Not sure what route to take :-/

[shardlake]

Morning all.
I'm new here so please be gentle, or if the truth demands it, be rough

All in all I owe about 55k in unsecured debt. 3 loans which are as follows:
LVBS/Morganstanley 12k
Morganstanley 8k
First Direct (my bank) 11k
The rest are Credit cards including MBNA, Marbles, Citi, Bank of Ireland, Morganstanley.

The mortgage is 110k with my wife of which we have 21 years remaining. I earn about 14k a year and my wife 35k. My income has dropped from 20k when I was made redundant about 6 months ago. The value of the house is now roughly 280k+ and mort is with Nationwide.

The problem is is that I'm now paying out roughly double of what I earn. Sadly, being a muppet, all this debt is mine. And a lot of it has been using cards etc to pay creditors. Silly but in a spiral , it's hard to see the way forward.

I'm really not sure how to proceed as things are now reachign crisis point. I've applied for a few loans recently and been refused. I can understand why but intelligence with finances is not my strongest point. We have equity to play with although our disposable income is going to drop in 7 months time as we've just discoverd the a new arrival in the family is expected in Oct.
You wit and wisdom would be greatly appreciated.

Shardlake, a crazy fool.

[aguise]

Hi there and welcome to the forum. We are never rough lol.
Only my opinion , and please wait for the clever ones to come along, but I would think your best option might be to remortgage and pay all the debts off and wipe the slate.
All the best from me though and congrats on your forthcoming arrival.

Ang

[Lisa2009]

Hi and welcome.
I have to agree with Ang.
With so much equity in the house, remortgaging to pay everything off in full would be your best option and as Ang says, you can walk away with a clean slate.

[shardlake]

MY only concern is that Nationwide might look unfavourably at all the unsecured debt and not allow us to take this extra mortgage commitment on. We're coming up to the end of our fixed rate deal in July and to be honest this needs looking at sooner rather than wait until then. Does anyone know of Nationwide track record in this department?

And many thanks for the kind words and advice so far

[Lisa2009]

I cant see why they wouldnt look favourably if you explain that you wish to remortgage to pay off all the unsecured debts. As long as you have a good track record for paying your mortgage on time you shouldnt have anything to worry about.

[size5]

Be very careful if you go down the remortgage or secured route. It is vitally important, especially so if you know that you are having a change in circumstances, that you do not overstretch yourself, work out your budget properly and if you cannot make a new arrngement fit then don't do it.

[luluj]

You are not insolvent so please think before you enter the IVA world. If you can reduce your debt without entering into a formal agreement with your creditors then this is the way to go.

However be careful on the remortgage as you will need to be able to afford the repayments once your circumstances have changed.

Good luck

[Adam Davies]

Hi
You have 85k equity[your share]and 55k unsecured debts.
An IVA is not possible therefore you have the options of an informal arrangement with your creditors[debt management plan],remortgage,to clear your debts or to bring them down to an affordable level,or to sell up,downsize and pay off your debts in the process
Regards

[Reviva UK]

Hi Shardlake

the adverts from some IVA providers might start to look attractive at this point.

"little known goverment legislation ..... write of 75% of your debts in 60 payments"? sound good doesn't it.

At this point you should be nowhere near an IVA because you will probably end up paying back all of your debt PLUs interest and costs. There would be a clause that in the 4th year you would remortgage your house and contribute some of the equity. Might as wel do it now.

You do have the right joint income to meet a mortgage of £165k ( 3.5 x joint income, However nationwide may not remortgage you if you haveany form of missed or late payments on anything.

Question is can you manage to pay the debts until the fixed rate mortgage expires in July? This would mean you probably won't pay a redemption penalty.

the switch side of this is that if you can't make it until July without missing payments you won't pay the redemption penalty but you will pay a higher mortgage interest rate for a longer time.

You have to sit down with a caluclator and do the math. If you haven't got a good mortgage broker now is the time to find one. You could do a lot worse than starting with the people on this site.

The repayment for a new mortgage is likely to be significantly lower than your current outgoings and probably nearer the £850 PM.

You also have the pregnancy / maternity situation to think about - CONGRATULATIONS and good luck - Will your wife go back to work / when etc and how will this effect the income.

Hope it helps

[shardlake]

Thanks for all you replies on this. A few things in the pipeline here. THe Mternity thing is no longer an issue sadly. Another thing to worry about.

Anyways - have tentatively approached Nationwide but have a quesy sense that they indeed are not keen on the remortgage. I may have to look at another provider. Anyone got any suggestions who would look favourably on this situation. Given the amountof current equity in the property.

[Adam Davies]

Hi
Try a mortgage broker,both Andrew Graveson,Brightoak,and Welshboy[both can be found on the experts page] who post on this forum are excellent mortgage brokers.
Regards