Could we Consolodate

NY_Girl

Hello everyone,

Have neve posted on here before but feeling a bit desperate and was hoping someone might be able to help.

In the last two years my husband and I have bought a house and got married, overstetching ourselves terribly and now have got into a bit of a state with debt. Our joint debt is as follows: -

Lloyds Loans x3 totalling: £6,000 - monthly repayments £550 a month
Mint Loan: £3,500 - monthly repayment £176 per month
Natwest Loan: £3,500 - monthly repayment £178 per month
GE Money: £4,000 - monthly repayment £100 per month
Credit Cards: £2,000 - minimum payment each month

We have a mortgage of £206,000 - monthly payment £1,450 (repayment). The house was valued at the beginning of the year at £225,000 but I should imagine now it is only worth £210,000 so no equity in it really

I bring home £1,900 a month and my other half £1,600. We cannot reallly increase this as we both work v.long hours doing all the overtime we can.

We are making all the monthly payments on the loans but after paying all our bills and for our travel to work etc we are literally left with nothing and what is scaring me is that our credit card is what we use for emergencies as we have no surplus income to save etc.

Do you think we would be able to get a consolidation loan from someone like freedom finance even though we do not have any equity in our house? I have tried to apply for some loans to consolodate but have been declined and I have checked my credit report to day and my score is pretty low, I assume because we have so much credit.

Any suggestions about how we might manage this a bit better would be gratefully received.

RAS

Hi

We strongly advise against consolidating your debts. Would suggest you put up a full stateement of affairs so we can work out how to make things go further. If that does not work, you may need to talk to a debt charity.

skintandscared_2

Welcome to the board!! Consolidation is a VERY bad idea. 83% of people who consolidate go on to run up their cards again. And every application you make and have refused just makes your credit score go down even further.

The best way we can help you is if you post a statement of affairs (SOA) which shows all your income and outgoings. We can see if there's anywhere you could potentially cut your expenses down a bit, to give you something extra to live on and manage your payments. The other alternatives are things like debt management plans (through a non-fee-paying organisation like CCCS or PayPlan) but it will be easier for you to see if that's necessary when you have all the figures in front of you.

I will see if I can find a post with the link to complete your SOA. And don't worry - you've come to the right place. There are some amazing people on here with great suggestions on how to cut expenses!!

Here's the link ....

http://www.makesenseofcards.com/soacalc.html

Damita

Welcome to the board

hayley11

Welcome to MSE NY Girl

I don't really have much to add, a statement of affairs would be the best thing. I also agree that consolidation loans aren't the best options, I've done it a couple of times and both times have run up the cards/catalogue again

Hayley xx

NY_Girl

hello everyone, thanks for the welcome!

As suggested I have had a go at my SOA and I wish we had done it a long time ago, it has made me feel quite sick.I will have to update it as the life insurance is paid directly from my husbands pay as it is through work. I am also unsure of car related expenses as that is his area! However, all our finances are joint we just have the one joint account and all the figures below are for both of us. I have not included any entertainment, presents etc as anything not included on here has to go on our credit cards as we just do not have the money.
Monthly income after tax................ 1900
Partners monthly income after tax....... 1600
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3500

Monthly Expense Details
Mortgage................................ 1498.23
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 125
Electricity............................. 40
Gas..................................... 35
Oil..................................... 0
Water rates............................. 26.25
Telephone (land line)................... 15
Mobile phone............................ 70
TV Licence.............................. 11.95
Satellite/Cable TV...................... 27 (includes internet)
Internet Services....................... 0
Groceries etc. ......................... 120
Clothing................................ 0
Petrol/diesel........................... 150
Road tax................................ 12.5
Car Insurance........................... 35.76
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 120
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 10
Buildings insurance..................... 30 (inlc. contents)
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 35
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2361.69

Assets
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 210000

Secured Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 206000...(1498.23)..0
Total secured debts........... 206000....-.........-

Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Lloyds loans x 3...............6000......468.2.....0
Natwest........................3500......178.......0
Mint...........................3500......173.8.....0
Credit Cards...................200.......100.......0
Barclays Partner Fina..........500.......70........0
GE Money.......................4000......100.......0
Total unsecured debts..........17700.....1090......-
Monthly Budget Summary
Total monthly income.................... 3,500
Expenses (including secured debts)....... 2,361.69
Available for debt repayments........... 1,138.31
Monthly UNsecured debt repayments....... 1,090
Surplus(deficit if negative)............ 48.31

Personal Balance Sheet Summary
Total assets (things you own)........... 210,000
Total Secured debt...................... -206,000
Total Unsecured debt.................... -17,700
Net Assets.............................. -13,700

skintandscared_2

Well done - that's the hard part over with!! heh

Right, there are people on here a lot more experienced than me at finding where to make savings, but a quick look at your SOA shows that you don't really have any extravagent outgoings. Mobile phone is very high, plus petrol (where there are also "other travel" expenses) is high too, but your grocery bill is pretty low and there's no allowance for MOT, dentist, prescriptions or an emergency fund. Levelling those things out I can't see that you could make any huge adjustments on what you are spending now to be honest - but I'm sure other people's eagle eyes will spot something!

One thing that does stand out is that, if you take away your unsecured debt payments, you have a huge surplus to actually put towards debt. I don't know whether a Debt Management Plan is something you've thought about, but it might be worth speaking to someone at CCCS or Payplan about your options. You could reduce the amount that you have to pay to creditors, but still send the debt managers quite a healthy chunk every month. It really depends how you feel about your credit rating disappearing!!

NY_Girl

Hi skintandscared (that is just how I am feeling at the mo!)

I acknowledge that the mobile bills are quite high - we both pay £35 a month line rental and get a lot of free minutes in that and never go over. They are both 18 mth contracts though and have a while to go, but when they do finish I do think we could reduce that.

My husband travels a long way to and from work each day and that is why the petrol is high. I do not drive or have a car myself but live in the suburbs and travel into London everyday for work. My work buys me an annual season ticket and then I pay them back £120 a month directly out of my wages. This is actually the cheapest way of doing it, if I paid weekly or montly it would be more, I also get to use it on weekends to get around as well.

I have never heard of a debt management plan before, I will have a look into it.

Thanks again.

lrr_2

Do you have long to pay on your loans?

As long as your bills are getting paid and you have money for food I would just stick it out as long as possible. No luxuries and just basic living until 1 loan is paid off then it will get a bit better.

If on the other hand your are struggling with basic living I would contact your lenders ASAP.

skintandscared_2

NY Girl, I do the same thing - commute into London and get the season ticket loan.

Very good point from Irr about how long to go on the loans. If it's not long, it would be well worth sticking it out. With that money back you could easily up the other payments and clear them pretty quickly.

Jesthar

Hi NY Girl,

Welcome to the forum, and congratulations on posting!

Not much I can add to this, except to say I am sure you can reduce your grocery bill. I'm single and living alone, and although I don't buy premium brands I don't buy value brands either, and I try to spend only around £50 on food for me a months - and I DO eat very well! Check out the Old Style Moneysaving part of the furum for lots of help and advice, a spending diary and meal planning are good weapons. There was a lady on here a few months back who found herself left with only about £30 plus the contents of her cupboards to feed her whole family of four (2 adults, 2 children) for a month, and she managed to do it so well her family never even noticed or knew!

I think you also need to find out the APRs on your credit cards/loans, then have a play with the Snowball calculator here:

http://www.whatsthecost.com/snowball.aspx

This will tell you which debt to throw any spare cash you have at first (whilst just paying the minumum amounts off the rest) - I'd guess that 'Credit Cards' and 'Barclays Partner Fina' might be the first two targets, which is good as they are also relatively small and you may be able to clear them in just a few months!

You could also start doing things like paid surveys and daily 'clicking' on cashback sites to bring in a little extra cash (though this will take a few months to filter through), and selling some things on e-bay.

And I think the others are right, you stand a chance of riding this out without going down the DMP route if you can start overpaying in a few places, so it's worth a go - you can always fall back on a DMP if you need to.

Hope that helps,

~Jes