Brand new to this and need help!

CASR25

Brand new to this and need help!
I originally posted this on the loans board - they suggested we post it here.....could you help, reallly worried, can you possibly help?


My husband and I are hoping you people on this site will be able to help us. We are in a rather bad situation and have finally realised it and so really need to sort it. But, we need help/advice?!

We are having to put food and general living expenses on credit cards each month, all of our income is accounted for before it enters our accounts - we have a problem. It is entirely our fault - for years we've lived as though we earn 60k between us and now we nearly do we can't use it - the live for now pay for it later group I suppose.

I'm about to go on maternity leave with our second child. I'm a teacher and earn £32k my husband earns £25k (basic he does get commision but we don't rely on it and have often paid some debt off if he's earned a bit more than we need to live on!). I'm having to go back as soon as mat pay ends, after 4mths, which is so early in my opinion - but our fault I suppose!)

So this is where we're at....

We have 3 un-secured loans, with 40k remaining on them. We pay back 700 a mth and the latest one to end is in 7years.

We have 9 credit cards with 31k on them, pay back 1000 a mth. 2 are 0% but most are just the normal high rates! We've tried to get more 0% but have been declined.

I checked my credit rating this time last year and it was poor my husband's is excellent - most of the debt is in my name as I have always earned more and have been in work for longer. (we don't have any ccjs or anything like that, and no missed payments int he last year I'm certain - i think mine was low as I'd forgotten to pay a card that we'd yet to put on dd and because i've so much debt in my name)

We bought our house for 130k, paid 10% deposit - 3 years ago - have bought it back to life, it was a wreck, it was valued at 155k 2 years ago. However, I rang our mortgage people, nationwide, last week to see if we could do a mortgage break while i'm on maternity and they said the house was in neg equity, worth only 123k! They calculate this using the market situation and houses that have sold on the street recently (2 yes - both needed central heating putting in before habitable!!!) Anyway... so we're in neg equity.

What should we do???? We thought...

A 31k loan over 7years, paying back 500 a mth. That would mean after 7years we'll be debt free an we'll have 500 per mth to live on.
Ideally that would clear the cc debt.

But, where do we start to look? We had a fab ind financial advisior who got us our mortgage, do we call him? Do we go secured?????? What on earth should we do. We really don't want to go to iva or bankrupcy stage - but is that out only option now????

My husband and I hope some of you lovely people on this site could give us some pointers????

We've got ourselves into this stupid situation and need to get out, I'm panicing.

Could you help?

Thanks,

Cx

CASR25

Also, do you think we should speak to a financial advisor and possibly ony look for a 25k loan to perhaps prevent us from going through the debt management process????

So confussed!

Deep_In_Debt

Hi
Can't really help much but I just wanted to say that the suggestion of turning an unsecured loan into a secured loan is not a good idea as it will put your house at risk and often takes longer to pay off.

Also, getting another loan is not a good idea as it is not clearing your debt as such, just adding to it and again can take longer to clear off.

It may be worth you considering a dmp for a while - it will trash your credit rating but do you really want any more.

Why not post up an SOA and we'll see where we can help you make savings to throw at your debts.

Give CCCS, CAB, or National Debtline a call on Tuesday and see what they say. They offer free impartial advice. I would suspect your Financial Advisor could be costing you money.

Sorry I can't help and good luck.

Poosmate

Hello and welcome to the DFW thread. There will be many people on here who will be able to help, support and "advise" you.

If you can post your SOA it would help others to see if there are any aspects of your outgoings which could be reduced. Please use the link below:-

http://www.makesenseofcards.com/soacalc.html

I would echo what Deep In debt said and not make the unsecured debts secured.

I am tying with the idea of getting a loan to pay off one of my CC's because they keep putting up the interest rate, apparently "because I can afford it"!!

Good luck anyway.

Poo

rupe34

Hi - was just passing and thought I would say hello.

Don't worry about the lack of responses - by Tuesday evening you will have LOADS of good advice - its just cos its the BH weekend.

Facing up to the debt and asking for help is the biggest step :T

In_my_dreams

Reading the figures, this could have been me writing this! I have also been told by mortgage company we are in negative equity although we don't believe them!

Having read these boards daily for a long time the first thing you are normally advised to do is post a SOA. Sometimes you can make cut backs you don't even know about until someone points them out.

Have you rung up any of the CC companies and asked them if they can reduce the interest rate, even for a short time? I have rung up before and told them I was thinking of BT to another card and they offered me a deal, may not work for everyone but worth a try?

I would be reluctant to borrow more money unless you know it will save you a lot of money, if you know you can get one and if you know you won't turn back to the CC's again. Speaking from experience, I have run up CC debts, maxed the card, paid them off with a loan and started off again .....and this is where I find myself. Also, a secured loan would be a definite no as then you are risking your house.

I'm sure there will be a lot of people offering advice but maybe the first step is to get everything down in writing and see where you can make cutbacks. Also, try ebay/amazon etc to raise cash short term until you work out what you need to do.

Good luck!

CASR25

Thank you so much for these replies. I'll post my SOP thingy.

Can not stop worrying - the lightbulb is definitely on now. We've been silly people!!!!

CASR25

Here is my SOP I hope it makes sense - there's alot to take in!

I need to sit down with all the bills and work out apr etc for the ones that weren't that obvious.

Household Information
Number of adults in household........... 2
Number of children in household......... 1 with 1 due in 2 weeks
Number of cars owned.................... 1 (husband has company car that inc petrol)

Monthly Income Detail
Monthly income after tax................ 1936
Partners monthly income after tax....... 1410 (does not inc his commission which can range from 50-1000 a month)
Benefits................................ 118 (this is working tax credit & child benefit – this will go up once no2 arrives)
Other income............................ 0
Total monthly income.................... 3458

Monthly Expense Details
Mortgage................................ 720
Secured/HP loan repayments.............. 0
Council tax............................. 84
Electricity..& electric........................... 167
Water rates............................. 31
Telephone (land line)................... 15 (quarterly payment to BT – need to get rid of this and go totally with sky)
Mobile phone............................ 30 (I’ve recently reduced this by changing package - husband has work phone)
TV Licence.............................. 12
Satellite/Cable TV/internet...................... 45 (need to reduce this when we add land line to package – we’ve looked into this already)
Groceries etc. ......................... 250 (we know we can do this, although we often go over with unessential things – we must reign it in, I know)
Clothing................................ 20
Petrol/diesel........................... 50
Road tax................................ 15
Car Insurance........................... 38
Car maintenance (including MOT)......... 5
Childcare/nursery....................... 250 (my mum is a childminder and gives us reduced rates!)
Other child related expenses............ have inc these in groceries and clothing
Pet insurance/vet bills................. 7 (have just knocked this down from 12)
Buildings & contents insurance..................... 45
Life assurance ......................... 54
Presents (birthday, christmas etc)...... 10
Haircuts................................ 30
Entertainment........................... 40 (we can do this, although we often have not!)
Holiday................................. 0 (have not had proper holiday for 3years)
Emergency fund.......................... 0 (know we should but we don’t)
Union fees.............................. 13 (a must have as a teacher)
To cover od fees........................ 10 (we trans 10 to our A&L od each month to cover interest etc)
Children's mutual trust fund............ 20
Total monthly expenses.................. 1964


Assets
Cash.................................... 0
House value (Gross)..................... 123000 (according to bank - puts us in neg equity! 130000 minimum I hope though, what we paid for it 3 years ago, when it was a wreck - valued 2 years ago at 155)
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 132000



Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(720)...... (not sure what we’ve paid in 3years) 5.3 fixed till 2011
Total secured & HP debts...... 0.........-.........-

Unsecured Debts Some of these I can not work the apr out unfortunately.
Description.......Debt, remaining......Monthly................APR
IF.............................12892.....................293...................5.9
IF.............................4583......142.......7.9
N ROCK.........................22603.....269.......7.9
student loan...................8000......106.......0 (I tend to ignore this as the apr is so low)
HSBC OD........................400.......0.........?
A & L OD.......................1500......0.........?
HSBC OD .......................1000......0.........?
BARCLAYS.......................5788......130.......0 (3300 is 0% after a balance trans)
CAP 1 .........................4800......200.......0 my mother in law got this 0% card for us in dec, we pay 200 regardless
CAP 1..........................9116......273.......18
TESCO..........................980.......25........?
HALIFAX........................3000......80........0%
MBNA...........................1331......40........?
VIRGIN.........................2864......50........?
VIRGIN.........................830.......25........?
EGG............................701.......25........19.9
EGG............................4916......120.......21.9
Total unsecured debts..85304.....1778.....




Monthly Budget Summary

Total monthly income.................... 3,458
Expenses (including HP & secured debts). 1,964
Available for debt repayments........... 1,494
Monthly UNsecured debt repayments....... 1,778
Amount short for making debt repayments. -284 which we've put on cc and any other over spends!


Our daughter has recently moved into her 'big girls' room - I sold all of her baby girl clothes to decorate & furnish it via ebay. Don't have much more to sell now!

I also see, now it's in front of us, that we've been so silly and in some respects are so lucky compared to many i.e. mum a child minder & husbands petrol, car & phone, I think weve just lived the good life too long!

What do you think is going to happen to us our finances?

Scared and worried.

Thanks,
C

mrscmr

CAS

just wanted to say.. well done for posting and being brave. i have been in your situation too and its scary - there will be help on its way to you - lots of good peeps with advice.

i would add though - i dont thing secured is the right way - we wanted to do that but the bank said there was not enough equity in house something to do with loan to value percentage and plus houses are being valued very very low at mo.
i wish you well on your journey to you and your hubby x

CASR25

Oh thank you, yes it's really scary - but it's great to have friendly posts!
I don't think we'll be able to go secured either - it's just we really need to free up 500 a month, and have all debt cleared in 7 years. - so need about 30k. What you said is bascially what Nationwide said when I phoned to enquire about a mortgage break while on maternity!

kittiej

I'm just wondering why you have to pay your mother for looking after her grandchild?

I don't get that sorry.