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Original poster

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

115 replies

mrsdebt · 02/05/2008 15:28

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...

OP posts:
lardylumps · 03/05/2008 11:46

dont secure the lending as this will put your home in jeperdy. Talk to the CAB if the debt is bad then have you considered a VA. THis freeses the interest you owe and you make one payment a month that is split between all your creditors. It lasts for 5 years and if your financial situation changes you can pay off more.

lardylumps · 03/05/2008 11:52

IVA will help regardless of income. It goes on the amount owed not your income. I know someone that owed over £200,000 in unsecured debt. She worked in the city and earned a lot but she entered into a IVA as she had no reasonable way of paying of the debt (she was struggling to pay the interest payments alone) The help is free and easily accessable.

Bankruptcy is a little different and if dh is self employed then better avoided if possiable.

RubyRioja · 03/05/2008 11:57

This reply has been deleted

Message withdrawn at poster's request.

WideWebWitch · 03/05/2008 11:57

I don't understand why your mum has to lie.
Agree that swapping unsecured to secured is risky.

I had/have ALL debt on 0% and so far have managed to clear it before the 0% runs out.

sophiewd · 03/05/2008 12:14

Also talk to who you owe money too, an IVA will cost you money and your debtors will only get a part wmount of what they are owed and your credit rating will be affected, a friend of mine in your position was honest with who she owed, some froze interest, some cut down the mimimum payments. They were happier to do this and get all their money back then doing an IVA

Slacker · 03/05/2008 12:38

Any arrangement you make with your creditors will affect your credit rating to some degree - if you do a Debt Management Plan some creditors are more likely to play ball if you're going through CCCS or Payplan rather than arranging it yourself, but none of them will freeze interest indefinitely and they will keep phoning you asking you to pay more than you've agreed, also they may pass the debt on to collectors - if it's going to take longer than a few months to sort out you may need a formal solution e.g. an IVA. But it's impossible to say without knowing the full picture.

You may be able to get 0% or lower rate cards and juggle the debt, but that's less easy these days than in the past. Securing the debt really is a high risk option and best avoided if you don't want to put your house at risk.

Do look at the Motley Fool board I mentioned, and if you want to go down the path of making arrangements with your creditors do it in writing, and send a Statement of Affairs so they can see you can't afford to service your debt as it is. Also reduced payments to creditors should be pro rata, don't favour the ones who shout loudest...

soapbox · 03/05/2008 13:25

MrsDebt - you are doing the right thing in looking at how you manage the debt repayments, but are only really looking at one side of the equation as far as I can see. The other side of the balance is how to increase your income!

Do you currently work? Could you increase hours to make a greater contribution to income (i.e. would you earn more than child care costs)? Could you or DH work evenings or weekends to increase money? What do you have that you could sell?

I think it isn;t just about shuffling debt around, but increasing your income to enable you to pay the debt off quicker.

CarGirl · 03/05/2008 13:37

Most important is doind your statement of affairs and working out how you can cut back on your spending immediately.
Have you got sky, mobile phone contracts, switch energy suppliers, are you entitled to increased child tax credits because your dh income so much less than expected etc etc?

LIZS · 03/05/2008 14:00

tbh I'm not sure hwo you are going ot save money towards the debt simply by transferring it onto the mortgage - it is still debt and your repayments will rise accordingly. Unless your mum really is paying off the cars you should not expect her to act as guarantor. The loan may not be properly secured by the lender, as if they are leased another company already has first charge should you default. The lender may make it a precondition that all your other loans are paid off , if the extra mortgage has been based on affordability, and it could be fraudulent if you say one thing and do another. Do you really need more than one car anyway ?

tbh it sounds as if this is a quick fix, robbing Peter to pay Paul, not addressing the underlying issue of accumulating debt and spending money you can't afford . Please make an appointment to see one of the impartial debt services before you decide what route to take, which may still be this on , and to help you reassess your income (which sounds a bit unreliable) and expenditure to look for real ways to pay your creditors without simply gaining more debt elsehwere. They can write and freeze card interest etc but ultimately only you and dh can follow that through and make a long term differnce to the problem by curtailing your outgoings .

expatinscotland · 03/05/2008 14:19

in this economy, i think it's very unwise to put your consumer debt on your mortgage, especially as your chief breadwinner is self-employed.

this could be risking your biggest asset.

it's never good to borrow against your house unless you are making repairs to it that will increase its value more than the value of the loan AND you are going to sell it right away and stand to make a serious profit, something that's not a given now that the housing boom is on the wane.

expatinscotland · 03/05/2008 14:23

also, lying on a loan application could have serious reprecussions. PLEASE read the fine print before signing on any loan/promissary note.

Original poster
mrsdebt · 03/05/2008 14:42

just to clarify, we won't be lying on the application but the mtg company are under the impression that if they lend us £x then my parents will lend £x. The bank are after us paying the cars off BUT imo they are not the problem....

Think it may not be clear to some of you..apologies. Noone will become guarantors and all my mum would be doing is to say that they are giving us a bonus although she won't be iykwim...They don't want proof of her id or income or even the payment, just the letter so surely this isn't a risk..?

Thing is we have a good income, its just we are treading water and due to lenders not giving 0% on credit cards so easily its even harder..

Does that make sense..? I told the bank the cars are not an issue as they could be returned in a way BUT its the credit cards we want to clear. They seems though to clear all the debt via them YET they wouldn't lend us the full amount... Then suggested money from family etc...

OP posts:
expatinscotland · 03/05/2008 14:44

i think i'd put WWW's plans into action before borrowing off my house.

i'd even be willing to work swapped shifts with my spouse before i did that.

SanctimoniousCow · 03/05/2008 14:47

Mrs Debt - what will happen if DH has another spell of not earning for whatever reason, and the bank discover the cars were never paid off - could they recall the whole mortgage in? Would your lying prejudice the house over your head, is what I am wondering.

I think increasing your income by working, cutting back spending to the minimum and using o% credit cards, thus clearing the debts that way, is a far better plan.

Original poster
mrsdebt · 03/05/2008 14:55

yeah that was my worry tbh and why I have't been to the bank today to sort....

Forgot to add, Im a sahm and tbh if I worked it would cost me the same if not more in child care costs for 2 lo's....

DH, also doesn't want that option...I know, I know it sounds crazy but it really would finish him off..He's very traditional and would see that as failing.

Think we may have the look at the route of IVA's as unless credit companies could reduce the int rate etc we would struggle to put all the debt onto credit cards..we would be in the same position iykiwm...
Its not a small amount like £5k..!

OP posts:
expatinscotland · 03/05/2008 14:57

could you swap shifts? maybe get something part-time on evenings and weekends?

even taking in ironing.

something is better than robbing Peter to pay Paul.

that's just a bad move.

and WWW speaks sense.

soapbox · 03/05/2008 15:00

Do you have any skills at all that could make money from home? Can you ebay/auction stuff? It sounds a lot of debt to stack up in 7 months - so I am assuming that you have bought 'stuff' with it that could be sold?

I'm afraid that I'd be pretty unconcerned about your DH's desire to look like the hunter gatherer. I have little truck with that attitude at the best of times and would be even more so if I was looking at a pile of debt that needed shifting!

How about working when your DH is at home to look after the children?

What did you work at before you had children - then perhaps we can come up with ideas for you

I think you need to be very careful about the house - you need to hang onto that at all costs!

Original poster
mrsdebt · 03/05/2008 15:07

work honestly would be a struggle unless it was from home. Ironing . I hate even doing my own let along someone elses..
Prior to the lo's I was office based.

DH works long and varied hours.He can work 9-5 then the next 6-4 then they may ask him to stay away down south or to work late. He also works some evenings with "on call" and weekends....

So he is trying to earn as much as he can..

Thing is "to say we must have bought stuff" that we can sell..Not always true..When you have no income for 7 months money for general items like food shopping has to come from somewhere..

I do my best with the shopping and the weekly shop for 2 adults and 3 lo's is around £120..inc nappies etc.

I have also told dh that he needs to make changes with regards to excess spending iykiwm..

OP posts:
Original poster
mrsdebt · 03/05/2008 15:08

BTW, i do ebay as much as I can..My theory is if its not been used for a while SELL IT..! So I am trying..

OP posts:
hercules1 · 03/05/2008 15:08

That's quite a lot on shopping. We used to spend around that much but have cut down to around 45 a week now for 2 adults, 12 year old and 4 year old dd. Dog food is separate but about 10 a week.

noddyholder · 03/05/2008 15:10

I think debt of this size takes serious management and www is right securing it on your house when prices are falling (and even the banks and govt are saying they need to return to a manageable level) by up to 30% is dangerous.Try anything else.You need to seriously cut your spending and see how this accumulated because if you don't completely change how you live it will mount up again.

Mercy · 03/05/2008 15:10

What do you mean by dh's excessive spending?

Do you need 2 cars, could you make do with one?

Original poster
mrsdebt · 03/05/2008 15:10

I honestly don't know how I can cut down.....

I don't buy much branded apart from nappies and we go through lots of nappies esp with ds....(around 12 a day due to illness)

OP posts:
Mercy · 03/05/2008 15:11

sorry, I meant excess

soapbox · 03/05/2008 15:11

Office stuff might be good!

You could do bookkeeping or typing from home - lots of big firms source that out.

What kind of office work?

Sorry to make assumptions about the stuff - but I was working on the basis that if you are around £70k in debt and it built up over 7 months you spent £10k a month, which is hard to burn through on food shopping and bills alone. And I was assuming that there was no big holidays if you had a sick child. But that is by the by. It's what you can do to get out of this that really matters