AIBU to think that we can't sort this ourselves without professional help - desperate situation

[phillers]

Morning,

In a terrible situation. Years and years of poor communication and financial mismanagement have led us here. I am broken, ashamed and not sure if this is something that we can ever get out of. Terrified of losing our home

please be kind

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 4355
Partners monthly income after tax....... 2511
Benefits................................ 0
Other income............................ 250[b]
Total monthly income.................... 7116[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 801
Secured/HP loan repayments.............. 386
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 139
Electricity............................. 98
Gas..................................... 112
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 67
TV Licence.............................. 13
Satellite/Cable TV...................... 36
Internet Services....................... 21
Groceries etc. ......................... 600
Clothing................................ 30
Petrol/diesel........................... 220
Road tax................................ 22
Car Insurance........................... 64
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 120
Medical (prescriptions, dentist etc).... 9
Pet insurance/vet bills................. 28
Buildings insurance..................... 22
Contents insurance...................... 17
Life assurance ......................... 49
Other insurance......................... 9
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 150
Holiday................................. 0
Emergency fund.......................... 100[b]
Total monthly expenses.................. 3298[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 320000
Shares and bonds........................ 0
Car(s).................................. 14000
Other assets............................ 0[b]
Total Assets............................ 334000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 140098...(801)......4.11
Hire Purchase (HP) debt ...... 17000....(386)......0[b]
Total secured & HP debts...... 157098....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
updraft loan...................21000.....360.......16.9
updraft loan 2.................8000......210.......18.9
Updraft loan 3.................6500......165.......18.9
overdraft......................2500......80........42
Creation Credit card...........7100......192.......21
very...........................700.......48........50
halifax cc.....................2400......24........0
fluid..........................3600......170.......39
LLoyds.........................3890......132.......8
HSBC loan......................7309......210.......7.9
Lloyds.........................10500.....269.......29
barclaycard platinum...........12600.....258.......4.9
barclaycard....................4960......109.......4.9
natwest........................2000......20........0[b]
Total unsecured debts..........93059.....2247......- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 7,116
Expenses (including HP & secured debts). 3,298
Available for debt repayments........... 3,818
Monthly UNsecured debt repayments....... 2,247[b]
Amount left after debt repayments....... 1,571[/b]

Cards are all cut up. No possibility of us moving to 0% right now as we have too much debt and are seen as high risk

Partner thinks that it's fixable if we budget properly and start on the highest interest debt. I wonder if we need professional help

AIBU to think that this is not fixable by simple budgeting

This is not true about defaulting on a house in the US. Again, I wouldn’t take advice from people that hold themselves out as knowledgeable about a topic but have such glaring misunderstandings.

It may be possible to freeze interest rates and charges on cards (you may have to give the card up). StepChange will be able to advise on this and more. Don't go to a paid-for service as they are often in the business of just selling one huge loan to cover your debts

A quick Google of 'overpayment' shows multiple banks having a mortgage overpayment calculator. It's standard wording, no one is suggesting the OP doesn't owe the money.

If you can’t put it into your mortgage, a loan would also be much cheaper than the cards. Could well be possible.

Youre not going to lose your home on the budget you’ve set out. You’re able to pay it off

You could also take a six month repayment holiday from your (pretty low) mortgage to throw money at the higher interest debts.

The problem is the interest rates that you’ve got on that borrowing I agree, which you can hopefully bring down a bit. That and making sure you do stick to the budget going forward.

This is credit card debt, not mortgage debt. There is a massive difference in these types of debt. Purposely borrowing an amount, secured by an asset for a specific term and a set monthly payment is not the same as running up credit card charges at high interest rates that will take years to pay if only paying the minimum.

If someone doesn't comprehend that, I wouldn't take financial advice from them.

In addition to what I wrote above, banks make money from charging interest on your debt. They longer you owe them, the more they will make; pay them off earlier and their income decreases.

Of course their marketing teams understand human behavior and would use language that conditions people to believe carrying debt is the normal state of things.

@AliceOlive as you're the expert, what word would you suggest everyone uses to describe a payment that is above the mimium monthly payment?

What single word do you personally use for only paying the minimum?

Minimum

https://www.moneysupermarket.com/credit-cards/overpaying-a-credit-card/

Credit card "overpayment" means something and it's not "paying more than the minimum.", even in the UK.

If someone is mentally telling themselves that paying more than the minimum on a credit card is doing over and above the expected, they are not likely to pay down as quickly as they could.

Plenty of people believe that the psychology is relevant to paying off debt. I didn't make this up myself.

OK, while I get your point, I don't think that's what anyone here was saying.

'Higher than minimum' doesn't really roll off the tongue. Plenty of people here suggesting OP pays higher than minimum payments to get debt cleared ASAP. Just because they've used the wrong word for it doesn't make it bad advise.

Yep, I just think it takes a major mentality shift to clear that kind of debt.

The debt snowball sounded really stupid to me. Of course it’s smarter to pay off higher APR debt first. But I went to a series of Dave Ramsey classes and it’s difficult to argue with the results he is producing. It’s not for everyone and in fact, not really perfect for my exact situation at the time I attended. (Single woman, hitting retirement savings super hard and getting a great match, with some unusual external factors.)

But I’ve proven to myself repeatedly (paying off then again building up some cc debt) that what is logical is not the same as what’s likely to help me succeed.