- May 12, 2024
- Posted by: legaleseblogger
- Category: Related News
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**Current Living Situation with Ex and Financial Struggles**
Hi All,
I am currently living with my ex in a house we purchased 3 years ago under a promise that unfortunately turned out to be false. We were led to believe that the mortgage would be paid off for us after the first couple of years, as my ex’s parents had provided a significant deposit of 100k. However, this promise was not fulfilled, leaving us with the burden of the mortgage.
Despite our initial belief that we would be mortgage-free in 2 years, we later discovered that the house would not be paid off. To add to the financial strain, the renewal of the mortgage coincided with the financial crash, resulting in a significant increase in monthly payments from £930 to £1330.
In the 22 months since we moved in, my debt has risen from around 35k to 55k due to various expenses such as breaks away, furnishing the house, and purchasing a new car. These expenses seemed manageable at the time, but in hindsight, they have contributed to my current financial predicament.
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**Exploring Debt Management Options and Financial Plan**
As I work towards resolving my financial challenges, I have managed to reduce my debt to 48k over the past year. However, most of my 0% interest offers will expire soon, posing a new challenge. While options like IVA or DMP may be viable for individuals with high debt levels, the joint mortgage situation complicates my eligibility for these solutions.
Given the breakdown of my current debt across multiple credit cards, I am considering balance or money transfers to consolidate my debt at a lower interest rate. The option of 5.9% APR for 24 months without an immediate fee appears appealing, as it allows me to address my debt gradually without accruing additional charges.
By strategically managing my expenses and making extra payments towards my debt, I aim to reduce my financial burden and eventually sell the house to contribute towards paying off a significant portion of the debt. Although seeking advice from organizations like StepChange is on my agenda, my work schedule poses a challenge in accessing timely guidance.
In conclusion, I am open to receiving advice and exploring practical solutions to improve my financial situation. Despite the complexities surrounding the joint mortgage and false promise, I am determined to take proactive steps towards financial stability.
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****** just grabbed a
So let me get this straight, you bought a house, hoping somebody else would just pay for it. You then decided yolo i’ll just run up huge credit card bills and now you won’t be able to remortgage?
This one is extremely careless and you need to address the underlying behaviours here first. Stop spending money.
I think you need a much more detailed budget. Your airy £568 for “food and anything else that crops up during the month” is likely hiding your true expenses from you.
I’m especially concerned about that because you seem to be paying £831 a month / ~£10k a year towards your interest free debt, and yet the balance has only gone down by £8k. That suggests you *might* be spending £166 a month / £2k a year more than you realise. If you are, then that’s not sustainable – and it’ll only get worse if you have to start paying interest.
I know you say that it’s difficult to budget because your kids are only with you some of the time. But if the last month/three months/year was typical, then you could work out exactly how much you spent over that period and assume you’ll spend about the same amount (plus inflation) over the next year or so. That will give you a much better idea of how much you have to work with.
Also – the debt is in your name, but does your ex have any moral responsibility for any of it? Eg if the pair of you were working under the impression that ex’s parents had contributed the house so all fun money was to come from you, it wouldn’t necessarily be fair if ex didn’t now make a contribution to your debts. (To be clear, I’m not suggesting ex has any legal responsiblity for them, but if ex doesn’t know about your debt I think you should tell them.)
How do you own the property? Joint tenants, tenants in common with a trust deed saying… ? I ask because if you do enter insolvency proceedings, the way you own the property might affect whether your creditors can go after the equity.
Your budget looks incorrect.
You have listed cc5 in your total debt payments but also include it in your joint budget. Which is it because £125 is missing.
You have 48k debt total and the possibility of 0% for 35k utilising balance transfers. If the 12k for cc5 is coming from the joint budget then all others could, potentially move to 0%, however that 12k wont be on 0% much longer, unless your ex can do a transfer for it also.
Do you have anything to show for all this debt, are there things you can sell?
Did you remortgage at the end of your initial rate? If you are on SVR try looking at a product transfer with your existing lender to see if a cheaper rate is available – you could even get a tracker with no early repayment penalty if you both intend on selling soon. By doing a product transfer they don’t do as many checks, and usually takes 5 mins online.
For the debts I’d wait til closer to the time when they are due to expire and start transferring them to any 0% balance transfer offers you have at the time. It’s messy but by constantly keeping the balances on 0% you can chip away at the debt. Then you can decide if you want to throw everything at the smallest debt to clear that quickly and snowball from there, or start with the highest debt and work your way down.
It’s a lot of debt but as long as your credit score is decent and you don’t miss payments you should be in a decent position to pay it down. It will just take time.
[deleted]
Hi /u/FinanciallyPoor4424, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/credit-cards/
* https://ukpersonal.finance/lump-sum/
* https://ukpersonal.finance/tax-traps-and-tax-efficiency/
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^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Sell the house, pay off your debt, start fresh?
So for tackling the credit cards, I’d tacke them lowest remaining balance to largest, paying minimum payments on the others and as much as you can to theat lowest balance (starting with CC3 by the looks of it).
The advantage of doing that is mentally you’ll be able to see progress as you clear balances one after another. Seems like CC4 is the one that would benefit most from a 0% interest / low interest balance transfer
Something I would add – this might be a good opportunity to teach the kids about financial management too so they can learn from your mistakes. Obviously don’t know ages but if they are old enough, maybe you could teach them about looking for the best deals and shopping around to lower their costs (e.g. can you get that £40 bill down in cost). This kind of thing is something that schools don’t teach but can be a valuable life lesson for later in life.