Father of five who is losing the will to live

fatherof5

Like a number of people on this forum I have been living beyond my means for years. Now facing the reality of running out of credit. My situation as follows:

Job - good secure job with monthly income of 2774
Outgoings: have tried paring these to the bone but currently 2900 (including mortgage on fixed rate of 1200 per month) House worth 300K with mortgage of 127K

However the kicker is the credit cards bills that have piled up. Now £35K and all maxed out. Please don't tell me how stupid I am I am more than aware of this now. Although our logic was tha an inheritance would clear most this. It didn't for complex reasons. Also have a £3k overdraft which is also maxed. Have missed a few payments on cards in the past so my credit score is low. Selling everthing not fixed down on e-bay but have am now at the stage of bills getting unpaid. Suggestions for dragging myself out of this mess? Not sure if trying to remortgage is the solution or if another approach would be better. Too ashamed to tell my kids although they will find out soon enough.
All comments welcomed.

purpleheather2810

Ok - there you said it. You're in the rght place! First thing is to take a deep breath and complete an SOA then post it here so we can all help you get sorted.

Jesthar

Heya, and welcome to MSE!

First off, relax a little - you aren't the first person to have done this, and you sure as heck won't be the last. Not much comfort, I know, but there is plenty of help to be had, and you just landed in one of the best places on the web to find that help.

There's an excellent 'how to get started' thread here:

http://forums.moneysavingexpert.com/showthread.html?t=107280

One of the main things it suggests is filling out a Statement of Affairs (SoA) - a sort of summary of your current financial position; our favourite tool for doing one of these is here~:

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

If you fill if out with as much information as you can and use the 'MSE' button in the 'Format' section, it will generate a version you can copy and paste into a new post here, and it's the most useful thing you can give us to help us help you, if you follow my meaning!

Congratulations on posting - it takes courage!

~Jes

In_my_dreams

Hello

If you go here http://www.makesenseofcards.com/soacalc.html and fill in your details all the more experienced people will come and tell you how to cut back and make yourself feel better.

Good luck!

So_Sad_Angel

Hi fatherof5 & welcome.

My immediate thoughts are your mortgage 1200pm on 127k....I am guessing that this is on a repayment basis ....try & get switched to interest only for a short while.....this will reduce the amount you pay in the short term....just to give you some breathing space to enable you to stop relying on further credit.

Obviously this will mean that for a while you are not reducing the capital balance on your mortgage however at this stage to need to stop the rest of your credit increasing by higher rates of interest or worse still by charges!

Angiex

dorisday

Ok first and only thing I would do is sell the house, pay off all debt and then buy a cheaper house. Problem then solved. oops - no more debt of course.

fatherof5

Looks like my last attempt at an SOA didn't get through so hear goes again. A couple of clarifications on costs:

1. Petrol high as we live in the country with 5 kids and need two cars for work (few buses)
2. Selling house - easy in theory but reality is the houses are way are not moving at all. Possibly a medium-long term solution but not any good in short term.
All comments appreciated though and other ideas welcomed.


Number of adults in household........... 4
Number of children in household......... 3
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 2774
Partners monthly income after tax....... 500
Benefits................................ 200
Other income............................ 0
Total monthly income.................... 3474
Monthly Expense Details
Mortgage................................ 1200
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 244
Electricity............................. 80
Gas..................................... 76
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 58
Internet Services....................... 0
Groceries etc. ......................... 500
Clothing................................ 100
Petrol/diesel........................... 250
Road tax................................ 15
Car Insurance........................... 32
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 0
Other child related expenses............ 150
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 12
Contents insurance...................... 5
Life assurance ......................... 40
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 40
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 3014

Assets
Cash.................................... 0
House value (Gross)..................... 300000
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 500
Total Assets............................ 304500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 127......(1200).....4.99
Total secured & HP debts...... 127.......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................15000.....400.......21
Credit card....................13555.....344.......19.9
Credit card....................9500......222.......20.9
Overdraft......................3000......0.........0
Total unsecured debts..........41055.....966.......-

Monthly Budget Summary
Total monthly income.................... 3,474
Expenses (including HP & secured debts). 3,014
Available for debt repayments........... 460
Monthly UNsecured debt repayments....... 966
Amount short for making debt repayments. -506
Personal Balance Sheet Summary
Total assets (things you own)........... 304,500
Total HP & Secured debt................. -127
Total Unsecured debt.................... -41,055
Net Assets.............................. 263,318

Bob_the_Saver

dorisday wrote: »

Ok first and only thing I would do is sell the house, pay off all debt and then buy a cheaper house. Problem then solved. oops - no more debt of course.

Seems a good course of action if the valuation provided is anything like realistic, Even if you have to drop the asking price from £300k than needs to be offset againt other outgoings like interest on CC & loans and an amount for wear and tear on yourself. The house WILL sell if the price is right.

CrazyCatLady

Hi, I thought I'd bump and I know I'm no expert but I thought I'd throw this one out there:-

You've got 4 adults in your house yet only 2 people's incomes? Can't all 4 adults who live in the household contribute to the household?

POSITIVE_AND_FOCUSED

Hi there, not normally on here at this hour, but just couldn't resist giving you a visit after reading your title.

Do NOT lose the will to live!! make your children the reasons WHY you will get out of this, they will see from your actions that nothing in life is a disaster unless you want it to be, that they can take rsponsibility for their actions just like you are now.

I am also maxed out to the hilt in my credit card situation, and I am just about hanging in there with repayments etc and working hard to now reduce the debt having tackled where my money is going by keeping a spending diary. Actions I am finding helpful which i have and am in the process of doing are: A spending diary - my food bill has drastically reduced and money spent on "incidentals", putting a £1 away a day, and then putting that to a debt each month, have written to a couple of my credit cards asking them to review the interest rate, keeping a debt free diary which helps with the rollercoaster of emotion you will no doubt feel as you get through this difficult time, complete a snowballplan, for me I will be df in 5 years which I was pleasantly surprised by, you may feel equally as positive when you know the facts of your situation, selling furniture , and other items via the local auction house and ebay, and to friends to raise lump sums to throw at the debt.

Most of all keep positive and try not to panic, although I understand thats easier said than done. Good luck!

barshamhillbilly

Hi just an outsiders view. Sorry - you are not going to like this ....

Gas and Electric, could easily be cut to less than £100 saving £57 for a family of 7, however big the house.

Sat TV @ £58 should go straight away - use freeview
Haircuts @ £40 .... learn to do you own.
Entertainment @ £50 - make your own
Groceries - £500 could easily be cut to £350 with a bit of planning.
Clothing £100 - what we spend a year on cloths ! Could easily be cut to £20 month.

Alas the rest of the family have to take responsibility also - turning lights off, short showers instead of baths etc. One telly on at a time.

Sorry - I know it sounds harsh but thats £435 you could easily save to put towards your debts each month.

Just my humble thoughts -
BHB