I have reached a point where I cannot cope

Hello,

I have been struggling with debt problems for a couple of years now and have now reached the point where I really cannot cope on my own.

It all started with suddenly losing my finance job a few years ago and since then it’s just gone from bad to worse.  We had a personal loan and a couple of credit cards that we had used for holidays and a new car but then we could manage the repayments just fine. I couldn’t find work again for 6 months and when I finally did I had to take quite a big pay cut compared to my last job.

It took a while to understand that we needed to live a bit differently as we were all used to being able to spend what we wanted to really. When my wife asked if we could afford something I just said yes and put it on a credit card.

Now I am having sleepless nights trying to figure out how to sort it out and get back into some control, I keep getting threatening letters and calls from the creditors that I just cannot pay right now.  Our eldest son is going to university in September and we will lose some of our family credit.  We still have to support him while he is away at uni though!

We owe about £42000 and cannot find a way to get on top of it. I am working but my salary is just not enough to cover the monthly outgoings and I am now maxed out on 5 credit cards. I kept thinking that if I just got another card I could pay off the creditors that are hassling me the most.

I have been researching different options and recently spoke to the Citizen’s advice for help.  I have been looking how to at least reduce my monthly payments and there a few options to do this but I am unsure how to proceed.

I am a homeowner so I really don’t want to go bankrupt as I think I will have to sell my house and I just can’t do this as I do not want to up root my family because I couldn’t take care of things properly.

My wife knows we are in difficulty but not by how much and we are already stressed out at each other I don’t know what this would do to us if we lost the house.

The CAB recommended an IVA and put me in contact with a charity debt advice company called Stepchange and also helped me to work out a budget so I could see how much I can afford to pay monthly for all my unsecured debts. I still felt a little lost after I had spoken to them as I am new to these debt solutions and really have no idea about each one.

When I spoke to Stepchange they recommended a debt management plan because I said I was worried about our home and apparently there is no risk to our home and I can set it up quickly.  Although I read the CABs advice guide and it states that it could take years to pay back all my debt and the creditors may not freeze interest which would prolong its length. Therefore I am also considering an IVA which lasts only 5 years and again you are not forced to sell your house.

Although both the CAB and Stepchange were helpful I felt that I had been given conflicting advice about my debt problems as CAB suggested an IVA would be better whereas Stepchange suggested a DMP. I felt a bit railroaded into a DMP after I mentioned my house.

So I got online and did some more research and found the Beat My Debt website. I had been looking through the IVA and DMP articles and a live chat box popped up so I asked a few questions about a DMP and IVA.  A gentleman called James responded to me and was very helpful.

It turns out that an IVA asks you to release equity at the end if there is any but we won’t risk losing the house. I am unsure about a DMP as it sounds like I could be paying forever! I haven’t discussed the options with my wife yet as I want to wait until I can tell her how we are going to resolve it.

I am going to speak to James tomorrow over the phone to have a more in depth chat about my situation and hopefully have more clarity. I would like to know if he thinks an IVA or a DMP would be better for me as I am still unsure.

I have decided to keep this log about my situation in the hope that I will be able to help other people who are unfortunate enough to find themselves in a similar situation. I will keep you posted.

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