Debts getting to a worrying level

Katiepops

[FONT=Arial, sans-serif]I took out a loan in 2005 with HSBC to consolidate an existing loan, credit cards and store cards. This loan is due to finish in September 2011.[/FONT]
[FONT=Arial, sans-serif]Shortly after agreeing this loan my partner and I spilt up leaving me with all the bills to pay and a rental agreement I couldn't get out of. I have been living off my credit card, hence I now have amounted roughly the same amount as I had paid off from the loan. [/FONT]
[FONT=Arial, sans-serif]I am now at the point where I will soon be unable to make the minimum repayments.[/FONT]
[FONT=Arial, sans-serif]My partner has a part time job and casual work. The following budget reflects the minimum income from him (i.e. guaranteed income) and maximum outgoings covering expenses for both of us. I use the Capital One credit card to pay for the short fall.[/FONT]
[FONT=Arial, sans-serif]I have never missed any repayment or been late paying any bill.[/FONT]

I don't know how I can get out of this spiral, any advise would be very welcome.

Debts

HSBC personal loan £5282.56 6.9% APR repayments £330.16 (finishes Sept 2011)

Egg Credit Card £3456.95 19.9% APR repaying the minimum amount c. £88.61 Limit £5900 I'm not spending on this card

Capital One Credit Card £5328.09 14.3% APR repaying the minimum amount c. £163.48 Limit £5700

Total Debts £14067.60
Monthly repayments £582.25

I also have a student loan of around £3500 but haven't started paying that back yet.
I also have an authorised overdraft of £1200 with HSBC and have used £700 at the moment.

Income

My monthly salary £1496.05
My partners monthly salary £200.00

Total Income £1696.05

Expenditure

Rent £750
Council Tax £113
Contents Insurance £15.55
TV Licence £12.12
Gas £32
Electricity £30
Water £25.72
Sky TV / Broadband / Landline £35
HSBC Loan £330.16
Egg CC £88
Capital One CC £165
Interest £3.50
Car (tax, insurance, MOT) £75
RAC £9.81
RSPCA £3
Food £200
Hair £55
Physio £80
Tolietries £10
Clothes £10
Petrol £20
Guinea Pigs (Food and hay) £25.32

Total Expenditure £2098.17

Difference -£402.12

GeorgeUK

Does the loan have payment protection insurance? Was this missold?
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance?dd

If your partner can't contribute more, then you need to either increase your income - possibly a 2nd job or drastically cut back on any non-essential spending.
Rent £750 - can you find somewhere cheaper?
Council Tax £113 - if paying over 10 months, can you ask to pay over 12?
Contents Insurance £15.55 - check the comparison sites to see if this is the best deal you can get
TV Licence £12.12
Gas £32 - check the meter readings and see if you are in credit. If so then ask for the money back
Electricity £30 as above with meter readings, also check the comparison sites to see if you can get a better deal
Water £25.72
Sky TV / Broadband / Landline £35 - might not be able to keep sky. This is a luxury you can't afford
HSBC Loan £330.16 - can you see if you are entitled to a payment holiday? They'll keep adding interest, but check to see if this would help.
Egg CC £88
Capital One CC £165
Interest £3.50
Car (tax, insurance, MOT) £75
RAC £9.81
RSPCA £3
Food £200
Hair £55 - every month? Can you get this done every other month?
Physio £80 - is this a medical requirement? Can you cut back on the number of visits?
Tolietries £10
Clothes £10
Petrol £20
Guinea Pigs (Food and hay) £25.32

katsu

Katiepops wrote: »

Debts

HSBC personal loan £5282.56 6.9% APR repayments £330.16 (finishes Sept 2011)

Egg Credit Card £3456.95 19.9% APR repaying the minimum amount c. £88.61 Limit £5900 I'm not spending on this card

Capital One Credit Card £5328.09 14.3% APR repaying the minimum amount c. £163.48 Limit £5700

Total Debts £14067.60
Monthly repayments £582.25

I also have a student loan of around £3500 but haven't started paying that back yet.
I also have an authorised overdraft of £1200 with HSBC and have used £700 at the moment.

Income

My monthly salary £1496.05
My partners monthly salary £200.00 he needs to increase this.

Total Income £1696.05

Expenditure

Rent £750 if he can't increase his income you may need to consider moving somewhere cheaper like a houseshare with other people.
Council Tax £113
Contents Insurance £15.55
TV Licence £12.12
Gas £32
Electricity £30 you should be able to reduce the total of these by say £10pcm. Turn everything off, don't use tumble dryers or the immersion heater for longer than 15 mins a day.
Water £25.72
Sky TV / Broadband / Landline £35 reduce this. Cancel sky element. You can get BB for around 7.50pcm from people like O2
HSBC Loan £330.16
Egg CC £88
Capital One CC £165
Interest £3.50
Car (tax, insurance, MOT) £75
RAC £9.81 Look at the advice in the travel and motoring tab. You can get Autoaid for £37 or cover by Boncaster? for £60. Both of these are the equivalent of top price AA/RAC. Do this urgently.
RSPCA £3 cancel for now.
Food £200 look at old style board. If it is only 2 adults no kids you should be able to drop £40+ off this.
Hair £55 go to a hairdressing college, leave it another week inbetween cuts. You need to reduce this as much as possible.
Physio £80
Tolietries £10 try 99p store to reduce this.
Clothes £10 can you reduce for now?
Petrol £20 with such a low monthly petrol spend do you really need a car? Can you cycle/walk/take the odd bus or taxi and save the £75 car running costs by taking the car off the road for a while or even selling it?
Guinea Pigs (Food and hay) £25.32

Total Expenditure £2098.17

Difference -£402.12

You are in a tricky situation and there are, I'm sure, spends unaccounted for - you have £0 entertainment and presents, for example, by not using a full SOA.

You need to make some serious changes - fundamentally your OH needs to bring in more income. You may need to contact a debt advice charity like CCCS or go to CAB.

Good luck and well done for facing up to this.

dark^knight

A few things I would reduce or cut out completely:

Sky TV / Broadband / Landline £35
RSPCA £3
Hair £55
Guinea Pigs (Food and hay) £25.32

Cutting the above out would give you around £120.

I admit it would be very tough to do, but some sacrifices will need to be made.

Fang_3

Katiepops wrote: »

Rent £750 - Move to a house share and cut this drastically
Council Tax £113 - Moving to a house share/lodging will get rid of this
Contents Insurance £15.55 - Look for a cheaper quote
TV Licence £12.12
Gas £32 - Look for a house share will all bills included and this will go
Electricity £30 - As above
Water £25.72 - As above
Sky TV / Broadband / Landline £35 - As above
HSBC Loan £330.16
Egg CC £88
Capital One CC £165
Interest £3.50
Car (tax, insurance, MOT) £75
RAC £9.81
RSPCA £3 - You can't afford this.
Food £200 - You need to get this down by at least £50.
Hair £55 - You can't afford this.
Physio £80 - Why do you need this?
Tolietries £10 - Why is this not in your Groceries Budget?
Clothes £10 - You can't afford new clothes. Charity shops are your friend when you need to replace worn out clothes.
Petrol £20
Guinea Pigs (Food and hay) £25.32 - You can't afford this. Rehome them.

Total Expenditure £2098.17

Difference -£402.12

You would save £622.44 every month if you moved into a house share at a cost of £500 a month, all bills included. There's your answer.

bottleofred

Hi,

You should take the advice from the other members and try to reduce the monthly outgoing, particularly on luxury items. If you don't do this now and continue to use the capital one card to pay the difference each month, it's only a matter of time until you either cannot pay the minimum payment or reach the credit limit on the card.

Katiepops

Thank you all for your responses.
I am glad I've finally got the guts to put my situation out on the forum.
I have done a lot of work already to strip my budget down as much as I can. My spending had got a little silly. I never go into town so I can't be tempted to go in any shops. Some people comfort eat, I was comfort spending!
Whilst the majority of your suggestions seem very obvious and sensible it's very easy to make the suggestions without knowing me personally which of course you can't being an online forum.
The obvious problem is that I don't have enough money coming in. I've considered getting a second job but I work shifts which have no pattern so it would have to be very flexible to work around them and I haven't found anything yet.
In an ideal world my partner would pay his share of the bills and expenses but he has depression (he has had some help but not enough, that's another story) so struggles to cope with work. He has had a part time job as a cleaner after having left his job a year ago because he couldn't cope with the stress of working with other people. Sounds daft I know but he pushes the self destruct button and gets so parinod that everyone hates him and is out to get him that the idea of us having a house share is unthinkable.
We had a lodger in our old house but I took a new job last October so we upped sticks and moved across the country so I could earn more and in the hope that a fresh start would help him and our relationship. We down sized so our house is too small for a lodger.
We're in a contract on our current house til October so moving is not an option at the moment. We will of course see if we can find somewhere cheaper but we can't actually afford to move. We sold so much of our stuff to get together the deposit, fees and cost of hiring a van etc to move to this house that I just don't think we can get the money together to do it again any time soon. It's another visious circle.

I know I'm in serious debt and have to do something about it but anything I can do is not going to be enough.
As for rehoming our guinea pigs, they are part of the family and I love them so much I could never do that. I've reduced the cost by bulk buying the hay which has saved a lot of money and changing the bedding to vet bed to wash rather than desposible bedding so saved a lot of money there.
I'm in a contract with Sky til January.
The cost for hair is an average across the year- I've started going every 7 weeks instead of every 6 to save a bit of money. I agree it is a luxury but I have to look my best for my job and my confidence - I know that sounds very vain but my boss even commented my roots needed doing and it needed cutting! As I'm sure anyone who's in or has been in my situation will know that having so much worry with money and my partners health I have to put on 'the face' and try and keep myself together to keep going. We never go out, buy new CDs / DVDs / clothes - I know I've put £10 in my clothing budget but only because if I didn't I knew it would be questioned, just like the entertainment and birthday presents. I make a cake and card for presents or buy small presents out of the grocery budget. We don't buy for each other, just agree we'll do something nice for each other. (like organising a picnic in the garden)
I have seriously thought about getting rid of the car. It's my mums so if I was to get rid of it I wouldn't get any money for it but would save on insurance etc. I save £75 a month so I have enough each April when the MOT, Tax and insurance all comes at once.
There are three things that make me hesitate about getting rid of it. I work a lot of late shifts so finish around midnight, I'm not sure how happy I'd be walking home on my own this late. I've already paid for everything other than petrol up to April 2011. If I was to get rid of it (i.e. my mum sells it) the chances of me ever being able to afford to buy a car feel very slim and the next time I change my job it would limit me as my last job relied on having a car.
I will try again to reduce the 'physio' treatment cost. I have craniosacral therapy for my migranes which is regular to keep them managable.

I can see what's going to happen - I won't be able to afford the minimum payments and will run out of credit on my cards. I have always been fully aware of my financial situation - I'm good a keeping a budget and track every penny I spend which is why I know I have to find a solution before this happens.
I've claimed back missold PPI on my loan and cards. My cards have been rate jacked. I was on 6.9% when I took out both cards - is there anything I can do?

I think I'm going to go to Citizens advice.

and_breathe

Can your partner claim any benefits? if he can't work, then you should be looking at DLA or similiar.
I can't find my link to the benefit checker at the moment, but I'm sure if you google it, you'll find one.

You could also try asking Mind for advice, they have workers who specialise in money problems.

HOWMUCH

Can you change over to a 0% credit card

katsu

Hairdressing students still do good cuts and colours, just slowly and under supervision. Especially as you work shifts this should be good for you, as you will be able to get there when the college is open.

Can your partner not get more cleaning hours?

You do need to talk to someone like CAB or CCCS about going onto a debt management plan. They will then put a budget in place which will not allow you to keep your current spending in some areas, but will reduce your debt payments. It will affect your credit rating and is not plain sailing, but if you can't bring more money in, then you need to take action.

Katiepops

and_breathe wrote: »

Can your partner claim any benefits? if he can't work, then you should be looking at DLA or similiar.
I can't find my link to the benefit checker at the moment, but I'm sure if you google it, you'll find one.

You could also try asking Mind for advice, they have workers who specialise in money problems.

Thank you I didn't know that about Mind, I'll look in to it. He's been on sickness benefit while he was having treatment but is now off it. Because he can sometimes get some extra hours he occasionally works more than 16 hours a week which means he's over the limit to get benefits. Because I'm on a good wage and can cover all living expenses (exept from debt repayments which aren't considered) we're not eligible for anything else.

Sorry what's DLA? I'm struggling to keep up with the initials. Is there a glossary? lol

Your username was exactly what I needed to do after getting my last post off my chest, thank you. :-)