Oh what financial fools we’ve been

[Platform8]

Good evening,

So today DH and I finally sat down, pulled our credit reports and faced up to years of spending fuckery. We are early 40’s with 2 teens. In ‘good’ jobs with a reasonable mortgage. I earn 65k and DH earns 50k. I also earn an additional 5-10k on freelance work .

for years we have been financial dickheads taking fancy holidays, spending on the house, cars, supporting other family members and generally buying whatever we want. We’ve consolidated many times and run up debt again and again. We tried to remortgage recently but we were declined due to our level of borrowing.

I owe 47k and dh 44k. Please be gentle…. I know how atrocious this is. We also owe my mum 18k but she has said that there’s no rush to repay.

so…. This is where things change. Thankfully we can afford the payments if we get our spending under control. we’ve been through everything and we think that we can throw £3500 at the debt. It will still take a while but we WILL do it

what fucking idiots we have been

We also owe my mum 18k but she has said that there’s no rush to repay.

I actually agree with a PP about this. Your tone here is shockingly blasé. If I owed my mum £1k I'd be bending over backwards to pay it as quickly as possible and we have a similar joint income to yours. It doesn't matter that she's said there's no rush, she deserves to be paid back asap. On salaries like you have you really are taking the piss needing to borrow anything from family so I'd prioritise that.

I think that some people just hang around on these threads to make shitty comments. Water off a ducks back

Have you had any debt counselling? Might be worth investigating -

https://www.gov.uk/debt-advice

Op one of the things you MUST do (speaking from experience) is to go through your last 3 months of statements and work out where the money is going.

Your new budget will come unstuck very quickly if you are guesstimating how much you’re spending. I.e - Food - oh I think we spend about £500 when in reality it’s £700 a month.

You’ve got this.

What on earth have you been buying 😱

Abso-fucking-lutely everything

@Temp2024 if you've defaulted on debts, I assume they're now with debt collection agencies (Moorcroft, Wescot and the like).

Just keep in mind that these companies are usually very open to offers. You can offer them a settlement, haggle. If they say no, leave it a few months and try again. As long as you have a payment plan and pay something regularly, it's very rare for them to progress to a CCJ...and every month you get closer to that 6 year timescale when your defaults are removed from your credit file, the discounts these companies will accept as full and final settlement increase.

I have clients I've worked with who've secured 80% discounts to clear accounts. There's every chance that £45k of debt could be cleared for less than £10k.

Well done for being brave and facing it.

It would be good to get proper debt advice. There's often things a debt advisor can help you with that you can't do yourself including in some cases the interest being stopped.

Well said. Good luck op. You are young enough to emerge from this well and please don’t stop saving once you are debt free. Carry on and build up a good savings pot.

Good luck, OP. As PP have said, it’s easy to get into financial difficulties but there are a great many resources to help you. The PP’s suggestion of saving some money each month and applying the rest to paying down debt sounds sensible; otherwise you risk ending up back in debt because of unexpected costs.

Just being another voice to say well done for facing facts. You're pretty young in some ways considering you have teenagers and so you can tighten your belts and sort this out. Good luck! Don't listen to people mocking you. I'm sure they've buried their heads in the sand about something at some point.

Do you think you can deal with it? You might be better approaching a debt charity

Why do you have two mortgages? If you sell one property you'll be able to pay for the one you live in 😊

It sounds like a lot of debt but you probably borrowed much more on your mortgage. I’d echo those suggesting to get financial or debt advice as your own money approach hasn’t been the best and your plan to reducing the debt may also have flaws. They may also suggest that you get a debt consolidation plan which may reduce the sum, and help you work out if paying off the mortgages when you have high personal debts is the most cost effective route.

We are only on our second month of missed payments atm and still waiting on official defaults. We used last month's missed payments to focus on emergency funds and next few months will be put in a separate pot in the hope that we will have a lumpsum to accept full and final settlement offers. Thank you so much - we are just a while away from it at the moment!

(Embarassingly) I work in the financial services industry so have to tread very carefully and this has meant a lot of the debt options offered by Step Change could jeopardise membership of my professional body

What we're you buying?. Cars and takeaways, tech?

Wow. Good for you for realising and sorting things out now.

I think people do live in cloud cuckoo land sometimes, especially when they have a decent salary! A recent poster talked about spending 10K on a holiday for ten days with a toddler - honestly that seems madness to me unless you are earning triple figures each, and even then why?

you can have great holidays for a few thousand for the whole family. Just cut your cloth and ignore the instagram show offs.

You'll be fine!

Yes plus holidays, weekends away, clothes, house stuff

OP’s own mother has said no rush .Maybe she is happy and can afford to wait and would rather rhey tackle the CC debts first.

👏🏼👏🏼👏🏼. Yes, well done.

I also second using YNAB, I find it incredibly useful for budgeting.

It's only money. It's shit to deal with but nothing compared to death or illness. Totally fixable and you're all set to do it. Good luck.

Do you have anything tangible from your spending you can sell ?
Can you downsize and free up some equity ?

I had some debt when I divorced 15 years ago, I'm on a quarter of your combined salaries but i've managed to become debt free, pay off my mortgage, pay cash for my car and save over 120k . I still have a social life, 3 holidays a year (not luxury but still abroad)

You will get there, and once you have financial peace of mind, you'll wonder why you were ever tucked in to the poison of consumerism

Sounds like you have drawn a line under it all and brave of you to admit how bad it has got.
I would really recommend putting all your outgoings on an excel spreadsheet. You may find other things (subscriptions etc) that you can mange without for a while and save a bit more. Do you have savings? If not I would probably pay off 2.5k a month for the debt and save 1k. Good luck op.

i can recommend following Ramit Sethi (podcasts, Netflix, books…etc). Good luck!

If you were declined for a remortgage, how are you going to get a remortgage? Or will you just roll onto your mortgage’s variable rate? Presumably that is much higher?