Do I have to start worrying about debt?

angeljay

Hi,
I am very confused and stressed, as you can see from my old posts I have had a dilemma with my home for a long time:

I NEED to get my ex off my house, i want to keep the house but he wants rid.... anyway, currently my debt is as follows:

350 O/D With bank
£5200 Credit card on 0%
£2700 Loan for New Heating System (had to be done as my old boiler was condemmed as dangerous and leaking Carbon Monoxide)

I have a NR Together loan approx £75K secured, £25k unsecured, as I don't earn enough to remortgage all this in my name I was going to try and remortgage just the secured part of the mortgage into my name. unsecured will stay in joint names.

However they then add 8% to the unsecured rate, adding this to my current debt do I have a problem?

When rates rise I am also going to have a problem with the payments unless I can get myself onto a fixed rate mortgage. Payments will rise with unsecured loan.

If i try and sell the house I will then have to use credit card to pay HIP, solictor, estate agents as I believe the house to be in NE.

What can I do? I have spoken to National Debtline and they say I can just about manage my payments, but right now I am very worried about the future.

Can you help?

Thanks,

angeljay

Bump for some help please

theoretica

Have you explored taking in a lodger to provide extra (tax free up to some level) income?

rachel6188

id advise posting up statement of affairs and im sure people will come in to help.
http://http://www.makesenseofcards.com/soacalc.html
hope this helps and welcome xxx

powerwin

Are you under any time pressure to act from your ex?

Was your split amicable? Would you ex be amenable to "helping you out"?

You need to think very carefully about taking on a variable rate mortgage that is near your limit, because no-one can predict interest rates, so you would need to factor in a comfortable margin of error if you are going to make an undertaking. Don't rely on interest rates going the way you want them to.

Rgds

angeljay

Well I was thinking of getting the secured part remortgaged onto a fixed rate, or trying to anyway. But then I would have a unsecured mortgage (in both names) to deal with at about 14%.

Split was amicable, ex cannot help as they are on benefits. Current situation is causing problems in my new relationship due to the fact that I basically own a house with an ex!!! Also when rates rise as I am on NR SVR I know I am not secure in the property due to mortgage rates going up. This is why I wanted to fix and at least then I knew I would have a mortgage to pay.

A friend of mine said that an IVA on the unsecured part after you have secured my property could be the way to go!

TotallyBroke

angeljay wrote: »

Hi,
I NEED to get my ex off my house, i want to keep the house but he wants rid....
£2700 Loan for New Heating System (had to be done as my old boiler was condemmed as dangerous and leaking Carbon Monoxide)

I have a NR Together loan approx £75K secured, £25k unsecured, as I don't earn enough to remortgage all this in my name I was going to try and remortgage just the secured part of the mortgage into my name. unsecured will stay in joint names.

However they then add 8% to the unsecured rate, adding this to my current debt do I have a problem?

When rates rise I am also going to have a problem with the payments unless I can get myself onto a fixed rate mortgage. Payments will rise with unsecured loan.

If i try and sell the house I will then have to use credit card to pay HIP, solictor, estate agents as I believe the house to be in NE.

What can I do? I have spoken to National Debtline and they say I can just about manage my payments, but right now I am very worried about the future.

Can you help?

Thanks,

If you have to sell the boiler loan, HIP, solicitor and estate agents etc will all be paid from the sale of the house along with the secured and unsecured mortgages. You can ask the solicitor to sort this for you. They did for me when the profit came in he sent cheques to EA, kept his fee and then gave me a cheque for the rest. Work out exactly what is owed on the house, mortgage and all loans, work out approx how much HIP and solicitor and EA will cost. Then work out how much realistically the property will sell for. If negative then explain to EX that they will still owe money on the property even if it is sold. Try and find out if there is a way that your EX could sign over their rights of the property to you so that they have no interest in the property years down the line.

As for new relationship, tell him/her to grow up. You have a house together how would they react if it was a child!!! Explain that when you can afford to take on the property yourself then you will do but at the moment you cannot. Sounds like a lodger would be of no help to you unless you got rid of your partner as jealousy springs to mind.
Post https://www.makesenseofcards.com/soacalc.html up and we will see if you can reduce your outgoings to be able to free up some income to make things easier.
But most importantly do NOT worry it is bad for you.

angeljay

Hopefully this will help:

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned....................
Monthly Income Details
Monthly income after tax................ 1200
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1200
Monthly Expense Details
Mortgage................................ 425
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 84.9
Electricity............................. 60
Gas..................................... 65
Oil..................................... 0
Water rates............................. 24.1
Telephone (land line)................... 10
Mobile phone............................ 35
TV Licence.............................. 12
Satellite/Cable TV...................... 17.5
Internet Services....................... 10
Groceries etc. ......................... 130
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 64.9
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 13
Pet insurance/vet bills................. 0
Buildings insurance..................... 6
Contents insurance...................... 6
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 20
Entertainment........................... 50
Holiday................................. 100
Emergency fund.......................... 0
Gym..................................... 30
Total monthly expenses.................. 1223.4

Assets
Cash.................................... 0
House value (Gross)..................... 90000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 90000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98500....(425)......4.79
Total secured & HP debts...... 98500.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclays.......................5500......100.......0
Boiler.........................2700......108.......0
Total unsecured debts..........8200......208.......-

Monthly Budget Summary
Total monthly income.................... 1,200
Expenses (including HP & secured debts). 1,223.4
Available for debt repayments........... -23.4
Monthly UNsecured debt repayments....... 208
Amount short for making debt repayments. -231.4
Personal Balance Sheet Summary
Total assets (things you own)........... 90,000
Total HP & Secured debt................. -98,500
Total Unsecured debt.................... -8,200
Net Assets.............................. -16,700
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

I am not sure what it all means, the house i think is in NE as I bought in 2006 with a NR together mortgage. As you said my new partner needs to chill out about the house but what do I do when rates go back up...... NR will put their SVR up as well making the house unaffordable unless I can some how secure a fixed rate!

The boiler was a seperate loan as well took out 2 years into living in the house.

There is not really enough room for a lodger, my current partner does not live with me but is there a lot of the time so would be something I could consider! But they are on a very basic wage salary and have rubbish credit for no chance of them helping!

RAS

Hi

You need to separate out the secured and unsecured debt - 75 - 25K split and put the APrs into different places

You also need to ensure that you spends are less than your income - which is not the case at the moment.

You defiuinitely need to consider the lodger as the first £370 per month is tax -free.

angeljay wrote: »

Hopefully this will help:

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned....................
Monthly Income Details
Monthly income after tax................ 1200
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1200
Monthly Expense Details
Mortgage................................ 425
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 84.9
Electricity............................. 60
Gas..................................... 65
Oil..................................... 0
Water rates............................. 24.1
Telephone (land line)................... 10
Mobile phone............................ 35 - you need to cut this back and then PAYG
TV Licence.............................. 12
Satellite/Cable TV...................... 17.5 - get rid - you cannot afford it.
Internet Services....................... 10
Groceries etc. ......................... 130
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 64.9 - what is this?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 13
Pet insurance/vet bills................. 0
Buildings insurance..................... 6
Contents insurance...................... 6
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 20
Entertainment........................... 50 - halve this but ideally get rid
Holiday................................. 100 - you CANNOT afford this - it is half your mothly deficit
Emergency fund.......................... 0
Gym..................................... 30 - get rid - you cannot afford it
Total monthly expenses.................. 1223.4

Assets
Cash.................................... 0
House value (Gross)..................... 90000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 90000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98500....(425)......4.79
Total secured & HP debts...... 98500.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclays.......................5500......100.......0
Boiler.........................2700......108.......0
Total unsecured debts..........8200......208.......-

Monthly Budget Summary
Total monthly income.................... 1,200
Expenses (including HP & secured debts). 1,223.4
Available for debt repayments........... -23.4
Monthly UNsecured debt repayments....... 208
Amount short for making debt repayments. -231.4
Personal Balance Sheet Summary
Total assets (things you own)........... 90,000
Total HP & Secured debt................. -98,500
Total Unsecured debt.................... -8,200
Net Assets.............................. -16,700
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

You either need to dramatically increase your income, reduce your expenditure to the bare minimum or sell up. All are options but carrying on as you are is not.

The IVA probably would not help as you would have to release the equity in the hosue in year 4 and you simply do not have the spare monthly income to do one anyway.

TotallyBroke

angeljay wrote: »

Hopefully this will help:

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Monthly Income Details
Monthly income after tax................ 1200
Other income............................ 0 Any chance of overtime or maybe weekend bar work
Total monthly income.................... 1200
Monthly Expense Details
Mortgage................................ 425
Council tax............................. 84.9 Is this paid over 10 or 12 months. Over 12 gives you a lower payment, over 10 gives you 2 months of spare money to put onto a debt. I'm guessing this includes the single person discount
Electricity............................. 60 Every month ring them with updated meter readings, this will give them a better idea when they calculate yearly. Also reduce the usage, turn everything off at the plug until being used. Don't waste elec by having the microwave tell the time.
Gas..................................... 65 Again reduce this, turn off the radiator in the kitchen and bedroom it's not needed
Water rates............................. 24.1
Telephone (land line)................... 10
Mobile phone............................ 35 Do you use all your mins, even in contract they can reduce down a tariff saving £5+
TV Licence.............................. 12
Satellite/Cable TV...................... 17.5
Internet Services....................... 10 Can you include this in with Sky, broadband £5 transfer your calls to them and see if you can get £5 broadband discount
Groceries etc. ......................... 130 Really needs to be cut, I spend half this and have a 2.5yo still in nappies at night. Meal plan and cut back on waste.
Clothing................................ 30 Put this on hold for a few months
Other travel............................ 64.9 Do you get a season ticket at all it can be cheaper to pay monthly or even yearly
Medical (prescriptions, dentist etc).... 13
Buildings insurance..................... 6
Contents insurance...................... 6
Life assurance ......................... 10
Presents (birthday, christmas etc)...... 20
Haircuts................................ 20 Can you do this every 2months instead of monthly, check out if there is a college near you, it can be cheaper and everyone is supervised
Entertainment........................... 50 Entertain at home for a cheap night
Holiday................................. 100 Is this already already booked, if not forgo a holiday for a while and use it to pay off the debts. £1200 is a lot for a holiday
Gym..................................... 30 Is this used to the max, if not could you pay as you go
Total monthly expenses.................. 1223.4

Assets
Cash.................................... 0
House value (Gross)..................... 90000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 90000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98500....(425)......4.79
Total secured & HP debts...... 98500.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclays.......................5500......100.......0 When does 0% run out? Are you using the max facility. Could you move some of the Boiler loan onto it
Boiler.........................2700......108.......0 Is this really 0%, find out if you can over pay on this.
Total unsecured debts..........8200......208.......-

Monthly Budget Summary
Total monthly income.................... 1,200
Expenses (including HP & secured debts). 1,223.4
Available for debt repayments........... -23.4
Monthly UNsecured debt repayments....... 208
Amount short for making debt repayments. -231.4
Personal Balance Sheet Summary
Total assets (things you own)........... 90,000
Total HP & Secured debt................. -98,500
Total Unsecured debt.................... -8,200
Net Assets.............................. -16,700
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

I am not sure what it all means, the house i think is in NE as I bought in 2006 with a NR together mortgage. As you said my new partner needs to chill out about the house but what do I do when rates go back up...... NR will put their SVR up as well making the house unaffordable unless I can some how secure a fixed rate!

The boiler was a seperate loan as well took out 2 years into living in the house.

There is not really enough room for a lodger, my current partner does not live with me but is there a lot of the time so would be something I could consider! But they are on a very basic wage salary and have rubbish credit for no chance of them helping!

Even if your partner is on low wages, if he eats at yours then he should pay towards it. Get him to buy one of your weeks shopping at least. Or ask him to pay say £10 per week board it will definitely help you.
If you cannot overpay on the boiler loan then I suggest you over pay on the mortgage to reduce that down and thus giving you a lower amount to remortgage when the rates start to go up.
You may just be able to scrape your deficit back upto 0zero each month but you need to act sooner rather than later.
Good Luck

slig

angeljay wrote: »

Hopefully this will help:

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned....................
Monthly Income Details
Monthly income after tax................ 1200
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1200
Monthly Expense Details
Mortgage................................ 425
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 84.9
Electricity............................. 60
Gas..................................... 65
Oil..................................... 0
Water rates............................. 24.1
Telephone (land line)................... 10
Mobile phone............................ 35 too high - go down a tariff if you can, and go on PAYG once your contract is up
TV Licence.............................. 12
Satellite/Cable TV...................... 17.5 get rid for the time being - freeview is pretty good
Internet Services....................... 10
Groceries etc. ......................... 130 if this is just for you you can knock £30 off with a little effort, and possibly get it down even further. Meal plan and cook from scratch - have a look at the old style board
Clothing................................ 30 You can't afford this
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 64.9
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 13
Pet insurance/vet bills................. 0
Buildings insurance..................... 6
Contents insurance...................... 6
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 Can you reduce this a little? I earn a £10 Amazon voucher every 6-8 or so weeks from Toluna surveys, £10 every couple of months from free scratchcards on bingo sites, the odd fiver/tenner from a mystery shop, etc. If you started doing this kind of thing you could get all your presents for free!
Haircuts................................ 20 Look out for free/£5 cuts with trainees, and perhaps try and get your hair cut slightly less often if it's short, or trim the ends yourself if it's long
Entertainment........................... 50 Reduce considerably for the time being - there are plenty of things you can do to entertain yourself for free or at low cost
Holiday................................. 100 Is this booked? You cannot afford it.
Emergency fund.......................... 0
Gym..................................... 30 Realistically you can't afford this
Total monthly expenses.................. 1223.4

Assets
Cash.................................... 0
House value (Gross)..................... 90000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 90000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98500....(425)......4.79
Total secured & HP debts...... 98500.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclays.......................5500......100.......0
Boiler.........................2700......108.......0
Total unsecured debts..........8200......208.......-

Monthly Budget Summary
Total monthly income.................... 1,200
Expenses (including HP & secured debts). 1,223.4
Available for debt repayments........... -23.4
Monthly UNsecured debt repayments....... 208
Amount short for making debt repayments. -231.4 You can make up this deficit by cutting back on your expenditures
Personal Balance Sheet Summary
Total assets (things you own)........... 90,000
Total HP & Secured debt................. -98,500
Total Unsecured debt.................... -8,200
Net Assets.............................. -16,700
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.
QUOTE]

In awswer to the question 'do I have to start worrying about my debt?', not necessarily, no, but you do have to start doing something about it before it gets worse.