45K in debt

[UsedToLoveMorrissey]

Hello, i think i just need to get this off my chest.

We are £45k in debt. All unsecured, and no access to anymore credit and all in husband's name.

I don't work. I used to do well on-line and at craft fairs but that has taken a huge hit and I don't do fairs anymore as they are not worth it now where we live. I am learning to drive so I can get a job within school hours (we live in the middle of nowhere, 5 buses a day, if they bother to show up and times don't suit to get back for DS).

DH has a good job, but we live in Scotland and I think the rate has changed or the pension contributions have because DH is less £70 a month now. I cried when I saw this this morning.

We can make the payments but any spending above our food/petrol/school lunches etc and we end up in our overdraft so by christmas, we are £2k down. My craft sales at xmas pay this off thankfully, and pays for presents but the rest of the year is rubbish. I sell on Etsy so I dont have a website to upkeep, just the cost of listing each item and a small % in commission.

DS has a good job, but with less than £3k a month coming in, and £900 of to go purely on CC and Loans repayments, excluding mortgage and car (which DH needs because of where we live) we are struggling. Our food bill is approx £100 per month. That includes 1 bottle of wine. No smokes. I have coeliac disease so my bread is a bit dearer, but that's only one loaf a week. One pack of GF biscuits, no other biscuits and very little crap.

I'm not a good cook, we eat basic meals that I do cook from scratch. We eat meat once a week (either chicken or mince beef), we eat mostly salads with tuna/roasted veg and rice/baked pots/soups. We don't eat takeways (we live too far our for delivery). I get the shopping delivered from Asda as that works out at about 40p per week with the mid week saver. We go through about 20 eggs a week (DS and DH love them). Sliced Egg on toast is a favourite weekend lunch.

We eat a lot of fruit, which we do buy from M&S as that is so nice. I have found the delivered fruit to be poor quaility.

If I really try, I am sure we could shave about £10 of the shopping. But really, I cant see anywhere else to make the saving.

The issue somes to this: because we are making the payments, we've not missed one, the Debt website Step Change, are recommending a cut in spending accross the board but no debt advice as such because we can repay.

Also, DH has a job which he would lose if he was made bankrupt. We'd love the debt to be paid off, but we have no extra income, and we'd be out on the streets if were chose a debt soloution as we have no savings to get us through DS losing his job.

I'm prepared to accept the advice that we simply have to accept the situation, we can pay the debt, we have a house and food, but we have nothing else. Any clothes, hair cuts, days out takes us further in debt. It's getting us down and we are snipping at each other too. I'm probably about 6mth away from passing my driving test, and will be reliant on getting a part time job to help out. Until then, I'll keep doing surveys. Being a lurker on here, I have recently changed the CC repayments to a set amount, so that should reduce the balance so much quicker. Thank you t the poster who mentioned this trick.

Sorry for the moan. I know we are to a certain extent luckier than so many people but for 2 very unflashy, unshowy people, we sure have wracked up too much debt through poor choices years ago.

Well done setting the CC payment, that will make a large difference.

I know that M&S food is really nice, but for now I would stop paying their prices and get the fruit from the supermarket. When you buy the chicken is it a whole chicken or breast fillets? I know it’s tough when you can buy exactly what you want, but with that level of debt I would want to cut everything back to the bone and throw every penny at the debt.

I’m a little confused, you’ve mentioned your DH and DS, is that a typo?

Oh, and well done getting it off your chest 👍

It’s surprising that you mention the 40p cost of Asda deliveries but absolutely no mention of your mortgage amount.

What about Extending the term. That can lead to a quite dramatic fall in monthly payments that will help you out during this difficult time.

Of the £2k remaining after debt repayments, how much goes on the absolutely essential bills? (Mortgage, council tax, utilities).

Many families manage on £2k quite comfortably so you must have some high bills going out.

I hope there are other organisations able to help you. If not, Money Saving Expert website is really worthwhile engaging with for pointers in reducing bills.

Do you have skills to do virtual PA, Admin, design or writing work on Upwork.com or similar? You bid for jobs, negotiate rates and work from home. I did that when my exDH lost his job and now make about £30per hour after 3 years. I started at about £12 per hour

I would look at moving to a cheaper house and paying off what you can, preferably moving to an area where you can get a job. Having a job would make the biggest difference to your problem. Why do you think it's going to take 6 months to pass your test? Can't you go out regularly with your husband?

Sounds like a very stressful situation.

If you don’t mjnd me asking , what did you spend the £45k on? Anything you could sell ?!

Are your loans 0% interest?

As someone else asked, could you change the mortgage term? Or move house to someone cheaper/ nearer work for you

Is there anything online or long distant Work you could do ?

Yes I'd agree, £45K is going to be a challenge to pay off just on monthly payments, something 'bigger' needs to happen.

Would moving house/re-mortgaging/extending your mortgage term/something like that be possible?

Have you costed a full time return to work if ds is school age? Even if you did it for a few years and cut back it could be worthwhile - you’d have a better extra pension if you went back ft too.

Any chance to work weekends or nights?

I’m also wondering whether you should consider moving to somewhere with better job prospects for both you and dh?

When you pass your driving test will you need to buy, insure, tax a second car, plus petrol ? Suggest for all utility and insurance bills do not auto renew, use comparison sites to look for cheaper deals. Would it be cheaper for one of you to have a motorbike rather than a car ? If you eat fruit have you looked at frozen or tinned it's probably cheaper. Do you have a spare room that you can rent out or Air B&B. When your DH cones home, can you go out to work using his car ?

Credit card debt : the standing order trick is your friend
you'll be fine

Budgeting is key.
I recommend using YNAB. If you google it you can get a free trial - this will allow you to budget and see exactly what you are spending.
Your shopping must be more than £100 pm.

Also recommend watching some Dave Ramsey videos on You tube or reading his book "The total money makeover". His baby step plan involves saving £1000 for emergencies, then paying off the debt. Without ever incurring more debt EVER. His plan is foolproof for getting out of debt. I find him very motivating but understand he is not for everyone.

So many replies, thank you

ok, £45k. Our biggest mistake was taking out a Northern Rock Mortage all those years ago . we took the max (120%) at the height of the market. We, stupidly, bought a house with a shitty ancient kitchen and a cupboard for a bathroom. We knew these needed to be replaced before we made the offer and the Northern Rock deal was perfect at the time for us to be able to do this. We were young(ish) 1st house, naive ...

We didn't bank on a full re-wiring and new boiler/central heating. These issues were only noticed when the other work was being done (or in the case of the boiler, within 5 minutes of us getting the keys and looking at our new house, smelling gas and getting an emergency plumbe who immediatley condemned the boiler). Despite the house being sold at full price, we were unable to make a claim against anyone for mis-selling as the seller had gone into sequestration? I think that was it. He wasn't yet bankrupt but close I think. We chose the cheapest home report. All our own fault, bad decisions.

we bought, did up, then had a child, then 2 redundancies. We had added the extra home imporvement jobs to the credit cards already, but the redundancies maxed out them out, upping the debt to stupid amount. The house was small, 2 bed, old and needed a lot of maintenance. DH got a new job, then I did, and we maintained as best we could, but we've never recovered from that bad house purchase 10 or so years ago.

We managed, through amazing good fortune, to sell our house a couple of years ago, a new build, closer to DH work, so his commute is less. It did mean giving up my work but I've never had a career, just shop jobs. Our new house has an extra bedroom, a proper garden and a village environment for DS which has been amazing for him. We are just skint. This is our forever home but it has come at a cost.

Ourgoings other than debt

Car: 200
Mortage 610
Council Tax 175
Utilities 100
Insurance (life, car, home) 40
Lottery 30 (postcode and national, living in hope)
phones 30
Netflix 8
Sky 25
BT 55 (this is so much, line, broadband and sport, but it's DH one luxury. He doesn't drink or smoke, no hobbies, he runs to keep fit so no gym, he's the main breadwinner and works hard, I can't begrudge him this. i think the sport is only about £16, the rest is line rental and broadband. However as soon as our contracts finish, we are leaving Sky and changing broadband to get a better deal.

Without going into my bank and checking, there are a couple of smaller debits tha I cant remember. Essentially our left over is c£850. This is for food, petrol, extras

We only bought our new house 2 years ago, with a 30 year mortgage, We cant extend the terms.

I'm sure there are replies that I've not answered, but I'll re-look in the morning, its been a stressful evening waiting n DS to go to bed and then looking through things.

Thank you for replying though, I'll look through the relpies again in the morning.

I would not be paying £30 to the lottery. The chances of winning are so slim and if you add up what you have spent on it I would bet it would come to a fair amount. £850 for just 3 of you to cover food and petrol sounds like a lot. Have you tried a spending app tracker to see where that £850 is going?

The first thing which jumps out at me is the lottery, you’re literally throwing money away. The second thing is the car, is that paying off a loan or is it a hire purchase scheme? That seems like quite a lot to me, and I wonder if you could buy a cheaper one.

In terms of your food shopping, how do you get to M&S to buy the fruit if you live rurally? Does your DH take you? If so that fruit is costing you in petrol too - while I agree it’s nicer than Asda, if you’re trying to cut back then cheaper fruit would be an easy way.

I was also going to suggest shopping round/changing suppliers for things like insurances and broadband, but specifically try using Quidco to get some cash back on things you’d be paying for anyway.

A couple of really obvious things:

Stop paying £30 on lottery and £8 on Netflix

Then cut your food by £20 per week (I assume you spend £100 per week not month?)

That saves £1040 per year with virtually zero effort and would mean (on the figures you have given+assumptions) would have you paying £12,000 less and paying your debt off 2 years earlier.

Oh god bless you. You must feel awful keeping all that in.

Can you consolidate all your loans?

Stop the sky, lottery, BT and Netflix. That saves you £79 straight away. You can't be spending 100 a month on food as said in your first post. How much do you actually spend on food? There are far cheaper places to source nice fruit and veg than m&s.

30 quid on the lottery? Put that towards the debt.

Do you really need Sky as well as Netflix? I would drop Sky as it’s so much more than the other one. How long until you can get out of those contracts?

Scrap the lottery. It's a triumph of hope over experience.

Your spending sounds quite extravagant, given your circumstances. Not judging, just an observation. I think there are a lot of quite obvious savings that you could make straightaway. You just need to change the way you look at the problem.

£30 on the lottery? You haven't mentioned the debt payment? Talk to stepchange, they can freeze int rest.

I love m and s but fruit isn't an essential!

Agree, get rid of lottery and sky for now. Cut out marks and spencer for even 6 months, you’ll cope if you choose good seasonal fruit. Can you air b n b?
Using these savings Over pay your smallest loan, soon it will be gone. Then add that repayment amount to overpaying the next smallest loan.

i was in a similar position and then my marriage failed and i couldnt replay the debt.

to give me thinking space i sent all my creditors a letter saying i could afford £1 a month for a few months while i got advice and they were without exception brilliant about it - all agreed and all left me alone to sort it out.

i then went to a national debt advisory service who did me a budget showing what i could afford to pay, and they recommended an IVA so i phoned up payplan who gave me all the solutions with costs.

going bankrupt was not an option for me due to my job, a debt management plan would take 15 years to pay and an IVA would pay a % back and after 5 years be done (6 if i cant remortgage)

i was told there will be no chance of remortgaging with this as its a form of insolvency but not bankruptcy.

i am paying it off at a fairly eyewatering sum a month (i also pay my ex DHs as he cant afford it and it was the only way to keep him a roof over his head)

i had 39k of debt. i pay £411 a month and ex dh sum is about £260. its not an easy option as they monitor everything and review your pay every few months - any extraas you earn must be paid into the plan and its a bit big brother - but at least i will be debt free in 5 years. (been paying a year so far)
if by some miracle the bank remortgage us then they take a chunk of the equity of the hosue and the debt is settled in 5. there is however a limit to this and its actually a fair pay off - they cant just take your house or all the equity in it as i first thought!

op - if i were you i would contact the national debt line and go through your options.