Please advise,in trouble

wookie999

Hi my partner and i have been struggling to make ends meet after she was made redundent in Feb last year.We took an arranged 3 month payment break on our mortgage,and since have paid six months straight and all is ok on the house front,but this has damaged my credit rating. Since her change in circumstance she has taken a lower paid job, which is all she cant get!!So now were really struggling.My question is My Home is worth 235000 my outstanding balance is 184000, but i have 30000 secured loan on the property and 3x credit card totaling 12000,plus a loan of 12000,this is the first time i cant make two of the credit card bills. We have 2 kids and my partner has been promised more hours at work but not for another 2 months.I am sick with worry would you advise me to sell and try and rent and pay off as much as i can, even reading these forums im not sure i have enough money left for IVA DMP , mortgage company wont remortgage due to the payment break.dont know what to do..

Thanks for reading
Paul

Tixy

Hi Paul

Its difficult to advise you without seeing your full monthly budget to see how short you are each month - have you completed a statement of affairs (SoA)?

Just on the info provided above you don't have enough equity to repay all your debts and you would need to use some of it for moving expenses and up front rent etc so doesn't look like you would be that much better off each month (although that of course depends on how much it would cost you to rent compared to your mortgage etc).

If you fill in this http://www.makesenseofcards.com/soacalc.html and post on here people will see your full situation and advise better.

wookie999

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................ 2057
Partners monthly income after tax....... 380
Benefits................................ 179
Other income............................ 0
Total monthly income.................... 2616
Monthly Expense Details
Mortgage................................ 1073
Secured/HP loan repayments.............. 310
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 140
Electricity............................. 50
Gas..................................... 46
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 20
Mobile phone............................ 8.49
TV Licence.............................. 12
Satellite/Cable TV...................... 19.99
Internet Services....................... 5
Groceries etc. ......................... 200
Clothing................................ 10
Petrol/diesel........................... 150
Road tax................................ 15
Car Insurance........................... 40
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 22.59
Contents insurance...................... 0
Life assurance ......................... 25
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2195.07

Assets
Cash.................................... 0
House value (Gross)..................... 235000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 236000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 184000...(1073).....5.4
Secured Debt.................. 30000....(310)......0
Total secured & HP debts...... 214000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
credt card.....................4000......85........0
credit card....................4000......98........0
credit.........................2400......70........0
overdraft......................1500......0.........0
overdraft......................1500......0.........0
loan...........................12000.....190.......0
Total unsecured debts..........25400.....443.......-

Monthly Budget Summary
Total monthly income.................... 2,616
Expenses (including HP & secured debts). 2,195.07
Available for debt repayments........... 420.93
Monthly UNsecured debt repayments....... 443
Amount short for making debt repayments. -22.07
Personal Balance Sheet Summary
Total assets (things you own)........... 236,000
Total HP & Secured debt................. -214,000
Total Unsecured debt.................... -25,400
Net Assets.............................. -3,400

Reproduced on Moneysavingexpert with permission, using IE browser.


Hi Thankyou for your replies here goes any advice would be greatly recieved,all this was managable unitil was made reduntant.

Thanks
Paul

milliemonster

wookie999 wrote: »

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................ 2057
Partners monthly income after tax....... 380
Benefits................................ 179
Other income............................ 0
Total monthly income.................... 2616
Monthly Expense Details
Mortgage................................ 1073 Can you arrange to go interest only for a while?
Secured/HP loan repayments.............. 310
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 140 can you spread this over 12 months instead of 10?
Electricity............................. 50
Gas..................................... 46
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 20
Mobile phone............................ 8.49
TV Licence.............................. 12
Satellite/Cable TV...................... 19.99 go freeview and get rid of sky for now
Internet Services....................... 5
Groceries etc. ......................... 200
Clothing................................ 10
Petrol/diesel........................... 150
Road tax................................ 15
Car Insurance........................... 40
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 22.59
Contents insurance...................... 0
Life assurance ......................... 25
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2195.07

Assets
Cash.................................... 0
House value (Gross)..................... 235000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 236000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 184000...(1073).....5.4
Secured Debt.................. 30000....(310)......0
Total secured & HP debts...... 214000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
credt card.....................4000......85........0
credit card....................4000......98........0
credit.........................2400......70........0
overdraft......................1500......0.........0
overdraft......................1500......0.........0
loan...........................12000.....190.......0
Total unsecured debts..........25400.....443.......-

Monthly Budget Summary
Total monthly income.................... 2,616
Expenses (including HP & secured debts). 2,195.07
Available for debt repayments........... 420.93
Monthly UNsecured debt repayments....... 443
Amount short for making debt repayments. -22.07
Personal Balance Sheet Summary
Total assets (things you own)........... 236,000
Total HP & Secured debt................. -214,000
Total Unsecured debt.................... -25,400
Net Assets.............................. -3,400

Reproduced on Moneysavingexpert with permission, using IE browser.


Hi Thankyou for your replies here goes any advice would be greatly recieved

Thanks
Paul

Hi Paul

I have made a few comments above that may help to give you a bit more of a surplus to throw at your debt.

Can you wife/partner maybe get a job in the evenings for the time being? work in a pub for instance for a few hours?

You currently have enough to meet your repayments so I don't think a DMP or IVA is appropriate, nor would be agreed.

You need to make sure your spending is realistic, £200 a month on groceries is great for 4 and its what I aim for but rarely achieve.

You have nothing allocated for presents - did you not get anything for the kids for xmas??????

Nothing for child related expenses - if they are of school age do they not have trips etc that you have to pay for??

Do you really only spend £10 a month on haircuts and absolutely nothing on entertainment????

Make sure when you are completing your SOA you go back through your bank statements for the last few months to be completely and wholly realistic on what you spend, I feel that you have filled out this SOA based on what you are wanting your budget to be and not what it currently is

judi24

Hi Wookie welldone for posting and try not to panic- I am far from an expert but if this is an honest SOA you should be able to sort this without selling your house. You are only marginally short of the minimum payments - certainly on paper - that could be sorted by reducing your food shopping slightly - I am not great at this but some of the others on here are fab - have a look at the OS board for ideas - there are some thet feed a family of 15 on a fiver a week! (slight exageration - but there are definately some great tips and ideas for cutting food costs!) I know very little about DMP's but someone who does will be along shortly - but it would appear that you would have enough money to go down this route should it be the best way. Have you claimed all the benefits you are entitled to? Also I know you said your wife was going to get more hours in a couple of months but is there anything she could do in the meantime?

Anyway will stop rambling and let someone more knowldgeable advise you properly!

Good Luck

savingmummy

wookie999 wrote: »

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................ 2057
Partners monthly income after tax....... 380
Benefits................................ 179
Other income............................ 0
Total monthly income.................... 2616
Monthly Expense Details
Mortgage................................ 1073
Secured/HP loan repayments.............. 310
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 140
Electricity............................. 50
Gas..................................... 46
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 20
Mobile phone............................ 8.49
TV Licence.............................. 12
Satellite/Cable TV...................... 19.99
Internet Services....................... 5
Groceries etc. ......................... 200
Clothing................................ 10
Petrol/diesel........................... 150
Road tax................................ 15
Car Insurance........................... 40
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 22.59
Contents insurance...................... 0
Life assurance ......................... 25
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2195.07

Assets
Cash.................................... 0
House value (Gross)..................... 235000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 236000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 184000...(1073).....5.4
Secured Debt.................. 30000....(310)......0
Total secured & HP debts...... 214000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
credt card.....................4000......85........0
credit card....................4000......98........0
credit.........................2400......70........0
overdraft......................1500......0.........0
overdraft......................1500......0.........0
loan...........................12000.....190.......0
Total unsecured debts..........25400.....443.......-

Monthly Budget Summary
Total monthly income.................... 2,616
Expenses (including HP & secured debts). 2,195.07
Available for debt repayments........... 420.93
Monthly UNsecured debt repayments....... 443
Amount short for making debt repayments. -22.07
Personal Balance Sheet Summary
Total assets (things you own)........... 236,000
Total HP & Secured debt................. -214,000
Total Unsecured debt.................... -25,400
Net Assets.............................. -3,400

Reproduced on Moneysavingexpert with permission, using IE browser.


Well your SOA looks ok to me. I cant see anything that really needs looking at, maybe try cutting down on the grocery shopping drop some brands and stick to a strict shopping list. I see you have not included a few things such as entertainment, child related expenses are these correct?

leanneq

I think the main problems are two things:
You overstretched yourselves when you bought your house - i appreciate that your wife lost her job but that is a huge mortgage you got there especially including the secured debt too
Secondly, i would guess you have been getting in debts for years, getting a consolidation loan then building up the cards etc hence the position you are in now.
I think you need to speak to CCCS

slummymummyof3

Have you also thought about having a sort through unwanted things you might have that you could ebay?

Life assurance you may be able to get cheaper elsewhere as the prices have come down lots over the last few years - check out deals on the cash back sites (topcashback.co.uk, quidco.com and cashbackkings.co.uk) These can also be used for changing gas/electric, car insurance and internet shopping but you need to clear the cookies on your computer if you use comparison sites.

Do you really need both cars at the moment? Is it possible if not to do a SORN while one is ot being used.

Verbatim

Just to repeat what some one else said but are you getting Tax Credits at thr right level? Have you told them about your wife's reduced income?

wookie999

Thanks for your replies
Answer to some of the questions

Cant go intrest only on a fixed 5 yr deal 2011,already gave us a 3 month payment break unwilling to help any further,also this effectively closed all my credit(rating score) just as well i think!!
Having budgeted for kids or entertainment there 5yrs and 18 mths so tend not to do much because of financial reasons try to do the parks and cheap swimming Sorry for missing this.

leanneq your absoultly bang on will contact for advise

My partner is working as much O\TIME as poss in Tesco
Have taken one car off the road because we couldnt tax it anyway,will consider selling.

Once again thanks
Paul

milliemonster

Paul - why has your credit rating taken a bashing because of a mortgage payment break? if a payment break was within the terms and conditions of the mortgage you have then you have not broken that agreement therefore there is NO reason why it should have been noted on your credit file and therefore affecting your credit score.

We had a 12 month payment break on our mortgage a few years ago and it did not affect our credit ratings at all. Have you checked your credit reports to see what's on there?

If you really want to keep the house then you could consider an IVA or DMP, the only problem (well not the only one lol!) with an IVA is the payments are set at the beginning and its very difficult to change them irrespective of what happens to your circumstances, once set, it lasts for 5 years and a further year IF you cannot remmortgage to release equity to pay off what's still owed. In your position, this could mean your mortgage payments going up even more in the future.

With a DMP, there is no guarantee that your creditors would freeze interest so the debt could increase instead of decrease.

I know it is a lot to think about but have you considered selling up and buying something cheaper or renting for a while, paying off your debts and saving up and starting again? Your mortgage costs are incredibly high based on your income (even if your partner gets increased hours) and I think are unsustainable long term unless one of you gets a much higher paying job.