Need Help with Overdrafts - urgently

Avani

Hello, I am completely new to this forum so I hope this is in the right place. We are really stuggling finacially and we are getting ourselves into a bit of a pickle with our overdrafts and wondered if anyone had any advice.

We have 3 bank account between us. One is the Bills account (all our bills are paid from this account) then we each have our own account. Each month a standing order for 1/2 the bills comes from each of our accounts into the bills account to pay the bills / mortgage.

So far, the bills account is £900 overdrawn. I am £400 overdrawn and my partner is £300 over drawn. None of the banks will let us increase these overdraft limit resulting in numerous overdraft charges each month - this month it reached £102 charged to my account, £35 to my partner and £140 from our bills account. This is making our situation worse and its getting to the point were we are going to default our mortgage.

We also have £1200 on a credit card - but I am quite good at swapping these to 0%'s when needed.

We cannot afford the mortgage on our flat, which we have had for just over a year but are struggling to sell it. It has gone down in value by about £3000 over the year.

Does anyone have any advice on how we can turn this around??
Thanks

GeorgeUK

If you post up a statement of affairs we may be able to spot some savings in your expenditure. Hopefully we can assist in getting the overdrafts decreased and get rid of the creditcard while we're at it.
https://www.makesenseofcards.com/soacalc.html

Avani

Thanks - here it is:
Just to note, there are 2 adults and 0 children, 1 pet dog and no cars

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 850
Partners monthly income after tax....... 1200
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2050

Monthly Expense Details
Mortgage................................ 640
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 122
Electricity............................. 44
Gas..................................... 44
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 11.37
Mobile phone............................ 5
TV Licence.............................. 11
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 11
Contents insurance...................... 9
Life assurance ......................... 11
Other insurance......................... 0
Presents (birthday, christmas etc)...... 120
Haircuts................................ 0
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Sofa repayment.......................... 12
Dog food / stuff........................ 10
Total monthly expenses.................. 1588.37

Assets
Cash.................................... 0
House value (Gross)..................... 104000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 104000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 104000...(640)......0
Total secured debts........... 104000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................1200......20........0
halifax overdrafts ............1200......0.........0
smile coop overdraft...........400.......0.........0
Total unsecured debts..........2800......20........-

Monthly Budget Summary
Total monthly income.................... 2,050
Expenses (including secured debts)....... 1,588.37
Available for debt repayments........... 461.63
Monthly UNsecured debt repayments....... 20
Surplus(deficit if negative)............ 441.63

Personal Balance Sheet Summary
Total assets (things you own)........... 104,000
Total Secured debt...................... -104,000
Total Unsecured debt.................... -2,800
Net Assets.............................. -2,800

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

======== Enter any other useful information below ========

e.g. the number of adults & children in the household, the number

of cars included in the SOA or anything else that may be useful.

Avani

I have also contacted a debt helpline that have advised me to move all my bills and salery over to another account just leaving the overdrafts on the 3 current accounts... then negotiate payments... they are sending me some details.... In the meantime I need to make some savings!!!

blondescorpio

Avani wrote: »

Thanks - here it is:
Just to note, there are 2 adults and 0 children, 1 pet dog and no cars

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 850
Partners monthly income after tax....... 1200
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2050

Monthly Expense Details
Mortgage................................ 640 - have you switch to interest only for time being?
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 122
Electricity............................. 44
Gas..................................... 44
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 11.37
Mobile phone............................ 5
TV Licence.............................. 11
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 300 Maybe have a look at the old style board for tips on how to cut this down? This seems a lot for 2 people.
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 11
Contents insurance...................... 9
Life assurance ......................... 11
Other insurance......................... 0
Presents (birthday, christmas etc)...... 120
Haircuts................................ 0
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Sofa repayment.......................... 12
Dog food / stuff........................ 10
Total monthly expenses.................. 1588.37

Assets
Cash.................................... 0
House value (Gross)..................... 104000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 104000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 104000...(640)......0
Total secured debts........... 104000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................1200......20........0
halifax overdrafts ............1200......0.........0
smile coop overdraft...........400.......0.........0
Total unsecured debts..........2800......20........-

Monthly Budget Summary
Total monthly income.................... 2,050
Expenses (including secured debts)....... 1,588.37
Available for debt repayments........... 461.63
Monthly UNsecured debt repayments....... 20
Surplus(deficit if negative)............ 441.63 Your actually in credit by nearly £500 a month?

Personal Balance Sheet Summary
Total assets (things you own)........... 104,000
Total Secured debt...................... -104,000
Total Unsecured debt.................... -2,800
Net Assets.............................. -2,800

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

======== Enter any other useful information below ========

e.g. the number of adults & children in the household, the number

of cars included in the SOA or anything else that may be useful.

Sorry but to me this looks like you should be managing ok - does your partner spend a lot? Or do you socialise a lot?

GeorgeUK

Hmmm, according to the figures you have put there, you have a surplus of over £400 every month, so you could be free of all debt within 7 months. Is this right?

Council tax............................. 122
If paying over 10 months can you ask to pay it over 12 (from January)

Electricity............................. 44
Gas..................................... 44
These are a bit high. Look at some comparison sites (uswitch, moneysupermarket) to see if you are getting a good deal.

Telephone (land line)................... 11.37
Satellite/Cable TV...................... 40
Internet Services....................... 0
Are these on a package?

Groceries etc. ......................... 300
Have a look at the old style board for meal plans. Have you moved down a brand (shops own)?

Clothing................................ 50
Every month? Could this be reduced?


Presents (birthday, christmas etc)...... 120
120 every month?? This needs to be cut.

I was going to advise looking for a 0% card that would allow you to pay off your overdraft but if it is already 0% there's no need for that.

Are you sure the numbers are right? You seem to have quite a surplus left at the end of the month that you can't account for. Might be worth keeping a spending diary so you can see where everything is going.

misspoppy

Hi

It looks like you need to go through the bank statements and check what you are actually spending. It also looks like at some point you haven't been putting enough into the bills account which is why its got overdrawn. I would look into getting a water meter put in as it often saves small house holds money.

I think a spending diary is the way to go to check where money is actually being spent, are you sure you only spend £300 on food (which is a lot) have you added up the reciepts or checked the bank statement? You could also get rid of sky, spend less on going out and presents and then you could afford your home, it seems daft to get rid of it in the market when you actually don't need to.

gtx

i work for a bank as a personal banker - you need to go in and insist on seeing someone - they won't be interested because they won't be able to sell you anything - but insist.

Ask them to do a budget planner with you and then contact whoever their debt management team is- when you speak to these(probably on the phone) tell them you need a 'reducing overdraft'. this is where they increase your existing overdraft to the balance of your account and then they reduce it either weekly or monthly by an agreed amount - it'll stop any excess fees.

you need to do this for all your o/d accounts. they'll cancel your direct debits and standing orders but you can set them back up again.

they won't like doing this and may try to make you reduce by more than you can comfortably afford - don't. be polite but be strong.

i don't know who you bank with but all banks should offer this service - banking code 'we promise to treat you fairly' covers it i think.

Avani

Yes the £300 food bill was a guestimate.... I am trying to compile a list of food spend which would give me a more accurate figure.

The bulk of the overdraft comes from when we moved into our property just over a year ago. I followed all the councils advice about how to switch over C.T payments but a month after we moved in - they cancelled my DD and didnt inform us, I had no idea until 9 months later in March we had a knock on our door. Despite alot of fighting, we had to pay £1100 within a month and I had no other option than to spead it over our overdrafts and credit card. Theres also the fact that our mortgage is way too much for us.

Socialising - yes we do spend alot and looking at it, a hell of a lot more than £50.00 a month - think maybe more like 200 on stupid things.... although nothing to really show for it.

Birthday and Christmas - sorry, this is wrong, that was for over a year.

I am going to do another and alot more accuratly.
Thanks