Please help, now i've owned up to the Debt i have!

Lisa1978

Hi all,

I have just joined this as i have realised the mess that i have gotten myself into. I have spent all day crying trying to sort out my debt and have someone from PayPlan (are they free and ok?) calling me tomorrow night. The reason it has all came to a head is because my tennant has unexpectedly told me she is moving out and i CANT afford to pay the mortgage on the house! I'm hoping to get someone in within the next 2 wks but here is my scenario and i REALLY APPRECIATE any advice you have.

My fiance and i live together and pay £500 each towards our own home, that covers the morgage (£285), food (120), electricy (20), gas (20), PC insurance (5), Broadband (9), these figures are each!

The next problem is that we are saving to get married next year. always dreamed of getting married in Cyprus and the total cost would be £8k. We have told all our family and friends about it, they can't wait yet we know today that we can't save that much money by next yr!!! We took on a part time evening job a month ago and are earning £320/month from it - average, this money we were saving for the wedding but still wouldn't be enough plus finance thinks we'd be better putting wedding off for a year and paying off MY debts, thankfully he doesnt' have any!

Income : £1500 salarly plus rental income of £420 (although will be stopping!), cash in hand approx £320

Outgoings : £500 to joint account for our home/bills
£430 mortgage on let out house
£45 rates on let out house
£45 mobile phone
£200 to myself for
£145 loan, repayable on Oct 2010 (was over 3yrs)
£157 loan, repayable in 2012 (was over 5yrs)
Virgin credit card, £5200
Ulster Bank credit card, £2900
Gym membership, £20
Life insurance, £18

Our home has no equity and my house that i let out is mortgaged at £96k, valued at £100k so no point in selling?

I stuidply bought the virgin CC to clear the Ulster Bank card, but ended up spending on it instead of transferring ONLY. I didnt' realise at the time that i was paying 3% on purchases as well.

I really appreciate advice, sorry it's a long one.
Do you think we could still afford the wedding next yr?? I'd love to hear yes and how!
Thanks xx

RAS

Hi

I would suggest that you need to make a full SOA, so we can see the situation. Given your relationship and the two houses, this needs to be joint.

See here http://www.makesenseofcards.com/soacalc.html

Monthly payment, maximum values and APRs on the cards. APrs on the loans.

One thing - why are you paying rates on the rental house????? Surely this is the tenant responsibility?

niccatw

Hi Lisa

SOrry, I know this isn't what you want to hear, but I think your fiance is right. You'd be better posponing the wedding and giving yourself some breathing space to pay off the debts. You want to be able to enjoy arranging your wedding and have a fantastic day - not always have in the back of your mind that you can't afford it. Your fiance sounds very supportive though so that's fab!

I think there's scope for cutting back - if food is £120 each for the two of you, then this can be easily cut back. Also, do you need PC insuarance?

It might be easier for folk to advise if you could put everything down in the MSE SOA format... I'll see if I can dig it out for you...

Try not too worry too much - you've made a start and with a bit of hard work and determination, you'll get it cleared.

And we're all here to help on those days we need a bit of encouragement and motivation (or a kick up the a**)

RAS

Lisa1978 wrote: »

£500 each towards our own home, that covers the morgage (£285), food (120), electricy (20), gas (20), PC insurance (5), Broadband (9), these figures are each!


Income : £1500 salarly plus rental income of £420 (although will be stopping!), cash in hand approx £320

Outgoings :
£500 to joint account for our home/bills
(mortgage (£285),
food (120),
electricy (20)
gas (20),
PC insurance (5),
Broadband (9), )

£430 mortgage on let out house
£45 rates on let out house - why are you paying this?
£45 mobile phone - massively high - reduce your package now.
£200 to myself for - this has to go - you CANNOT afford it
Gym membership, £20 - can you reduce or get rid?
Life insurance, £18 - high - about right for you both on a reducing term insurance to cover the mortgage.

Debts
£145 loan, repayable on Oct 2010 (was over 3yrs) - value?
£157 loan, repayable in 2012 (was over 5yrs) - value?
Virgin credit card, £5200 - monthly payment
Ulster Bank credit card, £2900
Landlord's insurance?
Gas certificate?
Deposit insurance?

Our home has no equity and my house that i let out is mortgaged at £96k, valued at £100k so no point in selling?

Since your rental income is not even covering your costs on the rental house and it looks like you have missed some of the associated expenses, it is time to get rid.

niccatw

Looks like RAS and I were responding at the same time - that's the link I was talking about.

Lisa1978

Firstly, thank you so much for even reading my comments and replying, its means a lot as i don't want to have to pay a financial advisor for this information!
I shall have a look at this SOA link now and get back to yous.
Yes, i agree, i shouldn't be paying the rates on the house that i let out but thankfully my tenant (who i was desperate for at the time, didn't take a deposit either) is moving out in 2 wks and i've just had someone ring me interested in property and calling tonight , so some good news.
I have just got in broadband with free calls evenings/wkends so i think i will look into reducing my mobile phone now,thanks.
Sorry, forgot to mention the landlords insurance as i paid it in one go on the credit card (whoops, too easy to do when don't have the cash!)
I already have a gas certificate as my fiances father deals with this.

Yes, i am very thankful for my finace (who luckily doesn't have ANY debts) and thankful that he is working evenings with me yet taking nothing out of it just to help me pay my debts (although he did live with me rent free for about 6 months at start of our r/ship) so its his turn to help me out, lol.

We pay the PC insurance as only bought the PC at xmas but they said we can cancel at any time and we've only made one payment so far.

Thanks again - will do up SOA now, xx

Lisa1978

SOA

Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1500
Partners monthly income after tax....... 800
Benefits................................ 0
Other income............................ 715
Total monthly income.................... 3015
Monthly Expense Details
Mortgage................................ 1000
Secured/HP loan repayments.............. 302
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 12
Mobile phone............................ 90
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 7
Groceries etc. ......................... 200
Clothing................................ 50
Petrol/diesel........................... 50
Road tax................................ 150
Car Insurance........................... 450
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 18
Contents insurance...................... 18
Life assurance ......................... 20
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 15
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2594

Assets
Cash.................................... 0
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 203000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 209000...(1000).....4.42
Secured Debt.................. 6000.....(302)......7.5
Total secured & HP debts...... 215000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Virgin Credit card.............5200......126.......16.6
Ulster bank credit ca..........2900......52........17.9
Total unsecured debts..........8100......178.......-

Monthly Budget Summary
Total monthly income.................... 3,015
Expenses (including HP & secured debts). 2,594
Available for debt repayments........... 421
Monthly UNsecured debt repayments....... 178
Amount left after debt repayments....... 243
Personal Balance Sheet Summary
Total assets (things you own)........... 203,000
Total HP & Secured debt................. -215,000
Total Unsecured debt.................... -8,100
Net Assets.............................. -20,100

I know the amount of loans i have is £5k (£302/month), but not sure if secured or unsecured nor the rate, this is a guesstimate that a secured loan but really not sure, was just a personal loan i took out to buy a car. I shall look at the information when home tonight and advise tomrorow.

kingfisherblue

Lisa1978 wrote: »

SOA

Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1500
Partners monthly income after tax....... 800
Benefits................................ 0
Other income............................ 715
Total monthly income.................... 3015
Monthly Expense Details
Mortgage................................ 1000
Secured/HP loan repayments.............. 302
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 12
Mobile phone............................ 90 Wow! This is high! You definitely need to reduce this.
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 7
Groceries etc. ......................... 200 This can be reduced. Look at the Old Style board and plan your meals.
Clothing................................ 50 You need to use what clothes you have for now and reduce this to almost nothing
Petrol/diesel........................... 50
Road tax................................ 150 I think you have put the yearly figure here
Car Insurance........................... 450 Yearly figure again?
Car maintenance (including MOT)......... 0 Don't you ever need an MOT or new tyres?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 18
Contents insurance...................... 18
Life assurance ......................... 20
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 15 Per month? I pay a fiver for a mobile hairdresser every two months
Entertainment........................... 100 This is high - I wish I could spend this much each month! I don't think you can afford this at the moment.
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2594

Assets
Cash.................................... 0
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 203000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 209000...(1000).....4.42
Secured Debt.................. 6000.....(302)......7.5
Total secured & HP debts...... 215000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Virgin Credit card.............5200......126.......16.6
Ulster bank credit ca..........2900......52........17.9
Total unsecured debts..........8100......178.......-

Monthly Budget Summary
Total monthly income.................... 3,015
Expenses (including HP & secured debts). 2,594
Available for debt repayments........... 421
Monthly UNsecured debt repayments....... 178
Amount left after debt repayments....... 243
Personal Balance Sheet Summary
Total assets (things you own)........... 203,000
Total HP & Secured debt................. -215,000
Total Unsecured debt.................... -8,100
Net Assets.............................. -20,100

I know the amount of loans i have is £5k (£302/month), but not sure if secured or unsecured nor the rate, this is a guesstimate that a secured loan but really not sure, was just a personal loan i took out to buy a car. I shall look at the information when home tonight and advise tomrorow.

just a few comments - the annual cost of car tax and insurance listed as monthly costs should make a difference to your figures

Lisa1978

thanks for your reply Kingfisher. Yes, our mobiles are approx £45/month each, so defo going to look into this!
will defo look at the groceries and also the amount of takeaways included in this!
TBH i cleared out my wardrobes at the wkend, i have so many clothes, tags still on them so i won't be buying clothing for a while
sorry, road tax and insurance i have put in yearly figures. Also, tyres and things, expenses i don't expect, i am silly and put always on credit card
My sister does my hair, it's £15 colour and cut every 6-8 wks, which is very cheap!
I know i am going out too much at the minute, i've 7 nights out planned in next month due to my birthday, 2 friends, sister in laws, my engagement party (hopefully make some money at this, lol) so unfortunately £100 won't even cover this month. From nxt, i'll be sitting in!
Thanks for helping out xx

MrsTinks

Personally? I'd say do as your fiance says It's so much better starting out married life together debt free...

The second property - will the new tenants rent cover your costs of letting the property? If not then consider selling it. Is the mortgage for it interest only or repayment?

MrsTinks

Lisa1978 wrote: »

thanks for your reply Kingfisher. Yes, our mobiles are approx £45/month each, so defo going to look into this!
will defo look at the groceries and also the amount of takeaways included in this!
TBH i cleared out my wardrobes at the wkend, i have so many clothes, tags still on them so i won't be buying clothing for a while
sorry, road tax and insurance i have put in yearly figures. Also, tyres and things, expenses i don't expect, i am silly and put always on credit card
My sister does my hair, it's £15 colour and cut every 6-8 wks, which is very cheap!
I know i am going out too much at the minute, i've 7 nights out planned in next month due to my birthday, 2 friends, sister in laws, my engagement party (hopefully make some money at this, lol) so unfortunately £100 won't even cover this month. From nxt, i'll be sitting in!
Thanks for helping out xx

Huh? Make money at an engagement party? Seriously???
Do something cheap for the engagement party, go to Pizza express and use their bogof vouchers and tell your friends you can only afford one drink when you go out for their party - would you prefer to party to getting married?

Not being funny but your partner is doing extra work along side you to help you pay your debts and you are spending £100 a month partying, £50 on clothes etc?
I'm sorry but to me that is wrong... maybe that's just me though...