In a mess...what to do?

BDB_2

Hi everyone, this is my first post so please be gentle.

Basically i have been lurking around these forums for quite some time, mainly just for little money saving tips but now i really need some help/support/guidance.

Backstory:

6 years ago my wife and i purchased our first home, unfortunately we had debts at the time but they were manageable.
At the time of moving into our house we were earning somewhere in the region of 52k between us and enjoyed a frivilous lifestyle, anyways this continued until about a 18 months ago when we decided to get a secured loan to pay off all our debts and start "fresh".

The loan we got was for 42k, the firstplus advisor drew us in hook line and sinker, telling us about the benefits that we would experience and how much spare cash we would have etc....how naive we were

3 months after taking out the firstplus loan i was made redundant, luckily enough i managed to get another job after being out of work for only 6 weeks, however i did have to accept a massive paycut going down to 18k from 34k, but at least i was still earning.

This is where the major problems started: it came to the point where we had about the same amount of money coming in as going out, so we started living on credit cards.

4 months ago my wife went onto maternioty leave with our second child, so her earnings have gone down to about 450 a month until she goes back to work, which we have just found out this morning may have to be part-time as there isnt enough work for her to return full time.

Right then now that that is off my chest, i can get cracking with the nasty stuff:

Our home is worth about £85000 now (was valued at 110000 about 8 months ago) we have a 75k mortgage on the house but a 42k secured loan which puts us well into negative equity.

Credit cards and loans are the things that are crippling us at the minute, we have somehow managed to keep up to date with all of our payments so far until this month where we just simply cannot afford to pay anothing to any of the credit cards.

Last night we filled in the CCCS online thing and was given a web number and a phone number which i will be calling this evening so hopefully we will get some advice/help from them.

We simply dont have anything left to sell, the kids are wearing 2nd/3rd hand clothes and shoes, the wife hasnt had a haircut or any treats/ new clothes etc for 8 or 9 months.

We just dont know what to do for the best, we really dont want to lose our home but to be honest i think this is what will happen.

I will post an SOA as soon as i am able to do so truthfully.

Caroline73_2

Post your SOA as soon as you can because then people can help you look at it.

It's scary to do but once it's done you can go from there.

Good luck.

penniesgrowintopounds

Welcome, BDB, you've come to the right place. Once you've posted your SOA, you'll get lot's of help and useful advice. There are lot's of wise people here who can draw from their own experience to offer you support.

Good luck x

Starlett

Hi BDB, Your SOA really is the best starting point! You have all our support!

Try this link http://www.makesenseofcards.com/soacalc.html

Starlett x

BDB_2

Here's my SOA of a fashion....its all done off the top of my head so i apologise for any holes.

I know there are things missing, such as: we have a £2000 overdraft and a loan with barclays for 10k that i didnt put in the calculator.

So its even worse than it looks down below.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 450
Benefits................................ 290
Other income............................ 0
Total monthly income.................... 2040
Monthly Expense Details
Mortgage................................ 500
Secured loan repayments................. 425
Hire Purchase (HP) repayments........... 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 99
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 23
Telephone (land line)................... 17.5
Mobile phone............................ 20
TV Licence.............................. 12
Satellite/Cable TV...................... 19.5
Internet Services....................... 10
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 150
Road tax................................ 20
Car Insurance........................... 30
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 30
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 21
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1697

Assets
Cash.................................... 0
House value (Gross)..................... 85000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 87000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 75000....(500)......5.69
Secured Debt.................. 42000....(425)......9.1
Total secured & HP debts...... 117000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
CC1............................7500......180.......0
CC2............................7500......180.......0
CC3............................4200......70........0
CC5............................2000......35........0
CC3............................2250......40........0
Total unsecured debts..........23450.....505.......-

Monthly Budget Summary
Total monthly income.................... 2,040
Expenses (including HP & secured debts). 1,697
Available for debt repayments........... 343
Monthly UNsecured debt repayments....... 505
Amount short for making debt repayments. -162
Personal Balance Sheet Summary
Total assets (things you own)........... 87,000
Total HP & Secured debt................. -117,000
Total Unsecured debt.................... -23,450
Net Assets.............................. -53,450
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

Starlett

What's the APR & payments on the £10k loan?
What's the APR on the overdraft?

BDB_2

The payments on the 10k loan are £140.00 per month, because i am at work i dont know the APR's of any of the debts, they are all at home....will post them as soon as i am able to.

barge

If it makes you feel any better I am in the same position as you if not worse and have just gone down the same route. The CCCS have said I can pay £153 pm to them and they will deal with my non-secured creditors direct.
Have you looked into whether your PPI was mis-sold.
Have you suufered any bank or credit card charges you may be able to reclaim some of them. It helps a bit although it won't get you out of your current situation.
Best of luck.

catherine_h_2

BDB wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2 Do you need 2 at the moment?
Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 450
Benefits................................ 290
Other income............................ 0
Total monthly income.................... 2040
Monthly Expense Details
Mortgage................................ 500
Secured loan repayments................. 425
Hire Purchase (HP) repayments........... 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 99 Is your banding correct? Is this over 10/12 months?
Electricity............................. 40 Can this be cut down?You could get energy grants for insulation etc check out www.energysavingtrust.org.uk
Gas..................................... 40 As above & are you on the best tariff for your usage? Check comparison sites.
Oil..................................... 0
Water rates............................. 23
Telephone (land line)................... 17.5 Combine this with your internet services and possibly tv. Theres quite a few deals that are pretty good.
Mobile phone............................ 20
TV Licence.............................. 12
Satellite/Cable TV...................... 19.5 I know I said to combine with landline but do you honestly need it? What about freeview?
Internet Services....................... 10
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 150 Can you cut this down? Use the car less?
Road tax................................ 20
Car Insurance........................... 30
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 30
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 21 Is this with contents too??? Worth checking comparison sites just to see if you have got a good deal.
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1697

Assets
Cash.................................... 0
House value (Gross)..................... 85000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 87000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 75000....(500)......5.69
Secured Debt.................. 42000....(425)......9.1
Total secured & HP debts...... 117000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
CC1............................7500......180.......0
CC2............................7500......180.......0
CC3............................4200......70........0
CC5............................2000......35........0
CC3............................2250......40........0
Total unsecured debts..........23450.....505.......-

Monthly Budget Summary
Total monthly income.................... 2,040
Expenses (including HP & secured debts). 1,697
Available for debt repayments........... 343
Monthly UNsecured debt repayments....... 505
Amount short for making debt repayments. -162
Personal Balance Sheet Summary
Total assets (things you own)........... 87,000
Total HP & Secured debt................. -117,000
Total Unsecured debt.................... -23,450
Net Assets.............................. -53,450
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

Hi I've added a few comments and I hope they're at least a little useful. Another thing, as your children grow can you ebay their clothes they've grown out of to fund paying for new clothes???

chevalier

Please also take advice from your wife's union about her employer changing her hours 'just like that'. If she is the only one that is happening to then you could argue they are discriminating against her due to her pregnancy. Make sure it is all above board before agreeing to it. And if it is then she can always go back to work for them for a month or two, and then get a full time job somewhere else...
chev

BDB_2

I have replied to some of the comments about my SOA in blue.

With regards to the ebay thing, believe me we are doing this and the wife is becoming a dab hand at this, but as i said we have sold just about anything of value and we are coming to the end of available items to sell

The wifes work situation isnt just affecting her, everyone has been put on short hours so that people can keep their jobs.


Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2 Do you need 2 at the moment? (The wifes Mum is currently paying all costs involved with this car as it is the only way she would get to see the kids)
Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 450
Benefits................................ 290
Other income............................ 0
Total monthly income.................... 2040
Monthly Expense Details
Mortgage................................ 500
Secured loan repayments................. 425
Hire Purchase (HP) repayments........... 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 99 Is your banding correct? Is this over 10/12 months? (This is for Band A in our area and is correct, but is due to rise to £104 per month, and is for 10 months i think)
Electricity............................. 40 Can this be cut down?You could get energy grants for insulation etc check out www.energysavingtrust.org.uk (This is cut down, its a dual fuel internet saver deal and was the cheapest on the comparison sites and will more than likely still come up short (our neighbour has pre payment meters for both and is paying about £27 per week for gas and electric) please remember that the wife and kids are at home all day most days and do need to watch Tv etc and we need to dry clothes etc.)
Gas..................................... 40 As above & are you on the best tariff for your usage? Check comparison sites.
Oil..................................... 0
Water rates............................. 23
Telephone (land line)................... 17.5 Combine this with your internet services and possibly tv. Theres quite a few deals that are pretty good. (Quite right about the tv, phone and internet, these will change within the next 3 months when the current contract expires)
Mobile phone............................ 20
TV Licence.............................. 12
Satellite/Cable TV...................... 19.5 I know I said to combine with landline but do you honestly need it? What about freeview?
Internet Services....................... 10
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 150 Can you cut this down? Use the car less? (Yes, i will see the benefits of a diesel car from this month, i swapped my brothers car for mine so this figure should come down to about 90-100 per month)
Road tax................................ 20
Car Insurance........................... 30
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 30
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 21 Is this with contents too??? Worth checking comparison sites just to see if you have got a good deal.(Yes this is buildings and contents insurance, got a good deal by changing just this month)