and Mobile Phone -68 - mobiles can be cut, lower tarrifs, etc
Prescriptions/health costs -13
Satellite TV -45 - bin it, you can't afford this at the moment.
-2,917
Total for creditors 83

The cuts I've suggested would save you £395 a month, but that's not enough.

What did you get into debt over? Please don't feel harrassed, I'm trying to help not have a go. But is part of the debt related to things you bought, such as a car, caravan, expensive furniture? If so, can you sell some big items and whack a load off the debt?

Can you sell other stuff on ebay or amazon?

If you remortgaged all your debt, what would the monthly payments be for the whole lot?