Separating and some how have to keep my house

mrjohnmiles

Following a lengthy discussion with my partner, we have decided to separate, she has stated she wants no equity from our house and is happy just to walk away.

There are obviously a few things I now need to sort out. She has agreed to carry on mortgage payments etc, for the immediate future while we sort things out so for the immediate time being things are ok.

I have owe about 85% of my annual salary, I earn 38k per year and owe 34k.

Ideally I want to keep the house and transfer it to me in time so we can both move on, the house was bought last July for a knock down 90k, although we borrowed an additional 10k to cover necessary renovation works, windows, bathroom, kitchen, decoration etc.

The house is worth in between 115k and 120k, Ideally I would like to release some of the capital, pay off the high interest debts and get somewhere near back to normal although it is a long short in the current climate.

I have completed my SOA and it is as follows;

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................ 2150
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2150

Monthly Expense Details
Mortgage................................ 620
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 90
Electricity............................. 27
Gas..................................... 45
Oil..................................... 0
Water rates............................. 17
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 13
Satellite/Cable TV...................... 35
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 20
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 10
Other travel............................ 60
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 55
Contents insurance...................... 0
Life assurance ......................... 72
Other insurance......................... 52
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 10
Holiday................................. 0
Emergency fund.......................... 10
Total monthly expenses.................. 1291


Assets
Cash.................................... 0
House value (Gross)..................... 120000
Shares and bonds........................ 100
Car(s).................................. 0
Other assets............................ 1000
Total Assets............................ 121100


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 99000....(620)......5.95
Total secured & HP debts...... 99000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Loan......................17000.....353.......8.9
Egg Loan.......................6500......284.......7.9
MBNA...........................4000......110.......29.9
NEXT...........................100.......20........29.9
Littlewoods....................600.......20........39.9
Capital one....................1500......70........25.9
Barclaycard....................3500......90........29.9
Total unsecured debts..........33200.....947.......-


Monthly Budget Summary
Total monthly income.................... 2,150
Expenses (including HP & secured debts). 1,291
Available for debt repayments........... 859
Monthly UNsecured debt repayments....... 947
Amount short for making debt repayments. -88

Personal Balance Sheet Summary
Total assets (things you own)........... 121,100
Total HP & Secured debt................. -99,000
Total Unsecured debt.................... -33,200
Net Assets.............................. -11,100

Created using the SOA calculator.
Reproduced on Moneysavingexpert with permission, using other browser.

And it shows my assets are less than my debt, and when the time comes I will be over spending by about £90 per month.

I worked out if I could pay off all but the HSBC unsecured debt I would be about £300 spare a month.

I have put £60 for fuel for my company car, although I regularly spend £200 on fuel, however most of this is claimed back as an expense, so I have not included it, as its a net 0 expense.

I am just a bit lost over what to do next and if I cannot restructure the debt, I do not really want to resort to the IVA route, and a second job, hard to find in the current climate would be possible, however I already pay the high rate of tax and it could be a lot of work for very little money.

Any advice would be greatly appreciated.

lynzpower

Are you talking about securing the debt on your home, to be honest, this is one of the most riskiest things you can do.

mrjohnmiles

Yes in essence that seems the most sensible option in my mind, although I am open to suggestions, as I know it would be the high risk route.

lynzpower

It is a very high risk route.

Have you done a SOAon here before to see if there is another way? ( Im sure there is)

What about getting a lodger in, any chance of that you can get over 4k tax free here that could pay your debt off directly??

So_Sad_Angel

lynzpower wrote: »

Are you talking about securing the debt on your home, to be honest, this is one of the most riskiest things you can do.

Hiya MrJM

Sorry to hear about the breakup but well done on focussing your energies on sorting out your debt situaion.

I agree with lynzpower on this one...securing otherwise unsecured debt is a highly risky option. Also don`t be lured into the secured loan route....it has been many peoples downfall & in the current market place is riskier still.

Call one of the debt charities for advice CCCS/Nat Debtline/CAB....I think with a bit of advice there will be a workable solution...maybe down the DMP route perhaps but see what they say.

I wish you best of luck.

Angiexx

CLAPTON

building insurance at 55 is very high
do you have children or any dependants ... otherwise why do you need life insurance at 72
what are other insurances at 52


In any event you need to talk to the mortgage company to see what they will lend you so you can you have the house in your sole name.

lynzpower

In terms of cutbacks on your SOA Id recommend :

Cutting back on your food spending., 100.00 for one is a bit much, you can easily save 30 here

Do you need LIfe insuracne if you dont have children?

What are the other insurances for?

Do you really need to be spending 35 per month on satellite tv?

Just a few suggestions but im sure others will be able to help more

jules68

I agree with getting a lodger, I had to find a way of keeping up payments when my ex walked out.I rent a room out and also have gone to interest only mortgage, not ideal but keeps a roof over mine and the kids heads!

poorandindenial

A few suggestions/comments from me

mrjohnmiles wrote: »

I have completed my SOA and it is as follows;

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................ 2150
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2150

Monthly Expense Details
Mortgage................................ 620
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 90
Electricity............................. 27
Gas..................................... 45 (this is really high, £72 on energy is rather a lot, have you checked you are getting the best deal, are you saving energy when you can)
Oil..................................... 0
Water rates............................. 17
Telephone (land line)................... 0
Mobile phone............................ 35 (can you downgrade or go PAYG - do you really use this much worth of time/textx each month? I have 600 mins and unlimited texts for £25 and others would say that was too much)
TV Licence.............................. 13
Satellite/Cable TV...................... 35 (ditch this)
Internet Services....................... 0
Groceries etc. ......................... 100 (not too bad but you could probably shave a bit off by shifting down a brand, cooking more from scratch etc)
Clothing................................ 20
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 10 (car parking but no other car costs?? what si this)
Other travel............................ 60
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 55 :eek: you can get this for so much less
Contents insurance...................... 0
Life assurance ......................... 72 :eek: this is vast, you need to swith as soon as you can, I assume you have life insurance because of the mortgage? if so you can buy from any company and at this level I woud expect you to have a LOT of underlying health conditions)
Other insurance......................... 52 (what is this?)
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 10
Holiday................................. 0
Emergency fund.......................... 10
Total monthly expenses.................. 1291


Assets
Cash.................................... 0
House value (Gross)..................... 120000
Shares and bonds........................ 100
Car(s).................................. 0
Other assets............................ 1000
Total Assets............................ 121100


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 99000....(620)......5.95
Total secured & HP debts...... 99000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Loan......................17000.....353.......8.9
Egg Loan.......................6500......284.......7.9
MBNA...........................4000......110.......29.9
NEXT...........................100.......20........29.9
Littlewoods....................600.......20........39.9
Capital one....................1500......70........25.9
Barclaycard....................3500......90........29.9
Total unsecured debts..........33200.....947.......-


Monthly Budget Summary
Total monthly income.................... 2,150
Expenses (including HP & secured debts). 1,291
Available for debt repayments........... 859
Monthly UNsecured debt repayments....... 947
Amount short for making debt repayments. -88 (the good news is that you can free this from your budget just by sorting out your insurances)

Personal Balance Sheet Summary
Total assets (things you own)........... 121,100
Total HP & Secured debt................. -99,000
Total Unsecured debt.................... -33,200
Net Assets.............................. -11,100

Created using the SOA calculator.
Reproduced on Moneysavingexpert with permission, using other browser.

mrjohnmiles

I will have to look at my insurances, as they are all based on joint income, it should be straight forward enough to switch it to all my income only. I have also explained a few other bits.

Electricity............................. 27
Gas..................................... 45 (this is really high, £72 on energy is rather a lot, have you checked you are getting the best deal, are you saving energy when you can)

This is based on a British Gas fixed price 2011 tariff, I can get it cheaper but it was set up so I know what my outgoings are until the fixed mortgage deal ends the same month (April 2011)

Mobile phone............................ 35 (can you downgrade or go PAYG - do you really use this much worth of time/textx each month? I have 600 mins and unlimited texts for £25 and others would say that was too much)

I can see about down grading but it was a 24 month tariff, I am 12 months in now.

TV Licence.............................. 13
Satellite/Cable TV...................... 35 (ditch this) This is home phone, internet and TV all in one from Virgin, I could ditch the TV and use freeview, but I use the net for working from home on occasion.

Internet Services....................... 0
Groceries etc. ......................... 100 (not too bad but you could probably shave a bit off by shifting down a brand, cooking more from scratch etc)

I can reduce this a little but my aim is to use the budget for all meals, no lunches for me.

Clothing................................ 20
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 10 (car parking but no other car costs?? what si this)
This is for additional parking that goes with my company car. I also pay for fuel, hence the £60, although this could be less with a bit of effort, fuel costs are met by me and reclaimed at the end of the month.

Other travel............................ 60
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings & Contents insurance.................... 55 you can get this for so much less
Life assurance ......................... 72 this is vast, you need to swith as soon as you can, I assume you have life insurance because of the mortgage? if so you can buy from any company and at this level I woud expect you to have a LOT of underlying health conditions)

This should go down with me just on it, its for the mortgage like sickness and unemployment cover.

Other insurance......................... 52 (what is this?) This is my pension

Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 10
Holiday................................. 0
Emergency fund.......................... 10
Total monthly expenses.................. 1291


Assets
Cash.................................... 0
House value (Gross)..................... 120000
Shares and bonds........................ 100
Car(s).................................. 0
Other assets............................ 1000
Total Assets............................ 121100


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 99000....(620)......5.95
Total secured & HP debts...... 99000.....-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
HSBC Loan......................17000.....353.......8.9
Egg Loan.......................6500......284.......7.9
MBNA...........................4000......110...... .29.9
NEXT...........................100.......20....... .29.9
Littlewoods....................600.......20....... .39.9
Capital one....................1500......70........25.9
Barclaycard....................3500......90....... .29.9
Total unsecured debts..........33200.....947.......-


Monthly Budget Summary
Total monthly income.................... 2,150
Expenses (including HP & secured debts). 1,291
Available for debt repayments........... 859
Monthly UNsecured debt repayments....... 947
Amount short for making debt repayments. -88 (the good news is that you can free this from your budget just by sorting out your insurances)

Personal Balance Sheet Summary
Total assets (things you own)........... 121,100
Total HP & Secured debt................. -99,000
Total Unsecured debt.................... -33,200
Net Assets.............................. -11,100

Created using the SOA calculator.
Reproduced on Moneysavingexpert with permission, using other browser.