debt help please

samjo15

Hi

To be frank, my husband and I got in to £20,000 worth of debt when he was doing his PGCE 5 years ago. We would like to move house to give our teenagers their own bedroom. My husband has been a maths teacher for 4 years and earns £30000 pa, I am a accounts assistant and earn £16,000 pa. Our house is worth £160,000 (we think) and our mortgage is £142,000.
To get a 4 bed we would be paying minimum £175,000. Do we stand a chance of getting a mortgage for this amount?
Also, how can we get rid of our debt since we cant borrow on the house as there is not enough equity in it. Half of the debt is credit cards where the balance never reduces, the other half is a personal loan we took out to stop us having to use credit cards - it has 8 more years of payments left on it.

Is there any hope for us??

Many thanks

Apricot

Could you post an Soa? It will help us to see where cut backs can be made:
http://makesenseofcards.com/soacalc.html

samjo15

i just clicked on your link, im not really sure what im supposed to do?? youll have to help - sorry!

Tixy

Hi and welcome

The idea is to work out and complete a detailed monthly budget. Then we can look at it to find what money saving tips will help you save money, which will mean you can pay more off your cards and start to clear your debt better.

It does take a bit of time to do the statement of affairs (SoA) but it might show you where you are overspending if you see it in black and white and it will help us understand your full position.

Apricot

No problem, the link is a statment of Affairs and basically asks you to fill in the monthly amount that you spend on things so for example gas £40, electricity £40 etc. If you pay things only once a year (eg car tax) work out the yearly cost and put the figure divided by 12 into the space. It also asks for you to fill your debts, the monthly minimum payments and APRs. Once you have completed click calculate for MSE and copy it into a message here.

By doing this people on here will be able to see where you are overspending and what areas can be cut back and hopefully provide solutions. It is an eye opening thing to do as it really shows you where all of your money is going each month.

samjo15

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1060
Partners monthly income after tax....... 1700
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2760
Monthly Expense Details
Mortgage................................ 600
Secured/HP loan repayments.............. 90
Rent.................................... 0
Management charge (leasehold property).. 12
Council tax............................. 124
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 20
Mobile phone............................ 60
TV Licence.............................. 10
Satellite/Cable TV...................... 38
Internet Services....................... 0
Groceries etc. ......................... 500
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 10
Car Insurance........................... 25
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 120
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 18
Contents insurance...................... 0
Life assurance ......................... 12
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 50
Emergency fund.......................... 0
Total monthly expenses.................. 1889

Assets
Cash.................................... 0
House value (Gross)..................... 16000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 19000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 142000...(600)......0
Hire Purchase (HP) debt ...... 3500.....(90).......0
Total secured & HP debts...... 145500....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
amex...........................4000......90........0
lloyds classic.................6000......125.......0
abbey personal loan............10000.....149.......0
barcklycard....................1000......20........0
mint...........................1250......25........0
Total unsecured debts..........22250.....409.......-

Monthly Budget Summary
Total monthly income.................... 2,760
Expenses (including HP & secured debts). 1,889
Available for debt repayments........... 871
Monthly UNsecured debt repayments....... 409
Amount left after debt repayments....... 462
Personal Balance Sheet Summary
Total assets (things you own)........... 19,000
Total HP & Secured debt................. -145,500
Total Unsecured debt.................... -22,250
Net Assets.............................. -148,750

As an accounts assistant IM NOT QUITE LIKING THE LOOK OF THIS!!

samjo15

ok so, further looking at my balance sheet, I have typed the value of my house in at £16000 instead of £160000! Phew, looking a bit better

Tixy

The good bit is the surplus you are showing each month. The key is finding out where this is going. Are you paying any of your debts more than the minimums?

Where else might you be spending? clothes? haircuts? toys? kids activites? magazines/lottery tickets? lunch at work?

If you are not sure then keep a spending diary for a month and write down everything you spend (even 50p on a can of pop etc) to see where else your money is.

If you do have the £462 (or whatever you do have free) then target the debt with the highest APR.

If you have overdrafts don't forget to include those aswell.

Apricot

samjo15 wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1060
Partners monthly income after tax....... 1700
Benefits................................ 0 Any working tax credits or child benefits you are entitled to?
Other income............................ 0
Total monthly income.................... 2760
Monthly Expense Details
Mortgage................................ 600
Secured/HP loan repayments.............. 90
Rent.................................... 0
Management charge (leasehold property).. 12
Council tax............................. 124 is this over 10 or 12 months?
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 20
Mobile phone............................ 60 can this be reduced by at least half?
TV Licence.............................. 10
Satellite/Cable TV...................... 38 reduce to minimum package or cancel completely
Internet Services....................... 0
Groceries etc. ......................... 500 Can be reduced by at least £100 per month - look on the Oldstyle board for ideas.
Clothing................................ 0 Should be a figure here with 3 children
Petrol/diesel........................... 100
Road tax................................ 10
Car Insurance........................... 25
Car maintenance (including MOT)......... 0 You need something here
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 120
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 18
Contents insurance...................... 0
Life assurance ......................... 12
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 0 No haircuts?
Entertainment........................... 0 Really?
Holiday................................. 50
Emergency fund.......................... 0
Total monthly expenses.................. 1889

Assets
Cash.................................... 0
House value (Gross)..................... 16000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 19000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 142000...(600)......0
Hire Purchase (HP) debt ...... 3500.....(90).......0
Total secured & HP debts...... 145500....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
amex...........................4000......90........0 need to work out APRs for these
lloyds classic.................6000......125.......0
abbey personal loan............10000.....149.......0
barcklycard....................1000......20........0
mint...........................1250......25........0
Total unsecured debts..........22250.....409.......-

Monthly Budget Summary
Total monthly income.................... 2,760
Expenses (including HP & secured debts). 1,889
Available for debt repayments........... 871
Monthly UNsecured debt repayments....... 409
Amount left after debt repayments....... 462 Do you ever have this?
Personal Balance Sheet Summary
Total assets (things you own)........... 19,000
Total HP & Secured debt................. -145,500
Total Unsecured debt.................... -22,250
Net Assets.............................. -148,750

As an accounts assistant IM NOT QUITE LIKING THE LOOK OF THIS!!

A few ideas there. If you don't find that you have a surplus left at the end of every month I think perhaps you maybe need to do a spending diary to see where all of this surplus money is going.

samjo15

it doesnt look like were moving does it??

dancingfairy

If you could harness some of that 'spare' money you could begin to make inroads into the debts. I would think that a bigger house would leave your finance more stretched in terms of a bigger mortgage, bigger council tax bill, bigger water bill, higher insurances maybe? bigger electric/gas bills?
I'm not saying it's impossible but it would make repaying your debts even harder - perhaps a year or 2 of debt busting would see you in a better position to be able to move?
Have you got anything to sell at all? some people have made serious money by ebaying/car booting stuff.
df