Advice needed, please help!

pinkpunto

Hi,

I'm hoping someone can give me some advice. I was just about to remortgage when I came across this site and thought I should ask for some advice. I've been in debt for quite a while now only being able to pay the minimum payments, but I can't carry on like this living day to day. I'm nearly £36k in debt with a loan and the rest on CCs and overdraft. The majority of this has been built up over the years with me supporting my boyfriend as he's been out of work. He's finally going to start up his own business, so until he can start to pay me back what he owes me I really need to sort this debt out and try and get my life back. The only way out for me (as I can see it) is for me to remortgage my property and get some of the equity. I owe £37k on my mortgage paying £267 per month (which is at a rate of 6.5% with C&G, so can get a better rate) and my property was valued at nearly £100k a couple of years ago. I was therefore going to remortgage for £65k (which would be paying approx £395 per month) and pay off all my credit cards. However, I was going to increase the monthly payments to pay the mortgage off quicker. I've listed all my outgoings and incomings and hope that someone can give me some advice.

Debts

Egg Loan £8800 (6.5% APR, I think!)
Barclaycard CC £3,805 (between 1.4-1.2% per month)
Capital One CC £3,693 (between 1.2-1.6% per month)
A&L £3,912 CC (1.08% per month)
A&L £4,657 CC (1.87% per month)
Egg CC £10,000 (not sure on rate)
£1,000 overdraft

Total £35,867

Incoming

£1,500

Outgoing

Egg Loan £210
Barclaycard CC £95
A&L CC £35
A&L CC £95
Capital One CC £115
Egg CC £200
Gas £39
Electricity £31.50
Water £20
Council Tax £57 (at the moment haven't had this year's yet)
Mobile £25
Telewest (broadband and telephone) £32
Sky £42.50 (my only luxury!)
TV licence £10
Contents Insurance £10
Food £150
Petrol £40
(plus overdraft fees if I go over my overdraft!)

(plus I need to budget for Car Tax, Car Insurance, Service Charges on property which amounts to approx £600 per year)

Total £1207

I know you don't see remortgaging as the best way out, but it's the only way out I can see at the moment and I will be able to get my life back. I would cut up all the credit cards (may be keep one for emergencies) but I never ever want to be in this position again.

I only live in a one bedroom flat and would like to be able to buy a house in the next couple of years, but in the position I am in financially at the moment that wouldn't be possible. If I remortgage I can pay extra on the mortgage and be able to save some money every month as well.

I feel so much better that I've actually got this off my chest as I can't talk to anyone about it as I'm too ashamed!

Do you think remortgaging is my only option.

Sorry for such a long 'thread' but thought I would give you as much information as possible.

Look forward to hearing some advice!

Thanks in advance.

pinkpunto

moo842

you don't seen to have included your mortgage payment?

pinkpunto

Sorry, thought when I added it up didn't seem correct.

My mortgage payment is £267 per month so the total should be £1474 and not £1207.

Thanks.

pinkpunto

moo842

the only advice i can give is to cut up all your cards now, as whether you re mortgage or not you don't want to be spending on them again.

you need to budget for car tax and insurance, work out what you pay each year and break it down into 12 payments. you really need to make sure you can afford to live on a new budget if you did remortgage as you don't want to be here again in a years time as so many people are!!

aHullKingstonRover

Hi PinkPunto,

Sorry if this sounds a cold-hearted comment (it’s not meant to be!) but given your current situation, I certainly wouldn’t consider becoming involved in your boyfriend’s upcoming business in any shape or form (not that you've stated in your post that you intend to be) - by the sound of the way in which you have previously bailed him out, you’re just going to end up in more debt – I appreciate that you currently have a considerable personal financial burden but is your boyfriend the one behind the re-mortgaging idea? I'd think very carefully before doing anything of the kind; I'm positive there'll be many good offers of advice from forum members so hang tight for now... good luck.

CLAPTON

Takes great courage to recognise a debt problem and even more to ask for advice. Read around the site and you will find you are not alone here.
Don't be hasty...take your time and read the comments from people and see how it goes.

The most important starting point is to understand your current financial situation.
What exactly are your outgoing.

Could I ask that you to re post your situation in the standard Statement of Affairs format because it makes it easier for people to read....its very important to think about and include ALL your expenses so as to see the complete picture. So for example your posted figures show a small surplus at the end of the month ...is that correct?

Anyway please repost along the following lines

If you browse the bulletin board you will see examples but the general format is

: statement of income:

: statement of expenditure
this should be quite detailed but excluding debt repayment
: a subtotal to save us all having to add it up

: statement of all debts including
outstanding amount, monthly repayment , APR
a subtotal of the total debt and of the total repayments, to save us having to add it up

also add a brief details of you situation, partner, any children, rent or own property, value of house and mortgage, any special circumstances that are relevant

pinkpunto

Hi,

Sorry, I tried to list details as best as possible, but have now listed them in a better format:

Income: £1,500

Expenditure:

Mortgage: £267 (6.5% APR)
Electricity: £31.50
Water: £20
Council Tax: £57
Mobile: £25
Telewest (broadband and telephone): £32
Sky: £42.50
TV licence: £10
Contents Insurance: £10
Food: £150
Petrol: £40

Total: £685

Debts:

Egg Loan £8800, £210 pm (6.5% APR, I think!)
Barclaycard CC £3,805, £95 pm (between 1.4-1.2% per month)
Capital One CC £3,693, £115 pm (between 1.2-1.6% per month)
A&L CC £3,912 , £35 pm (1.08% per month)
A&L CC £4,657, £95 pm (1.87% per month)
Egg CC £10,000, £200 (not sure on rate)
£1,000 overdraft

Total Amount of Debt: £35,867 paying minimum payments totalling £750

I normally have about £50 a month left for myself, to get toiletries, etc and live on for the month, so don't go out!

I live on my own, owning my own property which was valued at approx £100k 2 years ago and I owe £37k on the mortgage.

Thanks for your help, all advice will be greatly appreciated.


pinkpunto

skintchick

Hi there! I'm not too hot on all the loans side of things, but can offer my thoughts on your SOA:

Electricity: £31.50
This looks OK but do you not have gas too? If not then this is very cheap for electric heating!

Council Tax: £57
Where do you live? This is tiny!! *jealous*

Mobile: £25
You can easily cut this down. I have got my mobile bill down to about a fiver a month - write down every timje you send a text to keep a tally of what you're spending, and think twice before you use the phone.

Telewest (broadband and telephone): £32
This looks OK, but check out the telephones board to see if you can do it cheaper.

Sky: £42.50This is a luxury and has to go!! Sorry. This is way too much to spend on television. It needs to go towards your debts.

Food: £150
Gulp! Just for you? I spend £40-60 a month on food and cleaning stuff and most of my toiletries so you can make a massive saving here. Check out the Old Style board on thes forum for advice and meal ideas, then set a budget and cut it every month till you get it right down.

If you do these things, then you could save £152 a month!!
To see what a difference that would make, go to

https://www.whatsthecost.com/snowball.aspx

and put your debts in there including that extra money in your overspend and see how much more quickly you could pay them off.

£150 will make a massive difference!

HTH

micheleen

With regard to $ky, even if you don't cancel it, do you really need the Sports and Movies channels ? You can save £21.50 just by dumping those. In fact if you phone to downgrade you may even be offered 3-6 months half price

CLAPTON

If general consolidating debt from short term debt to long term (mortgage in your case) is generally a bad thing:
Most importantly because unless you address the underlying cause of over spending you will simply continue to spend and start using the credit cards again until you get back to exactly the same situation as you are in now except your mortgage will be must higher...so you will remortgage and the cycle begins again.
So why are you in debt??? Because of you have been supportring your boyfriend? and what are you going to do after remortgaging....you're going to give money to your boy friend.
I do not what to offend you or upset you in any way and what I'm now saying is intended to focus your mind on the real issues .
You would be mad to go down that path. Your boyfriend needs to get a job, save some money and then start his business with your moral support but not your financial support. Your real issue is your financial support for boy friend and not where or not to remortgage.
Think about what will happen if the business fails....he will want to try again...with your money....


Reading your SoA, and assuming you have included everything in it (as an aside the way to deal with yearly costs like your car tax etc is simply to divide by 12 and made an allownace in the SoA as a monthly sum otherwise it looks as if you have more 'free' cash than you really do) the only real savings potential is your food spending which is high for a single person, sky and maybe the telewest. If you reduced these it might be possible to avoid remortgaging.

If you do go ahead with remortgaging then i would strongly advice you use most of your new spare monthly cash to build a financial buffer and never use credit cards again unless fully paid off (preferrably by full direct debit ) each month. Aim for at least a saving of three months take home pay before relaxing a bit and maybe just maybe treating your boyfriend to a nice meal out (or maybe with his new job he might treat you)

best wishes for the future

lynzpower

Definately ditch the Movies bit of your sky- and get yourself DVD tarting. They all have "free month" trials which you can cancel at the end, and they send you the films YOU want to watch, not whatever they want to put on. If you go through Quidco ( check out the referrals board) many of the companies PAY YOU to try it ( the money takes a while to come through though..) ive signed up for a free trial with blockbuster today and they are giving me £15 for doing it!

Cancel them before you get charged though, and swap to another company!

150 is a mental amount to spend on food shopping, This alone could save you £100 a month if you are astute