Max out cards to pay off family?

julia88

In a nutshell: Debts: In-laws £50k
credit cards £25k
Home mortgage £210k
BTL mortg £70k Total £355k

Assets: Home equity £40k
BTL equity £20k Total £60k

My credit rating is currently spotless; I have a credit card limit of £50k. I have never missed a payment and always try to pay off more than the minimum amount, but I can't maintain payments now. The mortgage/s and the credit card payments alone (interest only in both cases) come to more than £2k/mth out of a household income of £2,500.

I have some questions, if you can help me please:

1) Do I go bankrupt? I don't want to lose my lovely home (to three children, one disabled).
2) Should I max out my credit cards and repay my in-laws (they are charging me 2.5% above base) and THEN declare bankruptcy?
3) Do I carry on making minimum repayments and hope things improve?
4) Do I stop card payments but continue the mortgages?
5) If I stop paying the cards, should I also stop paying the mortgages?

PLEASE help. I am so miserable, it's really hard holding it together.

Waspeze

I'll answer a what I can

julia88 wrote: »

In a nutshell: Debts: In-laws £50k
credit cards £25k
Home mortgage £210k
BTL mortg £70k Total £355k

Assets: Home equity £40k
BTL equity £20k Total £60k

My credit rating is currently spotless; I have a credit card limit of £50k. I have never missed a payment and always try to pay off more than the minimum amount, but I can't maintain payments now. The mortgage/s and the credit card payments alone (interest only in both cases) come to more than £2k/mth out of a household income of £2,500.

I have some questions, if you can help me please:

1) Do I go bankrupt? I don't want to lose my lovely home (to three children, one disabled). You need to contact CCCS, CAB or national debtline first to establish your options
2) Should I max out my credit cards and repay my in-laws (they are charging me 2.5% above base) and THEN declare bankruptcy? Definitely not, this would be seen as favouring a creditor which is severely frowned upon by the OR, they can take action to retrieve the money from your family
3) Do I carry on making minimum repayments and hope things improve? again take advice first, if they advise BR then no point making minimum payments
4) Do I stop card payments but continue the mortgages? If you are advised to go BR then keep paying your essential items, utilities, council tax and mortgage
5) If I stop paying the cards, should I also stop paying the mortgages? Not sure when it comes to houses, soz. i'd think you only stop paying it if you are resigned to losing the house but don't know really!

PLEASE help. I am so miserable, it's really hard holding it together.

Hope this helps a bit.. DEFINITELY take free professional advice first!


One thing I would say is that the debt to your family, I think, is classed as unprovable so not sure how this would work with your BR so in theory your debts are £25k but you have equity of £60k so not viable going BR might be better on a DMP... someone better will be along soon to help:)

zoe2008

Hi
First off welcome to the board. Im not really much help with this as im still in the filling our forms stage but just wanted to say things can only get better.
The hardest step is the first and you have made it so well done you.
Im sure someone with some great advice will be along soon to answer you questions.
You can and will hold it together for the sake of you kids just like we are all doing right now.
Chin up x

julia88

Thank you very much.

peachyprice

julia88 wrote: »

In a nutshell: Debts: In-laws £50k
credit cards £25k
Home mortgage £210k
BTL mortg £70k Total £355k

Assets: Home equity £40k
BTL equity £20k Total £60k

My credit rating is currently spotless; I have a credit card limit of £50k. I have never missed a payment and always try to pay off more than the minimum amount, but I can't maintain payments now. The mortgage/s and the credit card payments alone (interest only in both cases) come to more than £2k/mth out of a household income of £2,500.

I have some questions, if you can help me please:

1) Do I go bankrupt? I don't want to lose my lovely home (to three children, one disabled). If you go BR then yes, you do stand a chance of losing your home, and most certainly your BTL
2) Should I max out my credit cards and repay my in-laws (they are charging me 2.5% above base) and THEN declare bankruptcy? Absolutely not, if you do this the OR can ask them to pay it all back as you will be giving them preference over your other creditors,
3) Do I carry on making minimum repayments and hope things improve? Only you know if that's feasible
4) Do I stop card payments but continue the mortgages? You can do this, then go BR
5) If I stop paying the cards, should I also stop paying the mortgages? No, only if you intend to relinquish your home. if you do go BR you'll have minimum 1yr, max 3 years to find alternative accomodation

PLEASE help. I am so miserable, it's really hard holding it together.

Hope this helps some

julia88

Thanks. Your kind words have made me cry !

Waspeze

I know this is a hard time but as already said, you've taken the first (arguably hardest) step by posting here asking for help.

You do really need to get advice from CCCS, CAB or national debtline first though!

peachyprice

Hey chickadee, one thing we all have in common here is that we've all been deep in the do do and some stage, we understand just how bleak it seems to you now, but beleive me there's a good life waiting once you take control of your finances rather than them controlling you, it's just seems such a massive step for you to take right now, but you can do it.

philnicandamy

Waspeze

Thanks for the contact details Phil

AllNancy

Hi, Welcome to the board. I'm no expert, they'll be along soon but go to one of the debt help lines first. An absolute must to find out what your options are.

Essentials are mortgage, council tax and utilities, try to keep those going. Your in laws are a non essential.

There's a lot of help on here so don't depair, we've all been there believe me!!

Cheers


Nancy