Delurking... and a wake up call.

PeppermintPatti_2

Hi,

I have been reading the forums for a while now and thought I should come out of the woodwork as I've had a big scare today!

To cut a long story short, I moved in with my boyfriend last year with the intention of helping him to pay the mortgage he had with his ex. The plan was that I would take over her share of the mortgage and we began the transfer.

Moving house and the transfer costs meant we relied heavily on credit cards through most of 2009, to the point where the payments were unmanageable and we missed a few.) We were under the impression that once the transfer was done we could borrow a bit more (there is a fair bit of equity in the house) to clear all the cards. The transfer completed a few weeks ago.

Fast forward to this week, we have been to see our mortgage provider and they have said we cannot borrow anything due to the missed payments. They have no problem with affordability, but they have said we need approximately 6 months worth of on time payments to improve our credit score.

In a panic, I phoned Ocean Finance as we are behind with a fair number of payments. I thought a secured loan might help get us back on our feet in the short term. They have just phoned to say that they can't help and to be honest I feel a bit relieved. I just worked out that a £15,000 loan would end up costing us £60,000.

So now, it's up to us. After reading these forums I feel very scared but also a bit excited that we might be able to sort this out ourselves. Our unsecured debts are about £20,000 and I need to find about £1000 this month from somewhere to bring all our payments up to date.

I think my boyfriend and I would just about break even at the end of the month if we had no unexpected expenses, but we've got into a cycle of late payments which add additional charges, which then end up costing us more.

Any opinions/advice on how to get out of this mess would be much appreciated.

Patti

moneysavingmonkey85

Hi and Welcome!
Well done for posting, and coming to the right conclusion about consolidation - it seems to gets expensive and even with the best intentions most people fill up the credit cards again. The first thing to do is get all the paperwork together and work out all your in/outgoing, and post this as your Statement of Affairs (SOA). I'm not sure of the link, I'm sure someone will post it soon.
Good luck and hugs!

Numpty_Monkey

Hi and welcome :hello:

The link to the SOA calc
http://www.makesenseofcards.com/soacalc.html

Maybe finding £1000 in a month will be more or less impossible wtihout makeing your situation worse
It might take time to get you on a level from where you can progress,
but Rome wasn't built in a day;)

PeppermintPatti_2

Statement of Affairs and Personal Balance Sheet


Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1940
Partners monthly income after tax....... 850
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2790

Monthly Expense Details
Mortgage................................ 491
Secured/HP loan repayments.............. 185
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 114
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 10
Mobile phone............................ 140
TV Licence.............................. 10
Satellite/Cable TV...................... 30
Internet Services....................... 20
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 200
Road tax................................ 14
Car Insurance........................... 40
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 189
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 40
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Union Fees / Professional Body M'Ship... 20
Total monthly expenses.................. 1883

Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 147000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 94000....(491)......0
Hire Purchase (HP) debt ...... 800......(35).......0<
Car............................2500.....(150)......0
Total secured & HP debts...... 97300.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Virgin CC......................6000......160.......29.9
Barclays CC....................5200......130.......21.9
Egg CC.........................1800......40........22
Payday Loan....................1500......200.......0
Egg Loan.......................3000......104.......5.6
HSBC CC........................3000......70........19.9
Total unsecured debts..........20500.....704.......-

Monthly Budget Summary
Total monthly income.................... 2,790
Expenses (including HP & secured debts). 1,883
Available for debt repayments........... 907
Monthly UNsecured debt repayments....... 704
Amount left after debt repayments....... 203
Personal Balance Sheet Summary
Total assets (things you own)........... 147,000
Total HP & Secured debt................. -97,300
Total Unsecured debt.................... -20,500
Net Assets.............................. 29,200

PeppermintPatti_2

Just to add, I've worked out I need £1100 to make the arrears payments on the credit cards.... seeing it like that has really hit home what a disaster our finances are.

DawnW

Aren't you entitled to any benefits at all? Surely you get child benefit?

PeppermintPatti_2

Sorry... included that in my income... I get £80 child benefit and £40 tax credits for childcare.

Want2BMoneySavvy

PeppermintPatti wrote: »

Statement of Affairs and Personal Balance Sheet


Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1940
Partners monthly income after tax....... 850
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2790

Monthly Expense Details
Mortgage................................ 491
Secured/HP loan repayments.............. 185
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 114
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 40 This seems high?
Telephone (land line)................... 10
Mobile phone............................ 140 This is outrageously high, even for 2 people. Can you reduce down to lowest tariff and get a PAYG sim card?
TV Licence.............................. 10
Satellite/Cable TV...................... 30 Get rid, or reduce right down. Freeview should give you enough choice.
Internet Services....................... 20
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 200 Are these all necessary journeys?
Road tax................................ 14
Car Insurance........................... 40
Car maintenance (including MOT)......... 0 No MOT? Is your car under warranty?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 189
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 40
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 None?
Haircuts................................ 0 None?
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Union Fees / Professional Body M'Ship... 20
Total monthly expenses.................. 1883

Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 147000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 94000....(491)......0
Hire Purchase (HP) debt ...... 800......(35).......0<
Car............................2500.....(150)......0
Total secured & HP debts...... 97300.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Virgin CC......................6000......160.......29.9
Barclays CC....................5200......130.......21.9
Egg CC.........................1800......40........22
Payday Loan....................1500......200.......0
Egg Loan.......................3000......104.......5.6
HSBC CC........................3000......70........19.9
Total unsecured debts..........20500.....704.......-

Monthly Budget Summary
Total monthly income.................... 2,790
Expenses (including HP & secured debts). 1,883
Available for debt repayments........... 907
Monthly UNsecured debt repayments....... 704
Amount left after debt repayments....... 203
Personal Balance Sheet Summary
Total assets (things you own)........... 147,000
Total HP & Secured debt................. -97,300
Total Unsecured debt.................... -20,500
Net Assets.............................. 29,200

Some comments as above, you mobile phone bills seem massively high, can these be reduced? Or can you change tariff? If you are paying £70 each every month, you're probablyon the wrong tariff anyway.

Have you got anything you can sell? Any baby bits, high end cllothes which will do well on eBay? Any clutter you can get rid of and make some of the cash needed?

Any chance of either of you picking up some extra work? Just in the short-term - bar work in summer evenings, or do you have any skills you can sell?

indierocker85

PeppermintPatti wrote: »

Statement of Affairs and Personal Balance Sheet


Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1940
Partners monthly income after tax....... 850
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2790

Monthly Expense Details
Mortgage................................ 491
Secured/HP loan repayments.............. 185
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 114
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 40 This is a bit high, what area do you live in?
Telephone (land line)................... 10
Mobile phone............................ 140 This is VERY high, are you PAYG? Contract, if so try and re-nogotiate your contract.
TV Licence.............................. 10
Satellite/Cable TV...................... 30 Cancel this for the time being, freeview will suffice until you are in a better situation
Internet Services....................... 20
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 200 Are you using the cheapest station in your area? Are they all necessary journeys? Are they a commute? Could public transport be a feasible alternative?
Road tax................................ 14
Car Insurance........................... 40
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 189
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 40
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Union Fees / Professional Body M'Ship... 20
Total monthly expenses.................. 1883

Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 147000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 94000....(491)......0
Hire Purchase (HP) debt ...... 800......(35).......0<
Car............................2500.....(150)......0
Total secured & HP debts...... 97300.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Virgin CC......................6000......160.......29.9
Barclays CC....................5200......130.......21.9
Egg CC.........................1800......40........22
Payday Loan....................1500......200.......0
Egg Loan.......................3000......104.......5.6
HSBC CC........................3000......70........19.9
Total unsecured debts..........20500.....704.......-

Monthly Budget Summary
Total monthly income.................... 2,790
Expenses (including HP & secured debts). 1,883
Available for debt repayments........... 907
Monthly UNsecured debt repayments....... 704
Amount left after debt repayments....... 203
Personal Balance Sheet Summary
Total assets (things you own)........... 147,000
Total HP & Secured debt................. -97,300
Total Unsecured debt.................... -20,500
Net Assets.............................. 29,200

You have stated that you need to find a £1000 in a month, have you considered a 2nd job? You could earn an extra £200 a month simply by doing an extra 8 hours a week at min wage (worked out at min wage for the example) £5.80*8*4.33=£200.91.

Have you checked the Income section on here? There are various ways you can boost it, surveys, ebay, etc. Whilst it isn't quite the amounts you need, it can help.

I also not that you say you have roughly £203 a month left over after all is paid. Could this be utilised as extra payments off debts? Hopefully, after you have made over payments/caught up then you will be in a much better situation. Even more so if you do manage to cut a few ends on your SOA. You could utilise that money too!!

Good luck, and keep posting

PeppermintPatti_2

Thanks for all the tips! It makes me feel so much better knowing that there are people out there with fantastic advice.

I have just been down to the garage and packed up all my daughter's toys and baby bits that she has grown out of... going to try my 1st Carboot tomorrow! (Fingers crossed for nice weather!)

I'm also going to have a look at the survey sites. Working an extra job isn't really feasible due to long hours in main job and commute, but I am going to have a look at marking exam papers in the summer holidays as I work in a school.

The mobile phones are a nightmare. My other half thought it would be nice to treat us both to iphones - and signed us up for 24 month contracts. They still have ages to run before I can lower the monthly payments - I've marked it in my diary so it gets done as soon as it is possible. I'm going to ring sky tomorrow and cut down to the lowest package until our contract is up.

The car is still under warranty and isn't due an MOT til next year. Petrol is a real pain, we live about 20 miles from where we work and where my daughter goes to school. She's on a waiting list for a local school, and when she gets in there our petrol and childcare costs should drop a fair bit.

I'm going to check our water usage - we're on a meter with Anglian Water - I know we use far too much though so thinking about ways we can cut back.

Does anyone know if £200 would be enough to start a snowball? I'm still not 100% sure how it works but I am getting frustrated at simply paying minimum payments and seeing nothing in return.

Also, just to add, we get free haircuts (brother's gf is a trainee hairdresser) and my mum usually helps out with birthday and christmas presents, or I tend to make a lot - keen cross stitcher!

purpleheather2810

Even an extra pound over the total minimum payments is enough to start a snowball
However if you are not meeting the minimum payments and have a few charges mounting up you need to try and get these things under control first.