New mum swamped in debt, help needed ASAP

fi76

Hi, I've just started posting on the site and have seen some really helpfull people helping others and am hoping someone out there can help me too.

As a background I became a first time mum in April this year so despite working up untill 2 weeks before due date my savings are just about gone. I am self employed so am only receiving £123 week from maternity allowance and £20/week child benefit. My husband is working fulltime but I have always been the breadwinner, his monthly wage would cover mortgage and nowt else! I have always been the one to provide for us, pay for things etc and although I had a fair bit of debt it was always servicable but then after being continuously told if we didn't buy now we would never get a house we bought a run down property in Dec 2007. So now we are in negative equity, I have had to shell out loads of money for renovations, particularly when I fell pregnant as it was full of damp etc, I started saving as much as poss to cover not working and reduced all payments to minimum in meantime. And to top it all now in the cuurent "financial climate" I don't seem able to switch around my cards like I used to, my house is a weight hanging around my neck, mortgage is due for renewal in October, I'm struggling to book enough work come September not that I want to go back anyway as baby will still only be 5 months old.

I'm not sure where to start to get back on track, Barclaycard wouldn't give me any BT for existing customers, Abbey have offered 0% till next March and husband is applying for a 0% deal aswell. I did apply for a 10K Sainsbury loan yesterday but it was declined.

I've never been as bogged down and worried as I am now, we've just had a succession of bad luck over the last few years (except baby obviously). I'm not expecting miracles but to be able to buy milk without worrying about the expense and to be able to buy the odd teddy for baby would be nice too.

Within 6 weeks benefits will stop I am trying to earn £3000 gross per month but will also have £397 childcare to pay per month also.

Sorry for length of post but didn't know what to include or leave out, am very new to this, bit of a technophobe!!! I also feel quite ashamed/embarrassed and upset about sharing this info with people. Only me and hubby know what a state we have got ourselves into.:o

Statement of Affairs and Personal Balance Sheet
Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1235
Benefits................................ 572
Other income............................ 0
Total monthly income.................... 1807
Monthly Expense Details
Mortgage................................ 948
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 115
Electricity............................. 27
Gas..................................... 27
Oil..................................... 0
Water rates............................. 21
Telephone (land line)................... 15
Mobile phone............................ 40
TV Licence.............................. 0
Satellite/Cable TV...................... 20
Internet Services....................... 7.5
Groceries etc. ......................... 240
Clothing................................ 10
Petrol/diesel........................... 80
Road tax................................ 17.5
Car Insurance........................... 45
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 13
Contents insurance...................... 15
Life assurance ......................... 21
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 10
Emergency fund.......................... 10
Total monthly expenses.................. 1772

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 100
Car(s).................................. 8000
Other assets............................ 0
Total Assets............................ 8100

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 162060...(948)......5.39 (fixed ends OCT 09)
Total secured & HP debts...... 162060....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................8936......244.......20 (0% just expired)
Natwest........................7550......170.......8.07
Am Ex..........................1309......35........14
A&L Loan.......................8840......281.......10.8
AA loan........................1460......153.......6.25 (ends April 10)
Abbey..........................0.........0.........0
Halifax........................8100......200.......26.93
Mint...........................2431......55........18.32
Capital One....................6200......195.......0 (0% ends Feb 10, then 15.9
Virgin.........................5119......25........0 (0% expires Aug 09then 15.9)
Barclaycard....................0.06......0.........19.9
Total unsecured debts..........49945.06..1358......-

boredofbeingathome

fi76 wrote: »

Hi, I've just started posting on the site and have seen some really helpfull people helping others and am hoping someone out there can help me too.

As a background I became a first time mum in April this year so despite working up untill 2 weeks before due date my savings are just about gone. I am self employed so am only receiving £123 week from maternity allowance and £20/week child benefit. My husband is working fulltime but I have always been the breadwinner, his monthly wage would cover mortgage and nowt else! I have always been the one to provide for us, pay for things etc and although I had a fair bit of debt it was always servicable but then after being continuously told if we didn't buy now we would never get a house we bought a run down property in Dec 2007. So now we are in negative equity, I have had to shell out loads of money for renovations, particularly when I fell pregnant as it was full of damp etc, I started saving as much as poss to cover not working and reduced all payments to minimum in meantime. And to top it all now in the cuurent "financial climate" I don't seem able to switch around my cards like I used to, my house is a weight hanging around my neck, mortgage is due for renewal in October, I'm struggling to book enough work come September not that I want to go back anyway as baby will still only be 5 months old.

I'm not sure where to start to get back on track, Barclaycard wouldn't give me any BT for existing customers, Abbey have offered 0% till next March and husband is applying for a 0% deal aswell. I did apply for a 10K Sainsbury loan yesterday but it was declined.

I've never been as bogged down and worried as I am now, we've just had a succession of bad luck over the last few years (except baby obviously). I'm not expecting miracles but to be able to buy milk without worrying about the expense and to be able to buy the odd teddy for baby would be nice too.

Within 6 weeks benefits will stop I am trying to earn £3000 gross per month but will also have £397 childcare to pay per month also.

Sorry for length of post but didn't know what to include or leave out, am very new to this, bit of a technophobe!!! I also feel quite ashamed/embarrassed and upset about sharing this info with people. Only me and hubby know what a state we have got ourselves into.:o

Statement of Affairs and Personal Balance Sheet
Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1235
Benefits................................ 572
Other income............................ 0
Total monthly income.................... 1807
Monthly Expense Details
Mortgage................................ 948Can this be put onto interest only for the interim?
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 115Can you pay this over 12 months?
Electricity............................. 27
Gas..................................... 27
Oil..................................... 0
Water rates............................. 21
Telephone (land line)................... 15
Mobile phone............................ 40Gotta cut back on this or get rid of
TV Licence.............................. 0
Satellite/Cable TV...................... 20can this go or combine with tv and internet and phone?
Internet Services....................... 7.5see above
Groceries etc. ......................... 240
Clothing................................ 10
Petrol/diesel........................... 80
Road tax................................ 17.5
Car Insurance........................... 45
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 5Yours should be free
Pet insurance/vet bills................. 0
Buildings insurance..................... 13
Contents insurance...................... 15
Life assurance ......................... 21look around for deals for all your insurances and cashback where possible
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25cut back, look at surveys etc/ebay and make it neutral ..lots of ideas on celebrations board
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 10I would put this in emergency fund
Emergency fund.......................... 10
Total monthly expenses.................. 1772

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 100
Car(s).................................. 8000any chance of selling and getting another?
Other assets............................ 0
Total Assets............................ 8100

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 162060...(948)......5.39 (fixed ends OCT 09)
Total secured & HP debts...... 162060....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................8936......244.......20 (0% just expired)negotiate the interest on all of them!!
Natwest........................7550......170.......8.07
Am Ex..........................1309......35........14
A&L Loan.......................8840......281.......10.8
AA loan........................1460......153.......6.25 (ends April 10)
Abbey..........................0.........0.........0
Halifax........................8100......200.......26.93
Mint...........................2431......55........18.32
Capital One....................6200......195.......0 (0% ends Feb 10, then 15.9 ca you transfer any?
Virgin.........................5119......25........0 (0% expires Aug 09then 15.9)
Barclaycard....................0.06......0.........19.9
Total unsecured debts..........49945.06..1358......-

Hi and welcome to the boards.

I have put a few suggestions on for you, hope they are helpful. Also have you looked at https://www.entitledto.com to see where you stand re baby etc. You will get extra family allowance and tax credits, as well as the childcare element. So apply for those as your circumstances will be changing, even if you earn more in the future it is the current situation you are concerned with.

I think it would be a good idea to keep reviewing your situation and also have a look at cccs debt remedy. It is online and confidential and will give you a good idea of where you stand as well as opening up options for dealing with your debts.

Don't feel embarrased about your situation, we are all on DFW for a reason and that reason is because we want to deal with our debts. So well done for taking that step.

Keep posting Bob x

catspaw

Hi,

There will be someone along better than me soon.
First thing: you have nothing down for TV Licence?

fi76

Thanks for the ideas, will look into these fully later as baby just woke up. I did look into entitledto.co.uk but It said I wasn't entitled to anything, think it may go on previous years earnings?

The hubby pays TV licence( about the only thing!!) so I didn't bother to include that as I don't need to worry bout it.

I better go and give little un some time, he's feeling a little ignored today I think.

Tixy

Hi and welcome, and well done for posting.

You seem to have missed the bottom off the SOA

Which would read:

Income 1807
Expenses 1772
Left for debt repayments 35
Debt repayments 1358
Defecit 1325

So it appears you are overspending (or increasing your debt) by £1325 every month.

Obviously if you can bring in self employed income (after business costs tax & NI) in the region of £2000 then you will again be able to manage the debt.

How much of the £572 benefits will you lose, once you start working?

You need to look through the expenses and be really brutal with what you can reduce or get rid of.
Media items (telephone, tv. internet) could probably be reduced. Groceries could be cut by £50 or so. Check all insurances, I expect you may be able to get them cheaper.

If you are not going to be able to take home in the region of £2000pm within the next month or so then I'd suggest you speak urgently to one of the free debt advice services (CCCS, Payplan, CAB etc) as your situation will keep getting worse.

Good luck and do keep posting.

WillpowerFree

Hi there. I was in a similar situation to you a year ago (my son is now 14 months old). Even down to the renovating - there are photos of me at 8 months pregnant chipping plaster off walls and ripping off skirting! However, luckily OH is main bread winner but his income dropped by over £1000 a month (mainly commission) so we had to make some serious adjustments. I'm by no means an expert but thought that some suggestions from another new (ish) mum might help

Firstly, check out tax credits. I didnt think we'd be eligible cuz've OH's income but we got £80 a month for the first year (you get extra when baby is under a year).

Also, what is it that you do? Only wondering if you could do a bit on the side iyswim? I know a girl who is a hairdresser and when she was on maternity leave she did some private stuff.

If you go on the 'old style' board you might be able to get your grocery shopping down. I was never a 'cook from scratch' kinda gal but since visiting that board i've got our shopping down by £40 per week. Also, if your not big on cooking then it'd be good to start practising now cuz when you wean baby its a lot cheaper to cook your own than get into the habit of buying jars. I made that mistake and they cost a fortune! Also, with nappies, Tesco's own are as good as the brands (better than Huggies IMO) and cheaper and their wipes are fine as well.

Check what the standard variable rate is with your mortgage company. We had a fixed rate of 5% and i was panicking about it ending cuz the SVR would've been 7% but then interest rates came down and so now we've just stuck on the SVR cuz it's like 4% so we're better off.

Sorry I know i'm not much help.

pinkneonmartini

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 100
Car(s).................................. 8000 sell and swap for a cheaper one?
Other assets............................ 0
Total Assets............................ 8100

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 162060...(948)......5.39 (fixed ends OCT 09)
Total secured & HP debts...... 162060....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................8936......244.......20 (0% just expired)
Natwest........................7550......170.......8.07
Am Ex..........................1309......35........14
A&L Loan.......................8840......281.......10.8
AA loan........................1460......153.......6.25 (ends April 10)
Abbey..........................0.........0.........0 ***
Halifax........................8100......200.......26.93
Mint...........................2431......55........18.32
Capital One....................6200......195.......0 (0% ends Feb 10, then 15.9
Virgin.........................5119......25........0 (0% expires Aug 09then 15.9)
Barclaycard....................0.06......0.........19.9 ***

*** = COMPLETELY CLOSE DOWN THESE ACCOUNTS AND GET IT IN WRITING THAT THEY HAVE BEEN CLOSED!!!!
credit agencies are being very stingy with their pennies atm, so you need to fully close all credit not currently in use, in order to allow applications to new creditors. both my dad and OH have been refused credit despite having scores of 999 because they owe too much to too many lenders.
Total unsecured debts..........49945.06..1358......-

then you need to work out what takes priority, like clearing 3 more little debts or going after 1 big one with a high APR????

WillpowerFree

Ooh just remembered something i forgot to say. When you do the calculator for tax credits it will say you arent entitled because they base it on last year's income (we had this problem cuz I earned good money the year before i had DS). What you have to do is apply using last years figures then when they write to you to tell you you can't have any money then you ring them and give them this year's figures and they'll amend it and tell you if you're entitled or not. Seems very long winded and typically bureaucratic but heyho !

fi76

Beginning to feel a bit better now, thankyou to all. I am going to apply for tax credits based on income now and amend it when I start working properly. I have booked some "back to work" days which allow me to work without losing my maternity allowance so that will get us through August.

I'm desperate not to loose my car as I need it for commuting all over the place so selling that really will be a last resort.

Lucky for me hubby does nearly all the cooking, from scratch too so my food/household/baby stuff budget is £50/week plus an extra £40 to account for 5 week months or to stock up on household stuff. I try to be very carefull buying in Tescos & Sainsbury depending which products cheaper where but I will look at reducing further.

Longterm DS will just have to be in nursery more days once he's a few months older so I can earn enough to make a big dent rather than a little slice into the problem. I'm gutted as I spent my 20's at uni & training and working long hours and still we can't afford to have a family.

MyLastFiver

fi76 wrote: »

Longterm DS will just have to be in nursery more days once he's a few months older so I can earn enough to make a big dent rather than a little slice into the problem.

Can I suggest another solution? How about you going back to work full time and your husband packing it in and caring for your son full-time? If may seem mad but if you can get a £3000 gross p/m job (as you say you are looking for), and you didn't pay for child care, you could be in a better position than currently, and your son will be being brought up by his dad rather than in a nursery.

I do sympathise with your desire to make big in-roads into your debt, but I have no doubt that your top priority is your son's welfare and research shows that children are happier and better adjusted if brought up by a close family member rather than in a nursery, particularly between the ages of 0 and 3. Screw the banks - your kids are more important. Good luck.

fi76

Of course you are absolutely right, I agree me working full time and OH staying at home would be the better option, EXCEPT that OH is not keen despite the fact that he hates his job, despite the fact that he is unenthusiastic about working fullstop, despite the fact that he moans more than Victor Meldrew about work, colleagues, public transport etc etc. I've given up banging my head against a brick wall, if he's not happy then the whole house is miserable. MEN!!!!!!!:mad: