SAO....here we go, the grim facts!

Bagpuss741

If that amount counts medication that's good, I know all amount vet bill :mad: My dog has been to the vet nearly every week since christmas, luckily she is insured with M&S which has no excess :T
Hope the guys on here can help you, I have been lurking for some time and they seem very knowledgable.

Steph

Bothered!

Hi speakerabbit, I feel for you. :grouphug:

I know what it is like living beyond your means, been there once cleared it up then wham got to do it all again....

I think you should do what you can to cut the everday bills, then if your mortgage is only tied in til Aug 06 I would suggest going to see the woolwich b/soc. they have an openplan offset mortgage which allows you to pop your savings/isa into an account to offset the mortgage interest but still have them accessable, re-organise some debt but perhaps not all to the mortgage but try to 0% interest as much as possible. use the snowball calculator here.... https://www.whatsthecost.com/snowball.aspx

Don't worry about the mortgage term too much, as you can reduce that by making overpayments later on.

K x

Annie_Fanny

speakerabbit wrote:

After posting about my plight yesterday I was advised to post a SOA. For those who never saw the post here's a brief outline. Found out yesterday that husband has built up debts to the tune of 50K, also in same day recieved cheque for 10K from an inheritance (Didn't you say 12k in another post?). I assumed a secure loan ie remortgage was the only option but replies to the post suggested otherwise and that by posting my SAO all you lovely people would be able to help me.

So here it is warts and all, sorry it's so lengthy but thought the more info the better:

State of Affairs (SOA)


Mortgage and debt information

Mortgage (Woolwich Flexible Mortgage Plan) £46,118
Mortgage interest set at 4.25% until August 2006
Monthly payments £178
Approx current value of property £130000

ISA monthly payments £166 (Stop this for now)
Approx units held 7616.82
Total fund value £11211.94 (Cash this in and pay off the CCs which are 14.9% each. I bet your ISA doesn't have that rate!)

Mortgage and ISA taken out Sept 1999

Tesco loan £23500 apr@ (approx 6.4% this still has to be confirmed) over 7 years
TSB loan £17200 apr@ (approx 6.4% this still has to be confirmed) over 7 years

Mint CC £3300 apr @ 14.9% Ditch!
TSB CC £2000 apr @ 14.9% Ditch!

Listed outgoings per month

Mortgage interest payments £178
(including life cover)
ISA monthly payments £166
TSB Loan £361
Tesco loan £368
Mint CC £100
TSB CC £100

Car insurance £31.28
Council tax £104.46
Life Insurance £20
House insurance £29
Landline £25 Try Ntl, 3 for £30 offer
Mobile 1 £10
Mobile 2 £30
Water rates £35.36
SKY £42.50 Ditch!
Pet insurance £11.01
TV Licence £10.99
Broadband £25 Try Ntl, 3 for £30 offer
Gas £50 (approx)
Electric £30 (approx)
Gym membership £33 Ditch!
Dental plan £20
Groceries £400 Go to OS board!
Dog food £25

Total approx £2187 :eek:


Incoming


Salary (after tax and pension deductions) £2100
Child benefit £113.60
Tax credits £38.26
P/T job £150.00

Total £2401

Savings £10,000

So thanks in advance to any one who can advise me out of this mess!

Amanda

Can you overpay on the loans? Get a settlement figure? How far are you into these loans? I definately think you can sort this - but will your husband help you?

Good luck

Annie

Chortle_2

speakerabbit - I think that you should edit your original post to make it clear that the ISA is linked to your mortgage (and is in fact how you are repaying the capital I assume?) - and therefore cannot be cashed in to clear the cards.

First thing you need to do is clear the cards with your inheritance - I know that you will not want to do this, but it'd get rid of them. Then cut them up!

Secondly, do you have payment protection insurance on the loans? (Its normally added on to the total of the loan amount, not a seperate payment) Get your OH to call and cancel it if you have - it is VERY expensive, and hardly ever pays out anyway!

BobProperty

Chortle wrote:

speakerabbit - I think that you should edit your original post to make it clear that the ISA is linked to your mortgage (and is in fact how you are repaying the capital I assume?) - and therefore cannot be cashed in to clear the cards....

I don't see why not. The lender can't force her to have an ISA. I am currently investigating switching from repayment to IO on a mortgage and was told all I needed to do was sign a document saying that I understood that the capital will need repaying somehow when the mortgage term finishes. Given that the cards are at 14.9% and the ISA at (guess) 5% the OP is losing at a rate just short of 10% any money they put in the ISA. It makes no sense to have savings when you are borrowing money at those sorts of rates.

speakerabbit

Thanks for all the great advice. I'll have to read and re-read as it's all a head banger. Priority one is to get rid of the CC's, this will be done the second the cheque has cleared. (The total amount is for 12K but 2 of this was given seperately for a kitchen refit, if I don't do it I don't get it....very long story that I won't bore you with, even my inheritance has conditions to it!!) Anyway, the CC's WILL be gone which will make me feel a whole lot better.

I should of made it clearer that the ISA was linked to the mortgage. I can understand everyones points about cashing it in (didn't think it was an option as it is linked) but the house still needs to be paid for somehow. Probably me being thick again but I didn't quite get that.

There's payment protection on one of the loans so will take your advice and cancel that. Gym, Sky etc will all go. Groceries...won't be easy but will do it somehow. I'll have to find out about the settlement figure on the loans and both loans are under a year old.

Thanks again...going to lie down in a darkened room, lol! :wall:

meanmachine_2

The OPs finances don't seem that dire - especially now that they're all listed and out in the open.

I'd remortgage at 4.4% and pay off all of the debts that don't have an early repayment charge.

Then I'd start all over again on a tight budget and continue paying into the ISA.

Seems straightforward to me.

CLAPTON

you haven't answered the question about how the debts were build up and of course you dont need to if you dont feel confortable about that, but it wasn't answered out of purient curiosity. sometimes big debts are run up by one party without the other being aware by simply overspending...nice holidays, better car, presents, clothes etc. if this is the case then cutting back is going to be much harder..if however, it is business problems, wine and song then cutting this out will not affect the family much.

I didnot realise that the ISA was the mortgage repayment vehicle and so i think you ought to leave that as it is.

Once you pay off the CC, I would suggest you pause a bit and see whether or not you can live within your new budget with the existing loans (they are not a bad rate of interest after all and they could be gone in 7 years). if you find you can't live within the budget then you still have the option of remortgaging.

dont feel you need to be hasty...this must be a terrible shock for you ....give it a little time before making any major decisions.



best of luck.

speakerabbit

Thanks for that Clapton, that's what I'll do, get rid of the CC's and then look again.

As to how the debt got the level it did, well....there have been two tax bills over the years, wrong tax code and a very hefty bill to follow. The rest has been basic overspending, interest on CC's before they were paid off by the loans. Some debt that was brought into the relationship, a wedding. Me finishing work to have a baby, so basically just keeping up a lifestyle we simply couldn't afford. I must admit I've been naive and assumed that the wages were covering this. O'H got into bigger debt than expected and through embarrassment, panic, feelings of obligation to provide etc just dug his hole deeper ever day, sadly going about obtaining money in the least practical of ways possible....the lovely CC's. I have found it hard to believe that this is all it is but I have been through all his previously hidden bills and he does seem to be telling the truth. He's admitted his problems with handling money (durrr) and is happy for me to take control, 7 years too late, if he'd done this from day one I'd now be posting about how I paid my mortgage off in 7 years and had squillions in the bank, lol...hey ho!

My next big expenditure is when I buy you all a drink to say thank-you, the day that this debt is finally gone.

Amanda

chivers1977

"I think you should do what you can to cut the everday bills, then if your mortgage is only tied in til Aug 06 I would suggest going to see the woolwich b/soc. they have an openplan offset mortgage which allows you to pop your savings/isa into an account to offset the mortgage interest but still have them accessable, re-organise some debt but perhaps not all to the mortgage but try to 0% interest as much as possible. use the snowball calculator here.... https://www.whatsthecost.com/snowball.aspx

Don't worry about the mortgage term too much, as you can reduce that by making overpayments later on."

I happen to work for the Woolwich. I don't see that using Offset would help the OP much as they are only going to be able to offset their mortgage at approx 5.35% whereas some of the credit cards etc are at a much higher rate. The term will not make any difference as the OP is on interest only anyway so the payments remain the same regardless of the term. The problem is that now mortgages are regulated and the OP would need to complete an affordability check. With the level of outgoings, the adviser might find it difficult to allow an increase in mortgage borrowing, especially if the OP was looking for the extra to be on interest only. If there is no repayment vehicle in place, this causes concern as they may never be able to get the mortgage funds repaid until death or sale of the property. to the OP, PM me if you want to know any more about the mortgage.