26k in debt - we may have to cancel our wedding please help

karlyjade

My first post here so please be kind.

A little background for you all. Me and my fiance are, supposed to be getting married in 4 months. He lost his job in December and has been really struggling to find another one. He's in the car trade so jobs are few and far between..he has had interviews but there's so many people in the same position he keeps missing out on the job. Previously he was a manager on over 40k.

So he's been out of work since december and i've been off work on maternity leave since last April. At this point i was also made redundant. I've just returned to work in february which was supposed to be on a part time basis but i've asked to work full time until my partner is back in work as we simply can't afford to live on one part time wage.

my partner usually deals with all the bills as he was the one making the money but now the shoe is on the other foot and it's me paying the bills i have began to become more and more concerned at our outgoings. So last night i bit the bullet and sat down to work out our finances. I was shocked to find that my partner owes over £26k on credit cards and loans, all of which are up to their credit limits. The interest rates are rediculous and the minimum payments barely cover the interest so he's not actually paying anything off the balances are staying the same. lucky for us we have a tracker mortgage and so our payments at least for now have come down conciderably. if it were not for that we would seriously be up !!!! creek.

oh yes and there's also the fact that we're getting married in 4months. We have paid deposits on everything but all our savings have gone now and we'll still need to find 10k to pay for the rest of it. DF says it's fine his dad will leand him the money - he simply doesn't understand that we need to get rid of our debt not increase it by 10k! this has all come as a massive shock to me and i'm absolutely distraught. DF is so blase about it all i've had to just take over and come up with some kind of plan of action myself.

I did an income and expenditure last night which looks as follows:

list of debts:
marbles: £9465
abbey: £6596
american express: 1k
Tescos: £4642
Mint: £3829
Halifax £365
Cahoot loan: £736

total: £26,733

Outgoings:
mortgage: £584
c.tax £188
Gas and elec: £87
water: £29
car insurance: £66.32
car insurance: £45
house insurance: £30.19
Car finance: £220
food: £200
Petrol: £70

total: £1519.51

CC's loans:
Marbles: £245
Abbey: 152
Tescos £139
Mint: £85
Cahoot: 267.15

total: £888.15

income:
Me: £1,400
Child tax credits (we have 2 children) £97
Child benefit: £60
JSA: £240

total: £1797

i have cancelled all the CC/loan direct debits and began contacting them to make them aware of our situation and to ask about reduced payments. Some have been really helpful (marbles) some absolutely vile (tescos) hopefully we'll be able to get the interest and charges frozen on the accounts but i need to see the CAB first. I've booked an appointment with them on 16th March.

my first though was consolidating the debt with a secured loan. I contacted our mortgage company about this but was told that even with both our previous wages the max they could offer us was £6.5k on 4.9% APR.

Our mortgage balance is £163k, our house value is £200k and our LTV is 81.5%

if someone could give me some sort of advice or suggestions on a way out of this it would be very much appreciated. It's a very worrying time im sure for the majority of us.

thank you.

lucielle

Please don't consolidate. That's great that you have contacted CAB you can also use the CCCS website which can help and you can phone them up. Sorry I don't have any links but if you google it, it will come up.

You have taken the first brave step in acknowledging your debt, so onwards and upwards.
L

karlyjade

thank you lucielle. I have been told about the CCCS i will definately speak to them too.

Thank you for the welcome, i've been reading through the forum with interest you seem like a lovely bunch x

Horace

Hi could you post an SOA showing all your incomings and outgoings and include APRs on the credit cards and loans?

https://www.makesenseofcards.com/soacalc.html (there is a button on it marked MSE which allows you to formulate the SOA and copy and paste it here).

Do not consolidate your debt by taking out another loan, that is the worst thing that you can do. Talk to one of the debt charities such as National Debtline or CCCS (details of which can be found elsewhere on the forum - I think they are in one of the stickies at the top of this board).

With regard to your wedding, what do you need to pay? Is there a way of reducing the numbers or even what you are having on the day? e.g not having a night time do?

Try not to stress too much.

ms_london

karlyjade wrote: »

Incomings:
total: £1797

Outgoings:
mortgage: £584
c.tax £188
Gas and elec: £87
water: £29
car insurance: £66.32
car insurance: £45
house insurance: £30.19
Car finance: £220
food: £200
Petrol: £70
total: £1519.51

DEBTS
marbles: £9465
abbey: £6596
american express: 1k
Tescos: £4642
Mint: £3829
Halifax £365
Cahoot loan: £736
total: £26,733

Hi Karlyjade

Welcome to MSE! Sounds like a bit of a rubbish time for you at the moment, esp if you have a new baby too! Youve come to the right place though, and we'll keep our fingers crossed that your OH finds a job soon, that would be a shame if you have to cancel your wedding. How much do you stand to lose in deposits?

Do you have any redundancy insurance including in your mortgage cover or anything like that? Could you take a payment holiday?

Gas/elec/water - do you pay monthly or is this an estimation? Could you shop around for cheaper utility provider?

Cars - 2 cars, can you go without one? How long does the car finance run for? You havent included anything for MOT/Car Tax

House insurance - can you shop around for a cheaper quote?

Food - I think this could definately be reduced, maybe even to half. Head to the Oldstyle board where you can pick up some great tips, the people over there are amazing and know their stuff.

Nothing is budgeted for prescriptions/dentist/birthdays/christmas/holidays - you really need to take into account EVERYTHING.

DEBTS

What are the APR's for your debts? Are they CC's or loans? Is your credit rating could enough to apply for a 0% CC? Otherwise perhaps if one of your cards has a lower rate than the others, you could balance transfer the more expensive card onto this one?

With the cahoot loan, do you have Payment Protection Insurance? Check the t&c's and see if redundancy is covered with this too, although looks like you only have a few payments left, still this is a big amount each month.

£277.49 is the difference between your outgoings & income based on the above.

If you have to take the cahoot payment out of it (£267.15) it leaves you with £10.34 and this takes no other payments into consideration for your other creditors.

You said you have already spoken to a few creditors, what payments did they suggest you make?

I think you have done the right thing by temporarily cancelling your DD's for your credit cards etc, it will give you a bit of breathing space until you have seen the CAB. I would still suggest calling the creditors again (esp the ones that are being difficult) and say you can pay them £X a month. It may have to be £5 each a month, no good agreeing a repayment you cant afford, follow it up with a letter, and let them know if your circumstances change you will be in touch ASAP.

Let us know how you get on xx

System

Hi there,

Just wondeed why everyone is so anti-consolidation? I myself have about £27k of debt and I was condering consolidating with a loan which has a much lower interest rate than I'm paying on the credit cards at the moment, but CCCS advised me against it. I am unsure why if it means that the overall interest level comes down. Surely that means clearing the debt quicker? I'm obviously being really thick here.

Karlyjade - you're in a pickle but not one that not solvable. I'm not sure about reducing your food costs if you have 2 children. I myself only live off of basic food products at the moment and still can't get away with much less than £60 a month as it is. But it sounds like you have two cars - are both absolutely necessary?

Alternatively, can you remortgage and release some of the equity in the house to clear off some (or all) of the debts? Although probably not if you've already approached your mortgage company.

I'd probably recommend speaking to CCCS as well. Good luck!

ms_london

In_The_Red_2009 wrote: »

Just wondeed why everyone is so anti-consolidation? I myself have about £27k of debt and I was condering consolidating with a loan which has a much lower interest rate than I'm paying on the credit cards at the moment, but CCCS advised me against it.

To be honest, if you can trust yourself to consolidate and then not go ahead and run up the cards/overdraft/loan you have just cleared, then go for it. I think people are just speaking from experience and consolidating doesnt really teach you anything, and it isnt always cheaper - but if it is and you can do it, go for it.

Have you posted on a separate thread for advice on your situation? xx

karlyjade

hi there and thanks for your reply. I realise a lot is missing i've just started on the SOA but have to find out about car tax etc but h2b isn't in so it'll have to wait until now.

to answer a few of your questions:

There is no unemployment insurance on the loan or our mortgage. We can have 3 mortgage breaks a year, March will be the second we've had, the last we may have to use if we really get desperate.

The wedding - i am trying to cut corners where ever i can. at least the invites haven't gone out so i can knock a few off the guest list (or would charging them £35 per head to come be wrong? ) we would probably lose about 2k in deposits.

cars - h2b usually has a company car when he's working, he just bought a bmw a couple of weeks ago for £200 and is selling it at £1200! £1000 profit would be great, he's already had an offer of £1000 cash. he just got it as a run around to make some profit on. when he sells it he plans on doing the same again. Because of his contacts within the car industry he can get cars at trade price and make big profits selling them on. this may be the key on getting us out of this mess.

The gas and electric i have just u switched, previously we were being ripped off by Npower, we're now with Eon and have saved a conciderable about.

i've just switched our mobile tariffs to tmobile flext which should hopefully cut them in half.

h2b also has a motorbike and rolex that he plans on selling.

i will have a look at the house insurance, thanks.

the APR of the CC's is:
Debt description </SPAN>Debt (£) </SPAN>Min Pay (£) </SPAN>Annual Rate (%) </SPAN>


not sure about the cahoot it doesn't seem to say it anywhere but i will find out. All are credit cards just the cahoot is a loan. All are pretty much up to their credit limits so we won't be able to do any 0% bt's as there's no room. With my low wage and h2b's massive amount of debt (and no job!) i imagine we won't be able to obtain further lending.

The housekeeping is so high because i have 2 children still in nappies, we go through tonnes of wipes and my daughter is still on formula milk which is £7 a go. i will definately start bargain hunting whilst shopping though.

thanks again and i will update and post my SOA very soon.

karlyjade

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................ 1400
Partners monthly income after tax....... 0
Benefits................................ 390
Other income............................ 0
Total monthly income.................... 1790
Monthly Expense Details
Mortgage................................ 584
Secured loan repayments................. 0
Hire Purchase (HP) repayments........... 220
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 188
Electricity............................. 87
Gas..................................... 0
Oil..................................... 0
Water rates............................. 29
Telephone (land line)................... 0
Mobile phone............................ 100
TV Licence.............................. 0
Satellite/Cable TV...................... 50
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 70
Road tax................................ 0
Car Insurance........................... 111.32
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 30.19
Contents insurance...................... 0
Life assurance ......................... 47.14
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1716.65

Assets
Cash.................................... 0
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 200000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 166000...(584)......1.4
Hire Purchase (HP) debt ...... 0........(220)......0
Total secured & HP debts...... 166000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
marbles........................9465......245.......32.9
mint...........................3829......85........18.9
tescos.........................4642......139.......15.9
egg............................1336......35........19.9
cahoot.........................736.19....0.........267
american express...............1000......26........21.9
halifax........................365.32....12.79.....26
abbey..........................6596......152.......26.9
Total unsecured debts..........27969.51..694.79....-

Monthly Budget Summary
Total monthly income.................... 1,790
Expenses (including HP & secured debts). 1,716.65
Available for debt repayments........... 73.35
Monthly UNsecured debt repayments....... 694.79
Amount short for making debt repayments. -621.44
Personal Balance Sheet Summary
Total assets (things you own)........... 200,000
Total HP & Secured debt................. -166,000
Total Unsecured debt.................... -27,969.51
Net Assets.............................. 6,030.49
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

samboss0306

hi i cant offer any help as im in a money nightmare situation like you ( we owe just over £10,000) and i also have to young children (well age 2 & 5 but they are still young to me!!) i just wanted to say good luck with everything i only felt brave enough to ask for help on here tonight too!!!
lots of luck and best wishes xxxx

TurnaroundSue

karlyjade 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 cars
Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 0
Benefits................................ 390
Other income............................ 0
Total monthly income.................... 1790
Monthly Expense Details
Mortgage................................ 584
Secured loan repayments................. 0
Hire Purchase (HP) repayments........... 220
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 188Is this over 10 or 12 months?
Electricity............................. 87 This is too high
Gas..................................... 0
Oil..................................... 0
Water rates............................. 29
Telephone (land line)................... 0
Mobile phone............................ 100 OMG definitely reduce this
TV Licence.............................. 0 No TV?
Satellite/Cable TV...................... 50 This could be reduced
Internet Services....................... 0
Groceries etc. ......................... 200 Not bad, but go to Moneysaving Oldstyle and see what you can do there
Clothing................................ 0
Petrol/diesel........................... 70
Road tax................................ 0
Car Insurance........................... 111.32:eek:
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 30.19 Too high
Contents insurance...................... 0 No contents ins?
Life assurance ......................... 47.14
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 need to put sum aside for these
Haircuts................................ 0 No haircuts?
Entertainment........................... 0 Dont go out?
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1716.65

Assets
Cash.................................... 0
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 200000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 166000...(584)......1.4
Hire Purchase (HP) debt ...... 0........(220)......0
Total secured & HP debts...... 166000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
marbles........................9465......245.......32.9
mint...........................3829......85........18.9
tescos.........................4642......139.......15.9
egg............................1336......35........19.9
cahoot.........................736.19....0.........267
american express...............1000......26........21.9
halifax........................365.32....12.79.....26
abbey..........................6596......152.......26.9
Total unsecured debts..........27969.51..694.79....-

Monthly Budget Summary
Total monthly income.................... 1,790
Expenses (including HP & secured debts). 1,716.65
Available for debt repayments........... 73.35
Monthly UNsecured debt repayments....... 694.79
Amount short for making debt repayments. -621.44
Personal Balance Sheet Summary
Total assets (things you own)........... 200,000
Total HP & Secured debt................. -166,000
Total Unsecured debt.................... -27,969.51
Net Assets.............................. 6,030.49
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

Hi once again. I have highlighted some of the things that stand out to me above? It is really important that you put everything down like birthdays etc otherwise you are not getting a true reflection of your monthly expenditure.

I would recommend going through www.quidco.co.uk which is a cashback site for anything you buy, particurlarly insurances/mobile phones/utilities etc. Have you thought about going back to cotton wool and water instead of baby wipes. I know it is more inconvenient, but could save you a fortune in the long run. Do you use brand nappies - if so, try own brand and see how they fair up. I am sure there is somewhere on this site that will have a discussion about nappies and which ones are okay and which ones aren't.

It is good if OH can buy old cars and do them up, especially making a £1k profit each time - only 26 to do and you are home and dry:rotfl: :rotfl: . No seriously, that is a great way of reducing the debt fast. Have you checked you are getting all your benefit entitlements? Go to www.entitledto.com and check.

That is all I can think of for now, but will be back again to give you support and advice wherever I can. You are in the right place and will get loads of help from this site - well done for posting, and once again welcome to the boards.