Please help with some debt advice....

blossom36

Hi all, am in an awful mess and would appreciate some guidance. I dont know where to start on the road to getting debt free (it will be along one!). I have not yet defaulted on mortgage or cr card payments but only because I have been paying essential bills on cards for ages and of course it has all caught up with me. This month i am unable to pay anything and dont know where to start.... Have looked at the CCCS website but havent spoken to anyone yet. Have done a SOA below.
If at all possible I dont want to sell the house as Abbey have told me no-one will lend to me now as tax credits etc will stop soon as kids are teenagers, so i would like to hang on to the mortgage I have. Renting in my seaside town is v expensive. I have 21 years mortgage left and 1 year left at a rate i am tied into (4.5%). I am particularly angry with Abbey - when I went to them to release some equity in my house they wouldnt let me and instead gave me 2 Cr Cards which has added to my problems! I have got into this state because I had a lodger who left and maintenance payments halved and have never made up the shortfall. I have booked some foreign students to stay for a bit in the summer to help out. Please understand we dont live a luxurious life - my car is 20 years old! We have had one holiday in 6 years. I feel so guilty that I have got into this state. My 2 teenagers ask for v little but they do not know the extent of my debt.

And so my questions are:
Can I keep my house or will I be forced to sell it? Am I stupid to want to keep it whilst being in debt?
Can I approach the CCCS as yet I have not been chased by my debtors?
Is a DMP appropriate for me or is my debt too much? Is it better to do one yourself or through the CCCS?
What is an IVA?


Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 2
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 807
Partners monthly income after tax....... 0
Benefits................................ 770
Other income............................ 270
Total monthly income.................... 1847
Monthly Expense Details
Mortgage................................ 607
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 85
Electricity............................. 50
Gas..................................... 70
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 12
Mobile phone x 3............................ 45
TV Licence.............................. 11
Satellite/Cable TV...................... 0
Internet Services....................... 8
Groceries etc. ......................... 270
Clothing................................ 30
Petrol/diesel........................... 125
Road tax................................ 12
Car Insurance........................... 12
Car maintenance (including MOT)......... 15
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 30
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 12
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 12
Entertainment........................... 25
Holiday................................. 20
Emergency fund.......................... 25
Overpayment of tax credits.............. 22
Total monthly expenses.................. 1606

Assets
Cash.................................... 0
House value (Gross)..................... 160000
Shares and bonds........................ 0
Car(s).................................. 150
Other assets............................ 0
Total Assets............................ 160150

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98000....(607)......4.5
Total secured & HP debts...... 98000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
AA (RBS) loan..................15000.....196.......7.5
AA (RBS) Cr card...............2447......29........6.5
Capital One Cr Card............2085......58........26.94
Barclays overdraft.............1900......23........0
Abbey Cr Card..................1782......41........0
Abbey Cr Card..................2399......56........0
Post Office Cr Card............2984......70........16
Total unsecured debts..........28597.....473.......-

Monthly Budget Summary
Total monthly income.................... 1,847
Expenses (including HP & secured debts). 1,606
Available for debt repayments........... 241
Monthly UNsecured debt repayments....... 473
Amount short for making debt repayments. -232
Personal Balance Sheet Summary
Total assets (things you own)........... 160,150
Total HP & Secured debt................. -98,000
Total Unsecured debt.................... -28,597
Net Assets.............................. 33,553
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

AfterDark

blossom36 wrote: »

Hi all, am in an awful mess and would appreciate some guidance. I dont know where to start on the road to getting debt free (it will be along one!). I have not yet defaulted on mortgage or cr card payments but only because I have been paying essential bills on cards for ages and of course it has all caught up with me. This month i am unable to pay anything and dont know where to start.... Have looked at the CCCS website but havent spoken to anyone yet. Have done a SOA below.
If at all possible I dont want to sell the house as Abbey have told me no-one will lend to me now as tax credits etc will stop soon as kids are teenagers, so i would like to hang on to the mortgage I have. Renting in my seaside town is v expensive. I have 21 years mortgage left and 1 year left at a rate i am tied into (4.5%). I am particularly angry with Abbey - when I went to them to release some equity in my house they wouldnt let me and instead gave me 2 Cr Cards which has added to my problems! I have got into this state because I had a lodger who left and maintenance payments halved and have never made up the shortfall. I have booked some foreign students to stay for a bit in the summer to help out. Please understand we dont live a luxurious life - my car is 20 years old! We have had one holiday in 6 years. I feel so guilty that I have got into this state. My 2 teenagers ask for v little but they do not know the extent of my debt.

And so my questions are:
Can I keep my house or will I be forced to sell it? Am I stupid to want to keep it whilst being in debt?
Can I approach the CCCS as yet I have not been chased by my debtors?
Is a DMP appropriate for me or is my debt too much? Is it better to do one yourself or through the CCCS?
What is an IVA?


Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 2
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 807
Partners monthly income after tax....... 0
Benefits................................ 770
Other income............................ 270
Total monthly income.................... 1847
Monthly Expense Details
Mortgage................................ 607
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 85
Electricity............................. 50
Gas..................................... 70
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 12
Mobile phone x 3............................ 45
TV Licence.............................. 11
Satellite/Cable TV...................... 0
Internet Services....................... 8
Groceries etc. ......................... 270 This could be cut down to around £200.
Clothing................................ 30 Cut this to around £10 for now
Petrol/diesel........................... 125
Road tax................................ 12
Car Insurance........................... 12
Car maintenance (including MOT)......... 15
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 30 what is this ?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 12
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25 Can this be dropped to £10
Haircuts................................ 12
Entertainment........................... 25 cut to 0 untill your on your feet, theres so many free things to do
Holiday................................. 20 Stop this aswell
Emergency fund.......................... 25 Stop this untill your able to cover your out goings
Overpayment of tax credits.............. 22
Total monthly expenses.................. 1606

Assets
Cash.................................... 0
House value (Gross)..................... 160000
Shares and bonds........................ 0
Car(s).................................. 150
Other assets............................ 0
Total Assets............................ 160150

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98000....(607)......4.5
Total secured & HP debts...... 98000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
AA (RBS) loan..................15000.....196.......7.5
AA (RBS) Cr card...............2447......29........6.5
Capital One Cr Card............2085......58........26.94
Barclays overdraft.............1900......23........0
Abbey Cr Card..................1782......41........0
Abbey Cr Card..................2399......56........0
Post Office Cr Card............2984......70........16
Total unsecured debts..........28597.....473.......-

Monthly Budget Summary
Total monthly income.................... 1,847
Expenses (including HP & secured debts). 1,606
Available for debt repayments........... 241
Monthly UNsecured debt repayments....... 473
Amount short for making debt repayments. -232
Personal Balance Sheet Summary
Total assets (things you own)........... 160,150
Total HP & Secured debt................. -98,000
Total Unsecured debt.................... -28,597
Net Assets.............................. 33,553
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

Can't really see where else you make any savings, Cut back around £160 of your outgoings. Is there anyway you could ask for the term of your loan to changed to spead it out for longer to bring your repayments down ?

blossom36

AfterDark wrote: »

Can't really see where else you make any savings, Cut back around £160 of your outgoings. Is there anyway you could ask for the term of your loan to changed to spead it out for longer to bring your repayments down ?

Thank you so much for the tips - some of the amounts I input came recommended from the CCCS website so perhaps I need to rethink.
I could make these cuts to help me in the long term of course, but in the short term I need to know how to approach my debtors.

dancingfairy

Hi in answer to your questions:
Can I keep my house or will I be forced to sell it? You should be able to keep it Am I stupid to want to keep it whilst being in debt? No - it is very stressful moving house. If downsizing or releasing equity would enable you to pay off your debts and then start again then maybe - but if it won't be any cheaper to rent then why sell?


Can I approach the CCCS as yet I have not been chased by my debtors?
Yes definitely.
Is a DMP appropriate for me or is my debt too much? You have about 200 a month to do dmp so it will take you quite a while to pay off 28,500 pounds. So yes a dmp is definitely possible - as it will take a long while to pay back you may wish to think about bankruptcy as well -it's your choice.

Is it better to do one yourself or through the CCCS? It's up to you - CCCS will help you deal with your creditors and if you get any problems you can always get help from them. On the other hand some people really like to be in charge on their own and are strong enough to not take any nonsense from the creditors - generally I think it is best to at least get advice from somewhere like CCCS and I think they do take a lot of the stress away so would probably go that route unless you feel particularly strongly about doing it yourself.
What is an IVA? I believe it's an Individual Voluntary Arrangement - my understanding is it's a kind of half way house to bankruptcy. It is often sold by companies as 'the answer to everything' when in reality it is only suitable for a small section of the population. If it is suitable then CCCS should recommend it to you and be able to talk it through with you (or one of the other debt charities). An Iva is a legally binding agreement whereas a dmp is an informal one. If an IVA fails for any reason then you could be facing bankruptcy so you need to consider this carefully.
Hope that helps.
df

stephane_2

The last thing you want to do if possible would be to sell your house. Why don't you call CCCS and explain the situation, they will lesson and give you plenty of help, they will tell you what are your option. At least you are realising that you cannot go on and that is the first step to recovery.

katsu

Can your kids get jobs - gardening, babysitting, paper round, shop job etc? Around their education to cover own mobile phone and entertainment costs.

Can you get more work? Check all your insurances are best value and use a cashback service like quidco to buy them.

dancingfairy

Nothing on your SOA looks too drastic to me - apart from the gas and electric really. Yes you probably could make savings but not enough to get you back in the black without extra income really - hence why a dmp would be a good bet. With the SOA it is probably wise to overestimate things slightly so if you did have any problems it would not cause any problems on your dmp. Anything you could save beyond the amounts stated could be saved for emergencies and to make full and final offers when the time comes. Also you need to make sure that prices rises are sort of planned in a bit. However if you did ever need to redo your budget then you can change the amount you pay into your DMP but it is probably best to leave a little flexibility as when you do a dmp you agreee not to get any more credit.
df

katsu

blossom36 wrote: »

some of the amounts I input came recommended from the CCCS website so perhaps I need to rethink.

Can you please help us understand what you are really spending on things, as otherwise we can't advise you properly.

blossom36

katsu wrote: »

Can your kids get jobs - gardening, babysitting, paper round, shop job etc? Around their education to cover own mobile phone and entertainment costs.

Can you get more work? Check all your insurances are best value and use a cashback service like quidco to buy them.

Thank you for your help.
Yes, my girls have been looking for work for a few weeks now. Hopefully in our town the easter and summer hols should produce some work.

I could get a second job but am in catch 22 at the moment with tax credits. If I earn more, they go down, so not sure I would benefit. Of course I will work more when they cease.

blossom36

dancingfairy wrote: »

Nothing on your SOA looks too drastic to me - apart from the gas and electric really. Yes you probably could make savings but not enough to get you back in the black without extra income really - hence why a dmp would be a good bet. With the SOA it is probably wise to overestimate things slightly so if you did have any problems it would not cause any problems on your dmp. Anything you could save beyond the amounts stated could be saved for emergencies and to make full and final offers when the time comes. Also you need to make sure that prices rises are sort of planned in a bit. However if you did ever need to redo your budget then you can change the amount you pay into your DMP but it is probably best to leave a little flexibility as when you do a dmp you agreee not to get any more credit.
df

Thank you so much for your help.
As i am in debit with my gas/elec cos of the winter I didnt think I could swap suppliers?

BringtheStoneshome

I would take the advice being offered to you about approaching debtors. However, if your house is worth £160,000 and your mortgage is worth £98,000 then you do have this as a fall back plan.

The reason for selling your house is that you would be able to, in one fell swoop, rid yourself of the unsecured debtors. Your income does cover your outgoings and, the help that will be given by people on here will improve that further.

Look at the options of not selling your house but, if all else fails, then sell it. I have moved house several times (through choice not necessity) and if you view it as exciting not stressful then it is OK. When moving house you need to keep harrying the so-called experts (estate agents, solicitors etc) so that you are in control (after all you are the customer). That makes it much less stressful. It could be that the loss of the debts is the release you need to become more worry-free. We all try to hang on to material possessions too much believing they bring us happiness. Ultimately it is your kids and their security that will bring you the most happiness not a house.

Good luck with it all

BTSH