Unsecured Vs Secured

buuuug

Hi,

I have recently completed a mortgage review with Northern Rock and because the SVR was not much differant from fixing my rate with an equity release loan to took the fixed rate option. I borrowed an increase of £14k with the intention of consolidating my credit cards to make the fixed period affordable whilst the house continues to be up for sale.

My dilema is that since i did my sums the continuing rising cost of things outside of my control, such as fuel and utilities has messed up the sums somewhat, together with my contracting employment varying my income somewhat, ie, these may days cause my income to drop around £100 each one and that has seriously affected things too. I am having to use at least a full tank of fuel a week at the moment and cost me £60 last weekend, not that long ago it was costing about £48 and i dont see this massive increase reversing anytime soon.

My current position is that i think the easiest option would be to pay as much of that £14k to the cards and attempt to pay the rest each month from any remaining money. This option is causing me a lot of worry and stress at the moment as i feel it may not be the best long term approach.

My other thought is to pay what i can, advise them that i will unlikely be able to pay anymore and keep £1k or so in the bank to cover emergencies and the like because there WILL be other times where i will drop wages, that will happen so i have to try and cater for that.

What will be my position with the credit card people in that event? I have tried to pay what i can but essentially, if i dont have any more then i literally cannot give it.

I owe around £16.5k over 3 cards at the mo, my house has been up for sale since last year & i released a further £14k to try and keep afloat until its sold. My current mortgage is £108k and its for sale for £150k but suspect i will need to drop this, awaiting advice from sales guy.

I am trying to sort out a Saturday job to try and build some kind of contingency supplementary income but need others advice on best way to proceed in view of the above please as starting to get sleepless nights and finding it hard to eat now cause of worry and concern.

Ta,

Nat.

buuuug

hi, anyone with any thoughts or advice please as i am struggling with what to do for the best.

Nat

SunderlandBlackCat

Hi there, You sound like you're in a similar situation as I was in 2000.

I made a lot of bad choices back then which resulted in my debts spiralling but of all of them I think the biggest mistake I made was trying to use credit to prop up a contracting/consulting career beyond the point where it was no longer financially viable.

Have a long hard think about whether your interests are best served trying to carry on as you are or whether you'd be better off looking at a staff job with more stability until your other circumstances have improved.

If it was me I'd pay as much as possible off the credit cards & stop spending anything that isn't absolutely necessary for a while. It's easy enough to buy something later if your circumstances improve but once you've spent, you can't get that money back if your circumstances take a turn for the worse.

buuuug

Hi ya SunderlandBlackCat,

Well, distance to work has meant i have gone through some cars and fuel just rocketing its really hard to keep up. Coming off of a low interest fixed rate after 3 years has been that straw on the camel sadly as it pushed my outgoings up too much to support the other debts in conjunction with it, hence the remort to try and stabilise the situation.

My concern is that if i pay all i can out of the equity release funds then there will still be a shortfall of around 2.5k and i really dont think i could afford that and i am uncomfortable with no contingency fund.

Ironically, a staff job will work, if i were closer to home then my current wage would be ample, its the fuel costs that tip the balance as with utility bills and mortgage my outgoings would be £1088 on paper. Its the £240+ a month fuel and food that puts me near my total income and thats before things such as bank holidays and time off for doctors and the like come into it.

Will be ringing National Debtline tomorrow night as i think the F&F settlement method is best all round for all parties as i could use the majority of my release money to settle them and leave some money in the bank to cover the 4 week months and address the employment situation.

Many thanks for your time.

Nat