Help!! Mature Student's SOA

Bicks

OH and I sat down this morning and went through everything with a fine tooth comb.

We have to move to a cheaper property and have found somewhere suitable that will save us £100 per month. It is a newer property which should reduce our gas/electicity bills to a more manageable £70 per month.

We feel that taking out a loan to consolidate our current debts is the only way to go affordability-wise. Whilst I am a student and my OH's earning potential is what it is, untill we can improve this in 2 years when I qualify and get a job then we have to ensure that we can live.

So, new so new SOA is to follow, showing how our situation will be once we have moved and consolidated our debts with a loan (and cut up the offending cards, cancelled the accounts and opened a new bank account where only our available money for that month will be kept with no overdraft facility).

It feels so good to have all this out in the open and to be talking with my OH about this without arguing or panicking. I have also applied for a p/t job in a local pub so fingers crossed xxx

Ames

Please don't consolidate, many, many people on here have done that and ended up in far worse debt as a result. You pay back more, you're stuck with debt for longer, and there's a big risk that you'll run the cards back up, I know I did. There's always the 'emergency' or the 'brilliant deal' that you'll pay back on payday, but then can't quite manage to.

How important is your credit rating to you? Are you planning on getting a mortgage or something in the next six years? Some kind of debt management plan would probably be better if you don't mind a damaged credit rating for a while. Is the debt all in one name or is it joint?

Bicks

Thanks RAS -

I have already had a payment of £1200 from my university hardship fund. I was awarded over £4000 but they have only been giving out 25% of each claim to make the funds go further.

I actually live very close to my placement hospital and 2hrs away from uni. As I'm only in uni for 16 weeks a year out of 45, and I car share with 2 others to get there, it makes sense to live here due to the enormous cost living at uni and travelling to placement would incur - not to mention the travelling after 13hr shifts at the hospital which at best would be unsafe. I calculated the cost of moving to uni last year and even with travel costs reimbursed by the NHS grants scheme, we would still have been out of pocket as I would have had to stay in hospital accommodation during placements. So that is why we live here in the sticks. But we have friends and family here so it is good to be here.

Do you have any other suggestions for what else we can do other than take the loan? I have checked both mine and OH's Credit score on experian and we are both 999 'excellent', which is the highest score. That, coupled with OH now working should make us more likely to be accepted?

I can't see any other way to get our current account unlocked. It also works on the affordability as we know I'm stuck at uni with little earning potential for the next 2 years. Any other ideas?

I have just called the tax credits helpline who hae estimated that we are entitled to £86.87 per week!!! They are sending out a claim form but I have to admit after what happened last time I'm very reluctant to do it, but it's a lot of money to turn down. Aaarg!

Bicks

Ames, I will try to answer your questions...

I'm very scared of going to debt management, as my credit rating is very important to me, and I would like to be able to get another mortgage (we sold our house in 2007 just before the property crash thank goodness!) and I'd like to be able to buy about a year after I've qualified and my min earnings (NHS payscale) will be £24,000. This has always been our aim, but thanks to poor financial management in the last 2 years we are now in this mess.

Up to the time we sold our house and went travelling, we were really great with money. But then again, we both had well paid jobs in a city and could afford the odd treat after the mortgage and bills had been paid. When we returned from travelling to live in this fairly remote part of the uk in preparation for me going to uni, we found getting jobs impossible and recieved job seekers allowance. I guess we just carried on living day to day and didn't think about the consequences of being out of work for so long.

Now that OH has a job I feel we will be ok to get this sorted without going to debt management - at least, I really hope we can.

BeautyandtheBeast_3

Hi!

Hsbc have introduced this 8.7% loand within the last couple of months - its not exclusive - its on any new borrowing over £7000.
I have just move my balances of my HSBC gold card as my Interest rate has increased and im sure i dont remember being told about (perhaps i as and i just buriedmy head - who knows) but my Gold card isnt 16.9 or 18.9 but 20.9!!

hence the reason i took the advice on here and moved it to a 0% card.

Good luck with your course!!

BeautyandtheBeast_3

Bicks wrote: »

Ames, I will try to answer your questions...

I'm very scared of going to debt management, as my credit rating is very important to me, and I would like to be able to get another mortgage (we sold our house in 2007 just before the property crash thank goodness!) and I'd like to be able to buy about a year after I've qualified and my min earnings (NHS payscale) will be £24,000. This has always been our aim, but thanks to poor financial management in the last 2 years we are now in this mess.


Now that OH has a job I feel we will be ok to get this sorted without going to debt management - at least, I really hope we can.

I totally understand !!

Bicks

Here is my new SOA including working tax credits, student loan 'income'(haha) and the lower rent and gas/elec amounts. This is based upon us taking out the (non-exclusive - thanks Beauty&TB) 8.7% HSBC loan of 11000 over 5 years. I have also reduced the groceries bill to £150 ehich I hope is reasonable? What do you think?

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 800
Partners monthly income after tax....... 580
Benefits................................ 376.43
Other income............................ 198.42
Total monthly income.................... 1954.85
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 450
Management charge (leasehold property).. 0
Council tax............................. 89
Electricity............................. 20
Gas..................................... 30
Oil..................................... 0
Water rates............................. 26
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 12.04
Satellite/Cable TV...................... 0
Internet Services....................... 17
Groceries etc. ......................... 150
Clothing................................ 40
Petrol/diesel........................... 100
Road tax................................ 26.25
Car Insurance........................... 50
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 6
Pet insurance/vet bills................. 25
Buildings insurance..................... 0
Contents insurance...................... 7
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1163.29

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 50
Other assets............................ 0
Total Assets............................ 50

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................11000.....226.......8.7
Total unsecured debts..........11000.....226.......-

Monthly Budget Summary
Total monthly income.................... 1,954.85
Expenses (including HP & secured debts). 1,163.29
Available for debt repayments........... 791.56
Monthly UNsecured debt repayments....... 226
Amount left after debt repayments....... 565.56
Personal Balance Sheet Summary
Total assets (things you own)........... 50
Total HP & Secured debt................. -0
Total Unsecured debt.................... -11,000
Net Assets.............................. -10,950

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Horace

£11000 over 5 years might sound tempting but it will be front loaded with interest and you could end up paying this over a longer period whilst you carry on spending and racking up debt. Who knows where you will be in 5 years time and more importantly what state the interest rates may be in. You consolidate your debts and your credit rating could end up worse than it is now.

It costs nothing to get advice from one of the debt charities and you can do your own DMP without going through them. Your OH needs to get his head out of the sand too and be a bit more proactive - leave the cards at home, cut them up or better still get an empty ice cream or margarine tub fill it with water and put the cards in that and then hide the tub at the back of the freezer. If your OH is looking for another job - the university may well be an option and university jobs can be found on https://www.jobs.ac.uk

Bicks

Thanks Horace for your reply and suggestions!

OH is looking for another job whilst he is in this one for definate! More money for less hours would be ideal but I can't see it happening anytime soon as it's taken him so long (a year nearly!) to find this one. The uni is not an option for work as we live 2hrs away from campus as my placement hospital is close to where we live.

I agree about OH being in the sand - he really faced up to things with me today and we sat down and went through it all together. It was great to get it out in the open between us.

The idea at the moment is that we don't use the cards again. They will be cut up and one will be placed in the freezer as suggested!! I know no-one knows where they'll be in 5 years, but I know we will be in a much better position than we are now as I will have a qualification I can use and can get a job within the NHS for good money. So in fact we stand to gain a lot more by me staying in uni for the next 2 years and getting our finances sorted than if I left to get another crappy office job with no prospects.

The state of interest rates does worry me, but then this loan would be fixed at 8.7% so at least we would know how much is going out for that each month come what may. No other finance (aside from student loan) will be taken out by either of us and if we can refinance when I've finished uni to get a shorter term then all the better. But if not, at least we will be debt free by the time I'm 31.

Bicks

Ok guys...

Since you all think this HSBC loan / cut up credit cards idea is not a good option, then could someone please suggest what is?