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  • FIRST POST
    • worriedDan
    • By worriedDan 10th Feb 17, 11:12 PM
    • 165Posts
    • 449Thanks
    worriedDan
    I don't think it gets much worse than this. Feel totally beaten
    • #1
    • 10th Feb 17, 11:12 PM
    I don't think it gets much worse than this. Feel totally beaten 10th Feb 17 at 11:12 PM
    After many years of denial, I/we have to face up to our debt situation. I am sitting here feeling like the end of out world is about to come. I feel like I have let everyone down. SOA below

    We have always had some debt but an expensive few years have seen it really spike. Most of it is in my name although some is in my wife's name. She knows that we have loads of debt but I haven't shown her the bottom line and I am not going to. Not yet anyway. Things are difficult at the moment so I want to get on top of payments etc before sharing the true extent with her. I hope that this does not make me deceitful, but I think it's the best way for now.

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 3378
    Partners monthly income after tax....... 1010
    Benefits................................ 82.8
    Other income............................ 0
    Total monthly income.................... 4470.8


    Monthly Expense Details

    Mortgage................................ 497
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 103
    Electricity............................. 40
    Gas..................................... 82
    Oil..................................... 0
    Water rates............................. 35
    Telephone (land line)................... 10
    Mobile phone............................ 60
    TV Licence.............................. 14
    Satellite/Cable TV...................... 10
    Internet Services....................... 10
    Groceries etc. ......................... 200
    Clothing................................ 50
    Petrol/diesel........................... 160
    Road tax................................ 5
    Car Insurance........................... 60
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 23
    Contents insurance...................... 0
    Life assurance ......................... 40
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 20
    Entertainment........................... 50
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 1519



    Assets

    Cash.................................... 0
    House value (Gross)..................... 150000
    Shares and bonds........................ 0
    Car(s).................................. 8000
    Other assets............................ 0
    Total Assets............................ 158000



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 75000....(497)......1.5
    Total secured & HP debts...... 75000.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    cc1............................15900.....304...... .0
    cc2............................6600......200...... .18.9
    cc3............................4500......45....... .0
    hsbc...........................2700......75....... .18.9
    creation.......................4500......45....... .0
    creation.......................4600......100...... .18
    cc2 wife.......................4500......45........45
    cc1 wife.......................7000......165.......6.9
    cc4............................5000......100...... .0
    Total unsecured debts..........55300.....1079......-



    Monthly Budget Summary

    Total monthly income.................... 4,470.8
    Expenses (including HP & secured debts). 1,519
    Available for debt repayments........... 2,951.8
    Monthly UNsecured debt repayments....... 1,079
    Amount left after debt repayments....... 1,872.8


    Personal Balance Sheet Summary
    Total assets (things you own)........... 158,000
    Total HP & Secured debt................. -75,000
    Total Unsecured debt.................... -55,300
    Net Assets.............................. 27,700
Page 3
    • worriedDan
    • By worriedDan 13th Feb 17, 11:15 AM
    • 165 Posts
    • 449 Thanks
    worriedDan
    Hi there worriedDan

    Good to meet you and welcome to the boards.

    It looks to me like you are getting this well under control. Well done. You also said that you recently had a big pay increase so possibly accruing the debt was before that happened? Whatever, you're in a strong position now and it looks like you're about to make the best of it.

    I think everyone's advice so far has been good so I'll not add to it. 0% transfers, budgets, spending diaries, all good.

    Regarding this...



    Lots of people on here worry about telling their partners so you're not alone. So far, you've been hinting at things and trying to introduce your wife gently. After you posted the above, it occurred to me that sometimes knowing a little is worse than knowing the whole story. Your wife's imagination may be running wild, are we going to get bailiffs at the door? How worried do I need to be? Are there actually threatening letters that you've been hiding? Ignorance is often not bliss at all.

    I say you sit down with her once the wee one is in bed and give it your full attention. Work out the new budget together and decide how you're going to work it (new bank accounts? Envelope system? Whatever). Tell her how much you're hoping to repay every month, all in a calm and reassuring way, and let her know it can be done without any impact on your credit rating, nasty letters or anything else. You're in a strong position so emphasise that. There is more than enough to pay the bills and put food on the table. Then tell her that you're going to have to budget like that for a while because this is the total and it's therefore going to take a few years. She's your partner and equal and she needs to know.

    You could always go a step further and share that you've been very worried about it all and didn't want to let her or your little one down. You could tell her that you just wanted to protect her from all this because you care so much. She has every right to be a bit angry and upset with you since you've been in charge of the cash, but she also sounds like a sensible woman and everyone on here can see that your intentions were good, so I'm sure she'll see that too. It can bring you closer together if you're both fully on board.

    Best of luck. I've subscribed.
    Originally posted by ani*fan
    Thank you for your post. I sat her down on Saturday morning and talked to her about our new budget. I had put together a spreadsheet showing what we have to pay out and how much if left for debt payments. I showed her this spreadsheet and we both agreed that it was appropriate. We agreed to view it as a 3-4 year journey. She knows that we need to pay around £1500 per month in order to clear the debt in this time frame so this suggests that she has already thought about the total figure. I still haven't said ! we owe 50 odd grand, however I have given her every other bit of info to allow her to work it out for herself! I also offered to print a list of all of our debts and balances but she told me not to.

    I also told her that I hadn't been managing the debt particularly well for the previous 12 months and that I was sorry. She said that I didn't need to be sorry and that it was down to both of us.

    I kind of feel like I have done all that I can do for now in terms of confessing/disclosure etc. I have been on the edge of my nerves all weekend so I just want us to get on with paying it now.

    Thanks again
    • ani*fan
    • By ani*fan 13th Feb 17, 11:33 AM
    • 1,435 Posts
    • 3,377 Thanks
    ani*fan
    Well done. That sounds good enough for now. £1.5k per month over 3-4 years...she can do the sum.

    I wish you the very best of luck.
    If you know you have enough, you're rich.
    • enthusiasticsaver
    • By enthusiasticsaver 13th Feb 17, 12:35 PM
    • 3,208 Posts
    • 5,310 Thanks
    enthusiasticsaver
    £1500 per month looks totally doable on your income. I would be very wary about suspending pension payments for a whole year. You will miss out on employer contributions and on your income it looks like you can afford them. Also start emergency savings account. If you can stick to that plan, move as much as possible to 0% and don't use cards any more (except debit cards) then things should look very different in 3 years.
    Debt and mortgage free and saving for early retirement
    • ReadingTim
    • By ReadingTim 13th Feb 17, 3:18 PM
    • 1,396 Posts
    • 1,957 Thanks
    ReadingTim
    Sounds like you've made good progress, but I still think you need to be honest about the total amount owed. "Tens of thousands" is a bit of an abstract amount, which doesn't really mean much, especially if you're having to cut back on a lifestyle which you thought you could afford (even "deserved"), to something a little less.....comfortable. And the next 3 years aren't necessarily going to be comfortable, so it's important for her to know why she's having to cut back.

    "Fifty grand" sounds like a helluva lot, and indeed it is. But it's not insurmountable, and besides, once you've paid it off, how can she measure what an achievement that was, if she doesn't know how deep you were in it to begin with?
    • worriedDan
    • By worriedDan 13th Feb 17, 3:49 PM
    • 165 Posts
    • 449 Thanks
    worriedDan
    Sounds like you've made good progress, but I still think you need to be honest about the total amount owed. "Tens of thousands" is a bit of an abstract amount, which doesn't really mean much, especially if you're having to cut back on a lifestyle which you thought you could afford (even "deserved"), to something a little less.....comfortable. And the next 3 years aren't necessarily going to be comfortable, so it's important for her to know why she's having to cut back.

    "Fifty grand" sounds like a helluva lot, and indeed it is. But it's not insurmountable, and besides, once you've paid it off, how can she measure what an achievement that was, if she doesn't know how deep you were in it to begin with?
    Originally posted by ReadingTim
    You have hit the nail on the head with the 'deserved' comment. We definitely felt that we owed it to ourselves to have nice things because we worked hard!
    • Money Rollercoaster
    • By Money Rollercoaster 13th Feb 17, 4:00 PM
    • 238 Posts
    • 550 Thanks
    Money Rollercoaster
    Sometimes you think I get paid a reasonable amount, I should be able to afford X, Y and Z so you go ahead and treat yourself. Unfortunately, that only works if you don't have existing debts in the region of tens of thousands ... been there, done that, got the t-shirt on credit


    I'm hoping that when I'm clear of my current debts I might well be able to afford a few more luxuries, but I don't mind telling you that I've been at this since the end of 2013 and it is hard work and does feel pretty unrewarding at times. But hopefully, like me, you'll be happy to put up with the pain in the knowledge that you're doing the right thing for you and your family.
    Living Life @ 174 BPM >> CC Balance (0%) -£1,950 - Target DFD Dec 2017 >> Loan (Car) (3.1%) -£20,264.29 - Target DFD Oct 2020
    • ReadingTim
    • By ReadingTim 13th Feb 17, 4:46 PM
    • 1,396 Posts
    • 1,957 Thanks
    ReadingTim
    You have hit the nail on the head with the 'deserved' comment. We definitely felt that we owed it to ourselves to have nice things because we worked hard!
    Originally posted by worriedDan
    Sadly the people you "owe it to" now is the credit card company. Debt doesn't respect hard work. You can graft as long and hard as you like, but if more goes out than comes in, you have a problem.

    "Because I'm worth it" has led many into misery and the next couple of years for you and her won't be a lot of fun. To stay strong through this, she needs to know the full story.
    Last edited by ReadingTim; 14-02-2017 at 9:15 AM.
    • ani*fan
    • By ani*fan 13th Feb 17, 6:27 PM
    • 1,435 Posts
    • 3,377 Thanks
    ani*fan

    "Fifty grand" sounds like a helluva lot, and indeed it is. But it's not insurmountable, and besides, once you've paid it off, how can she measure what an achievement that was, if she doesn't know how deep you were in it to begin with?
    Originally posted by ReadingTim
    Ooh, good point, well made.
    If you know you have enough, you're rich.
    • worriedDan
    • By worriedDan 14th Feb 17, 9:45 AM
    • 165 Posts
    • 449 Thanks
    worriedDan
    Sadly the people you "owe it to" now is the credit card company. Debt doesn't respect hard work. You can graft as long and hard as you like, but if more goes out than comes in, you have a problem.

    "Because I'm worth it" has led many into misery and the next couple of years for you and her won't be a lot of fun. To stay strong through this, she needs to know the full story.
    Originally posted by ReadingTim

    Thanks for the post

    I actually think that the next couple of years could be really positive for us though. The thoughts of being at least 20k less indebted by Feb 2018 is a real driving force. I don't see any reason why we can't sort out this mess and still have some 'very carefully budgeted for' fun!
    • zippygeorgeandben
    • By zippygeorgeandben 14th Feb 17, 9:56 AM
    • 482 Posts
    • 534 Thanks
    zippygeorgeandben
    I know it might not seem so at the time Dan but this can be a positive experience. You'll both get a real value of worth through this. You must be a partnership though. Everything out in the open, it'll test your relationship but if you are strong, determined and bloody hard minded, then you'll see the light at the end of the tunnel.
    I wish you all the luck in the world but it shouldn't come down to luck. Take out less than you put in.
    For richer for poorer...
    End Sep 2016 End April 2017 £8236.57 £6670.91(Tesco 4.8%) £6185.75 £1779.78 (Zopa 4.0%) £5344.50 £3394 (Sainsburys 0% until 06/19) Sister £2000 (0%) Total debt £19.766.82 £13,844.69Original DFD May 2019.
    • enthusiasticsaver
    • By enthusiasticsaver 14th Feb 17, 10:30 AM
    • 3,208 Posts
    • 5,310 Thanks
    enthusiasticsaver
    Thanks for the post

    I actually think that the next couple of years could be really positive for us though. The thoughts of being at least 20k less indebted by Feb 2018 is a real driving force. I don't see any reason why we can't sort out this mess and still have some 'very carefully budgeted for' fun!
    Originally posted by worriedDan
    I actually think the satisfaction of knowing you are living within your income and owe nothing to anyone is worth more than any overpriced electronic goods, flashy cars or exotic holidays. We do have nice holidays and newish cars now but all are budgeted and saved for so if you are looking forward to that and have shunned the mindset of we work hard so we are going to go out and spend regardless that is a positive step forward. Make sure you keep posting and record your journey. Nothing is more satisfying than seeing that debt figure reduce.

    You can still have fun if you budget for it and you have a high disposable income so that will help. Living within your means is also a good life lesson to pass on to your kids. Just make sure you don't sacrifice your future income security for jam today though (I am talking about the pension now). Take the long view as short term thinking is often what gets people into debt and that includes not budgeting for your future.
    Debt and mortgage free and saving for early retirement
    • EssexHebridean
    • By EssexHebridean 14th Feb 17, 10:47 AM
    • 7,107 Posts
    • 37,815 Thanks
    EssexHebridean
    So - we've established from your other thread that consolidation is not the way forward, yes?!

    If I were you, I'd go through the SOA with a fine toothed comb, and also run a spending diary for a month at least so I can see where every penny goes. That should mean that a) you can get your budget to a state where it's an accurate reflection of what you are actually committed to spending, and b) you track down where frittering happens - that stuff that's not included in the SOA and so eats into the surplus you *should* have. Those things then mean that when your SOA says you have X-Amount surplus, you actually have it.

    From that point, I would view the next few months as a time to throw every penny of surplus at the debts - prioritising the highest interest rates OR 0% cards about to fall off-deal onto a higher rate if that is more appropriate. At the same time, I would also go back through the SOA and work out where you can make savings "painlessly" - that might be by using a little less electricity, by turning the thermostat down a couple of degrees and putting on a jumper, by forgoing some treats when you do your grocery shopping, or by walking rather than taking the car. It varies from person to person. Every penny you save can then either go to debt, or if you prefer, you can view that as "money you didn't know you had" and that can then become your entertainment budget - there's great motivation to save money in one place when you know it's going to be used for fun elsewhere!
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£276.01
    • enthusiasticsaver
    • By enthusiasticsaver 14th Feb 17, 12:10 PM
    • 3,208 Posts
    • 5,310 Thanks
    enthusiasticsaver
    Good advice EH
    Debt and mortgage free and saving for early retirement
    • ani*fan
    • By ani*fan 14th Feb 17, 12:34 PM
    • 1,435 Posts
    • 3,377 Thanks
    ani*fan
    Yes, very good advice EH.

    I'm not convinced consolidation is off the cards yet though. The OP has just had some alternative advice over on his other thread.
    If you know you have enough, you're rich.
    • worriedDan
    • By worriedDan 14th Feb 17, 4:33 PM
    • 165 Posts
    • 449 Thanks
    worriedDan
    Yes, very good advice EH.

    I'm not convinced consolidation is off the cards yet though. The OP has just had some alternative advice over on his other thread.
    Originally posted by ani*fan
    HI

    I don't think we are going to take the consolidation loan. As tempting as it is, I do worry that I will fall in to the trap that everyone has referred to in recent posts.

    I was thinking that I could call up the CC companies for the cards that are about to increase to 27.9% and ask them if they could consider a lower rate of interest? If not, I will balance transfer elsewhere. Have I got any chance of being successful with this tactic????
    • SkintTeacher
    • By SkintTeacher 14th Feb 17, 4:48 PM
    • 286 Posts
    • 1,439 Thanks
    SkintTeacher
    A lot of people saying it won't be fun... this does depend on your idea of fun. Have a think about what makes you really happy... if it is giving and receiving then think how you can do that without spending (massages, compliments, time - all free). That may sound corny, but if you spend the next few years thinking you're 'depriving yourself ' of everything you love then yeah, it'll be a miserable, long, hard slog. If you sit down with your partner and think about what makes you genuinely happy you can then go about looking at finding the lifestyle that you both want and that is sustainable. I wish you the very best of luck!
    • EssexHebridean
    • By EssexHebridean 14th Feb 17, 5:00 PM
    • 7,107 Posts
    • 37,815 Thanks
    EssexHebridean
    HI

    I don't think we are going to take the consolidation loan. As tempting as it is, I do worry that I will fall in to the trap that everyone has referred to in recent posts.

    I was thinking that I could call up the CC companies for the cards that are about to increase to 27.9% and ask them if they could consider a lower rate of interest? If not, I will balance transfer elsewhere. Have I got any chance of being successful with this tactic????
    Originally posted by worriedDan
    Well you've got nothing to lose by trying.

    If you're even the slightest bit concerned about falling into the "consolidate and run up more debt" trap then it really REALLY isn't for you. I suspect focusing on sorting things out will, financially, be the making of you and your family as it will give you time to totally re-evaluate things and form new habits.

    A lot of people saying it won't be fun... this does depend on your idea of fun. Have a think about what makes you really happy... if it is giving and receiving then think how you can do that without spending (massages, compliments, time - all free). That may sound corny, but if you spend the next few years thinking you're 'depriving yourself ' of everything you love then yeah, it'll be a miserable, long, hard slog. If you sit down with your partner and think about what makes you genuinely happy you can then go about looking at finding the lifestyle that you both want and that is sustainable. I wish you the very best of luck!
    Originally posted by SkintTeacher
    ^^^^

    Yes! Brilliant post!
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£276.01
    • Merlinetta
    • By Merlinetta 14th Feb 17, 7:39 PM
    • 4 Posts
    • 18 Thanks
    Merlinetta
    Hi Dan,

    I had credit cards stuck on 27-29% when I started snowballing. The card companies wouldn't help out at all with reducing the interest rates, one even used me asking about reducing interest as an opportunity to try to sell me a consolidation loan with them instead, which I declined! Doesn't hurt to ask though, I did, it could have been a different answer with a more understanding bank.

    Once I got to grips with it and after a short while of chucking as much as I could at these cards I was offered short 0% deals for existing customers even on these ones that had balances on them, when I had reduced the amounts on them a bit. Then I was able to juggle bits of balances around them for a while until I started getting accepted for 0% elsewhere and getting longer 0% periods and could finally get it all on 0%. During that time I kept everything open to take advantage of whatever offers I could get until I was able stop shuffling between the less generous cards and close them.

    So even in the absolute worst case scenario where you can't get a better deal and can't even get credit elsewhere to start with, it is still possible to manage it. You should find that once you reduce the balances by a chunk everything gets a lot easier in terms of finding better rates. It doesn't take so long .

    I did have a few late payments at some points in my history and I was using almost the maximum of my available credit, on a really low income so that was what I was dealing with at the start. I had to get my overall credit utilisation down as soon as possible before I could get better terms. You sound like you have a fair whack to hit your debts with and a good income so I'm sure things will be looking up really very soon now you're tackling it. Don't feel trapped by interest rates anyway or too nervous about them, things do change as your situation improves.
    • ani*fan
    • By ani*fan 14th Feb 17, 8:23 PM
    • 1,435 Posts
    • 3,377 Thanks
    ani*fan
    HI

    I don't think we are going to take the consolidation loan. As tempting as it is, I do worry that I will fall in to the trap that everyone has referred to in recent posts.

    I was thinking that I could call up the CC companies for the cards that are about to increase to 27.9% and ask them if they could consider a lower rate of interest? If not, I will balance transfer elsewhere. Have I got any chance of being successful with this tactic????
    Originally posted by worriedDan
    I've tried this before and they said no, but it's definitely worth asking.

    Another time I was contacted about an increase in % from 17 to 23 or something, and when I rang them to complain they said they would keep it the same if I stopped using the card and just paid it off. Which is what I did, until I could get it shifted. So it might be worth saying that to them, you accept the 0% deal is over but want a smaller interest rate for not using the card.

    You're making some good decisions here. Keep going. Once your budget and everything is in place and you see it working, you'll feel better.
    If you know you have enough, you're rich.
    • zippygeorgeandben
    • By zippygeorgeandben 14th Feb 17, 10:32 PM
    • 482 Posts
    • 534 Thanks
    zippygeorgeandben
    Lots of people giving sound advice here to the OP. May not want to hear/read some of it but perfect sense being made by those who have been there, done it, and bought the T-Shirt at a ridiculous APR.
    End Sep 2016 End April 2017 £8236.57 £6670.91(Tesco 4.8%) £6185.75 £1779.78 (Zopa 4.0%) £5344.50 £3394 (Sainsburys 0% until 06/19) Sister £2000 (0%) Total debt £19.766.82 £13,844.69Original DFD May 2019.
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