I don’t know what to do

Mistymorning · 20 July 2018 at 7:32PM

Hoping someone can help. I owe around £20,000 and I feel like I can’t breathe. I’ve completed an SOA(?) and it just told me what I already know - my income is around £11 less than my outgoings each month.

I had to move house last year for personal reasons and am currently renting (£400 per month). I am single with two kids and have a mortgage on our old place. When I moved, I put my old house on the market but it’s not selling - it’s currently being marketed for nearly £20k less than I paid for it (in 2006), which means that I will be/am in negative equity. I am nearly £3k in mortgage arrears and the mortgage company are threatening repossession.

I have bipolar disorder and when I am well I can manage my money well, but when I am ill I undo all my good work. I am no longer applying for any credit (no one will give me any credit anymore) but I have these huge debts and just cannot see how I am ever going to pay them.

I am on a small income from my job and as well as this I get PIP and tax credits. I don’t have any more money coming in and I just don’t know what to do. I have read up about DMPs and similar (I am in Scotland) but I am confused about the options available given that I can barely afford to make even minimal payments per month, even supposing I could somehow spend less on food etc.

Please, can anyone offer any advice?

secretdebt · 20 July 2018 at 7:46PM

More of a question than advice: can you move back into your old place? Or are you renting it out to someone? £400 a month on rent + a mortgage isn't helping. Obviously I don't know the reasons - but that is the first thing without seeing any further detail that comes to mind.

£11 isn't a huge amount to cut/make - so hopefully things should be able to be sorted.

By the way: sorry you are in this situation.

sourcrates · 20 July 2018 at 8:45PM

Hi,

As a first step, if you cannot afford your unsecured credit debts, then stop paying them.

It’s simple really, people post on here looking for something of a miracle cure, when in reality the right course of action is staring you in the face, all you do is stop paying them, yes it’s that simple.

You write to each creditor, explaining your situation, and that right now, you cannot afford to pay anything.

Credit debts are all non priority debts, which means you never pay them over and above your essential debts such as rent, council tax, food etc.

Once you’ve done that, get some advice on your situation.

Mistymorning · 21 July 2018 at 1:22PM

Thanks for your kind words, secretdebt.

We cant move back to the old place as we relocated to a different town and changed schools etc. Moving back isnt an option. The old place isnt being rented out as there are a number of works which would need to be carried out first.

Mistymorning · 21 July 2018 at 1:27PM

Thanks, sourcrates. I have stopped paying now and have written to all my creditors. I am stuck about whether to go for a DMP or bankruptcy or something else - I looked on the stepchange website and there were several options listed. I was hoping someone here who’s been in a similar situation could offer advice. Or do you mean I should get face to face advice?

sourcrates · 21 July 2018 at 3:53PM

Mistymorning wrote: »

Thanks, sourcrates. I have stopped paying now and have written to all my creditors. I am stuck about whether to go for a DMP or bankruptcy or something else - I looked on the stepchange website and there were several options listed. I was hoping someone here who!!!8217;s been in a similar situation could offer advice. Or do you mean I should get face to face advice?

Well, lets run through the options, you cannot do a DRO as you own a house, so that`s out the equation.

Bankruptcy, is an option, but for only 20k, its a tad extreme.

Iva is a possibility, but again, its 6 years, with a possible re-mortgage in year 5.

DMP, may be doable, depending on your disposable income.

Get an SOA filled in and posted on here, that will give us a better idea of what the best solution is (don`t forget to format for MSE when asked) link here :

http://www.stoozing.com/calculator/soa.php

Mistymorning · 22 July 2018 at 1:19PM

Thanks so much for your help, sourcrates. I’m having problems posting the SOA because I can’t cut and paste on my tablet. However, I’ve also gone through the stepchange website and it looks as though I can do a DMP - they’re sending me an application pack. It’s helpful that you say bankruptcy is prob overkill for £20k - that has helped me gain some perspective. Thanks. I am clearer now on what to do.

I don’t know what to do

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