Bankruptcy panic!

padders_2

You should check what the situation would be re: running a business if you go bankrupt, I do not know.

Its great you are starting a business, but you are making £5/day. That combined with your housing cost are your two main problems. I find it hard to believe that the cheapest day care avaliable is £40/day.

Kateelizabee

You mention living close to friends and family as a keeping your current home benefit, so could your parents spend more time with "the grandchildren" and help you out by providing free or low cost child care? Do they know how much debt you're in? If they had a choice of buying your house or spending more time with their grandchildren, I'd know which I'd pick!

Even if they're only semi-retired, part time work plus your business will help close the gap a little.

Edited to add, what if you watched your friends' children as well as your own, and worked on your business in the evenings? If those are the rates in your area, I'm sure other parents are in your position.

westernpromise

jacksdebts wrote:

Expenditure
Mortgage £1489

As others have said, this is the problem. Your mortgage is 5 times your salaries plus you have 2 kids. It's 2/3rds of your income after tax. If your net income from work is actually only 150, then your mortgage is 90% of your take-home. Either way, that is unaffordable. You cannot afford your house and you need to downsize or downshift it to a grottier area.

This is tough advice to offer, I know, but it's the bitter truth. Unless you sort this, nothing else you do is going to make a jot of difference. You need to have your 'lightbulb moment' where this dawns on you. Ahead of that, your situation cannot be improved.

Water £ 25
Council Tax £80
Gas £55
Electric £80
Home insurance £25
Telephoone £100 (high for my business use)

Looking at the longer term, with you in a situation where your mortgage is affordable, you may be able to make some economies sufficient to make a dent in your debts. Starting with your phone bill, it's far too high. If you use justdialsaver plus call1899, your phone bill should be no more than 15 quid a month including line rental from BT.

TV licence £12
Sky £11 (no aerial signal at all here even with 20 ft aerial!)
Preschool £87
Life Ins £39
Health ins £63

I'm afraid you can't afford health insurance. At best you can afford a small healthcare cashplan. But otherwise, sorry, no way are you wealthy enough to afford this.

Petrol £60
Tax, MOT etc £65

You can't afford a car, either. What makes you think you can?

Grocerys £400

Too high. You can't afford 5 grand a year on food.

Clothing £40
Dentistry £10
Kids swim £36
Business Ins £252

I echo the comments of others on this.

Balances of debts:
Overdraft £2000
Personal Loan £13334
Visa £3000
Amex £300
Personal Loan £9415
Amex £1000
Visa £3500
Mastercard £3600
Visa £2400
Visa £2800
Mastercard £700
Mastercard £3200
Catalogue £800
Visa £800
Visa £900
british Gas £960
Overdraft £1000
OVerdraft £650
Solicitors £650
Total: £51009

What did you spend all the loan funds on? Did you spend it on anything you could sell?

westernpromise

jacksdebts wrote:

Nearly all of my income would be taken up with childcare costs as it costs around £40 per day per child (and i have 2).

Without the business insurance i cannot trade. I am working extremely hard at trying to build my business as this is something I can do in the evenings around looking after my children. Without the insurance and without making telephone calls this would be impossible.

And even though I am "only" making £150 per month that's £150 i wouldn't make if I didn't have the insurance.. so must be worth it!

No, it's not. You can't afford a job which brings in only 150 pounds a month. It amounts to not working, which right now is a luxury, and you need money. You could earn more flipping burgers at McDonalds. The minimum wage is £5.05 an hour. You could be earning £750 a month after tax.

in*the*red_6

westernpromise wrote:

This is tough advice to offer, I know, but it's the bitter truth. Unless you sort this, nothing else you do is going to make a jot of difference. You need to have your 'lightbulb moment' where this dawns on you. Ahead of that, your situation cannot be improved.

I agree, please read back carefully through this thread and I think it will be obvious that your huge mortgage is/has been the crux of the problem.
You can't live without digging yourself further into debt so you need to put a stop to it asap.

bank_of_slate

Hi Jacksdebts!

It's fantastic that you're doing this, I hope you find some help and support from this forum.

It seems strange that your mortgage is so high as you say you live in an expensive area, yet your Council Tax is only £80 per month.

My house was purchased for £59,950 and our Council tax is £88 per month
....Linda xx

Thefunkygibbons

Don't take the advice the wrong way, even if some of it is strongly worded

However, unless your business is something that can really grow, you are in trouble

Re telephones, have you looked at using a broadband service such as homecall, which provides BB and all phones local and national are part of the charge?

jacksdebts

Thank you for all your comments. I shall spend some time now going through all your suggestions.

Thanks again

donnalove

you really need to sort your house out if you wont sell can you transfer to another lender with better rates or even increase the length of the mortgage to reduce it, it really is a major problem

BWZN93

I'll be blunt - Your housing costs are a MASSIVE problem - and I echo others here saying either sell or do something quick. If you really want to keep the house, could your husband not look after the children when he gets home from work while you go out to work at an evening job? Loads of places need evening staff, and not all are badly paid either.

I appreciate the want to run your own business, but seriously, is it practical right now?? Your priorities are that you have a roof over your head, heating, water and food, and can make some kind of repayments towards the debts, if not for your sake, but for your children. Selling the car for a cheap banger, cancelling the health insurance and finding an evening job would be your first priorities (and there would be no need for childcare, and secondly, it would quadruple your salary without having to work full time hours).

Something has got to give, and I fear that drastic action is the only way of ensuring you dont end up with no house and no business, period.

Jo xx