Help with Debt Problems

daisy1981

Hi, Me and my husband are in allot of debt so much so we can not afford food we have 2 children and 1 on way due to my husbands jobs going into receivership my husband has had to now retrain and take a pay cut of 16k a year so we are struggling and Ive been reading on here for weeks now and decided its time enough is enough and need some good advice please

daisy1981

[tt]Statement of Affairs and Personal Balance Sheet
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................ 1300
Partners monthly income after tax....... 1066
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2366
Monthly Expense Details
Mortgage................................ 1078
Secured/HP loan repayments.............. 240
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 128
Electricity............................. 70
Gas..................................... 60
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 12
Mobile phone............................ 20
TV Licence.............................. 12
Satellite/Cable TV...................... 15
Internet Services....................... 25
Groceries etc. ......................... 60
Clothing................................ 0
Petrol/diesel........................... 300
Road tax................................ 0
Car Insurance........................... 35
Car maintenance (including MOT)......... 0
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..................... 26
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2136

Assets
Cash.................................... 0
House value (Gross)..................... 185000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 185000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 172000...(1078).....0
Hire Purchase (HP) debt ...... 5700.....(240)......0
Total secured & HP debts...... 177700....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
egg............................3529.34...95........21.9
barclaycard....................3325.88...78........24.9
barclays loan..................5503.17...199.......27.9
overdraft......................500.......16........0
Total unsecured debts..........12858.39..388.......-

Monthly Budget Summary
Total monthly income.................... 2,366
Expenses (including HP & secured debts). 2,136
Available for debt repayments........... 230
Monthly UNsecured debt repayments....... 388
Amount short for making debt repayments. -158
Personal Balance Sheet Summary
Total assets (things you own)........... 185,000
Total HP & Secured debt................. -177,700
Total Unsecured debt.................... -12,858.39
Net Assets.............................. -5,558.39
[/tt]

Pollycat

Hi Daisy - welcome and well done for posting your SOA.

There's a couple of things that stand out for me that could do with some clarification:
You don't have any figures in the 'income' part for benefits, with 2 children there should be a figure in there (unless the £1300 or £1066 is for that).

Groceries - £60 per month is very low. What is the amount that you actually spend per month on groceries?

Do you really need to run 2 cars?
Could you sell one of them? Or are they really worth £nil as in your SOA?

You should also include costs for road tax and MOT on both cars.

No contents insurance at all?

Regards

daisy1981

Hi Pollycat thankyou for replying 1066 is including my benefits I get food we only have 60 pound a week due to my dad giving that to us and yesterday we only had 50 and we had nothing hardly in our trolley we just buy essentials and things the kids need Im having to eat at my parents most days so always having to go round to them. when my husband was on a good wage we would spend around 80-100 pw on shopping

we have 2 cars but only run the one the other is sitting at my parents which is not costing us anything but we may need to sell shortly to fund my husbands course or he will be out of a job which is due to start in september and is nearly 2 thousand

Sorry my building and contents are 26

Road tax is 80 for 6 months roughly

daisy1981

I did go Citizens yesterday and he kept saying about going bankrupt I really dont want to do this

Pollycat

daisy1981 wrote: »

I did go Citizens yesterday and he kept saying about going bankrupt I really dont want to do this

Oh Daisy, I'm so sorry to hear this.

I'm sure that nobody wants to declare bankrupcy but sometimes there just isn't any other option.

Did both you and your OH go to the CAB?
Did you take your full SOA so that the guy knew exactly what your financial position is?

Maybe a call to one of the FREE debt-counselling agencies would either confirm what CAB says or provide an alternative way forward.

Check out here:
http://forums.moneysavingexpert.com/showthread.html?t=2077631

katsu

Sounds very difficult for you.

Can either of you up your income - doing Avon, babysitting, extra hours at work, a bar job or cleaning, anything that might help for a few months?

This £2k course - is it essential? Can OH get any funding for it from work? Is the second car really worth that much?

If you don't need the second car anyway, why not sell it now?

How long do you have left to pay the Barclays loan and the HP?

What can you sell on ebay etc? Go round the house with a box and pile in books you don't read (then check their value by typing the ISBN no into Amazon), toys the kids have outgrown, any old stuff in a reasonable condition.

daisy1981

I took all the statements etc everything we owe mortgage etc and he suggested bankrupt... I have seen allo on here about DMP not sure if that would be an option would that affect our Mortgage when its up for renewal???

I have been selling allot on ebay and managed to save 130 in paypal and have other things to sell at moment which im hoping to put on a credit card my husband had a rebate and with the money we got etc we have managed to save 760 was thinking of putting this on a credit card to try and get rid of one thinking maybe egg I just really dont know what im doing i cant sleep I want to get a job but being pregnant and having 2 other children I dont hold out much hope for that my husband has been looking for a second job in the evening but he does not get in till gone 7 in the evening and is up at 5 o clock in the morning but has no overtime at work does not work weekends

I was told I could maybe take my car back to the hire purchaser and that would save me 240 a month as I have paid over half on the car that was due to finish march 2012 and my loan with barclays finishes in may 2013

katsu

A DMP will affect the rates you are offered when you come to look for a new mortgage. You will have to declare that you went bankrupt too. Someone with more knowledge may come to comment on this.

You should get rid of the highest interest card, to get debt free quickest.

Can you work at the weekend for a few hours whilst he has the kids?

Get the HP paperwork and someone here can help you work out if you can return the car and what the implications are. If you are not using it and are struggling financially, then it seems a good idea.

On your SOA:

elec and gas seem high. Are you paying arrears? If not, turn everything off overnight etc, reduce usage, turn thermostat down, consider switching to a new provider and if bills are estimated provide some actual meter readings.

Cancel satellite TV.

Reduce internet costs - you can get cheaper than £25.

Go to local college for haircuts and extend the time in between visits by one more week.

These are only small changes but they will help reduce your debt a bit.

Good luck.

DarkConvict

Your only £5.5k in debt, so i would hold off on bankruptcy, you have about ~£10k equity in the house so i would not do an IVA either, and you do not qualify for a DRO.

So this leaves a DMP - http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=29_debt_management_plan

The key thing I see though, it simply your income is not high enough to support your house/mortgage. The mortgage alone is higher than your partners income and we all know mortgages are near interest only at the start so 1/2 your income is swallowed and achieving pretty much nothing. I can't see you making much process until the mortgage cost is brought down, so i would recommend selling up and move into rented accommodation, i lived near london in a nice area of leatherhead, flat was £850 but would have been sufficient for your needs, im sure where you live you can find somewhere much cheaper.

dancingfairy

Hi. It's difficult as you say. Like Dark Convict says - your mortgage is half of your income. What you need to do is work out realistically what your husbands prospects are
a) is this course essential?
b) is there a cheaper way of doing it?
c) are there any grants around he can get? I think there is some help for people made redundant - try the job centre and your local college and see what's out there.
d) will he be earning more money in the near future - in order to be able to support the large mortgage or do you need to consider selling and renting somewhere?

What are conmparable rental prices?

Bankruptcy is an option but is not the only option available to you at this time. With 12k debt I would probably not go bankrupt at the moment - this may also affect yours or your husbands future employment prospects.
With the car being on finance I am not sure if you are able to sell it? There may be an option for handing the car back though and freeing up 240 a month like you suggested.
Have you got in touch with National Debtline or CCCS or one of the other free debt charities for a comparison with what the CAB said?
df