Huge debts - house sale to help out??

bananah

hi,
To begin with, let me simply explain our situation. We are a married couple with one 2 year old daughter and another child due next year. My wife is on redundancy alert, and expects to be offered this before Christmas. We own our house, and have debts of £60k.
We're at our wits end, and recently came up with a plan to sell our house to pay off a lot of this, move into rented accommodation and save for a year or two. However, this is obviously a terrible time to sell, and our house has dropped significantly.
We're out of ideas - we've cut back on as much as we can, including food, bills, phones, shopping and childcare - we just cant do any more.
The following SOA seems to suggest we have a surplus every month, but the reality is we're going backwards. So it may be that some of our expenses our higher than I've calculated here.
Any suggestions really welcome.

Thanks.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 2500
Partners monthly income after tax....... 1800
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4300

Monthly Expense Details
Mortgage................................ 931
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 122
Electricity............................. 40
Gas..................................... 30
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 20
Mobile phone............................ 30
TV Licence.............................. 12
Satellite/Cable TV...................... 20
Internet Services....................... 0
Groceries etc. ......................... 250
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 30
Car maintenance (including MOT)......... 0
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 750
Other child related expenses............ 30
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 20
Life assurance ......................... 22
Other insurance......................... 10
Presents (birthday, christmas etc)...... 30
Haircuts................................ 10
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 30
bank charges............................ 30
Total monthly expenses.................. 2592

Assets
Cash.................................... 0
House value (Gross)..................... 200000
Shares and bonds........................ 4000
Car(s).................................. 1
Other assets............................ 1000
Total Assets............................ 205001

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 173000...(931)......7
Total secured debts........... 173000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
egg card.......................6000......167.......0
citi card......................5430......122.......0
katy bacrd.....................2900......57........0
paul...........................1300......0.........0
next...........................667.......62........0
bcard sh.......................5517......110.......0
egg c sh.......................1261......53........19.9
all loan.......................21000.....483.......9.9
egg loan.......................9000......308.......6.73
MS card .....................2934......59........0
MS OTHER........................4100......93........0
Total unsecured debts..........60109.....1514......-

Monthly Budget Summary
Total monthly income.................... 4,300
Expenses (including secured debts)....... 2,592
Available for debt repayments........... 1,708
Monthly UNsecured debt repayments....... 1,514
Surplus(deficit if negative)............ 194

Personal Balance Sheet Summary
Total assets (things you own)........... 205,001
Total Secured debt...................... -173,000
Total Unsecured debt.................... -60,109
Net Assets.............................. -28,108

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

insider66

Hi there bananah,

I guess the first question is, do you want to sell your house?

bananah

well, if we could get the right price, then yes! but we have had it valued and we cant really sell as we won't actually get much equity out now

insider66

bananah wrote: »

well, if we could get the right price, then yes! but we have had it valued and we cant really sell as we won't actually get much equity out now

Ok, so you're happy to sell.

The only thing is, it won't clear the debt.

That aside, I guess you've applied for tax credits to help with childcare costs?

The budgets you have put in for some of your living expenses are pretty low - 250 for food?

also, car insurance but no other costs?

What about entertainment?

paybacktime2008

Do you not qualify for ANY tax credits?

bananah

on the car front, its a company car, so no other costs
entertainment is probably higher
no we don't qualify, in fact we were overpaid last year and as a result are paying back £30 pcm!!

insider66

bananah wrote: »

on the car front, its a company car, so no other costs
entertainment is probably higher
no we don't qualify, in fact we were overpaid last year and as a result are paying back £30 pcm!!

Thanks,

In reality, your living expenses are probably quite a bit higher (as you say) than on your SOA, which would probably explain the credit card debt...

just a guess, but are the loans for previous consolidation?

MoaningMyrtle

Can you get tax credits to help with childcare or change working patterns so that you can share childcare a couple of days a week?

paybacktime2008

Do either of your employers offer childcare vouchers.......you don't pay NI on them so you'll be saving around £75 a month. Most nurseries and childminders will take them.

chevalier

My comments are in blue. If your OH is on redundancy alert, do you know what their pay off will be, ie would it put a sizeable dent in your debt? Are they looking for new work already so they aren't caught out?

bananah wrote: »

Thanks.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 2500
Partners monthly income after tax....... 1800
Benefits................................ 0 what not even child benefit? what about working families tax credit?
Other income............................ 0 what haven't you used for 6 months? Find those things and put in on ebay, or amazon/ www.greenmetrpolis.com for books, or play.com for dvd's? Also when does you OH go on maternity leave? If she is made redundant now she should get redundancy pay AND maternity pay - I had this happen to me and got a double pay out. Check this FAST.

Also have a look at the up your income forum on here for ideas to do just that. But for now there are companies on the web like lightspeed.com, that offer rewards for doing surveys. If you both sign up the you can both earn.
Total monthly income.................... 4300

Monthly Expense Details
Mortgage................................ 931 repayment or interest only? 7% APR seem high now would switching providers save money? If repayment could you switch to a longer term, go interest only or have a repayment break?
Council tax............................. 122 Ask to spread the payments over 12 months rather than 10.
Electricity............................. 40 Not bad but when did you last check if you could get this and the gas cheaper elsewhere.
Gas..................................... 30 Make sure your heat thermostat is not set too high ie 20 degrees is enough. Rediscover jumpers (joke sort of). Also if your water is scalding hot coming out of the tap then turn the hot water temp down too.
Water rates............................. 25 hippos in your cistern will save you a bit or water and thus money. You can get them free from your water board.
Telephone (land line)................... 20
Mobile phone............................ 30
TV Licence.............................. 12
Satellite/Cable TV...................... 20 you can get cbeebies on freeview....:D
Internet Services....................... 0 how do you use the internet if you have no internet costs?
Groceries etc. ......................... 250I feed a family of four for less than this a month. Try down shift brands of things to save money. Also Aldi and Lidl do great stuff for less money. If you look at the Old Style forum there are loads of ways to save money on the grocery budget. Lastly if you have a local market, then go there for veggies and fruit. I always found it cheaper to go there than Tescos.
Don't forget to meal plan. Have a look through your store cupboards and freezer and see if you can do a weeks worth of meals from them, so you can just buy milk and a few fresh bits this week. Then from next week meal plan for as far in advance as your freezer/storage will permit, and then make a list and stick to it. I find that I stick to the list if I DON'T take the family but maybe that is just my family :rolleyes: .
As you are having a little one in May, then throwing the odd baby thing in the trolly each weeks spreads these costs too. And now is the time to see if you council/ health authority do any deals for getting real nappies cheaply.
Clothing................................ 50 children's clothes can get enormous bundles of good stuff on ebay, charity shops are a good source of adult clothes too. One tip I was given was to hang up your entire wardrobe and then look to see what new combinations of things you can wear to get a different look, without spending any money. Same for OH. And again anything that hasn't been worn in 6 months, goes to ebay, or the charity shop or the rag bank depending on how :eek: it is!
Petrol/diesel........................... 0 you have a car that drives on air FAB! But this maybe where your supposed surplus is going
Road tax................................ 0 You need to put money aside for this each month, so that you don't have to resort to the credit cards to pay it when it falls due.
Car Insurance........................... 30
Car maintenance (including MOT)......... 0
Car parking............................. 10 can you park a bit further away that is free?
Childcare/nursery....................... 750 :eek: holy cow that is expensive! When does your little one turn 3? As this will drop then due to free hours from the government. Will your OH be returning to work after the baby is born, as obviously you will have factor in two lots of child care at that point. Please both of you check whether either of your employers runs the nursery voucher scheme, this will save you a fair bit on money, and doesn't cost the employer anything. AND YOU CAN BOTH APPLY FOR THE SAME CHILD! Or could andy relatives have your child for a day a week to save a days nursery?
Other child related expenses............ 30 what is this for?
Medical (prescriptions, dentist etc).... 30 if you are paying this every month, you WILL save money getting a prepaid prescription card. If you take out a yearly one then you can pay by direct debit. I got a 3 month certificate, and that meant that I got 1 month free prescriptions compared to not having a prepaid certificate
Pet insurance/vet bills................. 0
Buildings insurance..................... 10For all these insurances check that you are getting the cheapest deal, and if you aren't switch via a cash back site such as www.quidco.com, www.topcashback.co.uk or similar.
Contents insurance...................... 20
Life assurance ......................... 22
Other insurance......................... 10
Presents (birthday, christmas etc)...... 30 Small children don't know that toys are second hand. Have a look on the celebrations forum for ideas for cheap but thoughtful presents to get this spend down. Or set yourself a challenge to ebay enought stuff to buy presents with.
Haircuts................................ 10
Entertainment........................... 50 Try and trim this. If you look the right of this page there are 2 for 1 offers for eating out and other things. Have a look on the freebies forum for things to do for nowt, and the discount and vouchers forum for other vouchers for cheap days out. If you shop in Tesco then don't forget Tesco deals mean you can exchange their vouchers for nights out at restaurant or cinemea. If you are going out with a group of friends then suggest a video night or some other low cost entertainment. Make you money work harder for you.
Holiday................................. 0
Emergency fund.......................... 30 THIS IS AN EMERGENCY! How much is in it and could it pay off anything you have outstnding.
bank charges............................ 30 Try really hard to get back under so that these stop.
Total monthly expenses.................. 2592

Assets
Cash.................................... 0
House value (Gross)..................... 200000
Shares and bonds........................ 4000 could you sell these to raise some cash?
Car(s).................................. 1 could you down grade the car and get a cheap one to free up some cash
Other assets............................ 1000
Total Assets............................ 205001

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 173000...(931)......7
Total secured debts........... 173000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
egg card.......................6000......167.......0
citi card......................5430......122.......0
katy bacrd.....................2900......57........0
paul...........................1300......0.........0
next...........................667.......62........0
bcard sh.......................5517......110.......0
egg c sh.......................1261......53........19.9
all loan.......................21000.....483.......9.9
egg loan.......................9000......308.......6.73
MS card .....................2934......59........0
MS OTHER........................4100......93........0
Total unsecured debts..........60109.....1514......-

You need to find out the APR of all of these debts. That way you can target the highest APR debt to pay off first, and use your money most productively. If you have a look at www.whatsthecost.com, there is a snowball calculator on there, which will tell you which is the most cost effective way to pay off your debt, and also when your debt free date is. It can be very motivating ie to try and find ways to bring that debt free date (DFD) forward.

Monthly Budget Summary
Total monthly income.................... 4,300
Expenses (including secured debts)....... 2,592
Available for debt repayments........... 1,708
Monthly UNsecured debt repayments....... 1,514
Surplus(deficit if negative)............ 194 So if you don't have this a month then you both need to do a spending diary to really track where your cash money is going.

Personal Balance Sheet Summary
Total assets (things you own)........... 205,001
Total Secured debt...................... -173,000
Total Unsecured debt.................... -60,109
Net Assets.............................. -28,108

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

I think that you can make some changes that will start you really cutting into those debts. If after a few months you don't feel you are making any progress, then please call one of the free debt charities - CCCS, Payplan, National Debtline (numbers are at the top of the forum), and chat to them about going on a Debt Management Plan. THEY DON'T CHARGE.

Also don't forget to join your local freecycle group - www.freecycle.org for free all sorts of things, from children's clothes to washing machines, to lawn mowers you name it somebody else wants to give it away for free. You just have to go and pick it up.

The very best of luck and sorry the post was so long
chev.

bananah

we already use vouchers and are actually going to knock off another 250 by putting our daughter with a childminder instead of nursery.
Some of the debt is old consolidation. The company I owned last year was shut down after a very nasty run in with an horrific client. I lost at least 20k.