What are my options?

polajoo

Hello,

Have been lurking for a while but thought I'd bite the bullet and go for it and introduce myself. I had my "lightbulb moment" about three weeks ago after working out that I am nosediving into pots of money that I shouldn't be touching, like the overdraft on the current account linked to the mortgage, which actually gets nothing going in to it.

So, here goes with my SOA...

Incoming:

My salary - £1413
Benefits - None
Occasional cash-in-hand work, no more than £60 per month

Total - £1473

Monthly Outgoings:

Mortgage/Rent - £200 (joint mortgage with a parent*)
Council Tax - £91
Gas - £20
Electric - £39
TV License - £11
Internet - £25
Mobile - £50
Food - £180
Car Insurance - £80
Petrol - £90
Life Insurance £20
Egg Loan - £400
Halifax Loan - £140
Egg CC - £50
Camera stuff on credit - £33.44

Total - £1429.33

The creditors:

Woolwich Mortgage** - Balance £48,000ish over 20 years - 18.5 left to go - fixed at 6% (AFAIK)
Egg Loan - Balance £23,000ish APR 7.9% 84months, 82 left to go***
Egg CC – Balance £480 (limit £500) APR 12.9%
Halifax Loan – Balance £6,720 APR 9.9% Length of term 60 months, 30 months to go

First Direct Overdraft 1 - £650 (limit £700) APR 10.48%
Woolwich Overdraft 2 - £2500 (limit £3100) APR 15.6%

Assets:

House - market value £110,000

fin

Next month I'll be starting my Money Diary.

Question: I need to find a way of reducing my monthly outgoings without it affecting my chances of getting a mortgage in the future.

I asked in another thread whether or not people thought I'd be good to offer a F&F payment to clear them all off and be done with it.

Another option I have is, come remortgage time, pay all the debts off with equity from the house and start again with a clean slate, as it were. But that will be 12-18 months away. In the meantime I need to figure out how to pay less to my main creditors before I go even more into the red.

Has anyone got any ideas?

To recap from my other post:

polajoo wrote:

Hiya,

I've been talking to the Consumer Credit Counselling Service (fantastic and free!) about trying to find a way out of my problem.

They've suggested:

• an IVA (cannot do -- have a house with a lot of equity that I cannot 'use', see below)
• defaulting on payments (cannot do -- can't jeopardise my chances of getting a mortgage as I need to buy out a partner in a year or two, and don't want any charges on my property)
• consolidating (cannot do -- many of my loans are interest-up-front, which I was unaware of at the time)
• Requesting reduced amounts (cannot do -- don't want any default notices or charges on my property)
• Offering a F&F payment

You see that the one at the bottom seems to be the only one that I seem to be able to do. However, I am up to date with all of my loan payments (while my overdraft suffers), as I don't want to risk my chances of getting a good mortgage.

Has anyone had any success of just out-of-the-blue offering a Full & Final Payment to their creditors, rather than a collection agency?

What are my chances? Anyone know?

Thanks for any help or suggestions.

polajoo

---

* - Parents split, Dad moved away, Mom stayed with us, so when I was 18 I became the main breadwinner so I had to help her pay the rent on a Council house, which we later joint-morgtgaged.

** - Ex-Council Right To Buy property. Can't remortage for another year or I will have to pay back the Council all the money that they discounted from the property.

*** - Recently "topped up" and in order to keep the monthly payments down, extended the term too.

CLAPTON

you have no realistic chance of F&F offer on your debts until/unless they are defaulted.

on your SoA

lots of internet providers at under £15...
mobile phone could be replaced by payg and used sparingly...do you have a telephone landline?
if food is for only one person you should be able to reduce this
can you get rid of the car and use other transport? your car insurance is very high

there seem to a some missing items.... a spending diary will help to identify them. car tax, mot, servicing etc, going out, clothes, haircuts, any work related expenses (lunches, snacks), newspaper/magazines, water rates, xmas or presents costs, holiday?,

realistically given the constriants about the property your best bet is to consider how you can increase your income.....can you work overtime or get a part time job.

all_hours

Hi,

First thing, it generally isn't a good idea to secure debt on a property. It will cost you more in interest and unless you plug the holes in your outgoings you could be in the same position in a few years.

Without counting the extra £60 per month and not making any changes to your outgoings you've only got a deficit of £16 per month. So you need to cut back your spending by £16 for the figures to balance. If you can cut back more you can then start paying of the overdrafts and credit card. When you get the extra £60 you can pay that off the debt you're focusing on.

Use this to work out the order you should pay off your debts.

http://www.whatsthecost.com/snowball.aspx

The mobile phone bill looks high.
How many people does that £180 feed? Take a look at the old style board for tips on cutting back on grocery shopping. There are people on here feeding families of 4 or 5 for £200 per month.

Other posters will be able to advise about insurance costs.

HTH.

lynzpower

Welcome

Is this right that you live with your mum in the house, but she pays nothing towards the bills?

Why is this? You re shouldering the TV license, gas, electirc, internet, coucil tax all alone? Why.. it seems so unfair?

sanfrancisco

Rent a room?

xela_17

You should try and concentrate on paying off your Woolwich overdraft first as that has the highest APR. Any spare money (e.g. the possible extra £60 a month) throw at that.

Why is the car insurance so high? Are you very young? Do you have a powerful/expensive car?

all_hours

I've just spotted that you're paying £50 per month off the egg card and that's more than the minimum payment. When you put the debts in the snowball calculator you'll see that you should pay the 15.6% overdraft first.

If you have a good credit status then you could apply for a 0% or low life of balance card to transfer the higher interest debts. This could increase your monthly outgoings but will reduce the total amount of interest you pay so in the long run you will be better off.

polajoo

lynzpower wrote:

Welcome

Is this right that you live with your mum in the house, but she pays nothing towards the bills?

Why is this? You re shouldering the TV license, gas, electirc, internet, coucil tax all alone? Why.. it seems so unfair?

Sorry, forgot to say -- the situation used to be a lot better because she was paying the council tax, water (which I forgot to include in the SOA) and TV and a few other things, but she's moved in with her other half now, and is moving to Spain, wants half the equity from the house to put down as a deposit on a property, which is why I MUST be able to remortgage in a few months' time.

I also have a few self-proclaimed holes in my expenditure: the grocery shop feeds me and a cat and also includes roughly £3.50 a day for lunch at work (sometimes £3, sometimes £4). Also includes food for the OH, too.

My OH is in a bit of a financial state also, and is going through an IVA so I can't include her income in my finances.

The mobile is a 3 phone, tied into a contract for another 7 months, but I have a feeling I'll spend more on PAYG. Don't know though. Can't spend what you don't have, I guess.

The Internet's £25 because I don't have a land-line phone line, I just use my mobile (thus need to ALWAYS be able to call from it, which is why it's contract). So I save a tenner by not having a landline, but it's kinda off-set by the Internet charge.

Thanks for all the replies. You're all really helpful! :T

david_hellier

According to my calculations you have £51.59 per week to spend on anything else INCLUDING food. I suggest you write this amount in a small book and make a note of everything you spend in that week. Try and spend less than this even if it's a penny. You are going to have to make some serious cut backs to survive.

That Egg loan is a killer. If possible try and move this to your mortgage account but not another lender!

income weekly monthly
self 1473.00
partner







total 0.00 1473.00
339.93 divided by 4.33

339.93 total weekly income

spend weekly monthly
rent/mortgage 200.00
council tax 91.00
elec 39.00
gas 20.00
water
secured loans
TV licence 11.00
fines
intenet 25.00
mob 50.00
car 80.00
petrol 90.00
life 20.00
eggloan 400.00
halifax 140.00
egg cc 50.00
camera loan 33.44













total 0.00 1249.44
288.33 divided by 4.33

288.33 total weekly spend

Start= income - spend = 51.59 per week

tawnyowls

xela_17 wrote:

Why is the car insurance so high? Are you very young? Do you have a powerful/expensive car?

That's one of the disadvantages of putting outgoings down monthly, as they can hide things like this. £960 a year for car insurance - yikes!:eek: Plus if polajoo's paying monthly by DD, it'll be costing more than paying in a lump sum (dunno why this only seems to apply to insurance - utility companies give a discount for this!).

polajoo

xela_17 wrote:

Why is the car insurance so high? Are you very young? Do you have a powerful/expensive car?

I'm 23, 5 years' NCB, and I have a five-year-old 1.8 Passat. It's nothing special (hardly a boy racer car!) but it is a nice big powerful car. I do a lot of miles (OH's parents live in Hull and Middlesbrough) and I pay £875 up front on car insurance.

It's better than £1200 on a 1L Metro (third party ONLY!) that I paid £30 for.