How to help a friend in debt?

[RosieLig]

One of my good friends has got herself into serious debt - £50K. It's just built up and she's been in denial.

It's consolidated into a loan but the bank are now talking about putting it onto her mortgage which would make them about 75% mortgaged. I think this has brought it home to her and she's gutted and tearful (her husband doesn't know the extent of it although it's been family stuff, holidays and car repairs that she's spent it on).

Where can she go to get some help? She's worried that putting it on the mortgage isn't the right thing to do.

Thanks!

She's lucky there's clearly enough equity that she can put it on the mortgage and 75% mortgaged isn't that bad, assuming she can manage the payments of course. The Moneysavingexpert site has good forums/advice. She needs to come clean to the husband so they can examine their spending habits together and prioritise things - £50K is a hell of a lot of holidays and car repairs; there has to be more going on.

Thanks. Do you think it's better to have it on the mortgage then?

Yes I was shocked too. I think it's been building up for a while and they had a very expensive car bill last year. She also admits she overspends on the kids (own childhood stuff...). All pretty emotional. I feel crap for her because she's the most lovely generous person you could meet.

TBH I would NOT get it put on the mortgage.

Get her to convert every one of the card direct debits into standing orders for the same amount and it will be paid off in 3 years.

Send her the links to the spreadsheet in this thread to see how
www.mumsnet.com/Talk/legal_money_matters/1987219-SPREADSHEETS-for-Debt-Control-Budgeting-Mortgages-etc

If you can, get her to sign up to MN and join the debt support thread as there are people there in the same boat who will understand.

Thanks Talkinpeace - why would you not have it put on the mortgage? Thanks for the links. :-)

The problem with putting it on the mortgage is its a 20 plus maybe years to pay it off and it's not a negative enough impact to stop her spending?

Whereas if she's feeling it every month and is skint maybe she will stop spending.

Rosie
It is currently unsecured debt.
Why secure it and massively extend the borrowing term
making shed loads more money for the banks
when she can cut up the cards, whump the repayments with my standing order method and get rid of it all without impacting on the house

if her current debt is unsecured (credit cards etc) then the last thing she should do is use her family home to secure it!!

x-post!! but great minds think alike

I think she needs some financial advice from one of those charity debt advice places. (Not a commercial one.) They will know the best way forward. I tended to think putting it on the mortgage was the best option maybe over a shorter term than the usual 20 years. But she needs to take advice before doing anything.

She needs to come clean. Maybe go on moneysavingexpert forum for help.

OP
I have personally cut up the credit cards of one of my clients
his wife guessed what I was about to do a fraction of a second before he did but just smiled
his finances are still nadgered, but he avoided bankruptcy.

I've also supported clients through IVAs
and now test out tactics for debt management on the big debt threads on this board, and my RL clients

my standing order method works.
Get her to do it tomorrow
BUT
she needs to work with her husband on this.

Thanks all. I'll speak to her tomorrow. Xx

not quite sure how you could pay that sum off in 3 years, but i do think she should speak to her husband about it. If she lives in Scotland there is a scheme which allows you to pay off debt, whilst protecting your house- the Debt Arrangement Scheme ?

shonamaxwell
play with the spreadsheets - they show EXACTLY how

formal agreements are always a PITA

Hi, maybe your friend should speak to one of the debt charities, like StepChange: www.stepchange.org/. They offer free advice on problem debt. I worked with them for over 12 years and I know they can help!