Help & Guidance Please!

Orlando_Virgin

All,


I hope you can give me some sound advice on this situation.

I currently bank with Santander and have just switched to Alliance and Leicester as part of their £100 cashback offer. I should have checked this myself and am mad at myself for not doing so, but I have an overdraft with my current bank of £1000, which I am always on the limit of at the end of the month and it didn't mention any of this online when I applied to switch, it just asked if I will be requiring one to which I said yes? I assume I will have to pay this back before I switch banks, or will Alliance & Leicester provide the overdraft facility?

Secondly and this is the most important, I am a homeowner currently paying the full amount on a joint mortgage. My girlfriend and I split up in December and she moved back home, as I am the only one who can afford to keep the house on my own I now live in the house and front all the bills. We put a £11,500 deposit down on the house of which she provided £3,500, of which she now wants back, which I understand. It was an amicable break up (or joint mess up if you like) and I appreciate she now has nothing of her investment, so I want to pay her back but I am also in a difficult situation as I have bills to pay etc. and am paying for the house on my own, with her still on the mortgage.

I now have debts of the following:-

£3500 - ex
£1000 - Overdraft
£1400 - Credit Card
£600 - TV (bought when we were still together)

I would love to pay all these back, but obviously with monthly outgoings and bills of just over 1k (I take home around £1700) what is the best way to do this? Should I seek a consolidation loan and then aim to pay that back? I really don't like having this debt hanging over my head and would love to get it out of the way, or at least move towards a solution as soon as I can. Any advice would be appreciated.

Little_Miss_Uni-Debt

Hi,

Firstly I'd have a look at maybe reasons why you're using your overdraft each month.

To do this fill our your SOA (Statement of Affairs) http://www.makesenseofcards.com/soacalc.html

When the details are inserted click the MSE button and copy and paste it back up here if you would like ideas of how to reduce spending.

We can then find a way to get you back into credit each month with a solid budget to work from which helps so you no longer need to spend on the credit card any more when unexpected things crop up.

Then we can work out what a reasonable amount would be to pay back to your ex each month and to your credit card.

I certainly wouldn't consolidate. The debt would still be over your head but you would be paying a LOT of money just for it to all be in one place.

Plus once you have a loan you are stuck to paying the full amount each month. Least with paying an overdraft and a card back you can choose how much you can afford each month which helps if you have things crop up now and again.

Hope this helps!

Orlando_Virgin

God its quite scary and shameful when you type this in!!!

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1685
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 200
Total monthly income.................... 1885
Monthly Expense Details
Mortgage................................ 626
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 40
Gas..................................... 35
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 11
Mobile phone............................ 35
TV Licence.............................. 12
Satellite/Cable TV...................... 25
Internet Services....................... 10
Groceries etc. ......................... 160
Clothing................................ 20
Petrol/diesel........................... 120
Road tax................................ 12
Car Insurance........................... 55
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..................... 0
Contents insurance...................... 0
Life assurance ......................... 8
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 8
Entertainment........................... 250
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1572

Assets
Cash.................................... 0
House value (Gross)..................... 115000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 116500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(626)......5.35
Total secured & HP debts...... 0.........-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Mastercard.....................1400......50........18.9
Total unsecured debts..........1400......50........-

Monthly Budget Summary
Total monthly income.................... 1,885
Expenses (including HP & secured debts). 1,572
Available for debt repayments........... 313
Monthly UNsecured debt repayments....... 50
Amount left after debt repayments....... 263
Personal Balance Sheet Summary
Total assets (things you own)........... 116,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -1,400
Net Assets.............................. 115,100
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

MrsTinks

Well firstly you can drop the £250 entertainment... sorry. Groceries are high - you can easily drop that for one person - you list 2 people in the house? Who else is living there? Do you have a lodger? Is that the £200 under other income? If you don't have a lodger have you applied for single council tax allowance?
Could you get a lodger?

Your ex will have to understand that you can't magic £3500 out of thin air having taken on all her bills and contributions by yourself after she moved out. Can you set up a repayment to her? Something like £200 (easy if you take it out of your entertainment budget) a month till it's paid off sounds fair to me...

Orlando_Virgin

MrsTine wrote: »

Well firstly you can drop the £250 entertainment... sorry. Groceries are high - you can easily drop that for one person - you list 2 people in the house? Who else is living there? Do you have a lodger? Is that the £200 under other income? If you don't have a lodger have you applied for single council tax allowance?
Could you get a lodger?

Your ex will have to understand that you can't magic £3500 out of thin air having taken on all her bills and contributions by yourself after she moved out. Can you set up a repayment to her? Something like £200 (easy if you take it out of your entertainment budget) a month till it's paid off sounds fair to me...

I deserve hammering for that "entertainment" budget, that's what I was on about with the shame...:eek:

Yeah the lodger is my friend, I only charge him £200 as frankly thats all he can afford and to be fair he's been great support and company whilst living there, and he's never in, so its like £200 I would have been without.

Really? You think £40 a week on groceries etc. is high?

Tixy

Hi

I would suggest that rather than consider a consolidation loan you work on cutting out non essentials from your budget to free up some more money.
What action have you taken with regards to removing her from the mortgage? Will she be prepared to accept installments for the £3500 (perhaps over 10months)? If she does not and insists on it being paid upfront you could arguably have to sell the house in which case she would be waiting ages (and of course you may not make back all of the deposit you both paid)

Orlando_Virgin wrote: »

God its quite scary and shameful when you type this in!!!

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2 who is this? is it your ex or do you have a lodger? do they contribute?
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1685
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 200 what is this?
Total monthly income.................... 1885
Monthly Expense Details
Mortgage................................ 626
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 110 if you are now living alone have you claimed the 25% discount?
Electricity............................. 40 have you checked you are with the cheapest supplier & best tariff for this & gas? can you try reducing your usage?
Gas..................................... 35
Oil..................................... 0
Water rates............................. 25 is this metered on unmeasured? have you looked to see if you would save by having a meter?
Telephone (land line)................... 11
Mobile phone............................ 35
TV Licence.............................. 12
Satellite/Cable TV...................... 25 can you stop this? or ask for a deal/cut to minimum?
Internet Services....................... 10
Groceries etc. ......................... 160 if this is for 2 people thats okay, if for 1 then it can be reduced by half.
Clothing................................ 20
Petrol/diesel........................... 120 is this all essential mileage?
Road tax................................ 12
Car Insurance........................... 55 have you shopped around for the best deal?
Car maintenance (including MOT)......... 0 need to budget 1/12 of the annual cost here (servicing, MOT, tyres etc)
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..................... 0
Contents insurance...................... 0 you should have this B&C
Life assurance ......................... 8
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 8
Entertainment........................... 250 cut right down until ex is paid off (£50 max)
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1572

Assets
Cash.................................... 0
House value (Gross)..................... 115000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 116500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(626)......5.35 how much do you owe?
Total secured & HP debts...... 0.........-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Mastercard.....................1400......50........18.9 is this the minimum payment
List you overdraft and apr here as well.
Total unsecured debts..........1400......50........-

Monthly Budget Summary
Total monthly income.................... 1,885
Expenses (including HP & secured debts). 1,572
Available for debt repayments........... 313
Monthly UNsecured debt repayments....... 50
Amount left after debt repayments....... 263 do you have this? if you do and can add another £200 from cutbacks then you can pay off ex in 8months or so.
Personal Balance Sheet Summary
Total assets (things you own)........... 116,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -1,400
Net Assets.............................. 115,100
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

DVardysShadow

Would you post the amount of your mortgage and the price of your house when you bought? And when did you buy? If the value of your house has dropped, that comes out of the deposits you both put in - I don't think your ex should be entirely isolated from risk and loss - similarly, if the value has risen, she should see some of the rise.

Otherwise, I agree with MrsTine, especially on the entertainment budget.

MrsTinks

For 1 person? Uhmmm YES Sorry
I spend that one 2 people and a 1 year old (and that includes nappies!)
And I can assure you we don't eat badly in the least
£200 for a lodger is pretty lean round here - nice mate or not but I don't know where you live so... It may be not far off the mark... (here you're looking at £500+...)

At the end of the day if your ex will accept a repayment plan then you can still reduce your OD and make all the payments... IF you drop your entertainment down...

Orlando_Virgin

Hi

Thanks for your helpful posts, and wrist slaps where needed, really is an eye opener that bloody budget sheet!

My mortgage (which she is still on) is £103,500 over 25 years repayment & interest. I'm currently on 5 years fixed rate on 5.35% which equates to the £626 repayment a month.

To everyone who has asked yes I have a mate living with me at 200 quid a month, I think I explained above why the amount is a little low, so I have not applied for 25% discount on the council tax.

Orlando_Virgin

MrsTine wrote: »

For 1 person? Uhmmm YES Sorry
I spend that one 2 people and a 1 year old (and that includes nappies!)
And I can assure you we don't eat badly in the least
£200 for a lodger is pretty lean round here - nice mate or not but I don't know where you live so... It may be not far off the mark... (here you're looking at £500+...)

At the end of the day if your ex will accept a repayment plan then you can still reduce your OD and make all the payments... IF you drop your entertainment down...

I would be playing at this if I didn't accept I have to smash my entertainment down, which I will do, and my food budget I guess...I must sound like a right chubster! I'm only 12 stone, I just love food by the look of it haha! I have contacted her and said there is just no other way of doing it and she accepts (finally). It's a good start, I said £200 per month and whatever I can salvage in the way of overtime, she can have that too.

I really do think thats reasonable and if I can manage the extra £150 from OT, by all means she can take that and I can close in on paying her in 10 months rather than bloody 18!

Orlando_Virgin

Thought I was on to a winner but got this e-mail back this morning:-

Hi
I have thought about your offer and I’m afraid to tell you it’s not good enough for the following reasons:
-Would the £200 include the interest I would get on £3500 in my bank for 18 months?
-How can I be sure in 10 months time that you won’t just stop paying me and refuse to give me the rest?
-What if 18 months time the house is worth 10K more than what we bought it for? I think its fair to say I made an investment in it too and I’m not missing out.
-I gave it you in a lump sum so I want it back in a lump sum.

I’m doing my exams at the moment so I don’t want to get into the details of this all but I will be thinking about what to do and I’ll let you know ASAP

And back to the drawing board I go...