Please Help

debt_free_dreamer_5

Dear Experts

I am looking for any help you can offer. I'm finally facing up to my mounting debts, and the extend of it all is overwhelming. I have a well paid job ( so does my husband) but somehow we've been accumulating debts until we're now at the stage where it feels we're living hand to mouth and struggling to make ends meet. How did I get to the stage where I'm raiding the kids money bank to pay school lunch money?

I've taken the advice of members, and started to compile a Statement of Affairs - there are still some gaps in this, but I think I'm getting there.

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.................... 1
Monthly Income Details
Monthly income after tax................ 1900
Partners monthly income after tax....... 1500
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3400
Monthly Expense Details
Mortgage................................ 1039
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 111
Electricity............................. 49
Gas..................................... 70
Oil..................................... 0
Water rates............................. 36
Telephone (land line)................... 33
Mobile phone............................ 50
TV Licence.............................. 28
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 60
Petrol/diesel........................... 80
Road tax................................ 20
Car Insurance........................... 27
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 17
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 35
Life assurance ......................... 45
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 40
Emergency fund.......................... 20
Total monthly expenses.................. 2205

Assets
Cash.................................... 0
House value (Gross)..................... 170000
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 0
Total Assets............................ 171300

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 95000....(1039).....0
Total secured & HP debts...... 95000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Egg Loan.......................16173.....413.......6.9
Next Mail order................444.......42........26.49
Homebase personal fin..........260.......2.........27.9
Egg Credit Card................0.........50........0
Egg Credit Card................7100......230.......25.9
Barclays Finance...............1500......64........0
Barclaycard....................7317......165.......26.9
Thomas Cook Credit Ca..........1715......44........18.9
Marble Credit Card.............8179......205.......21.95
Lloyds TSB M/Card.............3688......80........0
Barclaycard....................6890......140.......26.8
Dorothy Perkins acct...........405.......9.........29.9
Freemans mail order............86........18........0
Littlewoods mail orde..........164.......8.........35.7
First Direct C. Card...........1115......35........21.9
Total unsecured debts..........55036.....1505......-

Monthly Budget Summary
Total monthly income.................... 3,400
Expenses (including HP & secured debts). 2,205
Available for debt repayments........... 1,195
Monthly UNsecured debt repayments....... 1,505
Amount short for making debt repayments. -310
Personal Balance Sheet Summary
Total assets (things you own)........... 171,300
Total HP & Secured debt................. -95,000
Total Unsecured debt.................... -55,036
Net Assets.............................. 21,264
Created using the SOA calculator at makesenseofcards.com
Reproduced on Moneysavingexpert with permission, using IE browser.

In addition, I have an overdraft with my bank which I use to the max each month of £1000. my husbands overdraft is £1,500, which again is used each month.

The other payment I have is school lunches which amounts to £19.00 per week (£76 per month)

I also have gym fees to pay for my two daughters of £60 and £40 per school term.

I'm not sure tht everything is captured here, and there are some gaps in some of the figures (don't have all of the APRs and all of the outstanding figures to hand) but its a start.

We are seriously considering re-mortgaging - my husband reckons we could free up around £50K cash to pay off our debts, but I'm not sure this is the best way to go???

But I'm struggling to see another way - we get to the end of the month and there is literally no money left - we have to find a way to break the back of this debt.

Any advice anyone could give would be gratefully received. The sleepless nights are getting me severely down.

Many thanks in advance.
:embarasse

TellTheTruth_2

debt_free_dreamer wrote: »

Dear Experts

I am looking for any help you can offer. I'm finally facing up to my mounting debts, and the extend of it all is overwhelming. I have a well paid job ( so does my husband) but somehow we've been accumulating debts until we're now at the stage where it feels we're living hand to mouth and struggling to make ends meet. How did I get to the stage where I'm raiding the kids money bank to pay school lunch money?

I've taken the advice of members, and started to compile a Statement of Affairs - there are still some gaps in this, but I think I'm getting there.

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.................... 1
Monthly Income Details
Monthly income after tax................ 1900
Partners monthly income after tax....... 1500
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3400
Monthly Expense Details
Mortgage................................ 1039
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 111
Electricity............................. 49
Gas..................................... 70
Oil..................................... 0
Water rates............................. 36
Telephone (land line)................... 33
Mobile phone............................ 50 < cut down. Contact virgin and get a contract on 300 minutes and 300 sms for £15 a month.
TV Licence.............................. 28 < multiply by 12 = £336. Never knew a tv licnce was that expensive.
Satellite/Cable TV...................... 40 < bring down to basic package.
Internet Services....................... 0 <oops. Nothing yet you are on the internet!
Groceries etc. ......................... 300 < cut down your shopping and learn how to cook. If you and your husband are at work and your kids are at school you are only talking about 1 meal a day to cook (excluding weekends and school holiday). Forget takeaways. Unhealthy and expensive.
Clothing................................ 60 < cut down. Clothes are reusable and yeah may like to be in fashion but if you cannot afford then dont.
Petrol/diesel........................... 80
Road tax................................ 20 <change your car. I have two cars and none of them are £240 a year for road tax
Car Insurance........................... 27
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 17
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 35 <use online compare sites. Too expensive at £420 a year.
Life assurance ......................... 45
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 15
Entertainment........................... 50 < cut down. You have already stated you have satellite/cable entertainment.
Holiday................................. 40 < get your finances sorted before you think of holidays.
Emergency fund.......................... 20
Total monthly expenses.................. 2205

Assets
Cash.................................... 0
House value (Gross)..................... 170000
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 0
Total Assets............................ 171300

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 95000....(1039).....0
Total secured & HP debts...... 95000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Egg Loan.......................16173.....413.......6.9
Next Mail order................444.......42........26.49 <rip the book and throw in the bin for recycling.
Homebase personal fin..........260.......2.........27.9< forget the finance. NEVER ORDER AGAIN. You cannot afford it.. It looks nice. Ask parents relatives to get it for you as next birthday/christmas present.
Egg Credit Card................0.........50........0<cut the credit card in half and if aint got the cash to buy it then you do NOT buy it
Egg Credit Card................7100......230.......25.9<cut the credit card in half and if aint got the cash to buy it then you do NOT buy it
Barclays Finance...............1500......64........0<do not go there again. Remember debt - headache.
Barclaycard....................7317......165.......26.9<cut the credit card in half and if aint got the cash to buy it then you do NOT buy it
Thomas Cook Credit Ca..........1715......44........18.9<cut the credit card in half and if aint got the cash to buy it then you do NOT buy it and forget holidays for now. You can have good time just doing what the everyday person does during holidays. Go to the swimming baths. Download some music. Whatever costs no money.
Marble Credit Card.............8179......205.......21.95<cut the credit card in half and if aint got the cash to buy it then you do NOT buy it
Lloyds TSB M/Card.............3688......80........0<cut the credit card in half and if aint got the cash to buy it then you do NOT buy it
Barclaycard....................6890......140.......26.8<cut the credit card in half and if aint got the cash to buy it then you do NOT buy it
Dorothy Perkins acct...........405.......9.........29.9<rip the book and throw in the bin for recycling.
Freemans mail order............86........18........0<rip the book and throw in the bin for recycling.
Littlewoods mail orde..........164.......8.........35.7<rip the book and throw in the bin for recycling.
First Direct C. Card...........1115......35........21.9 <cut the credit card in half and if aint got the cash to buy it then you do NOT buy it
Total unsecured debts..........55036.....1505......-

Monthly Budget Summary
Total monthly income.................... 3,400
Expenses (including HP & secured debts). 2,205
Available for debt repayments........... 1,195
Monthly UNsecured debt repayments....... 1,505
Amount short for making debt repayments. -310
Personal Balance Sheet Summary
Total assets (things you own)........... 171,300
Total HP & Secured debt................. -95,000
Total Unsecured debt.................... -55,036
Net Assets.............................. 21,264
Created using the SOA calculator at makesenseofcards.com
Reproduced on Moneysavingexpert with permission, using IE browser.

In addition, I have an overdraft with my bank which I use to the max each month of £1000. my husbands overdraft is £1,500, which again is used each month. <

---

start learning to see it as "i have now £750 overdraft and my husband only has £1000. then next month look at it like "I only have £500 and my husband only has £750" and start bringing it down. Once you bring it down call your banks and ask them to bring the facility down as well.

The other payment I have is school lunches which amounts to £19.00 per week (£76 per month)

I also have gym fees to pay for my two daughters of £60 and £40 per school term. <

---

find your nearest baths. healthy and cheaper

I'm not sure tht everything is captured here, and there are some gaps in some of the figures (don't have all of the APRs and all of the outstanding figures to hand) but its a start.

We are seriously considering re-mortgaging - my husband reckons we could free up around £50K cash to pay off our debts, but I'm not sure this is the best way to go??? <

---

yep. It is called "dig a deeper hole". Sort out the finances first. Remortgage means you will then have to find more money to pay for the mortgage. As they say "Rob Peter to pay Paul".

But I'm struggling to see another way - we get to the end of the month and there is literally no money left - we have to find a way to break the back of this debt. < --- cut the luxeries. At the start it will be hard but after a while it will get easier.

Any advice anyone could give would be gratefully received. The sleepless nights are getting me severely down.

Many thanks in advance.
:embarasse

Comments posted above. Sorry for being blunt but unless you want it "as it is" then........

Nick Smith

Fire_Fox

The first thing to note is that you are £310 short every month without everything being on your SoA so something big has to happen. It's quite possible you won't be able to get any more credit - including remortgaging - as you already have so much debt. Consolidating rarely works anyway.

I note that after your mortgage and council tax you are spending £1000 a month on just living. There is an excellent thread 'Live on £4k for a year' that you should read: this is for an entire family after rent and council tax are out of the equation.

So big reductions in outgoings ... can you go interest only on the mortgage for a while? Can you take in a lodger? You must look at your energy bills - when did you last use a price comparison site or read the meter? Stop using the tumble dryer, shorter showers, jumper instead of heating.

Telecoms are £150 a month or £1800 a year :eek: you only need one phone between two adults, not three! Can you cancel the TV package or get a better deal on a bundle?

Food budget ... is fine until you start adding in lunch money! Everyone in the family should be able to eat well at home and take packed lunches on £300 a month. You can't afford clothes and holidays right now - use charity shops or sell the kids outgrown stuff on eBay and buy 'new' also on eBay with the proceeds. What are the gym fees for??

Credit cards ... try to renegotiate the APRs on all of them (don't say you are broke, just not happy with the interest rate), check what the balance transfer rates are and most of all recycle the catalogues and cut up the cards. :money:

Pollycat

As you say, you have a good income coming in but it's obvious that it's your debts (as opposed to your normal bills) that are crippling you.
Take a look at this link to see which debts you should be paying off first:
http://www.whatsthecost.co.uk/snowball.aspx

You'll obviously need to look out the actual APRs of the debts that you have shown as 0%.

I think you've probably got into this debt because you've had the mentality of 'we have good jobs so we can afford to do such-and-such' but really you couldn't afford to do it so you took out a credit card, then another and so on. Lots of people have done the same.

If you did re-mortgage (I personally wouldn't do this), do you think you would have the strength of character to live within your means or would you just start building up debt again?
If you're not 100% sure that it would be the former, DON'T DO IT!

Your SOA is showing a deficit of £310 per month - and that's without some of the things you say you're spending such as £79 pm on school dinners.
So what happens at the end of each month?

Regards

Ames

Please don't remortgage. Unsecured debt, they can just chase you and ask you for the money. Secured debt, you can lose your home. Also, if the worst were to happen and you had to go on benefits, they wouldn't pay the interest on the remortgage, just the original. You'd also end up paying more over a longer term.

I agree with what the others have said about the SOA, and what on earth is the gym membership for your kids? What happened to running around in the park? I think the school dinners have to go too, you can make packed lunches for much less.

gargrave50

debt_free_dreamer wrote: »

Dear Experts

I am looking for any help you can offer. I'm finally facing up to my mounting debts, and the extend of it all is overwhelming. I have a well paid job ( so does my husband) but somehow we've been accumulating debts (it would suggest the debts are accumulated because you have been living outwith your means for years on end - many of us have done it. Time to stop) until we're now at the stage where it feels we're living hand to mouth and struggling to make ends meet. How did I get to the stage where I'm raiding the kids money bank to pay school lunch money?(Start with the kids having packed lunch 2 days a week and then build it up, it will break them gently into packed lunches!)

I've taken the advice of members, and started to compile a Statement of Affairs - there are still some gaps in this, but I think I'm getting there.

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.................... 1
Monthly Income Details
Monthly income after tax................ 1900
Partners monthly income after tax....... 1500
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3400
Monthly Expense Details
Mortgage................................ 1039 Your mortgage is almost 1/3 of your total monthly income - this is massive. Consider going interest only until you get the rest of the debt under control. What you save could pay some of your smaller creditors off in only a few months and make it more manageable for you. Also getting rid of even the smallest creditors gives you a real boost when you are trying to wade through sorting out debts. No packed lunches for a month = almost bye bye Freemans. Try the demotivator (I'll post the link shortly), it calculates your small spends over a week e.g. £19 on school dinners as an annual figure (£988:eek:). Ok this is calculated on paying this every week and doesn't account for school holidays but it can't be far off. Here is the link
http://www.moneysavingexpert.com/protect/demotivator/#resultslocation

Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 111 (I assume this is paid over 12 months rather than 10? If not, contact your council and ask for it to be changed)
Electricity............................. 49
Gas..................................... 70
Oil..................................... 0
Water rates............................. 36
Telephone (land line)................... 33(This is high - does it include broadband? If you are with Sky sign up for Skytalk free evenings and weekend and free broadband = £0.00 providing you only make calls evenings and weekends however if you are both working this should work out fine) That way you can go down to basic line rental with BT £12.50 d/d
Mobile phone............................ 50 (Got to go, you need to renegotiate if these are on contracts. Even if they are not due, contact your supplier, explain you don't wish to go into arrears but you can no longer afford the tarriff.)
TV Licence.............................. 28 (You need to recalculate this - this is the quarterly figure I suspect)
Satellite/Cable TV...................... 40(If you save on entertainment this might be able to stay as is, if not reduce this package)
Internet Services....................... 0
Groceries etc. ......................... 300 (you can keep this at £300 and include food for packed lunches by batch cooking etc to save money)
Clothing................................ 60 (recycle your clothes on ebay for you all, then what you make you can use to buy new ones. You cannot afford £60 per month, this could go towards one of your creditors and pay them off in just a few short months e.g. Homebase x 4 months)
Petrol/diesel........................... 80
Road tax................................ 20 (really?!)
Car Insurance........................... 27
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0 (You might want to include your childrens gym expenses here - these are high why do you pay this?)
Medical (prescriptions, dentist etc).... 17 (If this is prescriptions, try a prepayment certificate)
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 (Really?! - I hope this is not with your mortgage provider rolled into one fat juicy payment. You need this, and if provided by your mortgage company its likely they are ripping you off - BIG TIME). Find out about this and change.
Contents insurance...................... 35 (Again, this is high, need to compare and switch - use cashback sites free to join)
Life assurance ......................... 45 (This is necessary with children, but high. Try some comparison sites and if switching always use a cashback site e.g. Quidco, Top Cashback)
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 (Try signing up for some survey sites, you can earn vouchers for M&S, etc to put by for Xmas, birthdays etc.)
Haircuts................................ 15
Entertainment........................... 50 (Not sure if you use Tesco - we use our clubcard vouchers to pay for entertainment e.g. free cinema tickets, family days out.)
Holiday................................. 40 (This has to go, you are £310 in deficit every month. If you have been saving £40 each month for a holiday where is it? Until some of the debt is reduced you cannot afford a holiday - sad but true
Emergency fund.......................... 20 (You have a debt emergency - where is this money? Do you have a pot or a separate account with emergency money in it? If so could it be used to shift some of the smaller debts?
Total monthly expenses.................. 2205

Assets
Cash.................................... 0
House value (Gross)..................... 170000
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 0
Total Assets............................ 171300

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 95000....(1039).....0
Total secured & HP debts...... 95000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Egg Loan.......................16173.....413.......6.9
Next Mail order................444.......42........26.49 (bin it, pay it, lose it)
Homebase personal fin..........260.......2.........27.9 Get rid ASAP, this could be paid off in no time by making some of the changes suggested above
Egg Credit Card................0.........50........0 (You need to know these figures)
Egg Credit Card................7100......230.......25.9
Barclays Finance...............1500......64........0
Barclaycard....................7317......165.......26.9
Thomas Cook Credit Ca..........1715......44........18.9
Marble Credit Card.............8179......205.......21.95
Lloyds TSB M/Card.............3688......80........0 (You need to know the APRs so that you can pay these off in the right order e.g. highest APR first)
Barclaycard....................6890......140.......26.8
Dorothy Perkins acct...........405.......9.........29.9(Cut this up now)
Freemans mail order............86........18........0 (Get rid)
Littlewoods mail orde..........164.......8.........35.7:eek:(As above)
First Direct C. Card...........1115......35........21.9
Total unsecured debts..........55036.....1505......-

Monthly Budget Summary
Total monthly income.................... 3,400
Expenses (including HP & secured debts). 2,205
Available for debt repayments........... 1,195
Monthly UNsecured debt repayments....... 1,505
Amount short for making debt repayments. -310
Personal Balance Sheet Summary
Total assets (things you own)........... 171,300
Total HP & Secured debt................. -95,000
Total Unsecured debt.................... -55,036
Net Assets.............................. 21,264
Created using the SOA calculator at makesenseofcards.com
Reproduced on Moneysavingexpert with permission, using IE browser.

In addition, I have an overdraft with my bank which I use to the max each month of £1000. my husbands overdraft is £1,500, which again is used each month.

The other payment I have is school lunches which amounts to £19.00 per week (£76 per month)

I also have gym fees to pay for my two daughters of £60 and £40 per school term.

I'm not sure tht everything is captured here, and there are some gaps in some of the figures (don't have all of the APRs and all of the outstanding figures to hand) but its a start.

We are seriously considering re-mortgaging - my husband reckons we could free up around £50K cash to pay off our debts, but I'm not sure this is the best way to go???

But I'm struggling to see another way - we get to the end of the month and there is literally no money left - we have to find a way to break the back of this debt.

Any advice anyone could give would be gratefully received. The sleepless nights are getting me severely down.

Many thanks in advance.
:embarasse

Never turn unsecured debt into secured debt. If you can't pay unsecured debt you get a CCJ, if you can't pay secured debt you are homeless. The temptation to spend on the cards etc again is too great, you will end up in this mess again. Trust me - done it , paying for the t-shirt now.:mad:. Cut up your cards, recycle your catalogues. Consolidating debt means you pay £!000s more in the long run. You can tackle these debts with some help. Try to make some of the changes suggested, keep on the forum for tips and motivation. Keep a spending diary both you are your husband, you may find your actual spending is different to that above. Contact CCCS, its anonymous to begin with and they will advise you regarding a debt management plan. It's free and you can start to make a plan. You will feel better after it. Also check out National debtline for some advice. Sorry for the comments if they seem a little blunt, but sometimes you need a fresh eye on your spending to really see what changes need to be made.

Good luck, you have done a great thing in facing up to your debt. You are going to come to a stage where there is nothing in the piggybank to raid one day soon.;)

lemoncheesecake

You have nothing listed under benefits and yet I notice you have 2 children. You can claim child beneit regardless of icome and also tax credits if you earn less than 66k gross.

BeautyandtheBeast_3

Hi there -
Im just confused as to how 2 children can spend £19 per week on school lunches.

That £9.50 each per week - nearly £2 per day each. I would ask the school to send you the menu because for a sandwich and a drink thats high!!!! Schools have discounted prices.
Or even better get the kids to take packed lunches - cheaper!!!!

debt_free_dreamer_5

Thanks - I know the kids school lunches are so expensive - £1.90 per day and I've got two kids. The thinking was they would have a hot, healthy meal during the day - but due to wages, not entitled to free lunches.

will consider changing to packed lunches in the new term in September.

debt_free_dreamer_5

Thanks for the advice - The mortgage payment is huge - we've already remortgaged in the past.

It all just seems so daunting - we've literally been getting to the end of the month with no cash left - and have been using credit cards to live (even, and I know this is mental, but even sometimes drawing cash off the credit cards). I know we need a total change in the way we live.

I've filled in my details on the CCCS website, and have a reference number - I'm going to call them tomorrow.

Thanks again for your help.

debt_free_dreamer_5

Ames wrote: »

Please don't remortgage. Unsecured debt, they can just chase you and ask you for the money. Secured debt, you can lose your home. Also, if the worst were to happen and you had to go on benefits, they wouldn't pay the interest on the remortgage, just the original. You'd also end up paying more over a longer term.

I agree with what the others have said about the SOA, and what on earth is the gym membership for your kids? What happened to running around in the park? I think the school dinners have to go too, you can make packed lunches for much less.

I know, I know, on paper the gym thing seems weird. But my daughters have been going to a gymnastic club (not as in treadmills and weight lifting) for a while now. Feel like it's my debt problem and i dont way to take it out on the kids.