worried about the future

alfiemama

Hi everyone, sorry been a shamefull lurker on here but now plucked up courage, so here goes.

we are about 12k in debt on unsecured loans.
My hubbys job is on a basic plus commision and some months on just his basic we are in a deficit (I think about -£195) on the months he has good wage we are not too bad but can still be a struggle.

we spoke to payplan who advised that to always go off the basic and the fact that we dont have £100 spare we cant do a dmp but just not to pay non priority debts (which would help us a little) but surely we would still end up with bad credit, which (please see below, surely would mean if we do remortgage we would get a higher rate resulting in us paying more money anyway , sorry all very confusing)

Now my main concern is the house we have a mortgage of £195k on a fixed rate interest only for 2 years with Cheltenham and Gloucester now the house was valued in april at £215k but due to the current market we think we would be near to if not in neg equity as for us to sell and move (buy another house we would have to sell for 210k, which I just cant see happening)

Our question is do we get out now and rent, hand the keys back and to vol reposession we will have a shortfall hence why we would need to go br as in 2 years we will not be able to remortgage due to neg equity and will not be able to afford the rate that it will be hiked upto.
Or do we ride it out struggle on and juggle the bills hoping that the market will change, Im sure lots of people are in this situation but are we wise keeping hold of something that is no longer an assett when we are struggling financially.
Please dont get me wrong I know that br is not to be taken lightly and this is why I need as much info as possible as it scares the living daylights out of me:eek:
But as we need to sell and have a shortfall is this the only option as there is no way we would be able to pay it back.

any help appreciated thanks

debt_doctor

Hi Alfie,

First I think you should go and see a debt charity and discuss this with them. Its a tricky situation without a crystal ball im afraid. Would you be able to rent much cheaper than your current mortgage ?

I have to say that I only see property prices going down further in the next 2 years, and if your mort goes up on top of that then can see why, quite sensibly, are thinking in the way that you are.

Let us have a little more info.

Best

DD

fiveyearplan

Hi Alfiemama. Do you still have 2 years to run on a fixed rate deal with C&G? Can you afford the mortgage, do you have any arrears?

If you can afford the mortgage and don't have any arrears, there is no need to sell. I think I would sit it out because property prices will go up eventually.

Thats also good news that the loans are unsecured - keep it that way! How many loans are there, is some of the debt credit cards, is £12,000 your total debt? With a bit more information we may come up with a solution!

alfiemama

Hi dd

This is my soa that I post on dfw, please note my hubby has relocated his job and part of the deal was that as we wasnt paying for his commute we would fund his laptop and mob phone bill

Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 0 I have tried to work but dont have the appropiate childcare having 2 little ones under 4
Benefits................................ 160
Other income............................ 0
Total monthly income.................... 1960

Monthly Expense Details
Mortgage................................ 876 interest only with tsb fixed rate for 2 years at the beginning of term
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 147
Electricity............................. 100 this was £54 with npower until fell in arrears and then very nicely advised I wasnt paying enough having meters fitted 15th aug
Gas..................................... 100 this was £45 with npower and same as above meter fitting on 15th aug
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 35
Mobile phone............................ 85.5 this is made up of £35 18month contract 02 (mine) and £45 plus £7.50 bolt on 02 unlimited calls for husbands work
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 30 made up of £9.99 aol broadband contract and £20 dongle for mob wireless (hubbys work)
Groceries etc. ......................... 280 this is for 4 of us plus petfood, nappies, wipes etc
Clothing................................ 20 I shop charity shops and put this to cover sons school uniform as he goes in sept
Petrol/diesel........................... 80
Road tax................................ 10
Car Insurance........................... 35
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 20 toddler groups, swimming etc
Medical (prescriptions, dentist etc).... 8 contacts
Pet insurance/vet bills................. 0
Buildings insurance..................... 35
Contents insurance...................... 0
Life assurance ......................... 29
Other insurance......................... 41
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 10
Total monthly expenses.................. 1833.5

Assets
Cash.................................... 0
House value (Gross)..................... 205
Shares and bonds........................ 0
Car(s).................................. 200
Other assets............................ 0
Total Assets............................ 405




Secured Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 195......(876)......4.9
Total secured debts........... 195.......-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
CARAVAN........................0.........104...... .0
BLACKHORSE.....................0.........137...... .0
SETTEE.........................0.........27....... .0
BARCLAYS.......................0.........20....... .0
CAPITOL 1......................0.........15........0
Total unsecured debts..........0.........303.......-

Monthly Budget Summary
Total monthly income.................... 1,960
Expenses (including secured debts)....... 2,031.5
Available for debt repayments........... -71.5
Monthly UNsecured debt repayments....... 303
Surplus(deficit if negative)............ -374.5

Personal Balance Sheet Summary
Total assets (things you own)........... 405
Total Secured debt...................... -195
Total Unsecured debt.................... -0
Net Assets.............................. 210



Hope this helps, yes we could save money by renting as our mortgage is £876 (not too bad at the min but in 2 years, arggghhh) and could maybe found somewhere in the area we like (ours isnt really where we want to be, and as we are interest only , surely we are renting anyway) for about £600-£650
but also I think that surely the other bills would be cheaper ie c/tax, water etc
We are in arrears with the gas and leccy but only because they have now told us after having fallen 1 month behind that we are not paying enough (I believe this is a well known trick of the providers grrrr)
when we switched we thought it was a lot cheaper £97 for both but now they want £218 a month which I just cant afford so I have had to have meters put in.
Am I right in thinking you can add gas and electric to the br.

With all the technology wouldnt you think someone would invent a cystal ball lol

debt_doctor

Hi again,

My personal opinion is that it would seem that the mortgage is a struggle now, impossible in the near future. It would also seem that you can rent significantly cheaper in an area you would prefer to be and feel that associated bills would be cheaper.

Your amount for essentials such as housekeeping and clothing is incredibly low. Bottom line is that you appear not to be having any real quality of life and it is the house that is the main tying factor in this.

I do see this sort of situation quite often with 'home owners ' You are quite correct, you are effectively renting ( but with all the repair and insurance costs of a homeowner ! ) In reality you own nothing, so you would not be giving up an asset.

I would have a chat to your family and produce a new SOA ( financial statement ) for yourselves with the new rent, less insurance costs, no unsecured debts and greater personal allowances and decide which one of those two senarios you are most in favour of.

Best

DD

ps yes gas and elect are put in to BR.

fiveyearplan

alfiemama wrote: »

Hi dd

This is my soa that I post on dfw, please note my hubby has relocated his job and part of the deal was that as we wasnt paying for his commute we would fund his laptop and mob phone bill

Monthly Income Details
Monthly income after tax................ 1800
Benefits................................ 160
Total monthly income.................... 1960

Monthly Expense Details
Mortgage................................ 876 interest only with tsb fixed rate for 2 years at the beginning of term
Council tax............................. 147
Electricity............................. 100
Gas..................................... 100
Water rates............................. 40
Telephone (land line)................... 35
Mobile phone............................ 85.5 this is made up of £35 18month contract 02 (mine) and £45 plus £7.50 bolt on 02 unlimited calls for husbands work
TV Licence.............................. 12
Internet Services....................... 30 made up of £9.99 aol broadband contract and £20 dongle for mob wireless (hubbys work)
Groceries etc. ......................... 280 Clothing................................ 20
Petrol/diesel........................... 80
Road tax................................ 10
Car Insurance........................... 35
Car maintenance (including MOT)......... 10
Other travel............................ 20
Other child related expenses............ 20
Medical (prescriptions, dentist etc) 8 contacts
Buildings insurance..................... 35
Life assurance ......................... 29
Other insurance......................... 41
Christmas ...... 20
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 10
Total monthly expenses.................. 1833.5



Secured Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 195......(876)......4.9
Total secured debts........... 195.......-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
CARAVAN........................0.........104...... .0
BLACKHORSE.....................0.........137...... .0
SETTEE.........................0.........27....... .0
BARCLAYS.......................0.........20....... .0
CAPITOL 1......................0.........15........0
Total unsecured debts..........0.........303.......-

Monthly Budget Summary
Total monthly income.................... 1,960
Expenses (including secured debts)....... 2,031.5
Available for debt repayments........... -71.5
Monthly UNsecured debt repayments....... 303
Surplus(deficit if negative)............ -374.5




Hope this helps, yes we could save money by renting as our mortgage is £876 (not too bad at the min but in 2 years, arggghhh) and could maybe found somewhere in the area we like (ours isnt really where we want to be, and as we are interest only , surely we are renting anyway) for about £600-£650 No its nothing like renting because your house price WILL go up at some point and once its paid off its paid and you don't have to pay rent forever.
but also I think that surely the other bills would be cheaper ie c/tax, water etc Not necessarily, they could even been more
We are in arrears with the gas and leccy but only because they have now told us after having fallen 1 month behind that we are not paying enough (I believe this is a well known trick of the providers grrrr)
when we switched we thought it was a lot cheaper £97 for both but now they want £218 a month which I just cant afford so I have had to have meters put in.
Am I right in thinking you can add gas and electric to the br.

With all the technology wouldnt you think someone would invent a cystal ball lol

I'm not sure exactly what kind of advice you are asking for. Do you want to go BR or try and find another solution? Do you really want to get rid of your house?

fiveyearplan

On your first post you say you have £12,000 of unsecured debt. Apart from your mortgage is this your only debt? In your I&E you say something about secured debt.
What is your total debt (apart from Mortgage). If it is only the £12,000 I would reconsider bankruptcy if thats what you were thinking of.

alfiemama

Hi DD

You make a lot of sense, I suppose the only think that is keeping us here is the fact that hubby can earn more and he does so we juggle from month to month, hubby says that we just need to learn how to spend better, but we are not extravagant at all I think he likes to bury his head in the sand where I am the realist and feel life is tooooo short to be constantly worrying and so not fair on the kids, I know we have got ourselves into this and there is no easy fix but like you said in reality we dont own anything

alfiemama

Well sorry at time of posting the soa we thought it was unsecured but spoke to payplan and they said the caravan is hp (black horse)and so is the settee the rest is made up of personal loan and cc cards


sorry just realised I havent posted an updated one hang on

alfiemama

Updated version

Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 0 I have tried to work but dont have the appropiate childcare having 2 little ones under 4
Benefits................................ 160
Other income............................ 0
Total monthly income.................... 1960

Monthly Expense Details
Mortgage................................ 876 interest only with tsb fixed rate for 2 years at the beginning of term
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 147
Electricity............................. 100 this was £54 with npower until fell in arrears and then very nicely advised I wasnt paying enough having meters fitted 15th aug
Gas..................................... 100 this was £45 with npower and same as above meter fitting on 15th aug
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 35
Mobile phone............................ 85.5 this is made up of £35 18month contract 02 (mine) and £45 plus £7.50 bolt on 02 unlimited calls for husbands work
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 30 made up of £9.99 aol broadband contract and £20 dongle for mob wireless (hubbys work)
Groceries etc. ......................... 70 this is for 4 of us plus petfood, nappies, wipes etc
Clothing................................ 20 I shop charity shops and put this to cover sons school uniform as he goes in sept
Petrol/diesel........................... 80
Road tax................................ 10
Car Insurance........................... 35
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 20 toddler groups, swimming etc
Medical (prescriptions, dentist etc).... 8 contacts
Pet insurance/vet bills................. 0
Buildings insurance..................... 35
Contents insurance...................... 0
Life assurance ......................... 29
Other insurance......................... 41
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 10
Total monthly expenses.................. 1833.5

Assets
Cash.................................... 0
House value (Gross)..................... 205k
Shares and bonds........................ 0
Car(s).................................. £200
Other assets............................ 0
Total Assets............................ 205,200
Secured Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 195......(876)......4.9
Total secured debts........... 195.......-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
caravan........................3,400.........104.....I think 7.5% apr. . 33 payments left
blackhorse.................... 6,000.borrowed but with interest 8,827.............. .13.9%
settee.........................989.........27....... .0% apr £940 outstanding
capitol 1......................0.........15........We think this is 30% apr:eek: amount outstanding £339
barclays.......................0.........20....... . apr 0% amount outstanding £60
Total unsecured debts..........0.........303.......-

Monthly Budget Summary
Total monthly income.................... 1,960
Expenses (including secured debts)....... 1,833.5
Available for debt repayments........... 126.5
Monthly UNsecured debt repayments....... 303
Surplus(deficit if negative)............ -176.5

Personal Balance Sheet Summary
Total assets (things you own)........... 405
Total Secured debt...................... -195
Total Unsecured debt.................... -0
Net Assets.............................. 210


Hope this helps a bit more sorry

alfiemama

Heres a question for you, me and hubby just looking at facts and figures of mortgage and we have got it wrong sorry, house was valued at £205 and mortgage £185k but a redemption penaltyof 5k if sold before June 09 after that 3k

How lenient are mortgage companys on this penalty, ie if we sold privately which may now be poss but we may not be able to pay penalty.

sorry for the figures being wrong my hubby always thought valued at 215 abd went of 10%