shocking debt - can't see a way out - please help.

jez75

Hi Everyone,

I'm in a real mess, primarily down to my own stupidity, extremely poor money management and burying my head in the sand until now.

The situation in short is extremely severe and I just don't know how my wife and I will get out of it.

Around 5 years ago, my wife and I had a 2 bed house with plenty of equity and mortgage payments of £350 per week. We a larger property when we decided to get married with having kids in mind and took a mortgage with a high street bank for £114k and put a deposit of £18k down. At the time we were earning £49k between us with outgoings of around £1300 pcm. In short we had a decent standard of living and a good credit rating.

2 months after moving in, I lost my job i'd had for 7 years after the company wound up - Worried, I took another job straight away, however kept it from my mife to be that I was earning 4k less per year.

We hadn't budgeted for the higher cost of heating and utilities in the new house, higher insurance, council tax and were landed with vital repair bills of £6k. On top of this, the wedding we had planned 2 years before meaning we had to find balances of around 6k in 3 months or face losing the 15k we had already spent on it.

Fast forwarding to today, I tried everything to shield from my wife the worry I was under - for years in fact! Until the baliifs, collection letters, banks, all seemed to come at once and I broke down and told her the situation in full - If only I had done this before! (I had touched on the subject but lied to her as we had already had a suspended reposession hearing on the house the day before the wedding!)

The straw that broke the camels back came at the suspended repossession hearing where the judge ruled that in addition to the morrtgage and £200 pcm towards the arrears I also had to pay a further £300 towards my bank loan and overdraft meaning a whopping £1350 per month + a secured loan elsewhere.

I tried to keep up payments for 6 months but lapsed at christmas - I was left with around £80 per month after payday from a 34k p/a job - I just couldn't cope anymore. I threw the towel in on all my debts.

Sure enough the intention to repossess came (the stage i'm at now). I have since told the wife everything and she has agreed to help us through it (none of this was of her making so it was a bolt out of the blue).

I am in negative equity with the secured loan with 2 charges on house.

The only good news is that in the last 4 weeks or so, we have both had significant pay increases at work which ironically would have meant we were not in this position if they had come earlier - our income now is £70k p/a.

As a starter: i'll list where I am with debt:

Mortgage - £125k inc £14k arrears (repossession pending if I don't pay in full) - Monthly payments should be £1350 inc secured charges as mentioned)
Secured loan - £22k - up to date on payments - £390 pm

Council tax - up to date - £112 per month
Gas - Arrears of £1k - paying at 70pm
Electric - Arrears of £400 - £100 per month down to £40 after this month
Bank loan - £5000 - secured on house and part of mortgage payment
O/D - as above
AMEX - £4,400 CCJ and charge on house - paying at £150 pm
Capital one Plat - £1200 CCJ - paying at £80 pcm as set by court
Isurances - £30 pm - up to date
Water - £400 in arrears - £100 pm and charged on house.
Car/travel - £0 as 2 company cars.
Other bank loan - £1500 CCJ payments £100 pm set by court.
Borrowed from family - £100 per month.
Food - £100 pm
Westfield - £15
Contact lenses - £20
TV - 15
Broadband/phone (essensial for work) £20

So, debts - and severe ones of around £2600 pcm with around £4000 coming into the house so from a level playing field we would be fine, although due to the severity, we are going to lose our house, still owe everything secured on it + any sale shortfall, we will have to pay 6 months rent up front for a rental property if we are evicted which we also haven't got.

My problem now (after all that).

Te only way to save our house is to raise £15k (the arrears). I we don't, based on auction sale prices in my area we will owe

shortfall - around £18-20k based on others in area
secured loan - £22k
other debts on property - 10k

so around 50-60k and we will have no home. It therefore makes sense to try and save the property - we have no chance of doing this without legal representation, however after trawling the internet - are there solicitors out there who will fight our cause - even with such a poor payment record in the past? Tapping into the internet only brings up the fast house sale people - we cannot do this due to no equity and time it would take in relation to the repossession and the red tape associated with getting the secured loan people to allow us to sell.

Personally, my health is suffering (i'm only 32), my work is suffering, my relationship is suffering, we obviously can't consider kids, my family are worrying (pensioners so can't finacially help us) and I'm not sure how long it would take to fall to pieces if I had to take such staggering debt to a rental property.

Obviously, my credit rating is shot, so any kind of consolidation out of the question - Is there any way anyone can think of as to how to save my home or indeed where to go next?

I have spoken to national debt helpline and another problem is that I am breaking down when facing my creditors (Which is why it has got so serious in terms of the level and severity of debt) and my nerves are now shocking every time I hear a knock at the door, the post or the telephone.

any assistance to help me smile again would be greatly appreciated!!

Bismarck

Wow...huge effort...well done for posting....

You're on the right site...

The cavalry will be along soon with the real help....

saffronflowers

Hi just wanted to say well done for posting.

SFx

Bismarck

For what it's worth, your OH sounds fantastic...you can't buy a good wife!

You also need to forgive yourself in all this and take care of yourself....you can't fix this if you're ill and your combined income gives you a great start to rebuild....

What's done is done. Keep your chin up and fight...you've got more going for you than you probably realise.

chevalier

jez75 wrote: »

My comments are in blue


The straw that broke the camels back came at the suspended repossession hearing where the judge ruled that in addition to the morrtgage and £200 pcm towards the arrears I also had to pay a further £300 towards my bank loan and overdraft meaning a whopping £1350 per month + a secured loan elsewhere. You can ask for a redertimination of and with all of the other things that are secured on your house.


Sure enough the intention to repossess came (the stage i'm at now). I have since told the wife everything and she has agreed to help us through it (none of this was of her making so it was a bolt out of the blue). Does she have good enough credit rating on her own to get a loan for the mortgage arrears?

I am in negative equity with the secured loan with 2 charges on house. that means they probably wouldn't take the house if you went bankrupt but you need professional advice about this.

The only good news is that in the last 4 weeks or so, we have both had significant pay increases at work which ironically would have meant we were not in this position if they had come earlier - our income now is £70k p/a. Have you told your mortgage provider this, ie that you will be able to make overpayments from 4 weeks time. Can you get an advance on these pay rises, to pay some now?

As a starter: i'll list where I am with debt:

Mortgage - £125k inc £14k arrears (repossession pending if I don't pay in full) - Monthly payments should be £1350 inc secured charges as mentioned)
Secured loan - £22k - up to date on payments - £390 pm

Council tax - up to date - £112 per monthask to pay over 12 months rather than 10, would give you a bit more to pay mortgage with.
Gas - Arrears of £1k - paying at 70pm how long before this will be gone too?
Electric - Arrears of £400 - £100 per month down to £40 after this month so £60 more to throw at the mortgage arrears from next month, have you told the mortgage people this?
Bank loan - £5000 - secured on house and part of mortgage payment
O/D - as above
AMEX - £4,400 CCJ and charge on house - paying at £150 pm
Capital one Plat - £1200 CCJ - paying at £80 pcm as set by court
Isurances - £30 pm - up to date
Water - £400 in arrears - £100 pm and charged on house.
Car/travel - £0 as 2 company cars.
Other bank loan - £1500 CCJ payments £100 pm set by court.
Borrowed from family - £100 per month. Could you stop this for now? All this should be going to the mortgage people at the moment.
Food - £100 pm
Westfield - £15
Contact lenses - £20
TV - 15
Broadband/phone (essensial for work) £20 and work are not paying for this because?

So, debts - and severe ones of around £2600 pcm with around £4000 coming into the house so from a level playing field we would be fine, although due to the severity, we are going to lose our house, still owe everything secured on it + any sale shortfall, we will have to pay 6 months rent up front for a rental property if we are evicted which we also haven't got.

My problem now (after all that).

Te only way to save our house is to raise £15k (the arrears). I we don't, based on auction sale prices in my area we will owe

shortfall - around £18-20k based on others in area
secured loan - £22k
other debts on property - 10k

so around 50-60k and we will have no home. It therefore makes sense to try and save the property - we have no chance of doing this without legal representation, however after trawling the internet - are there solicitors out there who will fight our cause - even with such a poor payment record in the past? Tapping into the internet only brings up the fast house sale people - we cannot do this due to no equity and time it would take in relation to the repossession and the red tape associated with getting the secured loan people to allow us to sell. Have you talked to CCCS or Payplan about this? They are debt advice charities who can talk you through this for free. They may also have a list of specialist solicitors who at least give a free half hour.

Personally, my health is suffering (i'm only 32), my work is suffering, my relationship is suffering, we obviously can't consider kids, my family are worrying (pensioners so can't finacially help us) and I'm not sure how long it would take to fall to pieces if I had to take such staggering debt to a rental property. And is your wife suffering like this too? Thing is that maybe being repossessed might not be the worst thing that could happen. My reasoning is that quite a lot of the debt you owe would go (the mortgage). Let them do the leg work for the selling, but keep on at them to get the best price.

Next could you put your things in storage and move in with relative for a couple of months. With your incomes you could save for a deposit in less time if you could do this, even though I know it is not ideal.

Obviously, my credit rating is shot, so any kind of consolidation out of the question - Is there any way anyone can think of as to how to save my home or indeed where to go next? Again as I mentioned before, what about your wife's credit rating. If she can raise the loan for the mortgage it would give you some breathing space. Have you been paying all of the secured loans/ credit cards just on your salary? If you have and she has low credit currently this might work.
quote].

I know that letting the repossession happen is not what you want to hear, but is your health, work and your relationship worth it? Ok you would have 60k worth of debt to still work through, but with the smaller arrears coming to an end soon, you would have more money to throw at these other debts anyway.

Please have a look at getting a redermination of the judges ruling ref the additonal money you have to pay on top of the mortgage. They may reconsider it, especially if you send them an income and expenditure sheet showing that you are over committed elsewhere.

Can you get another job to help with payments? Is there ANYONE you could get a loan off to pay the mortgage? Assuming your wife cannot get a loan?

hope this helps a bit
chev

chappers

Well done for posting Jez you will be able to get through this I'm sure especially with your now increased income. I am no expert in repossesion but it seems as Chev says that now your circumstances are changing there may be something you can do, maybe even if you can't raise all the arrears you may be able to borrow less and put that in as alump sum on top of your increased earnings..

You will find it a lot easier now there are two of you involved in this with your combined incomes and resolve.

When I first started living with my girlfiend, now my wife I was in a similar position to you trying to stave off creditors for a couple of years without her knowing(admittedly my debts weren't as high as yours, but neither was my income). Finally I fessed up except I didn't wait until after the wedding.
From then on things became so much easier. She was my debt consellor (I would advise you get some formal structure, through CCCS, payplan etc.) and together we laid down what we could afford, I tried negotiating with my credit card providers but they weren't having it. So I then let all my creit cards go into default and then negotiated regular payments. Slowley but surely we chipped away at my debts, throwing any extra spare cash at themm too.
Now 8 years later we are debt free, overpaying £1200 a month on our mortgage, credit worthy again and about to develop a second property.

You have done the right thing telling your wife as now all you have to worry about is sorting the problem and not about her.

Good luck I know what its like, but you can come out the other side.

jez75

Thanks v much for the advice chevalier,

Its a difficult one - I guess by facing up to it, I should hopefully start to get somewhere.

My wife has always had a really good credit rating until she met me! The mortgage and secured loan and a couple of the utilities were in joint names but ultimately in terms of her personal debt and any debt paid out of her bank, she has never missed a payment of a direct debit and pretty much keeps within her overdraft limit with no charges (other than one slip up).

She has a graduate account at her bank although I suspect that the joint debts have scuppered her chance of credit by association and in turn, our chance of raising the cash ourselves.

In terms of family/friends, that's a bit of a no go-er - My parents are retired with little or no income and her parents are not in a position to help at present.

We can't really get an advance from our employer - I have just started a new job and my wife is in a position at here employer where asking could potentially scupper her future plans with the company.

I guess you are right - If it came to repossession, it's not the worst thing in the world - It's the shame and the knowledge that I have brought this on myself that would be hard to live down. We also live in a very tight knit community where a repossession would be common knowledge in no time - The most the village has to look forward to usually is wheelie bin day so this would be a corker!

I would hand the keys in tomorrow if I thought it would ease outr problems - we have no problem staying with family in the short term, however i'm mindful that our relationship is very fragile at present with all my recent revelations and a move in with family may push this further.

We have the ability to get about 4/5k together in the next 4 weeks which would just about pay the payments i've missed in the last 3 months but i've been told in no uncertain terms by the bank and their solicitor that they will accept nothing less than payment of arrears in full.

Can delay the payments to the parents - no problem. Can't realistically get a second job - I am absolutely shattered as it is at present. I am a UK sales manager and spend around 60 -70 hours mon-fri either away from home or driving to see clients - I am really fit for nothing at the weekend and the time we do have together needs to be mending bridges at present.

I know i'm only making a rod for my own back but when I realised repossession was almost innevitable, I thought "well - that's the last penny they're getting out of me" - obviously the wrong choice with hindsight and has only made my goal of keeping the house less acheivable.

I've spent days now looking on the web for a solicitor / FA who specialises in taking your debts and dealing on your behalf - obviously for a fee but in my current state of mind, I would be happy to pay whatever the fee was if it brought closure/stability to the situation and helped my current mental state.

I have gone from being so care free to a wreck! I am having panic attacks, a skin complaint through stress, insomnia (3 hours a night since xmas and grabbing 5 mins here and there otherwise), depression, mood swings - I just cannot even now, face up to some of these people because above all, i'm ashamed of how we have got here - ok, so a few things were thrown in to test us but if i'd have been up front 18 months ago, my wife and I could have worked this out together and my burying my head and shredding mail has just put a top hat on the situation.

It sounds ridiculous but even now - my wife leaves earlier than me every day for work and I dread saturday coming (our day off together) because I know she'll be in when the postman delivers the next bombshell. I find myself washing the car in the rain to intercept the mail!! Crazy.

Jez

jez75

thanks chappers!

It really helps and inspires to see someone who has come out the other end!

I guess the first move is to talk to cccs or similar and get straight a plan of approach - It all seems far away at present and every call Ihave to make, I put off till tomorrow! No more - I need to face this now if I have any chance at all of saving the house.

Thanks again.
Jez

zincoxide

Jez - this is your lightbulb moment!! Be proud of yourself for starting to take the first steps.

As other posters have said, get in touch with CCCS or Payplan, today if you can, but don't put it off. Remember to tell them about every debt, store cards, catalogues, EVERYTHING.

And welcome to MSE - you'll find it an addiction and a great source if help & support when things are getting you down.

There is one thing about debt - they can't take what you don't have. Payplan or CCCS will help you with a DMP (Debt Management Plan) and start you on your way to being debt & worry free.

jez75

thank you v much.

I will get every last penny down on a spreadsheet and call them this evening if possible.

I look at some of the stories on here and it really is enviable, the fact that people in similar situations have got out the other end - one step at a time and with a bit of luck I can be giving the advice rather than craving it soon!!

Thanks again!

Squiggly_Diddly

Just wanted to add (((((hugs)))) as well - I can't contribute anything particularly useful unfortunately, but sounds like you have already had some good advice, and yes, definitely call CCCS or Payplan. Don't sacrifice your health & relationship for it - once you face it head on & have a plan, things do become less scary - and now you are not facing it alone either.

I've been there in the past, stuck my head in the sand, and the worse thing is not opening the letters & hiding them - fear of the unknown is worse than tackling it. Ended up struggling for years & going bankrupt (with my ex) but my sig will tell you I'm doing ok now . There is always a light at the end of the tunnel - and the support you get from this site is incredible.

And sod what the village think!!!! Do whatever is best for the two of you.

Take care & keep your chin up