30k Unsecured Debt + Homeowner

december90 · 18 November 2018 at 11:14PM

Hi,

After a lengthy debate with myself, I have plucked up the courage to come online and ask for help!

I currently have 30k worth of unsecured debt. The debt spans across several cards and 3 loans. All of my debt has been accumulated over the past few years, through bad spending habits. I am now trying to sort myself out, this debt has begun to affect me mentally causing me sleepless nights, low mood.

Here is a breakdown:
Credit Cards
Aqua £2062
Barclaycard £6000
Capital One £1825
Capital One £1385
Halifax £1115
MBNA £1931
Tesco £1986
Paypal Credit £2700
Loans
Sainsburys £5,266
Lendable £3,686
Secure Trust £2,020

I earn £2550 a year and around £5000 from self employment
My monthly income is circa £2100-2200.
My total monthly credit commitments are £1123
my mortgage payment is £545 per month
my council tax payment is £170 per month
Gas and Electricity payment is £95 per month (dual fuel)

As of this month, ill be running into a deficit after using my savings.
I am a homeowner with my wife and do not want to do anything which would jeopardise her credit score, or put us at risk from losing our house. All of the above credit is unsecured and is solely in my name.

Please help me, as I am seriously considering to stop paying the minimum payments and defaulting.

sourcrates · 18 November 2018 at 11:29PM

Hi,

As a homeowner your options are very limited, a proper SOA would be helpful, but as a rule of thumb, homeowners who cannot afford there unsecured debt repayments usually have to resort to a debt management plan, stepchange debt charity website would be your first port of call.

January2015 · 19 November 2018 at 12:49AM

As Sourcrates says, post a Statement of Affairs for people to give you informed advice. However, as a homeowner almost 4 years into a DMP, I can tell you it's nothing to worry about. As long as you keep in contact with creditors (and eventually debt collection agencies when original creditors pass debts on) and pay what you evidence you can afford then you have nothing to worry about with regard to your home.

I have been paying token payments for over two years now and all my creditors are fine.

DCFC79 · 19 November 2018 at 12:58AM

You need to fill in the soa form.

Your earnings @ £2550 a year are low so must be missing a digit, maybe a zero.

Start a spending diary and write down every single spend.

Use cash for grocery shopping, you tend to be more wary of whats going in the trolley whereas with card we just put stuff in without looking at offers or whats cheaper p 100g, I see alot of it where customers dont see whats on offer eg a bigger bottle of Heinz is on offer for less than a smaller bottle.

Craig1981 · 19 November 2018 at 6:47AM

another option would be insolvency under an IVA
best to spek to Step Change, Pay Plan, National Debtline to get some assistance whether or not a SMP or IVA will be the best way forward with your individual circumstances.

it could be that neither is an aption and better budgeting is needed to reduce your debt instead. if you post a statement of affairs (I&E), people will be able to advise what type of cuts can be made

december90 · 19 November 2018 at 10:34PM

Statement of Affairs

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned....................1

Monthly Income Details
Monthly income after tax................ 1700
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 300
Total monthly income.................... 2000

Monthly Expense Details
Mortgage................................ 545
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 170
Electricity............................. 55
Gas..................................... 45
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 20
Mobile phone............................ 20
TV Licence.............................. 10
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 70
Clothing................................ 40
Petrol/diesel........................... 330
Road tax................................ 35
Car Insurance........................... 140
Car maintenance (including MOT)......... 40
Car parking............................. 0
Other travel............................ 60
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 29
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 15
Life assurance ......................... 45
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1864

Assets
Cash.................................... 0
House value (Gross)..................... 156000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 158000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 122000...(545)......2.49
Total secured & HP debts...... 122000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Aqua...........................2062......50........0
Halifax........................1115......20........0
Tesco..........................1986......25........0
Paypal Credit..................2700......130.......0
Secure Trust...................2020......60........0
Lendable.......................3686......139.......0
Sainsburys Loan................5266......202.......0
Capital One....................3150......110.......0
MBNA...........................1931......71........0
Barclaycard....................6000......140.......0
Total unsecured debts..........29916.....947.......-

Monthly Budget Summary
Total monthly income.................... 2,000
Expenses (including HP & secured debts). 1,864
Available for debt repayments........... 136
Monthly UNsecured debt repayments....... 947
Amount short for making debt repayments. -811

Personal Balance Sheet Summary
Total assets (things you own)........... 158,000
Total HP & Secured debt................. -122,000
Total Unsecured debt.................... -29,916
Net Assets.............................. 6,084

Reproduced on Moneysavingexpert with permission, using other browser.

I hope this helps I have not included interest rate percentages as I do not know of them off the top of my head. But this is my shameful debt situation. I feel so ashamed of my self for getting into this mess. I see no way out. This forum is somewhere for me to express my fear and sadness.

The statement of affairs shows I have some extra money but I didn't factor in a professional subscription to 2 professional bodies which i am registered too. This equates to around £40 per month for both with another £20 per month for insurances of professional indemnity. I do not work in the finance sector.

Unicorn_cottage · 19 November 2018 at 10:44PM

Hi december90

I know it's hard but you are working towards a solution now so well done on posting an SOA. I know it is a personal question but can I ask why your partner doesn't have an income?

december90 · 19 November 2018 at 10:52PM

19th Nov 18, 9:44 PM
Hi december90

I know it's hard but you are working towards a solution now so well done on posting an SOA. I know it is a personal question but can I ask why your partner doesn't have an income?

My partner's income varies around £1100 per month. I wasn't sure as to whether or not to post it because we keep our finances separate, and she provided us with the deposit for the house we purchased. I feel bad enough, without having to burden her with my debt.

MEM62 · 20 November 2018 at 10:45AM

december90 wrote: »

My partner's income varies around £1100 per month. I wasn't sure as to whether or not to post it because we keep our finances separate, and she provided us with the deposit for the house we purchased. I feel bad enough, without having to burden her with my debt.

You are not going to resolve this level of debt by yourself. You will need to deal with this as a couple. I appreciate that you may not wish to do this but the reality of your situation is that your partner is impacted by it anyway.

January2015 · 20 November 2018 at 11:15AM

If you have a joint mortgage, then your partner will be affected by any negative credit record you have as they are financially linked to you.

kwame41 · 20 November 2018 at 11:51AM

Youve come to the point that you know something needs to be done which is a great first step.

Could you clarify some points re your SOA?

What parts do you share with your partner? Mortgage, Council Tax, etc?

You need to reduce these amounts by half which will give you a more accurate picture of your outgoings.

30k Unsecured Debt + Homeowner

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