Facing the wobbly financial house of cards

Lensa

Hi, I'm not utterly new to the boards, having been living with uncomfortably large debts for a while, but my wobbly financial house of cards nearly came crashing down this month, so I've got all the statements out, started updating the spreadsheets, and have finally sorted my soa out to post and ask for help!

The debts were largely generated by a failed business four years ago and the awful aftermath. I work full time and earn a decent wage. I have not included my partner's wages here because he is self employed - one month it may be £1,500, the next it may be £0, and out of that he has business overheads and his own bills to pay. The £0 earning is what happened to us this month. I had to pay his company van payment (£250) on top of all my bills and this put me over my overdraft limit, hit me with £90 worth of fines, and nearly brought my delicate finances crashing down. I managed to save myself by delaying a £290 loan payment until after my next payday and raiding the now empty xmas saving pot - but that is a one off fix. I need to find a solution before it all goes horribly wrong.

At the moment I have quite a good credit score - I've borrowed loads but I always always make my payments on time. We had to move out of our home and into my parents house (that is why we pay no rent / electricity etc) and while I am eternally grateful to my parents for all their help I'm 32 and feel utterly unable to move on with my life. We want to start a family - but I can't take even one month off work because the bills have to be paid, not to mention the imposition on my parents, and the guilt of bringing a child into such a pricarious situation. I am afraid I will end up well past child bearing age, with no family, and huge debts still dogging my heels *gloom*.

My soa is beow. I have not included the £5000 student loan because I can defer payment on that pretty much indefinatley and at the moment I still dont make any monthly payments. I can meet my monthly commitments, just, but any unexpected expense threatens to bowl us over. Any suggestions as to the best way out of this mess would be really really welcome.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1389
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1389

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 125
Clothing................................ 25
Petrol/diesel........................... 40
Road tax................................ 15
Car Insurance........................... 45
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 17
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 377

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 300
Other assets............................ 0
Total Assets............................ 300

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin card....................2074......40........23
Texaco Card....................881.......18........15.94
Cahoot Loan....................3464......81........10
OLCI...........................1608......131.......0
Dell...........................1388......10........18.9
Barclay Card...................1341......30........29.9
Barclay Loan...................11518.....290.......27
Bus Loan.......................10058.....270.......10
HSBC - L.......................957.......35........27
Argos..........................831.......40........27.9
Capital One....................282.......10........30
Total unsecured debts..........34402.....955.......-

Monthly Budget Summary
Total monthly income.................... 1,389
Expenses (including secured debts)....... 377
Available for debt repayments........... 1,012
Monthly UNsecured debt repayments....... 955
Surplus(deficit if negative)............ 57

Personal Balance Sheet Summary
Total assets (things you own)........... 300
Total Secured debt...................... -0
Total Unsecured debt.................... -34,402
Net Assets.............................. -34,102

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

RAS

Hi

Can you tell us what the limit is on each of those cards?

And is there any penalty for over paying on the loans, or is there no advantage in overpaying?

Do you have PPI on anything?

And apart from the latest panic, do you have any historical charges on any of the accounts?

Lensa

Hi RAS,

I have put the credit limits with the cards below:
Description........Debt......Monthly.. .APR.....Credit Limit
Virgin card........2074......40........23.......2100
Texaco Card........881.......18........15.94....1000
Barclay Card.......1341......30........29.9.....1400
HSBC - L...........957.......35........27.......1000
Argos..............831.......40....... .27.9....1500
Capital One........282.......10........30.......300


OLCI...............1608......131...... .0.......this is a payment for a course
Dell...............1388......10....... .18.9....HP computer payment

The loans are with Barclays and Cahoot, they are all fixed interest, fixed payment loans, I have been told I can not make any extra payments, only an early settlement payment. Hope this helps.

Lensa

Sorry, forgot to say, no I don't have any PPI on any of the loans.

RAS

OK - they are far from great APRs. if you just pay off the minimums, your debt will increase over the next year.

If you have a decent credit score, could you get a card with a low life balance and move the most expensive debts to that?

if not, you need to fiddle this a bit. Pay nearly all (£100) of the groceries on the texaco card thin month and every time pay exactly the same amount from your bank account towards the Cap One card. The idea is not that you increase your indebtednes, but that you transform £100 of debt at 30% to £100 of debt at 15.94%.

Do you have anything that you can sell to throw at the Cap one card, and cancel the clothes and ents this month and pay that towards this card.

Once it is clear, close the account altogether and start on the barclaycard.

If you look at the snowball on www.whatsthecost.com, you will see how to pay off this debt most efffectively.

I would suggest putting one month's emergency money into an account, so you can cover OH business payments, then throw every penny he earns beyond his tax saving s at the most expensive debt.

Given the paucity of income, would he be better off in normal employment?

Could he sign up for agency work when he has a bad month, and pretty much always, could he do a few days in a part-time job each month to ensure there is some income coming in, taxed?

Lensa

Thank you very much for that. It had not occured to me to transform high interest to low interest in that way, I will definatley do that. OH may be able to get some overseas work for a few months that would help a lot, we are waiting to hear, but whatever I do I need to know I can cover by myself come what may. Whats the cost looks like a very useful site - I'm off to work on the calculators now. I must admit I have been considering a debt management plan, but at this point am so confused by the different pro's and con's I'm not sure which way to turn.

Gemmzie

How long has your OH been self employed? Is there any way to work out his average income? If it's at £0 regularly - is it likely to pick up or is it worth him getting another job?

lynzpower

the thing is you have missed out so much of your SOA,

There is no mention of the van loan?, where do you live? With parents, for free only there is no rent/ bills ?

Im confused