BritPilot flying to debtfree heaven

new2civvystreet

LIke everyone else I've noticed that healthcare/life assurance is high but I'm guessing the reason for this is because BritPilot is an actual pilot. Hence stuff like that is going to be more expensive and he probably needs it. Does your employer offer stuff like this as a benefit which would work out cheaper????

Looking at your mortgage and house value.... I know it's not the best time to buy and sell houses at the moment but have you thought about downsizing? Is the house valuation recent or was it taken a while ago before the prices dropped? If it's recent;even with that unsecured mortgage (what is that btw??? I've not heard of an unsecured mortgage) you've still potentially got fair bit of equity in an expensive house with only you, your wife and the cat living there..... Unless of course you live in London or something and that's the reason for an expensive house.

slummymummyof3

Any thoughts on your wife going out to work?

Preferably you need to tackle the cards with the highest % rates first. Perhaps however, you could pay off the two with smaller balances (£778 and the one with £100 and something balance - sorry can't remember the exact amount) at least then you could get rid of those two and initially see you are making headway. Does that make sense? Sort of a phsycological thingy.

Gas and electric - do you know if you are in credit or debit at this stage?

BritPilot

tyllwyd wrote: »

With the figures you posted, I can't see that rearranging your debt is going to help at all, because you are spending £290 more than you earn each month before you have even thought about paying them. Can you do a revised budget which covers all your living expenses and leaves something over for debt repayments, because if you can't, then I don't see what option you have except a DMP/IVA/bankruptcy or moving house to downsize and release equity.

(About the life insurance - is this instead of a pension? Because if you have a work pension, it might provide a lump sum & income for your spouse. Just a thought.)

Edited to say - about doing more work - you've got your income down as £3333 and your deficit as £1757 - which is more than half of your current monthly earnings. If more work is available, how much extra are you likely to be able to earn?

Yes the life insurance is instead of a pension.

I have to admit that when I filled in the original form I ommited to explain that I have a business that is a Limited Liability Partnership and the partners are me and my wife.

Last year we earned about £130,000 before tax but this year it looks like it will be just over a third of that at £50,000 before tax. Although, if I can earn another £24,000 that will take us to £74,000 between us and almost all of our basic rate band will be used up.

A rough calculation shows that our net income would be £5,114 per month between us and if we cut down on outgoings that should be sufficient at this stage to tide me over until the credit crunch comes to an end.

BritPilot

slummymummyof3 wrote: »

Any thoughts on your wife going out to work?

Preferably you need to tackle the cards with the highest % rates first. Perhaps however, you could pay off the two with smaller balances (£778 and the one with £100 and something balance - sorry can't remember the exact amount) at least then you could get rid of those two and initially see you are making headway. Does that make sense? Sort of a phsycological thingy.

Gas and electric - do you know if you are in credit or debit at this stage?

We are in debit of about £100 on the electric and even on the gas with a fixed rate on the gas until next year.

Paying off the smaller balance credit cards seems like a good idea .

BritPilot

new2civvystreet wrote: »

LIke everyone else I've noticed that healthcare/life assurance is high but I'm guessing the reason for this is because BritPilot is an actual pilot. Hence stuff like that is going to be more expensive and he probably needs it. Does your employer offer stuff like this as a benefit which would work out cheaper????

Looking at your mortgage and house value.... I know it's not the best time to buy and sell houses at the moment but have you thought about downsizing? Is the house valuation recent or was it taken a while ago before the prices dropped? If it's recent;even with that unsecured mortgage (what is that btw??? I've not heard of an unsecured mortgage) you've still potentially got fair bit of equity in an expensive house with only you, your wife and the cat living there..... Unless of course you live in London or something and that's the reason for an expensive house.

I do have a PPL but its not my job - it's my age that makes it more expensive.

Were we live is about as small as I can go at this time and if I can get through the next year or two til the recession finishes then things will return to normal and I will be able to pay off more of my debts.

One of the reasons Northern Rock (my mortgage provider) had difficulties was that it offered 125% mortgages with the 25% being an unsecured loan at the same rate as the mortgage. No wonder they were so popular!

hypno06

OK, so now the potential income figures look a bit better, my top tip is to put your debts in the snowball calculator.

www.whatsthecost.com

This nifty little tool will tell you what your debt free date will be based on the payments you are making each month (presumably only the minimums at the mo).

Then, play around with the amount you can pay each month - increase it by £100 a month and see what a difference it makes - it really does act as a motivator for you to bring together a bit extra and bung it at the debt.

Perhaps you should re-do your SOA for the true expected amount of income and see where that leaves you surplus/deficit wise each month. Whether you post the SOA on here again is up to you, but for you to know the true position is vital.

Also, please ensure you have stopped spending on the cards etc - the idea from now on is to get the balances down - not to increase them. Cut them up, put them in the freezer, give them to a mate, whatever you need to do to avoid spending on them.

And keep posting! The support on these boards is fantastic. My unsecured debt was about the same as yours, and there was a time I thought I was going to have to go bankrupt which would have ended my career (I am a stockbroker) so it was a very scary time. However, when you start tackling things full on, differences can be made.

As a result, we are now down to £50k debt, with no defaults, and no CCJs etc along the way. We looked into DMPs etc, and decided to do it by the "knuckle down" approach instead.

That doesn't take away the possibility that if things get tough, even at this late stage, we would look at it again......and through "wobbly" patches, I have picked up the phone and spoken to CCCS.......but have then just "got on with it".

The support here makes that difference. It is priceless.

tyllwyd

It sounds as if you are different to most of us here on the DFW board, in that your income is a lot more than most, but equally your outgoings are higher as well.

It sounds as if you have got a way to get through this, so if it was me I'd see it as a wake up call. You've obviously got a lot of money coming in, and it is very easy to feel that since the figures are big, there isn't any need to worry about spending because you ought to be able to afford it. (I know that I'm been guilty of doing that, on a smaller scale of course.) Maybe now is that time to take control, make sure that the debts with stupid APRs get cleared ,make sure you know exactly what you are spending and what you are saving and why. If you did earn £130K last year, when you sit down and think about it, it is pretty shocking that you have got debts of £120K rather than savings of £50K, which would be seeing you through the leaner times.

hypno06

Perhaps not as shocking really - if there are debts of £120k against an income of £130k, then that is a debt to salary ratio of 92%.

I bet there are loads of us on here with debt to salary ratios that are as much if not greater than that.

If someone has a salary of £15k with a debt of £13800, they are in the same situation, to a certain extent.

rubydoiwannabee

hypno06 wrote: »

Perhaps not as shocking really - if there are debts of £120k against an income of £130k, then that is a debt to salary ratio of 92%.

I bet there are loads of us on here with debt to salary ratios that are as much if not greater than that.

If someone has a salary of £15k with a debt of £13800, they are in the same situation, to a certain extent.

I agree it is all relative.

BritPilot

hypno06 wrote: »

OK, so now the potential income figures look a bit better, my top tip is to put your debts in the snowball calculator.

www.whatsthecost.com

This nifty little tool will tell you what your debt free date will be based on the payments you are making each month (presumably only the minimums at the mo).

Then, play around with the amount you can pay each month - increase it by £100 a month and see what a difference it makes - it really does act as a motivator for you to bring together a bit extra and bung it at the debt.

Perhaps you should re-do your SOA for the true expected amount of income and see where that leaves you surplus/deficit wise each month. Whether you post the SOA on here again is up to you, but for you to know the true position is vital.

Also, please ensure you have stopped spending on the cards etc - the idea from now on is to get the balances down - not to increase them. Cut them up, put them in the freezer, give them to a mate, whatever you need to do to avoid spending on them.

And keep posting! The support on these boards is fantastic. My unsecured debt was about the same as yours, and there was a time I thought I was going to have to go bankrupt which would have ended my career (I am a stockbroker) so it was a very scary time. However, when you start tackling things full on, differences can be made.

As a result, we are now down to £50k debt, with no defaults, and no CCJs etc along the way. We looked into DMPs etc, and decided to do it by the "knuckle down" approach instead.

That doesn't take away the possibility that if things get tough, even at this late stage, we would look at it again......and through "wobbly" patches, I have picked up the phone and spoken to CCCS.......but have then just "got on with it".

The support here makes that difference. It is priceless.

That link was really useful and I will play with it tonight after work.

We have stopped spending now and switching the lights off and not eating out at lunchtimes etc. so hopefully we are on our way and I have appreciated everyones comments even the forthright ones. But please keep them coming.

I am very impressed by the help and will endevour to try to help others now.