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HELP!!! I need advice urgently please
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# 1
ihatebeingindebt
Old 01-03-2007, 10:22 AM
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Unhappy HELP!!! I need advice urgently please

Hi everyone - hopefully someone out there will be able to give me some helpful advice. This is my story!

My husband is self employed and as such doesn't have regular income each week. I'm a student and have no income apart from child benefit and tax credits. We've got a mortgage of 122K which is on a repayment basis and has 18 yrs left to run. During the last 7 yrs due to periods of unemployment and forking out for kids (we've got 5 between us!) we've managed to run up 60K of unsecured debts. I've now got to the stage where I can't bury my head in the sand any more and hope it will go away because I know its only going to get worse and I'm worried about losing my house.

For the last 6 months its really got to me, I keep crying, I can't sleep and I'm arguing with my kids and my husband. I'm not in a nice place at the moment.

I have read through some of the tips on this site and have been in touch with a mortgage broker who is trying to come up with a remortgage for me but I really don't know what to do for the best. Remortgaging and adding on the extra 60K will leave me with a really scary amount to have to pay back over the next 25 years and I'm really worried that having done that we find that we can't pay the mortgage and end up losing the house anyway if we get into trouble again.

I'm sorry if I'm rambling but I'm really hoping that someone will be able to give me some advice.

Thanks
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# 2
Seaxwyn
Old 01-03-2007, 10:32 AM
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Hi there

poor you - it's horrible being in debt and feeling so powerless, Ias most of us on here know. You will feel a lot better soon once you've had all the great advice on offer here and start to take control back.

I'm no expert but I would say DONT remortgage (I've done it twice and it didn't solve the problem). There may well be ways you can pay some of the debt off more quickly, so don't tie it up for 25 years until you've investigated all options.

One thing that jumps out - you could pay it back quicker with two incomes. Can you postpone your studies for a while and go to work? Or at least get a part-time job?

Others will be along shortly with more advice - and they will ask you to post a Statement of Affairs (see 'first time posters' thread at the top of the forum)
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# 3
ihatebeingindebt
Old 01-03-2007, 10:39 AM
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Thanks for replying so quickly. Yes, I have actually been trying to get a job for the past year. I was working two days a week up until a year ago which was keeping the wolf from the door but I was made redundant and although I've been applying for jobs since then don't seem to be able to even get an interview. That's not helping my confidence either because I feel unemployable as well as useless with money!
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# 4
joeblack066
Old 01-03-2007, 10:42 AM
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Hi There,

I would be happy to take a look at your CV if you like? I do these professionally at 20 a throw but will do them for free for a DFW on MSE, so PM me, I will send you my email address, and you can send me the CV. You are welcome to take outthe personal info if you feel better that way, ie name, address etc, and add it in yourself afterwards. CV's are so important as they are the door opener.
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# 5
chevalier
Old 01-03-2007, 10:47 AM
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Sorry to hear that you are in such a bad place at the moment. Is your OH on board about sorting these debts? If so then it will be much easier to make cuts backs to help with the repaying of the debt.

So there are a couple of things you can do, as already suggested post a Statement of Affairs on here, so that we can point out for you possible areas of saving.

Next keep a spending diary for both you and OH. This will show you where any little bits of money are leaking away. You may find that there is spending there eg lunches at work, magazines, that over the course of a year add up to A LOT!

The other reason for doing a SOA is that you may with to do a debt management plan via CCCS or Payplan, and they will need to see your income and outgoings anyway, so posting an SOA on here will be a good trial run.

I too am a student, and feel quite impotent to help out in the house money wise. However I have joined several sites in the last 6 months, that either give me vouchers, or pay to do searches, or give me vouchers to answer surveys etc. They don't take much time per day, and the rewards you can use either to pay for essentials, or to save up to help pay for xmas for example.

The sites I use are
www.lightspeed.com
www.quidco.com
www.mutualpoints.com
www.pigsback.co.uk
mainly.

I have only been with pigsback for a month or so and I already have 12 of vouchers saved up (and this is not buying anything either)

There are also mystery shopping sites, where you test a shops customer service, and they pay you to do so. I don't know much about this, but there is a mystery shopping thread on this forum which has the website addresses for these companies.

I also do every other shop online (I use Tesco), as then I can get either free delivery, or extra points, which I can put towards deals, like money off attractions or holidays.

How old are your children, are they old enough to get Saturday jobs? Or old enough to sit down and explain that you will be cutting back in the next few years to get out of debt?


Can you sell everything that is not nailed down, either on amazon, ebay or green metropolis (just books). This would help your short term cash flow.

Just remember that just by posting you are starting to take control of your finances.

Hope the above helps
chev
I want a job that is Mon to Friday from 10am til 2pmare you listening universe?
Keep Calm and Carry On!

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# 6
chevalier
Old 01-03-2007, 10:57 AM
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Plus if there are things you need like clothes, slow cooker, bread maker etc then have a look on www.freecycle.org for a group near you. These things are often posted on there and they are FREE you just have to pick the items up.
chev
I want a job that is Mon to Friday from 10am til 2pmare you listening universe?
Keep Calm and Carry On!

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# 7
ihatebeingindebt
Old 01-03-2007, 10:58 AM
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This is my SOA

Monthly Incomings:

My salary - £0
Partners salary - £2400 (appox can go up and down due to self employment)
Benefits - £368

Total - £2768

Monthly Outgoings:

Mortgage/Rent - £883
Council Tax - £117
Gas - £51
Electric - £51
TV License - £11.41
Sky £53.50
Phone - £34
Food - £400
Car Insurance - £40
Petrol - £300
Life Insurance £45.81
Pension - £58.13
TV Rental - £15.90
Water - £42.87
Mobile phone - £64
Sat equip ins - £10

Total: £2177.62

Credit commitments

HSBC Loan APR 9.9% - £262.50 - Bal £8658.87
Marbles Loan APR ? - £293 - Bal £14,476

Mint credit card - Bal £316.03 min payment £30
Marbles Bal £9023.03 min payment £150
Barclaycard Bal £1568.04 min payment £35
Mint Bal £4894.60 min payment £110
Citigroup Bal £3500 min payment £100
Morgan Stanley Bal £2974.65 min payment £60
Halifax One Bal £6782.08 min payment £140
Capital One Bal £4391.57 min payment £90

Total Balance outstanding - £56584.87
Total minimum payments - £1276.50


In the process of reclaiming bank charges - trying to set up a parachute account before sending off letter - amount claiming £2776 plus interest - this is where it all started!!
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# 8
WannabeMortgageFree
Old 01-03-2007, 11:28 AM
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Hi Ihatebeingindebt...

I'm a newbie here too... Did post an intro yesterday but nobody responded. *sniff*

I'm in the sam position as you. We've got two houses, both mortgaged and debts of £30k and my other half is also self employed. Our income is very unstable and I don't work as we have lots of young children around.

Anyway, just wanted to say hi, and although I'm new to all this stuff I'm here for moral support if you need it!
Proud to be dealing with my debts!

Lightbulb Moment - 28th Feb 07
Total Debt at that time - 28100

IF - 11000 ; Egg - 4500 ; Capital1 - 1600 ; HSBC - 8000 ; Lloyds TSB - 3000
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# 9
misspoppy
Old 01-03-2007, 11:44 AM
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Hi
Welcome to the board.
You don't seem to have made any provision for tax payments for your husband.
The obvious that I can see are: Sky - needs to go or be reduced to basic package if in contract. The sky eqp insurance needs to go. Your life insurance looks high as do your mobile and house phones.

There will be more advice soon.
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# 10
madhouseof4
Old 01-03-2007, 11:49 AM
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Posts: 848
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Ihatebeingindebt, one of the 1st things I would do is get rid of sky, we did this when we were in dire straights, for us, it was an automatic saving of almost £30 a month and to be honest, the adults didn't miss it much. Secondly, I would get my own tv as opposed to renting one, which works out expensive over time. Try freecycle. It may not be top of the range, hd ready, flat screen etc, but you should be able to get something decent enough.

I am guessing that your dh uses the mobile phone for work. It could be worth searching arounf for better tarrifs/packages. Same with the gas/elec (although wish I was only paying that much for my gas!)

Reclaiming your bank charges is a good move, with the money you get back you could pay off one of your cards.

I wish you lots of luck on this journey. It really is a horrible feeling. We have only recently been able to dig ourselves out of a massive hole, through dh getting a better job, but we still rely heavily on benefits to top us up, so are still very careful with money.

Hugs, it will get better.

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# 11
highguyuk
Old 01-03-2007, 11:50 AM
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Several things SCREAM at me about your SOA.

Petrol seems v.v.v.high? Having read your intro, I presume this is business travel mainly. Is this a large car, could the car be downgraded to save on fuel? Make sure that your getting clubcard/shell points for that much petrol use.

£53 is high for Sky subsciption as there are ways to reduce it. However, I would recommend cancelling all together. £50 a month is a big way to start reducing your debts. You could easily replace the channels with movies for the first year FREE by DVD rental trials, and you could earn money via Quidco doing this.

TV rental - £15 a month. I would recommend going and buying a cheap TV for a one off fee and have done with it.

Mobile Phone bill is REALLY high - especially as you have a home phone too. Why is it this high? You still tied into a contract? Go over it with minutes or texts? I have a good friends who works for Str8talk communications, mobile phone business, who I can get you in contact with the reduce this. Especially if this is a business phone, they do specialise in business phones. PM me if you want some more information.

Can you tell us anymore about this Sav Nav insurance?

If you reduced your mobile phone bill by half which is easy, no TV rental and no sky, that's already £100 per month extra.

EDIT: Changed a couple of things ...
-highguyuk-




Last edited by highguyuk; 01-03-2007 at 11:54 AM.
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# 12
lynzpower
Old 01-03-2007, 12:00 PM
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Id say 100 quid a week for food is pretty high as well, I dont know how many live in your house, but I reckon you can halve this with some planning and a trip over to the moneysving old style board
Well aint funny how its the little things in life that mean the most? Not where you live, the car you drive or the price tag on your clothes.
Theres no dollar sign on piece of mind
This Ive come to know...
So if you agree have a drink with me, raise your glasses for a toast
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# 13
TheAble
Old 01-03-2007, 12:03 PM
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Hello,

I'm no expert with IVAs and the rest, I could recommend areas where you could cut down but with 5 kids, I can imagine you won't be able to get much off that food bill and the high petrol bill I would imagine is necessary for your husband's business.

With £60K of debt, we're going to have to try to see the big picture. Your SOA is in fact not ask good as it looks because you haven't made any income tax provision. With income of £2400 a month, you'll need to factor in at least £600 a month for this.

I'm sorry but you're really going to have to give up your student course and get back to work. The reward you'll get from the degree will pale into insignificance compared with the relative reward of earning some decent money.

Secondly, I would seriously consider selling your house and downsizing radically. How much equity do you have? If you could sell up, pay off those debts and rent a place for around £500/month it'd take a massive weight off your shoulders.

If you have anything else of value you could sell (eg second car) you should as well.

Sorry if this sounds drastic, but unless you do something major you will inevitably lose your house and be bankrupted.

I wish you all the best - good luck!
You can shear a sheep many times - but you can skin him only once
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# 14
WannabeMortgageFree
Old 01-03-2007, 12:10 PM
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Just meant to add we've also got 4 children and another on the way and our monthly food bill (including baby milk/nappies etc) is around £220... We manage this by shopping at Tesco's and never buying anything to keep... Most of our dinners and lunches are bought the same day we eat them, that way you can often get the best products but at reduced prices on sale!

Good luck!
Proud to be dealing with my debts!

Lightbulb Moment - 28th Feb 07
Total Debt at that time - 28100

IF - 11000 ; Egg - 4500 ; Capital1 - 1600 ; HSBC - 8000 ; Lloyds TSB - 3000
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# 15
CLAPTON
Old 01-03-2007, 12:37 PM
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there are a lot of uncertainties that need clarifying before one can see the best way forward

a. OH income : is that an average of his last year?
b. is this income net after allowing for tax and NI?

c. on the spending side there seem a lot of things missing ..with 4 children you have nothing down for clothes, kids activites/school costs/pocket money /presents and you have a car but nothing down for car tax/servicing/repairs/MOT etc

d. people have already comments on sky/tvrental/mobiles which could be cut... also stop contributing to the pension for a while might make sense

e. but you need to really find out what you really spend, so start a spending diary and write down every single thing you spend and also think about all the annual/one off type things and all the kids related spending.

f. only when you really know what your income and true spending totals are does it make sense to look at the options.... for example it may well be that once you work out the proper totals that you couldn't actually pay for a remortgage (even if you could get one ).

also what is the house worth?
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# 16
Emmzi
Old 01-03-2007, 12:47 PM
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How about a studnet loan as a lower cost lending alternative?
Debt free 4th April 2007.
New house. Bigger mortgage. MFWB after I have my buffer cash in place.
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# 17
ihatebeingindebt
Old 01-03-2007, 3:47 PM
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Quote:
Originally Posted by CLAPTON
there are a lot of uncertainties that need clarifying before one can see the best way forward

a. OH income : is that an average of his last year?
b. is this income net after allowing for tax and NI?

c. on the spending side there seem a lot of things missing ..with 4 children you have nothing down for clothes, kids activites/school costs/pocket money /presents and you have a car but nothing down for car tax/servicing/repairs/MOT etc

d. people have already comments on sky/tvrental/mobiles which could be cut... also stop contributing to the pension for a while might make sense

e. but you need to really find out what you really spend, so start a spending diary and write down every single thing you spend and also think about all the annual/one off type things and all the kids related spending.

f. only when you really know what your income and true spending totals are does it make sense to look at the options.... for example it may well be that once you work out the proper totals that you couldn't actually pay for a remortgage (even if you could get one ).

also what is the house worth?
To answer some of your questions:-

OH income: This is his projected monthly income based on the contract he's on at the moment and as hes a builder he's on the CIS scheme which means that the contractor pays tax for him. We do self assessment at the end of the year and inevitably end up with a tax rebate once all our expenses are taken off his earnings.

Our petrol is high at the moment because his mate - who he works with has broken his foot and he's the one with the van and he's having to use the family car which is an old 8 seater due to the fact that with 5 kids we quite often have to get 7 people in the car! - Petrol isn't always this high (I'm just looking on the black side!!!)

The mobile phone is a bit of a problem at the moment. OH uses this for work and its how he gets his contracts. He was put on a 2 yr contract by ClubMobile who said they were Orange which he disputed because that wasn't what he wanted. He complained to Orange who didn't want to know and basically said he had to put up with it. The contract comes to an end next month and we are already looking around for a new package.

Ditto the phone and internet - I'm trying to get onto a package where I can combine the two together which will save me about 20 a month

Sky subscription - this suggestion is noted and is something I'm going to look into - thanks

Life Insurance is high because we are both smokers but have made appointments with the Drs to help us give up - wish us luck!!

Regarding the shopping - I know this is an area that I can really reduce my outgoings. I already do the shopping on the internet which helps because I can see what I'm buying and how its adding up but I'm going to have to try and be a little less frivolous.

Regarding the kids activities - I am very lucky in the fact that my parents pay for most of the kids' activities together with clothes and shoes and at the moment I am thanking my lucky stars for their help and support with this.

The spending diary is a really good idea and I am going to start it today.

Downsizing although an immediate solution is not really an option for us. There is a shortage of rental properties in our area, likewise Council and HA housing and I don't really want to disrupt the kids by taking them out of their schools and away from their friends. My son is 14 and about to start his GCSE courses in September and my daughter will be starting secondary school in September

Thank you everyone for your comments. Apart from anything its nice to know that you're not alone. I had started to think that I was the only one going through this but now I've taken this first step I know that maybe there are things that I can do to make this better.
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