debts have accumulated due to my husband being ill

[rosebottom]

My husband and I are facing some serious debt. We are mortgage payers and do have at least 60K equity in our house. However, we have a mortgage of about 95000 (repayment with Nationwide), secured loan of 45000 (firstplus), credit cards totalling 2500 and an overdraft of 2600. We are constantly at the limit of our overdraft and our debts have accumulated due to my husband being ill health retired and our income becoming less, whilst the Bank of England rate is increasing and our secured loan being on a variable rate increasing our monthly costs. We are not yet behind on any payments, but we are becoming perilously close and I feel any minute we are going to drop the balls that are in the air. We have 3 children, one who is 3 and I am so worried about it. We really don't want to lose our home, we do not have and Payment protection, so cannot go down this route. Our mortgage is fixed for another 2 years. What advice can you give us to perhaps somehow reduce our monthly outgoings to an amount we can manage?

[MelanieGiles]

Hi rosebottom and welcome to the forum

As you have very few unsecured debts, and a lot of secured debt, you may need to think about consolidating your mortgage to interest only, or even selling and downsizing, in order to restructure your budget. If not, you may rely too much on extended lines of unsecured credit and end up in a far worse position.

Try and get the majority of your outgoings paid on a monthly basis, in order to monitor your spending more carefully. And cut back on non-essential expenditure for a few months to see how you manage.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[rosebottom]

Thanks for your quick reply. We are in fact trying a new monthly budget plan and actually writing down every detail as to where our money goes. This we then hope will give us an idea of just how much we may not be sticking to our monthly budget. Most of our bills we do pay monthly in any case. As of yet, we are not behind on any payments - but it concerns me that we will be in the not too distant future unless we change either how we are spending or like you said, perhaps downsizing. We have considered selling our property and then renting, but then I am afraid that we may never get back on the property ladder again.

One thought did cross my mind as to whether or not we could in a sense remortgage with Nationwide the whole amount ie 95,000(current mortgage) + 44,000(secured loan). However, I am not sure that we will qualify for such a high mortgage as our income is not what it used to be. For instance, my part-time earnings are 11,000 p.a, my husband has a small pension of 562.00 per quarter, he also receives DLA (Disability Living Allowance) and Incapacity Benefit. As we have children, we also receive WFTC. But I am aware that lenders do not take this sort of income into account. Do you know if there is some way we could qualify for a self-certified mortgage? Once again, regards and thank you for taking the time to reply.

Jennifer

[MelanieGiles]

Hi Jennifer

There are many mortgage products out there these days for people in your circumstances, so I am sure that something could be sorted for you. Enlist the assistance of a mortgage broker who will be able to shop around the market for you to see what is available.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk