Head in the sand for years... Updated 08-Mar-06

Cantdance_2

Okay, an update and some more insane ramblings...

Well the people from PayPlan were very helpful indeed but there is most certainly no easy option for us. It's not that I expected there to be some magic cure, but of the two options they've given us neither jumps out as being the one to go for, and both have their cons.

First option - a PayPlan DMP, which is what we really wanted, but the problem is that the lady from PP explained that Egg, one of our creditors, will almost certainly not accept the DMP and they issue us with a CCJ and the money we owe them (around £6k) will end up as a charge on our house. This will take us into negative equity and it's really not something we want to do.

The other option is an IVA but unfortunately the fact that the largest debt (an HSBC loan) is in joint names means that we're jointly liable and therefore the debt will appear twice, thus meaning that a disproportionate amount of our monthly 'left over' will have to go to HSBC, leaving not enough for some of the other creditors who will therefore probably reject our IVA application - at this point we'd then go onto a PayPlan and scenario 1 would play out regardless.

We're not exactly jumping up and down for joy about either of these scenarios - so we've come up with:

Option 3 - Sorting it out ourselves

Now bear in mind that I said above that we currently have around £500 a month more going out than we do coming in. This is not going to be easy to do! However we're hoping that by making some serious sacrifices and cutting right back on the food budget we can actually make these savings.

First step is to sell our car which is costing £145 a month even before we start paying for tax, insurance, repairs, etc. Should never have got the car really but luckily my parents have stepped in and offered to give us their old Renault Clio for nothing to help us out! :j Unbelievable... Sadly it's not just as easy as selling the car - it's on an HP and we currently still have 2 years left to go before we can hand it back... However, I rang Peugeot up and they've said that as long as we pay off the whole of the finance we can do what we want with the car - so that's good news! I've now put the car up for sale at work and on Yahoo cars and will also be doing the same on eBay and in the local paper if there's no interest within a week. Fingers crossed that someone will bite!

Next, the idea is to tackle our worst debt - no, not the biggest, but the worst, the most annoying, the highest monthly payment and the worst rate of interest. Step forward, Next Directory! :T Currently we owe around £2,000 on this and the interest rate is a shocking 24.9% APR (or possibly even higher). What's worse is that for a comparatively small debt, the monthly repayments are shocking - around £230 a month at the moment.

We've figured out that if we can pay this off then we're well on the way to recovery. So I've been going round the house with a notebook and pen jotting down everything we own that we could possibly live without or downgrade - TVs, DVD players, computer, kitchen appliances, CDs, DVDs, possibly clothes and other bits of junk.

I think that between selling all this lot at work or on eBay we could possibly raise £1,000 which is a huge step in the right direction.

I also do some DVD authoring and transferring in my spare time and have managed to land a job transferring literally hundreds of video tapes onto DVD for one lady which will bring in somewhere around £500. I've also been offered a job filming a local school's play and making DVDs of that which could bring in another hundred pounds or so, so every little helps!

I reckon between all the items for sale and services rendered we can knock off the Next account in a month or so. Watch this space!

The last step has been to try and cut back on everything we possibly can...
The obvious place was food, as we have been spending anything up to £80 a week on it just for two of us -with some thrifty shopping in Aldi and a meal planner of meals for under £1 a person I reckon we can get by on £30 a week, plus toiletries (which are much cheaper in Wilkinson or Savers than Tesco, we've found!)

Some things we can't cut back - we're annoyingly spending £70 a month on mobile phones which we've been told we can't downgrade or cancel until October... :mad: We're also paying £21 a month for Sky which we can't cancel till August but a quick phone call to them yesterday netted me half price for 3 months with the promise of the same again once that offer ends! :T Our gas and electricity are also annoyingly high - paying £31.50 a month for the two of us for gas and £36.50 for electricity... however a phone call to British Gas confirms that we are indeed using that much of both, and moreover we owe around £180 for gas and £80 for electricity. Both of these totals should get righted over the summer but any attempt to move suppliers will presumably mean we need to pay back what we owe immediately (which isn't going to happen!)

Still, in the meantime I've identified ways to cut back on both (turning down thermostat, reducing hours of heating and HW, switching off computers / TVs and not leaving them running 24/7, getting rid of redundant fridge and freezer in cellar...) so hopefully by the time the summer comes round we'll be able to reduce our spend on that.

I also negotiated £8 a month off our mortgage simply by ringing up and seeing what better products they had on offer (did this once before and saved over £100!), and cut our broadband supply down from £24.99 a month to £13.99.

Hopefully all these things are going to add up but if we can't sell the car I fear all this will be in vain!

We'll keep you up to date!

James

loubie_lou

I know its not great for a married couple but do you have a spare room you could rent out? I'm sure that could bring in money to throw at your debts?!

jobbingmusician

That's a really good idea, if you can bear it - you can get more than £4000 a year tax free under the rent a room scheme. :T

skintchick

Yep - I do it and it's easy money as long as you get someone nice!

bizzy_lizzie

Hi James

Dont forget to run your gas & electric through uswitch to see if you can make some savings. It can be considerable.

Well done, youa re doing really well.

Bizzy Lizzie :T

Cantdance_2

Thanks very much, yes we did run our figures through USwitch and it seems like we could definitely save about £150 a year by moving to Powergen - only problem is that like I said, we are around £260 behind at the moment and they'd most likely want that back immediately so there's no chance of that happening!

As for renting a room - not a bad idea although we only have one small spare room and I'm not sure how our relationship would cope with adding a stranger into the mix but it's definitely worth a shot. In fact there are a lot of students in our area so it would be easy to find someone...

I'm looking into the possibility of working weekends somewhere but being immensely proud I really wouldn't want it to be somewhere that people from my main job were likely to see me, which rules out any local supermarkets or pubs! I'm looking for a Saturday and Sunday office job really, if such a thing exists... quite happy to do any filing, data inputting, anything along those lines!

I'll have a look around.

James

Bestthingsinlifearefree

Hi James,

You are doing well so far looks like you are really getting to grips with your potential options / cutting back.

If you monthly short fall is £500.

If you sell the car that saves £145 pcm
then if you e-bay / use the car profits to clear the 2K Next debt that saves £230 pcm.

+ your savings on sky and mobiles when you can get out of those contracts and you are getting very close to closing the £500 "gap" between outgoings and ingoings etc

I think you can do it. Keep up the good work !!!

Cantdance_2

Thanks for the words of encouragement! I really think we can do this if we can sell the car - it all hinges on that really though.

We were looking at trying to take out a 2K loan to clear the Next as the rates will be a lot less but there's no way, we were turned down on the first attempt for having a low credit score and I don't thinkanywhere else will be any more use. So it's plugging away the old fashioned way.

I think if we sell the car and clear the Next things will be just about okay, taking into consideration my food savings and the other savings we've made by ringing around... it's not going to be easy though and there won't be much if any spare money for emergencies, birthdays, Xmas etc... but if it's that or CCJs, then I choose that!

James

*zippy*

Hi James

With regards to getting a part-time job I really wouldn't worry about people seeing you. I had to do the same thing. Just smile and don't be embarrassed and most people won't be nosy. If they do just say you've set yourself the challenge to pay your mortgage off quickly, saving for a deposit, wedding, holiday or something similar they are quite admiring then and won't judge you. You will find there are alot of people now who have second jobs its quite surprising. With regards office work Ms London posted here a few weeks ago that she had got a weekend job in an estate agents by ringing around local offices that may be worth looking at.
Good luck and well done so far :T

Peppa_Pig_5

Hi James, just wanted to say good luck and I have read all your posts here. I couldn't stop reading it, very interesting and you are doing really well. In a way it is a blessing you couldn't get the loan, as I think the old fashioned way is the best way. Keep going.

Peppa
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