Help scared and worried

Katie-Kat-Kins

Yikes!

Ok, first things first, you are almost certainly going to be entitled to some sort of benefits if neither of you have an income, check this out so you get some money coming in.

Are either of you getting a redundancy payment?

Do either of you have any sort of payment protection insurance policy? If so look into making a claim urgently.

Next talk to your mortgage company, ask whether your mortgage allows payment holidays or whether you can switch to interest only for a period.

Might sound a silly question but do either of you have any savings? If so now is the time to access them.

Cancel all non essentials, gym, sky etc. It is time for a major change in attitude, you have been used to having a decent income, now you have none, you need to start living like that. It will be a major change as you have obviously been living well above your means for sometime to have that kind of debt and no savings.

Thinks like a £600 a month clothing budget have to go, while you have no income you can only buy new things if absolutely necessary. If you have been spending that much until now you must have shedloads of stuff, make use of it, wear it or sell it. Nothing new, unless perhaps your only pair of shoes have holes too big to be repaired!!!

Look into whether you can return the cars, or sell them to repay the loans. You probably don't NEED a car at all but it might be sensible to have one run around between you if you would normally NEED one for work. If you decide that a car is a necessity you should be buying a small, cheap car nothing fancy, but try and manage without at least until one of you gets a job.

It goes without saying that you should be looking for a new job immediately, (before you were laid off I hope) don't be afraid to take a "rubbish" job as a stop gap to pay the bills.

Haircuts entertainment holidays etc have to go until you get a new job. If your hair gets so scruffy it might stop you getting a new job then get a cheap cut at a college or on a trainee night.

Start doing online surveys and things to earn some pocket money in your free time.

Phone all your creditors, explain that you have lost your job and see whether on a temporary basis they will accept token payments while you get an income sorted.

Get onto the Old style board for advice on how to feed yourselves cheaply, your food budget is bordering on obscene for someone with so much debt. There is a lady on there who fed a family of four on £25 for a month! You are spending £100 a week on two of you!!! They can advise on decent meals using what you have in and cheap staples.

Your electric usage is very high even for two in an all electric house, cut it back, turn everything off bar the fridge freezer and only plug in when you are actually using it. You have to live frugally. There are some great threads on this site to help you.

I appreciate that you are scared and in need of help right now and I hope my advice has helped, but I couldn't live with myself if I didn't have a few stern words before signing off. You have had an amazing income, and have nothing to show for it, you have lived way beyond your means and you have to learn from this. You have borrowed unnecessarily to fund an extravagent lifestyle. You apparently have no savings no contingency and no back up. Your monthly net income is equivalent to many peoples gross income for six months. I really hope that you learn your lesson from this episode and don't end up digging yourself deeper or back in the same place as soon as you are back in work.

Good Luck

Jesthar

Okaaaay, this is going to be pretty hard to hear, but here we go...

SkintNScared wrote: »

Here you go

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 0 - Was £2,600
Partners monthly income after tax....... 0 - Was Just over £4k
Benefits................................ 0 - Not sure if we are entitled to any??
Other income............................ 0
Total monthly income.................... 0

Monthly Expense Details
Mortgage................................ 2935 (Repayment)
Secured/HP loan repayments.............. 1000 (Cars, figure is approx)
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 200
Electricity............................. 125 - pretty high, check supplier and useage patterns
Gas..................................... 0
Oil..................................... 0
Water rates............................. 65 - very high, if you're not on a meter you should look at getting one
Telephone (land line)................... 25 - can you reduce this?
Mobile phone............................ 70 - you need to reduce of cancel these
TV Licence.............................. 12
Satellite/Cable TV...................... 45 - need to cancel this
Internet Services....................... 32 - this is very expeensive for internet!
Groceries etc. ......................... 400 - :eek: for just two of you? That would last me and my cat five months! You need to aim for £150 or less, including pet food
Clothing................................ 600 - :eek::eek: - gotta go - if you've been spending this much you should have plenty to choose from
Petrol/diesel........................... 200 - very high, although if it was for work you won't be spending so much here
Road tax................................ 30
Car Insurance........................... 90 - this is pretty high even for two cars, expensive cars then?
Car maintenance (including MOT)......... 0 - you need something here
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 15
Buildings insurance..................... 65 - very high, shop around for a cheaper deal
Contents insurance...................... 15
Life assurance ......................... 60 - very high, shop around for a cheaper deal
Other insurance......................... 0
Presents (birthday, christmas etc)...... 75 - needs to be drastically reduced
Haircuts................................ 100 :eek: - needs to be drastically reduced
Entertainment........................... 500 - :eek: this needs to be dropped to almost nothing
Holiday................................. 400 - :eek: you can't afford this...
Emergency fund.......................... 0
Total monthly expenses.................. 7059


Assets
Cash.................................... 2500
House value (Gross)..................... 440000
Shares and bonds........................ 0
Car(s).................................. 40000 1at £25k 1at £15k, both less than owed on HP.
Other assets............................ 0
Total Assets............................ 482500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 400000...(2935).....7.49
Hire Purchase (HP) debt ...... 21000....(400)......0<
Hire Purchase..................32000....(600)......0
Total secured & HP debts...... 453000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Credit Card...............19000.....570.......17.9 << My debt
First Direct Credit............22000.....660.......0 << Partners debt
Store Cards....................6000......240.......0 <<My debt
Total unsecured debts..........47000.....1470......-


Monthly Budget Summary
Total monthly income.................... 0
Expenses (including HP & secured debts). 7,059
Available for debt repayments........... -7,059
Monthly UNsecured debt repayments....... 1,470
Amount short for making debt repayments. -8,529

Personal Balance Sheet Summary
Total assets (things you own)........... 482,500
Total HP & Secured debt................. -453,000
Total Unsecured debt.................... -47,000
Net Assets.............................. 3,500

:eek::eek:

Well, I think it's fairly clear how you got into this position, you have been spending beyond your means for quite a while by the look of it. I have highlighted the areas where you could have made major savings and got this sorted had you both still been employed, and you still need to deal with all those areas and quickly, but you really need to get some professional advice ASAP as you are not going to be able to afford anything other than the mortgage next month as it is.

So firstly, please contact one of the free debt charities (payPlan, CCCS or CAB) for help - and please DON'T be tempted to go with a 'Debt Management' company which charges a fee for what you can get fro free from the charities listed above.

In the meantime, you need to look to trying to realise all the savings above (I'm sure other people will have more suggestions) as a matter of urgency, as if you do have to go on a debt management solution you will have to do thsis anyway, and it shows good fainth in wanting to deal with your debts.

Sorry I can't be more help directly, but you really do need to seek ofiicial guidance on this one.

~Jes

BeautyandtheBeast_3

You had fantastic salaries!
But you were still living beyond your means - never mind its done - just need to move forward - I would certainly get some of the clothes on ebay and get some money back!!!!!!

sarahs999

The others have rightly pointed out that there is a lot you can (and must) cut down here right away, but I thought I would make my customary observation at this point, which is that you need to find out how and why you and your hubby got into such deep poop. You need to find out where on earth his personal debt of £75k was racked up and make sure you've BOTH had lightbulb moments about money. Identify the cause and sort out the headstuff. You don't need to spend like you have been. You really are out of control on the spending front and you should cut up those cards right now. It will be a long hard road for you but you have taken the first step, and that's what counts.

grahamlaw

You can use any spare time between job interviews to sell anything you don't need on ebay or gumtree. £500 on entertainment? I would love to know what entertains both of you.

Thankfully you have no children and you are able to cut back a lot. You can sell a car as others have already said. What two cars do you have? You say you only spend £30 on road tax? Are these figures correct?

kissjenn

Hi, welcome to MSE.

You both obviously had good jobs, what sort of redundancy packages are you looking at?

Are you being paid in lieu of notice for your salary to drop immediately to zero?

What outstanding holidays, bonuses etc do you have coming?

Obvious asssets to go are the cars and replace with far cheaper version(s).

Your SOA has lots of easy massive cuts,

Groceries etc. ......................... 400 - Look at £200
Clothing................................ 600 Lose altogether
Petrol/diesel........................... 200 Will drop?
Presents (birthday, christmas etc)...... 75 Cut meantime
Haircuts................................ 100 Cut (no pun) drastically
Entertainment........................... 500 Lose 90%
Holiday................................. 400 Unless booked lose all of this.

There are lots of places you can save more and the experts will come and point these out. But roughly you can cut your outcomes by almost £2k by just reining in your discretionary spend.

Benefits - Contribution based Job Seekers Allowance each. This is determined by you paying NI over the last couple of years an not your assets. Currently you'd get £64.30 each a week (if you both qualify). About £560 a month!

Depending on redundancy etc you may be able to also claim Income Based JSA and apply for help with the interest portion of your mortgage.

Speak to your mortgage company and see if you can go interest only for a while. That would cut the mortgage to £2500 a month another £400 saved.

Posting the redundancy figures will help so you can see how much you can potentially wipe off your debts or use as living money to service them.

SkintNScared_2

Hi. Thanks for some of the pointers, I will do my best to answer some of the things that came up. Feel a bit calmer now

Mortgage is repayment, we cannot go to interest only as the lender (Halifax) has said the LTV is too much for an IO mortgage? This was before my husband was made redundant though so not sure if they will be able to do something now we are in dire straights.

We now only need one car. However, cars are both on HP agreements and both worth less than what we still owe on them. I think one is £25k value and £32k owed, the other is £15k value with about £20k owed

We're tied into our Internet/Sky/Mobile packages for a while yet, although it is fair to say we dont need nor can afford them at the moment.

Clothing budget is approx, its not £600 every month. Sometimes nothing, sometimes £2k in one hit. This is my vice and I will try to stop this now.

Holiday is booked and paid for. Won't be putting aside any more money for holidays now.

Entertainment - roughtly half me and half my partner. Includes his golf membership, and general socialising. Could cut this down to about £300 a month but we both still have memberships that can't really be stopped until the min term is up.

Partner is going to get a redundancy figure, but this has not been calculated yet. I did not get any redundancy as I moved to the firm 18 months ago.

We are looking at downsizing the house now and I have already made an appointment for an estate agent to come and have a look around tomorrow. Our house is wonderful but I realise we can't afford it :rolleyes:

grahamlaw

I think you'll be ok. Just need to be careful. Lets hope your husband has a good payout.

Good luck.

LeeSouthEast

Even though you are tied in, phone them and tell them. Sky certainly, and most other companies have plans for dealing with this, particularly in the current credit crunch. I know Sky for example have 'retainer' packages that charge peanuts but extend your contract by 1 month for every month you're on it. You just pay a token payment to them. (Picked up from another thread here a while ago). Most other places probably will as well.

The most important things are:

1. Don't fret, and don't be scared. There are thousands of people here to help.
2. TALK TO YOUR CREDITORS. This is important, urgent, and must be done ASAP.
3. Speak to a debt charity. They will help you, and it'll be completely free.
4. DO NOT enter a Debt Management Plan with a fee-charging company.
5. Realise you were spending beyond your means when employed. Work out why. Examine your own approaches to money and the reasons for them. Only when you understand this can you begin to change your own attitude to money.
6. Don't be afraid to face this. It's not made you less of a person. This is a momentary life set back. If you can get out of it a stronger, money-healthier person, then you'll be set to not having the same issues again on finding employment.

Katie-Kat-Kins

SkintNScared wrote: »

Hi. Thanks for some of the pointers, I will do my best to answer some of the things that came up. Feel a bit calmer now

Mortgage is repayment, we cannot go to interest only as the lender (Halifax) has said the LTV is too much for an IO mortgage? This was before my husband was made redundant though so not sure if they will be able to do something now we are in dire straights. Certainly worth asking, they would probably rather accept interest only than have you default.

We now only need one car. However, cars are both on HP agreements and both worth less than what we still owe on them. I think one is £25k value and £32k owed, the other is £15k value with about £20k owed This is why it is never worth taking significant finance for a car, they depreciate soooooo fast you almost always end up in "negative equity" personally I think a car beyond a small basic second hand run around is a luxury and should be saved for. Lesson learnt the hard way I guess! I'd say sell both and reduce the debts as far as possible. Replace with a small basic second hand car so that you can get to job interviews and have something for when one of you gets a job, don't get a second one until you are back in work. In future consider whether it is worth getting into debt just to keep up with the jones'!

We're tied into our Internet/Sky/Mobile packages for a while yet, although it is fair to say we dont need nor can afford them at the moment. Call them, tell them you are in serious hardship, as if they will let you out early or reduce your package to the minimum, they will normally offer you some sort of saving.

Clothing budget is approx, its not £600 every month. Sometimes nothing, sometimes £2k in one hit. This is my vice and I will try to stop this now. No try, it has to stop, no option, you have no money. Buying when you haven't got the money is what got you into this mess in the first place. In the meantime sell any designer items on ebay to get some money towards the debt repayments. In fact sell anything you can on ebay, given the amount you were selling you probably have loads of "stuff".

Holiday is booked and paid for. Won't be putting aside any more money for holidays now. Good, take it out of the SoA if it is genuinely paid for.

Entertainment - roughtly half me and half my partner. Includes his golf membership, and general socialising. Could cut this down to about £300 a month but we both still have memberships that can't really be stopped until the min term is up. Again contact the companies you have membership with, explain you are in hardship and can't pay, many will let you suspend membership or reduce the level of membership to a minimum. All socialising that isn't prepaid or free has to stop until you are in work or have your benefits sorted.

Partner is going to get a redundancy figure, but this has not been calculated yet. I did not get any redundancy as I moved to the firm 18 months ago. Fair enough, you should be able to calculate the statutory redundancy payment he will get so that you have a starting point, anything above that will be a bonus. In future you should be saving an emergency fund for this sort of thing.

We are looking at downsizing the house now and I have already made an appointment for an estate agent to come and have a look around tomorrow. Our house is wonderful but I realise we can't afford it :rolleyes: Bear in mind you won't be able to get a mortgage when you are both out of work so you may want to hold off until your finances are a little clearer as you normally have to have a six month contract minimum on rented places. Depends a bit on your prospects of getting alternative work at a similar level. What do you do?

You've had bags of good advice already, you have time on your hands to sort things out get going with it and you will be able to dig yourself out of this one.

Good luck getting a new job.