In debt by a huge amount....how do I get out of this hole..?

[mrsdebt]

For various reasons dh & I are in a huge amount of debt..

Think of a number, treble it, add 10 and you are probably still nowhere near it...

DH is on a very good salary BUT following ds's birth last year (he was v ill) dh didn't work foe 7 months and as he is self employed he received no income.

We had some money saved but this I now know soon run out and dh wanted to sheild me from the true debt figure due to me only just giving birth along with having ds very sick in hospital.

DH is making himself ill, talks of self harm, suicide stories and i am concerned...
Following OTT behaviour its come to light what is on is mind.MONEY.

Today I agreed with dh that if he focussed on his wrk (his current contract emds in 4 weeks time which is adding to stress.) then I will sort the finances. Today I found out the true figure...

I had done a further advance and added the bulk to the mortgage and the mortgage company want my parents to write a letter saying they are paying off he remained amount (complicated....but this letter will just be a letter iykwim and m&d won't actually be paying anything..) and the smaller amount left I will look to out onto 1/2 credit cards on lower interest..

Im devastated, I know we got into this mess BUT at the time life was hard due to ds and all that mattered was him recovering. Work/bills were the least of our worries...till now..

We have a good credit rating and have never missed/defualted on a payment so I guess that helps but can anyone advise me further.

Im a regular mner btw but wanted to keep this annonomous (sp.) Im worried about dh, I am arranging for him to see a councellor next week and he has seen the gp today for various things. He's ill... I just want to know we will get through this...

You needs some indepedent advice - Cab or one of the national charity debt helplines. they can put a hold on interest accruing and help you budget . He may start to feel a bit better once it is all out in the open and more controlled.

Can you downsize and live somehwere cheaper and pay it all off.Nothing is worth that sort of stress that he is showing

Right, you need a plan:

1. NO NEW DEBT. You must start to live within your means.

2. Work out income and expenditure. Download bank statements and put them into a spreadsheet

3. look at what you have over for clearing this debt.

4. look at whether you can cut any costs

5. if you have a good credit rating and any of it is not on 0% move it to the longest 0% deal you can

6. Really, it's fixable, you must tell him it's not the end of the world.

7. go on, tell us how much?! I bet it's not as much as we owed. We will be debt free by Sept. You tell me yours and I'll tell you mime, bet mine's higher!

moneysavingexpert is useful.

right, well we are 99% sure about this plan of action (dh not home from work yet so we really need to discuss it iykwim.)

The bulk will be put onto the mtg (we can't move due to the current climate, housees are not really moving and even if we reduced it to rock b ottom I doubt we will make enough..BUT its something we did discuss..)

The remainer will be put onto a low int rate card bearing in mind that due to us just having a huge credit check for this one and again he current climate we may not be as successful to get "more credit" and it may man us having a few low rate cards to spread the debt due to the amount left..

THERE IS NO WAY WE WILL PUT MORE ON CREDIT CARDS. I simply won't let it happen. . I want to get rid of the cards we don't need and I have told dh with the surpless each month we must put it away and pay off cards etc in bulk.

I don't think we can get financial help due to dh's income...im sure that dh said due to him earning a high wage they don't always help esp in the case of bankrupcy or IVA's..

I am considering with the remainder debt to move it to a few cards as said above BUT to advise them that I was the int freezing and to agree an amount, its been suggested we do this ourselves instead of going via a company who will charge etc...
Dh has a programme on excel (i think) that will show where your money is being spent, I think I now need to add it to one of my "job" and to keep a control on it. I used to do this when we moved in together but dh hated me having control and saying we have £x left blah de dah..to much like my mum was his thoughts..now I think we have no choice.

I think we will survive this, its just atm it seems we won't. I have just moments ago booked dh a counselling session..they won't take background info off me and want to hear it from so im just hoping he will "SING LIKE A CANARY"

Thanks everyone, thanks www..its "nice" to hear someone's view who is going through it now. How long ago did things change..? How long has it taken to get you here..?

I think adding it to the mortgage is our only option and means we will have to stay in this home for a while yet..I just want to take this route for the next few years with the aim that we HAVE to start corecting things. xx

I'm not suggesting you spend anything on cards, not at all, just that you move it to the lowest rate possible and then your monthly repayment actually pays off some of the debt, rather than just interest. I used to have a card where the monthly payment was £175 and £173 of that was interest! So only £2 of the debt was paid every month!

Ours was £50k btw. It's nearly gone. I earn decent money too but didn't for a while, hence debts.

The spreadsheet is a great idea, I can't remember what WWW was frittering each month, but it was massive.

She is a reformed character,and like a woman possessed.

And I for one, am really proud of her.

I was frittering £400 a month on PRESENTS!
I still fritter but less than I did!

Agree with WWW. A budget plan is essential as is living within your means.

Cut up credit cards
Priotise the highest interest rate card or loan first and make more than the monthly payment if you can, or at least don't default on it

Dh learned the hard way many years ago so he now manages the finances.

(I used to live beyond my means too; I'm talking less than £1k on a credit card but it took me years to finally pay it off - only for the bank to fuck me right off when I defaulted on a £5 payment on a credit bill of £90 - sorry that turned into a bit of a rant)

sorry, I'm such a slow typist. WWW is right I'm sure

credit cards that you pay interest on are bad, from a debt pov or cards that you spend money on are bad from same pov. you must only spend what you have.

if the figure is that high i would not try to deal with this yourself - go through a debt charity NOT one of these dodgy secured loan thingies but the proper people. someone like this

there is good advice and people in similar situations here

my head is everywhere atm..so am I right in what we are doing..? paying bulk with mortgage and remainer (bank won't lend more..) we will put onto 0% or a very low rate card (ie 4%)

Thing is we have been "good" with regards to 0% int cards and thats all we started with and I think dh got a bit carried away....with 12 cards between us ...

WWW, how long did it take to get almost rid..?

BTW, yours was less ... .............

cccs was advised by the counsellor I spoke to today..
Just done their "quiz" and they ask me to call them as they can;t help due to dh being self emp...suggest debt counsellors..

hi
got to go but will come back tomorrow. Yes, if you have anything on expensive cards then getting them on lowest rate pos is good idea.

It's taken us less than a year but I have worked my socks off!

Post more details if you like, I'll be back tomorow. Don't worry, it's not the end of the world, really, it's just a shock when you add it all up isn;t it?

Have you researched your mortgage options fully, one of the mner has a dh who is a financial advisor who will give mner financial advice free, I think he has an ad on the small business section. Another lender may lend you more, give you a longer term (30 years), let you go interest only? If you go interest only just make sure you can make capital payments once you are in the financial position to do so.

Got anything to sell????

thanks www.

cg,I will have a looks for that mn dh. We are on int only mortgage and have been for about 2 years..not got around yet to sorting the "endowment" bit but will do once sorted..

The amount we borrow can only go on repayment due to the amount and dh's income etc...

I also don't think another lender could help. DH is self employed so that is not the best position iykwim.. it would be ALOT of work getting accounts and current account/predicated figures etc. Speaking to his accountant today (he didn't know full history) he basicaly backed up what I say..

I think whatever you do the most important thing is not to think of the problem as 'sorted' once you've increased your mortgage and so on, because (as you know with your head I'm sure, but may not with your heart if you're like many of us!) all you're really doing is re-naming your debt - you will still owe just as much. So from now on you have to know exactly where each penny goes, and be totally on top of things, and budget, because you've still got that debt to pay off (but you will do it!).

I think if your credit rating is still good and you still have the cards then the risk is that you run them up again - maybe not at first or only slowly, but eventually. Also, adding to the mortgage is turning an unsecured loan into a secured one, which obviously puts your home at more risk, and is as I understand it worth avoiding if you can (though I realize you might not be able to). So worth bearing that in mind.

Also, maybe work out the extra cost of a more expensive mortgage if you might need to remortgage later but have changed the loan-to-value ratio by adding this amount to it, and compare that to the cost of keeping the current debts where they are (even if the interest rate is higher) while you pay them off. £40K as a loan at a much higher (than the mortgage) interest rate for a year may perhaps be cheaper in the long run than adding that 40K to your mortgage but as a result paying an extra 1% (or whatever - not sure what it could be) on the whole mortgage over many more years, say.

I second the tip about moneysavingexpert - specifically the debt-free wannabe board - they will give you loads of advice. You will do it! I'm sorry your dh is so stressed - I hope you can get through to him that at the end of the day it's only money and that it really doesn't matter. It's great that you're being so supportive of him.

Post on the Dealing With Debt board on the Motley Fool before you decide to secure debt that is currently unsecured - the Moneysavingexpert debt forum is good but is more for peer support IMO, whereas the Fool board has real experts. Do you have an accurate Statement of Affairs drawn up yet?

And you will get through this...it's only money, it's not worth getting ill over money. Have been in dire straits in the past with self employed DH out of work for months, so am sympathetic, but please don't secure this debt until you're sure that's the best solution.

mrsdebt

as far as credit cards go, things have changed recently. few still offer a real 0% - they cant afford it anymore. most offer 0% for balance transfers for new customers for 12 - 15 months. But - theres always a transfer fee - ususally about 3%. this is very chaep credit if you can keep it on the move long term and be very strict with promotion end dates - sure you know all about it, but you must be careful and watch dates.
is best to close each account as the offer ends and you transfer elsewhere. you can then reapply and get the same deal after 6 months. hope you get a grip on it all.

Hi, how are you today? How's your dh?

This rapid debt repayment plan might be useful.

thanks again everyone...

Hi www,im ok thanks. Still thinking about this all the time and a bit stuck as to what to do...

As I said below we were going to repay most of the debt with a advance on our mortage BUT this would involve my mum giving the bank a letter saying they were donating £X amount to cover the cost of ours cars (cndition from the bank in that they lent us £x to cover debt BUT would not lend more and they wanted us to clear all debt inc the cars ..which I didn';t want to do as they are on a 3 yr lease iykwim...so vicious circle.) BUT this means mum would effectivly be lying for us as she isn't giving us £x as we don't want money from them and also we don't want the cars repaying..God what a mess...

BUT mum is not worrying that in signing this letter she will be accountable for us and should be become bankrupt etc..I have assured she is simply signing to say she is giving us a gift and nothing else...Hmmmmm...not sure what to do.

Dh is not brill, he is in work today and is booked to see counsellor on tue, back to gp next week for blood test results.

Thing with dh atm is that he doesn't care about anything and has even said he not his usual self in trying to find solutions. He says he's looked at website advised here and we are interested in sorting it our ourselves with the credit companies..

What do you suggest..? Do I rong or write and what do I say..? We thought of along the lines of, please stop activity on the cards, they are destroyed and please freeze all interest and we can afford to pay £x monthly..? What did you do www. You are an inspiration to be nearly debt free a year later .xx

We were struggling eith debt as well but took a few practical steps and are OK and have completely turned the situation around, nowhere as big as yours but both being self employed still scary.

One of you needs to take charge of finances, in our case DH was really bad, I now do all books, we have joint account and regularly look at online banking and work out how much we have to spend, if we can't afford it we don't do it.

Sort out your credit cards and then cut them up keeping one for emergencies.

We keep a maximum amount in our current account per week to cover food, any bills etc, at the end of the week I transfer excess into savings account but you could use this to pay off your cards.

These are just a few suggestions that have worked for us.

sophie,I have said to dh that the amount we save if we take the advance will be saved and pay off the remainder credit cards...
good idea x

Do anything but don't get someone to lie for you as it could have awful consequences for her and she is not in debt.