newbie needs advice!

smoty

firstly this is my first post though I have been visiting the forum for over a year just to scared to admit there was a real problem. We've been living off credit for years and that is going to dry up iminently although we're not in arrears with anything yet I can't see me keeping the plates spinning for very much longer. I filled in the debt remedy sheet at cccs and bankrupcy was recommended, this fills me with dread but am seriously considering it. My main concern is losing the house. Only my DH would be applying for bankrupcy and I have read here before about spouses being able to buy the beneficial interest in a house. What I'm really looking for is some advice on whether anyone thinks this could apply to us . Our mortgage has 100K left and the house would be worth between 124 -132k but we have a secured loan which is at about 36k. Sorry for the length!

Shelley84

Hi Smoty,

Welcome and well done for posting!

First off I would say don't get too worried or panicked about the bankrupcy just yet, there may be other options.

Secondly post an SOA on here - link is at the top of the DFW boards i think. And we'll take a look at it and see where there could be reductions etc...

Shelley

smoty

thank you for replying so quickly. Will do a SOA but know it won't be pretty!

Tixy

Hi Smoty and welcome. Well done for making your first post.

Whilst the debt remedy tool is useful it doesn't always suggest all the solutions. Have you booked an appointment with CCCS or one of the other charities?
They would talk you through all the implications of bankruptcy and the issue of the house. This will depend on a large number of things.

In the meantime as suggested do a statement of affairs which will focus your minds on exactly where you stand and may help us advise you better.

Also I'd recommend you start a spending diary where you write down everything you spend for a couple of months (if its 50p on a bar of chocolate or £50 on new clothes).

Its great that you are seeking help before you are in arrears, hope you keep your motivation going before things do get out of hand.

Good luck

TMoose

Don't worry about it not being pretty... None of our SOA's were pretty when we first posted them here, but the guys and gals on here have a way of giving them a bit of botox and making them less hideous. Then as time passes and things get better they turn into Claudia Schiffer! Well, I wish anyway!

smoty

Here's our soa its no surprise to me though i've done it a thousand times!

Statement of Affairs and Personal Balance SheetHousehold Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1125 DH
Partners monthly income after tax....... 900
Benefits................................ 120
Other income............................ 92 mom help
Total monthly income.................... 2237
Monthly ExpenseDetails
Mortgage................................ 544 DH pays
Secured/HP loan repayments.............. 425 DH pays
Rent.................................... 0
Management charge (leasehold property).. 0
Counciltax.............................128
Electricity.............................54
Gas.....................................37
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 12 DH
Mobile phone............................ 0
TV Licence.............................. 12.12 DH
Satellite/Cable TV...................... 80 DH
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................0
Petrol/diesel........................... 240 half DH
Road tax................................ 25 half DH
Car Insurance........................... 37 half DH
Car maintenance (including MOT)......... 10 DH
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 37
Medical (prescriptions, dentist etc).... 13 DH
Pet insurance/vet bills................. 0
Buildings insurance..................... 19
Contents insurance...................... 0
Life assurance ......................... 80 DH
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
(Unnamed monthly expense)............... 0
(Unnamed monthly expense)............... 0
Total monthly expenses.................. 2073.12
Assets
Cash.................................... 0
House value (Gross)..................... 130000
Shares and bonds........................ 180
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 130180
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 100000...(544)......0
Secured Debt.................. 36000....(288)......0
Hire Purchase (HP) debt ...... 7000.....(137)......0
Total secured & HP debts...... 143000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
overdraft......................4200......65........0 DH overdraft......................1500......20........0
personal loan..................10000.....250.......20 DH sofa...........................902.......35........0
HMRC overpayment...............1475......5.........0
credit card....................3500......76........13
credit card....................2744......25........0
credit card....................1696......37........14 DH
credit card....................4918......76........18 DH
personal loan..................2940......113.......7.6
personal loan..................1500......50........18
Total unsecured debts..........35375.....752.......-
Monthly Budget Summary
Total monthly income.................... 2,237
Expenses (including HP & secured debts). 2,073.12
Available for debt repayments........... 163.88
Monthly UNsecured debt repayments....... 752
Amount short for making debt repayments. -588.12
Personal Balance Sheet Summary
Total assets (things you own)........... 130,180
Total HP & Secured debt................. -143,000
Total Unsecured debt.................... -35,375
Net Assets.............................. -41,195
Created using the SOA calculator at Reproduced on Moneysavingexpert with permission, using IE browser.

Not pretty like I said!

smoty

Thanks all for taking an interest. I haven't booked an appointment yet but will do today can't keep seeing how we go. Not sure if i'm more scared about paying off this debt for the next 30 years or more or having to give up the house. DH isn't keen he's 10 years older and I think he thinks the only thing he's got to show for his age is the house and worried about not getting credit in the future but given the mess we're in I think i'd like the temptation taken away to rely on credit. I know this forum is not judgemental but would like everyone to know that I don't see bankrupcy as an easy option i've been putting off making any decisions for a couple of years and kept refinancing but thats not an option anymore and I am thoroughly ashamed of the situation i've got myself and my family into , i'm only planning to tell my parents once I know all our options- I know my mom will be disappointed she's very careful with money and already helps with my car repayments since my old banger died in January. Sorry again for the length just need to tell somebody something! I'm sure everybody's the same but I can't keep going on with a lump in my throat and a guilty knot in my stomach I go to bed thinking about it and wake up thinking the same I actually look forward to going to work!

Tixy

Hi Smoty - maybe not pretty but there are definatley some areas you could look at reducing costs. £588 is possibly too much to cut but any cut will be useful when it comes to deciding on the best debt solution.

Satellite TV is a huge cost -can you reduce down to the basic package or cut out all together?
Groceries -could be cut a bit, should be able to feed 3 for £200 per month by cooking from scratch, meal planning, dropping a brand and shopping around. If you feel that is too great a cut then start with £250 and try to reduce each month.

Petrol is high - are all journeys necessary? Have a look at the fuel efficency article - http://www.moneysavingexpert.com/travel/cheaper-fuel for ideas on reducing slightly.

Life insurance is really high unless one of you have a serious medical condition - you should be able to get adequate cover for you both for half this figure, shop around on comparison sites.

Have you checked www.entitledto.co.uk to see whether you are entitled to any benefits you are not receiving?

What is the HP debt? is it car(s)? If so what is the value of the cars? Could one car be sold or handed back and a cheap car bought to replace it?

Hopefully others will have more suggestions soon.