Baby no2 on the way,what shall we do about debts?

laurenjs88

Hi there.

As the title really we have baby number 2 on the way and we are in alot of small debts. We wont be able to afford most of the repayments when im off on maternity leave.

We've made things worse recently because ive been off sick for a few months, and we've ignored certain debts (stupid we know!)

So im on £16500pa but have never earnt a full months wages as i dont get sick pay!

OH is on £13400kpa -£146 pension contributions pa

Me - £1,109.05 pm
OH - £880 pm
Tax Credits (including CB) - £279 pw

= £3198 pm at the max

September I earned £57, October £718... Find out november tomorrow!

Our outgoings are:
£495 rent
£169 CT
£1000 Childcare (based on 4 weekly payment)
£88 leccy & gas
£113 OH car
£50 sky
£40 Phone & BB
£85 Mobiles
£63 car insurance
£400 ish shopping
£200+ petrol
£16 contents insurance
£35 OH laptop
£9 OH laptop insurance

leaves £435 if we have both earnt full wages, as you can see we havent! so thats really mucked us around with over £500 of bank charges since August.

Debts are:
£1,100 EdgeCard
£250 Vanquis
£200 Jacamo
£360 Provident
£500 Capital one
£1,1?? Halifax
£1,900 Barclays overdraft
£1,000 BarclayCard

= £6410 without interest

When my income drops to £123 pw we wont even be able to afford the outgoings we have already let alone the debts. All the debts are my OH's except provident and vanquies which are "joint" but in his name!

Were not in any rush to buy a house, I was being debt free and a single mum. But have accepted thats not going to happen anytime soon with it like this!

OH has offered to move out as ive been really stressed about it and its taking its toll on our relationship. But splitting up is not the answer.

I really dont want him go bankrupt as it will ruin us for ever getting a house but our credit score are shot already.

Should we look at an IVA? or some kind of loan to clear everything?

OH still has over £5k to pay off on his car. We've only been together 7 months i didnt realise how bad everything was untill a few months ago, and were already 25 weeks pregnant!

Im 21 & he's 25

Any ideas on what we can do?

Thanks :j

DarkConvict

Grats for coming on and trying to sort it out.

First read this - http://forums.moneysavingexpert.com/showthread.html?t=107280 and post up your SOA in MSE format - http://www.makesenseofcards.com/soacalc.html

Also contact one or more charities, CCCS, PayPlan, National Debtline and CAB are good starting points. They give free professional advice on debt matters, and can even set-up an account to help you thought it.

Verbatim

Hi,

I didn't want to read and run and there aren't too many peeps around now.

you are so young to have all this trouble I feel for you. but with a second child on the way you have to be practical.

So you are spending more than you earn are increasing your debt each month. Step one you have to live within your means.

As your OHs credit score will be wrecked already if he's been missing payments don't worry about that. Have you contacted one of the debt charities CCCS for eg? They are very well thought of on here and non judgemental. Do not use a firm which charges as CCCS will do all they do as well if not better and will not charge you so that all the money goes to your debts.

On the income side why have you never had a full month at your job? Is it childcare or genuine sickness or taking sickies? Your oh earns very little, could he do more hours or take a second job? Are you getting all the benefits (child benefit tax credits, child tax credits) you're entitled to?

Looking at your expenditure as said it's way too high for your income. What leaps out is mobiles, sky, the huge expenses for the car and shopping. You can often bundle your broadband,cable/satellite tv and landline for around £35p m. Have you looked into this? And your child care is costing your entire salary??? and is far more than your OH earns.

So do you NEED the car, not want but need? Ditch sky and keep the infrastructure for freeview, start planning your meals and cut your shopping right down and can you go PAYG on mobiles. How much longer will you be working before m leave? Try and get a full month's pay for the rest of the time.

Is your OH being realistic about what what his low wage will buy? Is the car an expensive one you could sell? Even if you live in a rural areawhere a car is essential you can buy reliable cheap older cars.

On a more personal note I'd advise you to keep your finances separate from your OH. No ccs, bank accounts or loans in joint names. Then even though his credit rating is trashed already you'll be able to get a mortgage when things improve in your name. You say he has suggested moving out. This seems a strange thing for an expectant dad. is he as committed to your family life as you are?

I do hope you manage to sort this and you're both young enough to do so and still have loads of time to build up the life you want. let us know how you're doing.

hugs V

wendyloub

For a start ditch the sky tv, and see if you can mangage with cheaper mobile, bb packages. Try doing food planners and shop online for your groceries, you could probably save around £40 per week doing that. I have three children and our weekly groceries are always under £60 and that includes toiletries etc aswell.

It's all about cutting back unfortunately, its hard but it's well worth it.

MrsTinks

I can appreciate how hard it is to be sick when pregnant but you need this money so morning sickness won't be a good enough reason to not go to work - speak to your GP - there are things that can be prescribed safely for severe morning sickness. If it's something else then get it seen to by your GP.
You OH needs to buckle up and probably get a second job. Forget about a mortgage for a while - you can't afford it - simple as! Your first priority is keeping a roof over the childrens heads and food in their tummies.
Get rid of Sky - it's a luxury and you cannot afford luxuries! Ditto internet! I'm sorry but you have to live within your means and if you need to access the internet go to the library. Get a PAYG phone and get rid of the landline too.
OHs laptop... luxury - sell the laptop and pay off the outstanding amount or see if you can hand it back.
The car - is this on HP? If so what was the original amount for? If you have paid over half the amount the agreement was for then you can hand it back but only if it was HP.
You need to sit down and re-prioritise and quickly!
A DMP seems the most sensible way forward - I don't think you qualify for an IVA with debts this "low" (low over all but high to you because of your low incomes) but I could be wrong.

Tixy

Hi

You need to make some serious cutbacks, as presumably things will be even tighter once you are on maternity leave.

Things you can do straight away
Cancel SKY (or switch to the very basic package)
Reduce groceries (should be able to manage on £200 for 3 of you)
Stop any unnecessary car journeys.
Speak to your mobile companies for better/lower tariffs (if in contract) or switch to PAYG (should be able to halve the amount you are currently spending).

Other things to look into
Childcare - can you reduce this at all, or find cheaper. You may even be better off if one of you stopped working
Check you are on the best gas & elec tariffs with the cheapest provider
Check car insurance is cheapest
Do you need laptop insurance, its probably covered in contents insurance.
Can OH work more hours/overtime or get a second job or find a better paid first job - did he have most of these debts already when he met you?
Do you have 1 or 2 cars? If 2 consider if you really need both.
Look into whether OH can hand back the car to the finance co and buy a cheap car for a few hundred.
What do you have you can sell by ebay/carboot/amazon/gumtree?

I don't think a consolidation loan is a good idea - and with bad credit ratings you won't get one unless its at a horrific interest rate. And don't think an IVA would be suitable as you have no house to protect and not enough debt to make the fees worthwhile.

A debt management plan might work for you - you need to speak to one of these guys - http://forums.moneysavingexpert.com/showthread.html?t=2077631

laurenjs88

Wow thanks for all your quick replies! ive not long got in from work this evening!

All the sickness is genuine i had 2months off sick as i was being bullied by my manager for being pregnant and another one hit me round the back of the head! I had a bit of a breakdown, its my first "real" job and i wasnt expecting to be treated like that!

Then since ive been back at work ive developed these kind of "episodes" that are a cross between me having a fit & a stroke, so im in and out of hospital! then working all the hours im out of the hospital trying to earn back the money im losing from being in, but then making myself stressed so the "episodes" more frequent! Arghh!

However im at the neurologist tomorrow to hopefully be told its not a brain tumor or strokes which will be a relief!

OH wont get rid of his car, or his mobile and DEFINATLY wont give up the sky sports *shakes head*

Before i met him i was single mum on benefits and i managed to pay off 3k in debt that FOB-no.1 left me with and pay back a social fund loan!

I am tied into a contract on my mobile for another 12ish months so i cant cancel it without having to make the same payment if that makes sense?

I never go out of the contracted allowances, and sold the phone it came with to help cover the rent last month so using an old one now.

OH is tied into all these buy now pay later bloody things he's brought when he was earning more (he lost his £16k job in May so just got this job as it was the first he was offered, but now cant find a better one, he is trying really hard though)

Childcare, if i move DD, then i have to pay back the 3 month half price discount we got when we first started her there which means i'd then owe them £1500 on top of everything else!

I've told OH im starting to shop online from now on, we will only top up things like bread and milk if we run out. I hope to almost half the shopping, and no more buying lunch at work! pack-ups only!

We have to have 2 cars as we work entirely different ends of the city and i often dont get home till 8pm or later where as he is home between 4-7pm dependant on his shifts. plus our start times in the morning range from 6am for me to 10.30am for him!

No overtime available at his job so i do as much as i can, but this doesnt seem to make up the hours i lose being ill, he cant take on a second job because of me having to work such sparadic hours and being in and out of hospital!

My OH is a computer geek (all 3 major games consols plus more games than he ever plays) ive tried to suggest us selling the xbox and the wii (so he can keep his ps3) but suposedly he needs them as there are games that work differently on all them...

I'm so stressed i could cry. Its horrible but i cant help being a little resentful that im being forced into this bloody mess when ive worked so so hard to make a better life for me and no.1 after the mess her dad left us in!

He is probably more emotionaly comitted to this relationship & the kids, than i am but not in a "i'll actually take my head out of the sand and do something" kind of way.

I'm going to go to the CAB and see what advice they can offer us. Are the debts too low for him to go bankrupt? he's said he wont do it, but to be honest it doesnt feel like he wants to do much about it at all.

Gosh it sounds like its all his fault, its not. I've made some stupid descisons too! I just feel like im fighting a constant losing battle to get any of this sorted!

I took on my contracts, when i had finished paying off my debts and could afford some nice things for me and DD-no.1 but im stuck in them for a good few months now.

I keep everything seperate from OH already all the benefits etc go into my account, all the proper bills come out of my account apart from the electric & gas bill and the contents insurance. I will carry on the same once DD-no.2 has arrived aswell.

He suggested leaving because then i would get more help as a single mum and he could just pay his debts off rather than having to pay housebills etc...

Its a horrible thought that we'd be better off financially if he wasnt here

MrsTinks

1 - tell him to grow up and face his responcibilities! "won't sell 2 of his 3 games consoles because some games work differently on them"... I beg your pardon?
2 - Sky... the fact he "can't live without it"... well actually I think he'll find he can't afford to live WITH it! If you go bankrupt or on a DMP then he won't have a choice!
3 - No his debts aren't too low as far I know to go BR... but a DMP seems a more sensible solution provided he grows a pair and gets onboard with the situation you're in!

YOU might realise the enormity of the situation but I'm sorry to say he sounds like a 15 year old spoiled brat! That might seem harsh but his choice is soon going to be if he'd prefer to play on one of his many games consoles or feed his child - right now I'm not certain his answer to that would be the right one!

DarkConvict

MrsTine wrote: »

1 - tell him to grow up and face his responcibilities! "won't sell 2 of his 3 games consoles because some games work differently on them"... I beg your pardon?
2 - Sky... the fact he "can't live without it"... well actually I think he'll find he can't afford to live WITH it! If you go bankrupt or on a DMP then he won't have a choice!
3 - No his debts aren't too low as far I know to go BR... but a DMP seems a more sensible solution provided he grows a pair and gets onboard with the situation you're in!

YOU might realise the enormity of the situation but I'm sorry to say he sounds like a 15 year old spoiled brat! That might seem harsh but his choice is soon going to be if he'd prefer to play on one of his many games consoles or feed his child - right now I'm not certain his answer to that would be the right one!

QFT - (Quoted for the Truth) from my gaming forum days, He can live without sky and expensive mobiles and games consoles. He has and still is living beyond his means and this might well be the tipping point to either falling off or actually sorting it out whilst you can.

There is a limit that any single creditor you owe more than £750 can make you bankrupt, but i do not believe there is any lower limit to declare yourself bankrupt, but for obviously reasons due to the affect of bankruptcy it should be for sizeable debts you can't pay.

andymc29

I'm really sorry if this comes across as offensive. But it sounds like you've got two kids already.
Your OH is certainly not acting like someone who's ready to be a father. He's putting sky sports and computer games infront of his family's well being.

You say you work at different ends of the city? IS that London? Or could your OH cycle to work? He might laugh at the idea but half my office cycle in and it's completely normal.

I used to be really into playing computer games, but since getting into my debt, I've realised that I'm only playing games to avoid facing up to having a real life. He needs to get his head out the TV and face some real challenges.

QueenBeruthiel

laurenjs88 wrote: »

All the sickness is genuine i had 2months off sick as i was being bullied by my manager for being pregnant and another one hit me round the back of the head!

And you did nothing?