40k in debt and counting...

rozzy62

My SOA:

Monthly Incomings:

My salary (self employed)- £5,000
Partners salary - £200

Total - £5200

Monthly Outgoings:

Mortgage - £900
Council Tax - £160
Gas - £30
Electric - £30
NTL (phone/tv/bband) - £100
Food - £300
Petrol - £50

Other DDs:
Car Finance - £320
Sainsbury's Bank - £220
Life Insurances/endowments - £400
3 valleys water £70.00
vodafone limited £50.00
world vision £15.00

Cards
Egg o/standing - £2000
Mastercard o/s - £10,000
JohnLewis o/s - £5000

Overdraft - £10,000

Inland Revenue o/s - £18,000

any advice would be gratefully rcvd.
to me it looks like i have to sell my house and downgrade.
It is on the market.
I am hoping to get £300k for it and then buy a smaller house in a less salubrious location for, say, £250k.

Gemmzie

Hi rozzy, what are the APRs on the cards?

Gemmzie

My first attempt at trying to help so I'll do my best

rozzy62 wrote:

My SOA:

Monthly Incomings:

My salary (self employed)- £5,000
Partners salary - £200

Total - £5200

Monthly Outgoings:

Mortgage - £900
Council Tax - £160
Gas - £30
Electric - £30
NTL (phone/tv/bband) - £100 Seems alot for a combined package
Food - £300 How many is this for?
Petrol - £50

Other DDs:
Car Finance - £320
Sainsbury's Bank - £220
Life Insurances/endowments - £400
3 valleys water £70.00
vodafone limited £50.00 Switch to pay-as-you-go and use for emergencies only
world vision £15.00 I think alot of people here will say scrap until you're out of debt

Cards
Egg o/standing - £2000
Mastercard o/s - £10,000
JohnLewis o/s - £5000

Overdraft - £10,000

Inland Revenue o/s - £18,000

any advice would be gratefully rcvd.
to me it looks like i have to sell my house and downgrade.
It is on the market.
I am hoping to get £300k for it and then buy a smaller house in a less salubrious location for, say, £250k.

rozzy62

one of my main questions i would have for, say, CAB is:
i am paying £900 mortgage part repayment/ part endowment thru Halifax, so why am i also paying about £400 for endowments as well, thru AXa Sun Life, Norwich Union etc?

APRs? i guess the regular APRs for those cards. I will have to check my statements.
NTL: yes, BBand and phone and TV for £100. InLaws live in Wales and other end fo England so phone calls can be expensive catching up. TV: most packages.
food: 5 of us. So may be an understatement.

hornetgirl

That water is very expensive if it's per month? (You are paying to the same water company as me - we currently pay £15 per month for metered water, 2 people, 3 bed semi.)

Willsnarf1983

I only had a quick look but it seems to me that u don't know where all ur money goes to, u earn 5 grand a month!!!!!! and ur expenses are what 2-3 grand a month...

work out where u money goes! and u cud easily pay ur debts of in 1-2 years and keep your house which at a guess is prob ur pride and joy!

Will

CLAPTON

how much is are the endowment worth? can these be cashed in to repay debt?

what is the situation about the tax owed?..is the taxman insisting on early payment or can you pay in installments?

selling and rebuying will cost many £000 of pounds ...have you worked out the costs of doing this?

your SoA says income £5,200 and spending without debt repayments of £2105...leaving 3,100 for debt repaymant ....is that actually correct?

with a surplus that size you could repay your debt without selling and buying.

tyllwyd

If you are self-employed, is your income of £5000 before tax, or after? Because if it is before tax, you are paying 40% tax on a huge chunk of that money, which is going to bring your actual monthly income down quite a bit.

rozzy62

yes, the £5k is gross. so that should be a lot less income available, say £4k.
the taxman isnt insisting but my accountant is, to pay off in installments. The trouble is that i have M'Card payments of £500 per month to pay, overdraft to keep down etc. Kids cost. Food costs.
I really dont know where the money goes each month!
"how much is/ are the endowment/s worth? can these be cashed in to repay debt?"
good question. How would i find this out?

"selling and rebuying will cost many £000 of pounds ...have you worked out the costs of doing this?"
yes, the move will cost us a few thousand pounds but we will recoup £50k+ and can pay off the debts in one fell swoop and start again. This time with budgets and putting some money aside each month for tax and paying off credit cards every month etc. Yes, we will have a smaller house and the kids will have to share a bedroom but the stress of being in debt will be gone. And we can maintain our lifestyle e.g. kids music lessons, food, drink etc.
I cant think of a quicker and easier way round this.
Water bill? that's what the DD says (or it could be per quarter?).

lynzpower

First off :wave: BIG WELCOME FROM ME

Sometimes the quick and easy way isnt always the best way. You say you want to maintain your lifestyle, but with all due respect you have obviously been living well beyond your means if there 3k a month not accounted for.

Re your phone calls, Id be expecting your calls to wales/ inthe UK to come under an inclusive call package. Primus 2 is a free package, its all evening & wekend calls for free. costs- £0.

Do you need all these channels? Id dump that?

You need to start a spending diary, then you can see where this extra 2-3k a month is going. If there is 2k literally unspent, within 9 months the inland revenue will be paid off?

Until you do this, any efforts of major changes such as house moving etc, will be pointless as you will more as likely spend the same money wherever you live, and getting your head round what your budget is and how to manage it , is imperitive.

Also How much are the music lessons?

Have you cut your credit cards up?

loobyloo1980

kids music lessons aren't on your budget above? so immediately it appears that you haven't budgeted for everything above, and that is where the money goes. you need to budget in birthdays, christmas, car costs, haircuts, hobbies, clothes, everything xxx