Help for a nervous newbie

sashanut

I want to say thanks again for all your great welcome posts - I have been *trying* to get my SOA together to post on here & it has really frightened me, setting it all down. But I know that is the only way, since I can easily 'forget' things otherwise. The down side of it is that I have been having migraine - waking me up in the night which happens which I get when stressed. Here in the meantime, here is my personal nightmare :eek:
BTW, 3 in family 2 parents one 15 yo daughter.
CC Debts

CC1
Bal: £7911.33
a/bal: £1988.67
CL: £9900
IR: 22.48% !!!!!

egg cc (me)

B: £14,001.49
C/L: £15000
IR: 15.9%

Egg cc (him)

B: £7,057.80
C/L: £8,800
A/B: £1,743
IR: 15.9%


EGG LOAN

£10,757.47

IR : 7.7%
£400 P/M
END DATE AUG 08

M&S CC

B: £3,039.95
C/L: £3,500
IR:16.26%

MINT CC
B1: £7,708.37 @ 13%
B2: £1,407.92 @ 18%
B3: £1,429.74 @ 13%

TOT: £10,546. 03

C/L: £12,500

LLOYDS CC
B: £7,851.22 @ 13.13%
C/L: £9,750
A/B: £1,964

BARCLAYCARD

B: £7,340.91
C/L: £8,300
A/B: £944.05

LLOYDS TSB PERSONAL O/DRAFTS (2)

I. O/L £5,500: currently £3915.60 O/D
II. O/L £2,000: " £1842.60 O/D

Business O/Draft

£10,000

OUTGOINGS P/M

Repayment MORTGAGE WITH WOOLWICH: 992.48
Interest-only mortgage with Nationwide: 184.45
House Ins: 51.94
council tax: 220
car ins: 40.97
gas:
electric:
water: 78.90
pet ins: 10.57
sky: 42.50 (I pay this for my Dad & have done for years!)
tv licence per qtr: 31.50
life ins: 15.00
hsbc home ins: 58.18
3 other insurances - not sure what they are, have to find out from DH
1) 56.05, 2) 46.42, 3) 20.79
One of them will be an endownment on the other property (nationwide mortgage)
Telephone/internet/tv - all from NTL via cable
140 p/m approx
Food: was approx £100 p/w aim to cut this!!

The above is the real down side! On the plus side the mortgage on our house is about 150,000 & there must be 350,000 worth of equity in it. We also have the other house which has a 38,000 endownment on it (nationwide mortgage), there must be 40,000 - 45,000 equity in that. It was rented out via a management co until last month & the rental easily covered the mortgage payment. We are self-employed & both work from home; originally made quite a lot of money but apart from the house purchases weren't prudent. Then we got hit with very large tax bills - which are paid - but left us with severe cash-flow probs. Our income is OK - WHEN we get paid - it is approx 3000 - 5000 per month. BUT out of that we have to pay our tax, vat, company tax etc. Some items we can pay through via the company - such as the NTL bill, petrol & car servicing. At the moment we are owed around £15000 but not getting it on time is killing us. My DH has a tax bill due end Jan of 696.14

In the last year people have been late paying us - & consequently we have missed a few CC payments, trying to juggle all the balls in the air. I realise we HAVE to do something but I have tried to get a 0% deal from Capital one for DH - turned down & then tried to get the A&L 0% bank account - turned down but offered something else, not sure what yet as they are sending it through the mail.....but bog standard which I already have.

Better stop now as there is soooo much here to go at.....any help would be more than welcome, I really need to know how to first of all get these CC interest rates down if poss. We also have saleable stuff in the house..

dont_want_to_be_in_debt

hello Mimi

Youve done the hardest thing admiting the problem is the worst bit. You need to get your other half to face the problem though. Mine took 2 years until it got to the stage that we could loose our home if we dont deal with it now.

Work out a budget with the help of the web site (be honest or it wont work).
Get out the paperwork for the credit cards loans etc. and phone them ask if they will do a better rate, we did and saved £3000 a year. Only allow yourself a certain amount for everything including cash and stick to it, it makes it easier when you run out of cash to say "I cant afford it".

Im new too, desperately in debt and determined to be out of it in 5 years.

good luck
Michele :T :j :T :rotfl:

sashanut

Cheers Michele

Yes you are right my OH does need to face the problem - altho he is better than he used to be! In the past he has suffered from depression & I don't want him to go back there if I can avoid it. He - funnily enough - is good with money & has a horror of debt! Trouble is he left me - who is useless with money - to deal with it all including the business side as well as the VAT & books etc. Not making excuses for myself, it's me who has to rein in the spending via the budget. I DID have a tiny victory today tho - thought I had set up a D/D for the Mint card but today in the mail got a letter telling me I had not made the payment. Of course, it now takes 6-8 weeks to set up a d/d & I missed it - yet ANOTHER late payment fee. Got up my courage; rang them up & got a snotty lady who told me I should know that it wasn't set up. I also asked for a better rate but she said no way. Then passed me on to the finance section - much nicer lady & I tried again with the late pmt fee & she waived it!! Should have got up the courage again to ask her for a reduction in the rate but looks like I am paying less than their current rate unless you count 0% till Nov for new customers.

Thanks very much for the encouragement; it's taken me a week to get as far as posting my incomplete SOA, it is such a tangled web...much appreciate the positive words. Have done lots of cooking; now off to find some saleable goods..

mimi :T

xela_17

At first glance, there are two house insurances, one for £51.94 and one for £58.18. Why is this? I know you have two properties but tenants should pay their own insurance. Is one bulidings and one contents? If so, combining them with one provider should be cheaper.

You have missed out your elec and gas bills. if you don't know what these are then check and then go to uswitch.com and see if you can get them cheaper. (I bet you can). Do you have dual fuel? Do you pay them by direct debit? Much cheaper this way.

What is the APR on your overdraft? I see you have some money left in it. If the APR is cheaper than your most expensive cc (22%) then pay off some of the card with the money from the overdraft. You could also possibly try to negotiate this rate down before doing this as 22% is very expensive.

Hth.

xela_17

Forgot to mention the telephone/internet/tv at £140 a month. This is extortionate! What is this made up of exactly? There are far far cheaper packages that you could get.

What channels do you actually watch? What phone calls are you making? Do you use saynoto0870 before calling? Look on the telephones board for more info for cheap calling prefix numbers, e.g 1899.

dont_want_to_be_in_debt

Hello Mimi

We were self employed and ran up a huge tax bill when hubby became employed. I did all the paperwork and do understand, its a nightmare.
We also had a flat we were renting out (it had negative equity) this year it has finally started to make a reasonable profit so were selling it raising £35000. We also are changing our mortgage to repayment and cashing in an endowment that is failing badly, we got a cheaper deal from the bank on the mortgage, switched to a repayment loan and still are better off.
One way to deal with hubby if you can may be to work on a plan yourself with the help of this web site then sit down with him and say we're in a pickle but if we do this it will help...
It feels very lonely doesn't it out there without much support, but your not on your own
Good luck
Michele

sashanut

Hi, and thanks for your helpful comments! I am uncertain about the insurances myself - I have to wait till DH comes home, he has been away overnight working, he'll be back this evening. He did say yesterday before he left that we'd have a talk on Friday about the finance stuff so a chance to ask him then. Just had the renewal from Direct Line on the house insurance - £657.30 - paid via instalments of £58 - & I need do nothing to take advantage of this generous offer.. Thanks to MSE I know that this is bad thing to do & plan to get the insurance quotes on line as recommended.
The fuel thing is hard - I have been on many occasions to uswitch but because we have 4 electricty meters they can't help me! The previous owner had these put in to take advantage of various cheaper tariffs I think. We have just swapped to EDF energy - they sent someone to the door - for both gas & electrcity; paid for via d/d & also include Sainsburys loyalty points. They promise they can save us money!! Not sure yet but we will see.
Don't know what the rate is on overdraft - will phone to find out. MSE is prompting me to know all these things which I have let slide. As for the telephone/tv/computer - we are on ntl cable. Have just cancelled an extra cable tv line (£15 p/m) & also the film package as we never watch any. We have the cheapest family pack + sports - we don't drink or smoke & rarely go out unless for a meal so that is our 'entertainment'. We have 1MB broadband - 3 computers always on & 3 phone lines - we run the business from home & as I said this bill we pay through that - we can claim back the vat also. I always thought if you had ntl cable that you couldn't buy your services elsewhere but I could well be wrong. Plenty of food for thought here thank you!! Do I just call the CC company & ask them to give me a better rate? What stick could I use to beat them with - say I will tranfer the bal to another card with a lower rate? (hahaha) And if so, what rate should i ask for or leave it up to them??

TIA
mimi

Bestthingsinlifearefree

Hi Sachanut,

Is it possible to sell the 2nd property and get the 40 - 45K equity / profit and throw this at your debts (tackling the higher interset rate ones first).

This would wipe out virtually all the debts and then if you live with in your means / cut back with your income you could quickly clear the remainder of the debts and begin saving again (and please,please cut all those credit cards up / reduce the spending limits..never take another loan out again etc etc)


Would that be the solution or am I missing some thing ?


Good Luck.

Best things in life are free

sashanut

No, you are not missing anything - it would probably solve all the problems if we sold the 2nd prop. We only kept it on intially because we would have been in a neg equity situation had we tried to seel it at the time. Since those days we have had it done up & as I said, rent it out. I was hoping not to have to sell it - it would be a last resort as I was hoping it would form part of our pension pot. We both have pensions from our previous employers but as you know there won't be much for retirees soon..

Point taken re the credit cards.....I have been not using them at all for the last few months - they are not cut up but I try to use the debit cards instead. I just need to ask how to negotiate with the CC companies - I'm not in a frozen-interest type scenario but I would like any tips on what to say to them when I call...

TIA
mimi

Bestthingsinlifearefree

Hi Sachanut,

I admire you tackling your debt without selling the asset of the 2nd property.

In many ways this is a good thing because selling the 2nd property would dig you out of the hole / clear the debts but might not result in a change in spending behaviour and then you might rack up fresh debts.

But at least you have that option to sell the property and clear the debts but the most important thing is to learn to live within your means and make sure each month your outgoings are less than your income.