In serious debt trouble

chevalier

I can't stress this enough, this is what you MUST do tomorrow, calling in sick if necessary or get emergency leave

1) Phone your mortgage provider and BEG to go interest only to help you pay off the arrears and get back on track with the mortgage.

2) Is there anyone that you can borrow the 2.5k off to get rid of this log book loan, so you could sell the car

3) Get together all the paperwork regarding the attachment of earnings and the other legal issue that is going to court and phone national debtline (phone number at the top of the forum), and go through it with them. If you do it NOW then you may find you can put a stop to them on the grounds that going forward with it would lose you your job, so you couldn't pay anyway, and the CREDITOR would lose their money.

4) Your priority debts are secured debt on the house - mortgage, and the log book loan, then the council tax as you can get put in prision for non payment. You need to talk to them and explain that you can't keep up the current payments due to having to pay mortgage arrears. Other priority debts are those that keep you warm - ie gas and electric. You need to read your meters and check that you are not in credit by accident. Strangely enough the water board can't cut your water off.

5) Once these have been paid, THEN and only then can you look at other creditors. And before you do them you need to sort out a budget for food. Sorry but £360 even with formula is too much. Ask at your doctors surgery if you are entitled to milk vouchers to help with the formula milk issue. The 3 year old can be on normal full fat milk now as can the 2 year old unless there is a specific medical reason like milk allergy for them not to be.

You need to phone all creditors and check what the APR's are for each one, and if they ask why say you are thinking of closing the account, they might lower the APR to keep you. Once you know the APR's then you can see which creditor to throw money at ONCE you have paid the priority debts above.

6) As others have said if you partner can't work due to shift work commitments on your job, then they need to help in other ways. So they need to write a list of everything in the cupboards and the freezer and meal plan so that all of that is used up. This way you should only need to buy milk and veggies, and nappies for a week or two. Then once that is done, they can meal plan for say 2 weeks in advance (including packed meals for you at work - no more canteen stuff, or buying crips with the petrol lol), and then goes shopping with a list, and that is ALL that gets bought. Or shop online and use a voucher code to get free delivery. Less temptation that way.

For a while this is going to be incredibly painful to get on track. You will have to make great changes to how you live BOTH of you. No take aways, no booze and preferable no fags if you smoke. Every single expenditure other than food has to be justified. And it will be hard to have to do without any sort of luxuries.

7) Also whilst your partner is at home, they can be contibuting by signing up to survey sites to earn money that way. Also pm Eagerlearner for a list of free clicks you can do at various sites to earn money that way. There are also sites like bingoport where you can earn points to redeem for Amazon vouchers to keep for next christmas.

Also the newborn baby clothes will go ok on ebay as a bundle. Be ruthless - if it hasn't been used for 6 months it goes on ebay, (or amazon for books, or play.com for dvds)

Sorry if this is harsh, but I think your situation is serious enough that pulling punches would be counter productive.

good luck
chev

beanielou

You have had some really really great advice there from chev.
Please please follow it & keep posting.

talana

fonay1805 wrote: »

Hi,
I managed to get the phone bill down to £22.50 a month. The TV is with sky, I currently owe them £34, which I hope to pay at the end of the month. After that has been paid I will try and sort out a different sky package.

Wrong priority. Don't sort out a different Sky package, you can't afford the luxury right now. Cancel Sky altogether, that money needs to be going towards your priority debts. If you're on a contract with them too bad, stop paying anyway, just add them to your list of creditors as a low priority.

And you owe them £34? Too bad, don't pay it for now. See above.
That has to go to priority debts, which Sky isn't.

fonay1805

RASQuote
Originally Posted by fonay1805
Hi,

Below is the SOA;

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 2177
Partners monthly income after tax....... 0 - you need to get earning something here
Benefits................................ 220
Other income............................ 0
Total monthly income.................... 2397
Monthly Expense Details
Mortgage................................ 1094 - is very high. Does this inlude arrears?
Secured loan repayments................. 0
Hire Purchase (HP) repayments........... 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 175
Electricity............................. 50 - you could cut this back a bit
Gas..................................... 50 ditto
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 45 - this is massive. Stop using itt in the day-time. Calls in and urgent business only.
Mobile phone............................ 20 - go PAYG and get rid
TV Licence.............................. 12
Satellite/Cable TV...................... 45 - ditch it - you cannot afford this when you have priority debts.
Internet Services....................... 0
Groceries etc. ......................... 360 this may be in line for a DMP but you cannot aford it - allow £200 and learn to budget on the Money Saving Old Style forum.
Clothing................................ 40 - you simply cannt afford this join www.freecyle.org and get stuff free.
Petrol/diesel........................... 220 - what are you driving or is it huge mileage?
Road tax................................ 20
Car Insurance........................... 54 - this is high,. Check via a comparison site and switch viaww.quidco.com
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 30 - what is this?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 26 - this is high unless it includes contents
Contents insurance...................... 0
Life assurance ......................... 30 - is this the lowest you can get? Switch vioa ww.quidco.com
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 - you cannot aford these
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2371

Assets
Cash.................................... 0
House value (Gross)..................... 192000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 199000

Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 192000...(1094).....5.9
Secured Debt.................. 2500.....(0)........0
Total secured & HP debts...... 194500....-.........-
Unsecured Debts
Description....................Debt......Monthly.. .APR
capital one....................400.......0.........0
natwest........................4000......0........ .0
provident......................900.......0........ .0
welcome finance................7500......47........0
british gas (elec).............251.25....0.........0
british gas....................270.56....0.........0
bt.............................157.......0........ .0
council........................855.......0........ .0
Total unsecured debts..........14333.81..47........-

Monthly Budget Summary
Total monthly income.................... 2,397
Expenses (including HP & secured debts). 2,371
Available for debt repayments........... 26
Monthly UNsecured debt repayments....... 47
Amount short for making debt repayments. -21
Personal Balance Sheet Summary
Total assets (things you own)........... 199,000
Total HP & Secured debt................. -194,500
Total Unsecured debt.................... -14,333.81
Net Assets.............................. -9,833.81
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.


Hi,
My mortgage payments are high because it includes £136 a month arrears repayment. I will be contacting them though because this is not enought o pay off the arrears before I need to remortgage in October.
The Gas and Electricity are high because I have arrears with them and it also covers a repayment. Are you able to switch supplier even if you have outstanding amounts owed?
The phone is £22.50. No idea where I got £45 from. I think I included the mobile and then put them on again later on. Sorry.
The mobile phones are already PAYG and the £20 is for myself and my wifes phone.
The £40 a month for clothing is for the kids as they grow so quickly and need shoes etc.
The mileage is massive, it's 100 miles a day when I'm on shift. The car insurance runs out around Jult time.
The buildings insurance includes contents and the life insurance is for the two of us.

Thanks,

Fonay

RAS

fonay1805 wrote: »

Hi,
My mortgage payments are high because it includes £136 a month arrears repayment. I will be contacting them though because this is not enought o pay off the arrears before I need to remortgage in October.
The Gas and Electricity are high because I have arrears with them and it also covers a repayment. Are you able to switch supplier even if you have outstanding amounts owed?

Yes, although they do not klike it.

The phone is £22.50. great

The mobile phones are already PAYG and the £20 is for myself and my wifes phone.

Ok. You need to start being stricter here. Make the £10 last two months.
The £40 a month for clothing is for the kids as they grow so quickly and need shoes etc.

Sorry You just cannot afford this. Knickers and shoes only from a discount store. get you and the misus signed up with the localgroups of www.freecycle.org and you can get toys, clothes, baby stuff, kitchen goods, electrical stuff and TVs for nNothing. It is like e-bay but the goods are free.


The mileage is massive, it's 100 miles a day when I'm on shift. The car insurance runs out around July time.

Can you lift share at all? Even once a week. Cut out unnecessary journeys etc.

The buildings insurance includes contents and the life insurance is for the two of us. great.
Thanks,

Fonay

How goes. Have you spoken to a debt charity?

beanielou

Either CAB or CCCS or Payplan.
Even without your arrears your mortgage is big.

nora_bone

fonay1805 wrote: »

Hi,

Below is the SOA;

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 2177
Partners monthly income after tax....... 0
Benefits................................ 220
Other income............................ 0
Total monthly income.................... 2397
Monthly Expense Details
Mortgage................................ 1094
Secured loan repayments................. 0
Hire Purchase (HP) repayments........... 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 175
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 45
Mobile phone............................ 20
TV Licence.............................. 12
Satellite/Cable TV...................... 45
Internet Services....................... 0
Groceries etc. ......................... 360
Clothing................................ 40
Petrol/diesel........................... 220
Road tax................................ 20
Car Insurance........................... 54
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 30
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 26
Contents insurance...................... 0
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2371

Assets
Cash.................................... 0
House value (Gross)..................... 192000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 199000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 192000...(1094).....5.9
Secured Debt.................. 2500.....(0)........0
Total secured & HP debts...... 194500....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
capital one....................400.......0.........0
natwest........................4000......0.........0
provident......................900.......0.........0
welcome finance................7500......47........0
british gas (elec).............251.25....0.........0
british gas....................270.56....0.........0
bt.............................157.......0.........0
council........................855.......0.........0
Total unsecured debts..........14333.81..47........-

Monthly Budget Summary
Total monthly income.................... 2,397
Expenses (including HP & secured debts). 2,371
Available for debt repayments........... 26
Monthly UNsecured debt repayments....... 47
Amount short for making debt repayments. -21
Personal Balance Sheet Summary
Total assets (things you own)........... 199,000
Total HP & Secured debt................. -194,500
Total Unsecured debt.................... -14,333.81
Net Assets.............................. -9,833.81
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

A few points with this are that:
1 - it is a pretty good estimate of everything I owe.
2 - I have 4 months of mortgage arrears
3 - The secured loan is on the car through logbook loans
4 - The direct debit for gas and electricity has been cancelled
5 - I have an attachment of earnings going through the system for the debt to the council. I would like to know how I can stop that as it could affect my job.
6 - I have a charging order against me for the Natwest debt. The date is set in Febuary.

I am absolutely, totally lost and this debt is now affecting my everyday working and family life. Any advice would be greatly appreciated.

Thank you,

Firstly your BT phone you need to change it to incomming calls only...as i take it you will need it for the internet..
As for sky you dont need it..cancel.
The car seems a lot of money for petrol.can you not walk instead of driving. or do without all together.
the gas and electric, go onto a card or key meter.
shopping...seems a bit excessive think about making cheaper meals...i dont know what your buying but it seems alot.
But the most important issue here, is paying your mortgage...you need a roof over your head, so do without sky and telephone even the internet..
There is a place online that could help you with your finances and how to manage.

Clariman

Hi fonay

Your SOA shows a Secured debt of £2500 but there is no corresponding entry for the monthly Secured Loan repayment in the Monthy Expenses table. Have you missed this out by mistake? Please check , otherwise your SOA will not be workable.

Clariman

Tinka21

I haven't got much to add except really with regards to nappies, if you buy brand names like pampers or huggies then stop!!

I would either invest in re usable ones that work out cheaper in the long run or if you don't fancy that then use store brands such as boots or tesco. I use these for my 2 boys who are 6 months and 2 years and they work just as good. Not a big saver but for example I got 2 big packs on 2 for £13 at boots when pampers were 2 for £16, plus points on my advantage card that save up and buy more nappies with!!

fonay1805

I have managed to get the mortgage company to agree to changing my monthly payments to interest only. I'm not changing the actual monthly payment amount but it should help to clear the arrears up faster.