New to posting and Spiralling out of control.

nicola8776

I just wondered if anyone can see what’s going wrong here and if anyone can see something I can’t.

A few years back me and my husband had some severe problems with finances (job losses, increasing mortgage payments blaa blaa blaa) we got all of our debt into one place with a company called payplan and they sorted a figure we could afford to pay each creditor and stopped all the nasty letters etc, we managed for a bit but another job loss and it all went wrong again, in the end we had to sell our house (couldn’t keep up repayments on mortgage and huge debts) with the equity we paid of most of our debts although couldn’t get rid of everything so kept one loan on the debt plan at £200 a month.
We moved to rented accommodation and things had been going ok, me and my husband split up and he moved out leaving me and the 3 kids in the house, I ended up tied to a rental I couldn’t really manage I did get some extra benefits but it still never added up and began borrowing on some of my previously paid debts and got into more financial problems, my brother got me a loan for £5000 and I paid everything off again and just pay the payments to him each month it was fine.

I didn’t know at the time but my husband who was living with a friend also ran up some more debt as he was giving me money towards the house and is just generally crap with money anyway.
We have worked everything out and are back in one place now but back at square one in terms of debt. We thought it was all ok because we had quite a cheap rental and it seemed secure for 3 years which was fab but then they asked us to leave for their personal circumstances after a year and as it was very sudden and last minute we had to take what we could get and so are feeling a little out of debt with the house rent although it is looking like its quite average given the current situations.

Unfortunately my husband is self employed in IT and has had contracts ended early and its subsequently impacted hugely on our finanances meaning he can only take a salary of £900 after tax without causing problems with payments to inland revenue etc with no chances of any dividends and because of this we have ended up borrowing on cards to pay normal bills.

We don’t lead a lavish lifestyle at all, we don’t go out, both work full time, go camping once a year as our holiday with family, the children have never been abroad, we don’t have sky (use free view) etc
We do both have cars (second hand a V and S reg so not high value) and can’t really change that because he is self employed and travels around for his work and I work shifts, when I’m not at work I’m doing school runs/ childcare runs etc.

I’ve gone through the site changed mobile phone deals, changed gas and electric, always shop using the mysupermarket thingy and generally eat value stuff!
We can’t ditch home phone line as need that for internet which is needed for my husband’s work (we do claim part costs in his company)

We have tried and tried to get a consolidation loan to clear all the debt but cant get any further credit because of the debt plan.

We can’t alter the childcare costs any further as for 3 kid’s full time £800 is as cheap as i can find!

We are on a water meter in this house so we are saving a bit each month by being very careful (bathing the kids at my mums!)

The only other things I can see savings on are house contents insurance up for renewal dec and maybe just cancelling the life insurance but even those things are going to get us back into a positive amount.

Its the debt that’s causing problems and what I’m tending to do is pay £100 into one overdraft then transferring it to the other just so a payment is registering but I’m sure they are going to get shirty about the fact no salary is being paid into the account.

So what happens when you know that your already doing all the money saving yet its still not going to add up? the problem this month is the cards are all maxed out we have no cash and car tax is due, christmas is around the corner and its all looking very bleak, i cant sleep at night through worrying about getting more in debt but i cant see a way out?

Help?

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1142
Partner’s monthly income after tax....... 900
Benefits................................ 936
Other income............................ 0
Total monthly income.................... 2978

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 200
Rent.................................... 850
Management charge (leasehold property).. 0
Council tax............................. 191
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 12.99
Mobile phone............................ 40
TV Licence.............................. 10
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 150
Road tax................................ 31
Car Insurance........................... 70
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 800
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 32
Life assurance ......................... 29
Other insurance......................... 0
Presents (birthday, Christmas etc)...... 30
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2780.99

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 4000.....(200)......0
Total secured debts........... 4000......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Capital one....................200.......5.........0
Vanquis........................1500......61........39
Capital one....................500.......20........0
Family.........................5000......170.......11.5
lloyds tsb overdraft...........1500......100.......15
lloyds TSB overdraft...........1800......100.......15
Total unsecured debts..........10500.....456.......-

Monthly Budget Summary
Total monthly income.................... 2,978
Expenses (including secured debts)....... 2,780.99
Available for debt repayments........... 197.01
Monthly Unsecured debt repayments....... 456
Surplus(deficit if negative)............ -258.99

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total Secured debt...................... -4,000
Total Unsecured debt.................... -10,500
Net Assets.............................. -12,500

GeorgeUK

Council tax............................. 191
If paying over 10 months, can you ask to pay it over 12?

Electricity............................. 50
Gas..................................... 50
Check you are getting the best deal with comparison sites (uswitch, moneysupermarket) Make sure everything is turned off at night and try using energy saving light bulbs.

Mobile phone............................ 40
PAYG?

Groceries etc. ......................... 150
Have a look at the old style board for meal plans and recipies. Have you moved down a brand?

Car Insurance........................... 70
Check the comparison sites to make sure you are getting a good deal

Childcare/nursery....................... 800
Do you get vouvhers from your employer or anything for this?

Contents insurance...................... 32
Life assurance ......................... 29
Again, check comparison sites.

I thought that as part of a DMP, you weren't supposed to take out any other credit or it would negate the agreement. Is this what the secured debt is or is it still part of a DMP and this secured debt is something else?

I would try to target the £200 Cap1 card first. As this is quite low, if you get a nil balance, they may offer a balance transfer deal which would allow you to move that high Vanquis rate.

I don't suppose there are any relatives that live nearby that may be able to help one day a week so you can reduce the nursery costs? That's crippling you right now.

MurrayMint

Hi,

I appreciate the whole economy is really tough, but I was wondering whether your DH could look to find a full-time job with an employer, rather than being self-employed? It's just that £900 net pcm for an IT professional is not good! Maybe worth considering?

MM

paybacktime2008

Hi, with the childcare costs you might be better off one of you giving up wrk and working evenings/weekends when the other can look after the kids. It seems you only clear £342 a month when you are paying £800 for childcare. thats only £85 a week, Could you not look into earning more than this doing evening/weekend work...plus being home during the day to spend time maybe doing ironing (Other peoples for money!)or something. I don't know if this is feasible but it's an idea.

I know how crippling childcare is so my sympathies to you.

Good Luck

Airwolf1

Monthly Income Details
Monthly income after tax................ 1142
Partner’s monthly income after tax....... 900
Benefits................................ 936
Other income............................ 0
Total monthly income.................... 2978

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 200
Rent.................................... 850
Management charge (leasehold property).. 0
Council tax............................. 191 - as said, try to get it spread over 12 months.
Electricity............................. 50 can you change? Comparison sites been checked?
Gas..................................... 50 can you change? Comparison sites been checked?

Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 12.99 Can you go to a company where you may get a cheaper deal for telephone and internet together? (Talk Talk)
Mobile phone............................ 40 I pay £25 for 800 cross network mins and unlimited texts. Are you out of your initial contract? If so, ring them up and re-negotiate.
TV Licence.............................. 10
Satellite/Cable TV...................... 0
Internet Services....................... 15 See telephone
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 150 Do you top up where you can get vouchers, or a points scheme? (Shell/Tesco etc)
Road tax................................ 31
Car Insurance........................... 70 - When up for renewal, shop around. Use comparison sites again.
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 800 - Would you not get WFTC if you packed up work and didn't use nursery etc?
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 32 Again, use a comparison site and shop around for cheaper deals at renewal.
Life assurance ......................... 29
Other insurance......................... 0
Presents (birthday, Christmas etc)...... 30
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2780.99

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

Secured Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 4000.....(200)......0
Total secured debts........... 4000......-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
Capital one....................200.......5.........0
Vanquis........................1500......61....... .39
Capital one....................500.......20........0
Family.........................5000......170...... .11.5
lloyds tsb overdraft...........1500......100.......15
lloyds TSB overdraft...........1800......100.......15
Total unsecured debts..........10500.....456.......-

Monthly Budget Summary
Total monthly income.................... 2,978
Expenses (including secured debts)....... 2,780.99
Available for debt repayments........... 197.01
Monthly Unsecured debt repayments....... 456
Surplus(deficit if negative)............ -258.99

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total Secured debt...................... -4,000
Total Unsecured debt.................... -10,500
Net Assets.............................. -12,500

nicola8776

thanks for the input so far..

I try to disregard the childcare because the tax credits we get of £173 a week we only get because of paying £200 ish a week childcare (approx 80% help) so childcare is cancelled out anyway.. the childcare is needed from 7am and sometimes until i finish work at 8pm as i work in a hospital shifts so it can also be weekends if hubby is away. if i stopped childcare and or working we would loose that money and so wouldnt be any better off IYSWIM.

I find it bizarre that we arent entitled to any other element of tax credits only the childcare element as our earnings cancel the rest out.

My hubby is looking and applying for jobs at present with more money and could have taken a 2 month contract at £180 a day but that would leave us without him with a job in january which wouldnt have been very sensible. he gets £12 a hour with his current contract which is still crap compared to previous contracts but we have a corporation tax bill in jan and tax and NI on the payroll so realistically cant take any more than the £900 from the company becuase i dont fancy getting into a new debt with inland revenue!

I have applied for Bank shifts at the hospital but need to be careful about how many hours i can realistically work without running myself into the ground!

I looked at the council tax and we have to pay every month the £191 until march because we are only paying part year as we moved here in september. its a high council tax band which i didnt really think about when we moved
I have read my tenancy agreement and i cant get out of it until sept 09 so am stuck with that too...

I switched (went through last week) to the best deal on energy around here, we were paying £60 a month on gas and £70 electric before i am trying to use less as a general rule though!

I did consider PAYG with my mobile but i dont use the landline i use free calls on my mobile me and hubby both have 600 mins unlimited texts for £20 a month will go see if i can beat that as its a month by month deal so no tie ins.

Sadly the £70 on both car insurances is the best we can get Hubby's is 30 a month 3rd party and mine is 40 i had 5 small claims on a lease car within the last 3 years which screwed up my chances of a best deal, i did both insurances on cash back sites just waiting for the payout!

forgot to mention Hubby joined the TA so gets something silly like £16 a week for that and i am paying off a Tax credits overpayment at £60 a month.

I have an account with a credit union i also forgot about i had a loan with them ages ago which is nearing the end so should be able to get the money that they save alongside out and pay that off one of the cards.

Ive been analising all the finances all night have now set all my accounts up in the egg money manager, i am determined that somehow this will work out!

Airwolf1

I assume your hubby (if self employed) claims expenses etc? Eg, £0.40 per mile for car expenses.

nicola8776

yes the accountant sorts all that out when they do the accounts.. so thats all quite seperate, they take an ammount off each year for all the expenses..