Don't know what to do

Big_Les_Wade

Hi all, have started reading this forum in the last few days as I have some problems. I am currently approximately £35,000 in debt (unsecured) - most of which being amassed while trying to pay off other monthly payments (I've been living off my credit cards for the last year!). I've completed an SOA (below) and can see the reason why I have gotten into this trouble.

The hardest thing is that I don't know how to break this to my wife. She has always been careful with money, always pays her credit card off (she once couldn't sleep because we had bought a sofa on interest free - we were still in the first year! - and had to go and pay it from savings the next day. She works three days a week and all of her money goes to paying childcare, most of the food and travel to work so the SOA is only my income (I cover the mortgage and bills).

Monthly Budget SummaryAmount(£)Total monthly income1,984Monthly expenses (incl. HP & secured loans)1,827.27Available for debt repayments156.73UNsecured debt repayments686.64Amount short for making debt repayments-529.91

Personal Balance Sheet SummaryAmount(£)Total Assets (things you own)162,000Total Secured & HP Debt-133,000Total Unsecured Debt-35,919.69Net Assets-6,919.69
Household Information

Number of adults in household2Number of children in household2Number of cars owned2
Income, Expense, Debt & Asset Details

IncomeAmount(£)Monthly income after tax1984Partners monthly income0Benefits0Other income0Total monthly income1984

ExpensesAmount(£)Mortgage798.5Secured/HP loan payments0Rent0Management charge (leasehold property)0Council tax141Electricity60Gas32Oil0Water Rates46.93Telephone (land line)25Mobile phone17.5TV Licence12Satellite/Cable TV18.5Internet services15Groceries etc.125Clothing20Petrol/diesel250Road tax18Car Insurance29.49Car maintenance (including MOT)38.04Car Parking0Other travel0Childcare/nursery0Other child related expenses25Medical (prescriptions, dentists, opticians etc.)15Pet Insurance/Vet bills0Buildings Insurance20.46Contents Insurance20Life Assurance19.85Other Insurance0Presents (birthday, christmas etc.)20Haircuts10Entertainment10Holiday20Emergency Fund20Total monthly expenses1827.27

Secured & HP Debt DescriptionDebt(£)Monthly(£)APR(%)Mortgage133000(798.5) 0Secured & HP Debt totals133000- -

Unsecured Debt DescriptionDebt(£)Monthly(£)APR(%)Egg credit card3693.6189.7517.9Smile loan8100.26156.212.29Northern Rock loan12000123.40Smile bank (overdraft60000MBNA Credit card 25400.3385.3923.29MBNA credit card 16125.49231.928.82Unsecured Debt totals35919.69686.64-

Asset DescriptionValue (£)Cash0House Value (Gross)160000Shares and bonds0Car(s)2000Other assets (e.g. endowments, jewellery etc) 0Total Assets162000


I just need to know what to do as I haven't got a clue!

GeorgeUK

Hi Les - at the bottom right of the post you should have an edit button if you need to amend a post. Are you using the SOA calculator? If so, format for MSE, do select all (ctrl + A) and paste on the board.

Big_Les_Wade

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1984
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1984
Monthly Expense Details
Mortgage................................ 798.5
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 141
Electricity............................. 60
Gas..................................... 32
Oil..................................... 0
Water rates............................. 46.93
Telephone (land line)................... 25
Mobile phone............................ 17.5
TV Licence.............................. 12
Satellite/Cable TV...................... 18.5
Internet Services....................... 15
Groceries etc. ......................... 125
Clothing................................ 20
Petrol/diesel........................... 250
Road tax................................ 18
Car Insurance........................... 29.49
Car maintenance (including MOT)......... 38.04
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 25
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 20.46
Contents insurance...................... 20
Life assurance ......................... 19.85
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 10
Holiday................................. 20
Emergency fund.......................... 20
Total monthly expenses.................. 1827.27

Assets
Cash.................................... 0
House value (Gross)..................... 160000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 162000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 133000...(798.5)....0
Total secured & HP debts...... 133000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Egg credit card................3693.61...89.75.....17.9
Smile loan.....................8100.26...156.2.....12.29
Northern Rock loan.............12000.....123.4.....0
Smile bank (overdraft..........600.......0.........0
MBNA Credit card 2.............5400.33...85.39.....23.29
MBNA credit card 1.............6125.49...231.9.....28.82
Total unsecured debts..........35919.69..686.64....-

Monthly Budget Summary
Total monthly income.................... 1,984
Expenses (including HP & secured debts). 1,827.27
Available for debt repayments........... 156.73
Monthly UNsecured debt repayments....... 686.64
Amount short for making debt repayments. -529.91
Personal Balance Sheet Summary
Total assets (things you own)........... 162,000
Total HP & Secured debt................. -133,000
Total Unsecured debt.................... -35,919.69
Net Assets.............................. -6,919.69

Tixy

Hi Les

Thats easier to read. I really think you need to tackle this as a family, does your wife have the benefits such as child benefit and any tax credit in addition to her wage?

Your council tax seems high compared to your house value - have you checked you are in the correct council tax band? its a quick 10min check to compare your band to your neighbours.

Your elec bills are pretty high, are these based on actual readings? Are you paying off arrears? Do you make an effort to cut down on the amount you use? Tumble driers, immersion heaters, fan heaters all cost a lot to run.

Is the £125 groceries in addition to what your wife spends? How much does she spend, you said she pays for the majority. You should be able to easily feed a family of 4 for £250 per month, so if you spend more than this between you there is scope to cut back.

£20 clothing, yours or childrens?

£250 fuel, just yours or including your wifes? This is really high, are all journey essential? Is any refunded by work? Do you drive efficently? Is you car fuel efficent?

Buildings & contents seem high for the house value. Check you are getting the best deal - I pay £24 combined for a house of similar value. Also make sure the cover is not excessive.

It will be hard to tell your wife but presumably she must have some idea that you are in debt? You need to tell her that as a family you are living above your means and you will need to cut back on some areas of expenditure. Could she increase her work hours at all? Perhaps you need to sit down with her and show her this SoA as with a £500plus overspend each month things are going to reach breaking point very quickly where you are unable to keep adding to your debts.

Sit her down with a cup of tea (or glass of wine) once the children are in bed and go through this SoA and your joint living costs. Good luck.

GeorgeUK

The first thing you need to do is identify why the overspending has occurred. You should probably tell the wife too. A defecit of over £500 may be too steep to claw back from any cutting back and a debt management plan may be called for.


Mortgage................................ 798.5
Is this repayment or interest only?

Council tax............................. 141
If paying over 10 months, can you ask to pay over 12? Sometimes they allow this.

Electricity............................. 60
Gas..................................... 32
Have a look at the price comparison sites to see you are getting the best deal (uswitch, moneysupermarket)

Water rates............................. 46.93
Is this metered? Do you use a water hippo to use less water?

Mobile phone............................ 17.5
PAYG?

Telephone (land line)................... 25
Satellite/Cable TV...................... 18.5
Internet Services....................... 15
Is this a package deal? Can you use freeview instead?

Groceries etc. ......................... 125
This is pretty good for a family of 4. Have a look at the old style board for mealplan ideas and cooking in bulk.

Petrol/diesel........................... 250
Is there a cheaper alternative - bus/train?

Other child related expenses............ 25
What is this for?

Car Insurance........................... 29.49
Buildings insurance..................... 20.46
Contents insurance...................... 20
Life assurance ......................... 19.85
Again look at the comparison sites to see if you are getting the best deal.

You said that your wife covers the childcare and food - is this £125 just extra groceries or do you have this available for debt repayments?

Big_Les_Wade

Comments below:

GeorgeUK wrote: »

The first thing you need to do is identify why the overspending has occurred. You should probably tell the wife too. A defecit of over £500 may be too steep to claw back from any cutting back and a debt management plan may be called for.


Mortgage................................ 798.5
Is this repayment or interest only? Repayment

Council tax............................. 141
If paying over 10 months, can you ask to pay over 12? Sometimes they allow this. I think it's over ten, but need to check

Electricity............................. 60
Gas..................................... 32
Have a look at the price comparison sites to see you are getting the best deal (uswitch, moneysupermarket) Need to do as I think we got this deal a couple of years ago when fuel prices were on the up

Water rates............................. 46.93
Is this metered? Do you use a water hippo to use less water? Unmetered

Mobile phone............................ 17.5
PAYG? Monthly payment - Cheapest I could find (includes approx. £60 of calls / texts)

Telephone (land line)................... 25
Satellite/Cable TV...................... 18.5
Internet Services....................... 15
Is this a package deal? Can you use freeview instead? Freeview not really an option as we don't have an aerial - would cost too much to get installed.

Groceries etc. ......................... 125
This is pretty good for a family of 4. Have a look at the old style board for mealplan ideas and cooking in bulk.

Petrol/diesel........................... 250
Is there a cheaper alternative - bus/train? Unfortunately I live approx 40 miles from work so this is just me. Trains are irregular and more expensive - plus I would have to have a car for weekends as well.

Other child related expenses............ 25
What is this for? Baby milk / food

Car Insurance........................... 29.49
Buildings insurance..................... 20.46
Contents insurance...................... 20
Life assurance ......................... 19.85
Again look at the comparison sites to see if you are getting the best deal. Car insurance is cheapest (always compare) - will need to look at the other ones

You said that your wife covers the childcare and food - is this £125 just extra groceries or do you have this available for debt repayments?

This is additional groceries (for home and packed lunches for work)

Big_Les_Wade

Tixy wrote: »

Your council tax seems high compared to your house value - have you checked you are in the correct council tax band? its a quick 10min check to compare your band to your neighbours. I've checked (using the links on this site) and there would be little point trying for a revaluation

Your elec bills are pretty high, are these based on actual readings? Are you paying off arrears? Do you make an effort to cut down on the amount you use? Tumble driers, immersion heaters, fan heaters all cost a lot to run. We have a joint payment for electric and gas - may have got the split wrong. We do need to compare tarrifs though

£20 clothing, yours or childrens? Both

£250 fuel, just yours or including your wifes? This is really high, are all journey essential? Is any refunded by work? Do you drive efficently? Is you car fuel efficent? Just me - work far from home (40 miles each way) Car is diesel and driven very efficiently (55 on the motorway!)

QUOTE]

Ames

Big_Les_Wade wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1984
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1984
Monthly Expense Details
Mortgage................................ 798.5
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 141
Electricity............................. 60
Gas..................................... 32
Oil..................................... 0
Water rates............................. 46.93 Your water company website should have a calculator to see if you're better off on a meter, if you get one installed and you're paying more you can have it removed in the first 12 months.
Telephone (land line)................... 25 Make sure you're getting the best deal - if you're making a lot of calls at a certain time see if there's a deal, eg evenings and weekends, that would save you money.
Mobile phone............................ 17.5
TV Licence.............................. 12
Satellite/Cable TV...................... 18.5 Make sure this is the cheapest package, I think if you're out of contract sky and virgin also let you cancel tv and keep the equipment to use as a freeview box, you'd have to check though.
Internet Services....................... 15 This is high, I get mine for £10 and that's only because I haven't had my BT line long enough to combine all three with sky.
Groceries etc. ......................... 125 What's this for if your wife pays most of them?
Clothing................................ 20 Try to cut it down - ebay, charity shops, freecycle etc.
Petrol/diesel........................... 250
Road tax................................ 18
Car Insurance........................... 29.49
Car maintenance (including MOT)......... 38.04 That's high every month, although I suppose if you do a lot of mileage that could be why.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 25 Should really be in the food budget.
Medical (prescriptions, dentist etc).... 15 If this is prescriptions for one person look into a prepay certificate.
Pet insurance/vet bills................. 0
Buildings insurance..................... 20.46
Contents insurance...................... 20
Life assurance ......................... 19.85
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 Try to cut these down, leave longer between cuts, go to the hairdressing college etc.
Haircuts................................ 10
Entertainment........................... 10 This is very low, is this realistic?
Holiday................................. 20 You can't afford this now.
Emergency fund.......................... 20 This is your emergency.
Total monthly expenses.................. 1827.27

Assets
Cash.................................... 0
House value (Gross)..................... 160000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 162000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 133000...(798.5)....0
Total secured & HP debts...... 133000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Egg credit card................3693.61...89.75.....17.9
Smile loan.....................8100.26...156.2.....12.29
Northern Rock loan.............12000.....123.4.....0
Smile bank (overdraft..........600.......0.........0
MBNA Credit card 2.............5400.33...85.39.....23.29
MBNA credit card 1.............6125.49...231.9.....28.82
Total unsecured debts..........35919.69..686.64....-

Monthly Budget Summary
Total monthly income.................... 1,984
Expenses (including HP & secured debts). 1,827.27
Available for debt repayments........... 156.73
Monthly UNsecured debt repayments....... 686.64
Amount short for making debt repayments. -529.91
Personal Balance Sheet Summary
Total assets (things you own)........... 162,000
Total HP & Secured debt................. -133,000
Total Unsecured debt.................... -35,919.69
Net Assets.............................. -6,919.69

I've put a few comments above.

Big_Les_Wade

Just wanted to say that I told my wife yesterday - really thought I was going to be living out of my car - and she has been fantastic :A. She's not happy with me and I now have a new nickname!! Now I just need to get around to sorting out my mess!:eek:

Tixy

Hi Les

Glad to hear you have spoken to her -it really will be much easier if you tackle this together. And less stressful for you rather than trying to hide it.

Have you got a plan of action?

Big_Les_Wade

Yup, sent pressed the button on DMP with CCCS this morning. Have to say that it's so much nicer being able to breathe properly again!