out of control debt - help!

clareabella

Hello all,
My situation is pretty dire (see below!) and am struggling to work out how to make cutbacks here. We've run up huge debts over the last few years caused by moving around a lot! We've not been back in the UK for long and things have reached a crisis point as i still have no work and we're now maxed out on credit! Any constructive suggestions would be very gratefully received!
Thanks in anticipation!

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

Monthly income after tax................ 3900
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3900
Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 105
Rent.................................... 900
Management charge (leasehold property).. 0
Council tax............................. 160
Electricity............................. 50
Gas..................................... 100
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 0
Mobile phone............................ 90
TV Licence.............................. 12
Satellite/Cable TV...................... 30
Internet Services....................... 30
Groceries etc. ......................... 400
Clothing................................ 50
Petrol/diesel........................... 250
Road tax................................ 15
Car Insurance........................... 100
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 450 (rail ticket for oh to travel to work)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 36
Contents insurance...................... 40
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 30
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 3008


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 5000.....(105)......9
Total secured & HP debts...... 5000......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................11000.....230.......17.8
Credit Card....................10000.....190.......17.8
Credit Card....................9000......180.......17.8
Loan...........................12000.....499.......10
Total unsecured debts..........42000.....1099......-

Monthly Budget Summary
Total monthly income.................... 3,900
Expenses (including HP & secured debts). 3,008
Available for debt repayments........... 892
Monthly UNsecured debt repayments....... 1,099
Amount short for making debt repayments. -207
Personal Balance Sheet Summary
Total assets (things you own)........... 303,000
Total HP & Secured debt................. -5,000
Total Unsecured debt.................... -42,000

hackedoffatthem

HI Clareabella, I'm pretty new to this and in debt myself so feel free to ignore anything i might say but here's my first thoguhts on areas that you could cut back.

clareabella wrote: »

Hello all,
My situation is pretty dire (see below!) and am struggling to work out how to make cutbacks here. We've run up huge debts over the last few years caused by moving around a lot! We've not been back in the UK for long and things have reached a crisis point as i still have no work and we're now maxed out on credit! Any constructive suggestions would be very gratefully received!
Thanks in anticipation!

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

Monthly income after tax................ 3900
Partners monthly income after tax....... 0
Benefits................................ 0- With children in the house you should be entitled to at least child benefit.
Other income............................ 0
Total monthly income.................... 3900
Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 105
Rent.................................... 900
Management charge (leasehold property).. 0
Council tax............................. 160
Electricity............................. 50
Gas..................................... 100- HUGE!!- try a comparision website
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 0
Mobile phone............................ 90- Go PAYG for a while as this is high even for two phones.
TV Licence.............................. 12
Satellite/Cable TV...................... 30Could you do without for a while?
Internet Services....................... 30
Groceries etc. ......................... 400-I'm sure this could be cut back for a bit (mne is 2 adults, 3 children and £250/month)
Clothing................................ 50- Does it need to be this high for the moment?
Petrol/diesel........................... 250Where are you driving if no job and hubby gets the train?
Road tax................................ 15
Car Insurance........................... 100-HUGE!!!! for one car- again try a comparision site
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 450 (rail ticket for oh to travel to work)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 36-
Contents insurance...................... 40-High shop around!
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 30
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 3008


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 5000.....(105)......9
Total secured & HP debts...... 5000......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................11000.....230.......17.8
Credit Card....................10000.....190.......17.8
Credit Card....................9000......180.......17.8
Loan...........................12000.....499.......10
Total unsecured debts..........42000.....1099......-

Monthly Budget Summary
Total monthly income.................... 3,900
Expenses (including HP & secured debts). 3,008
Available for debt repayments........... 892
Monthly UNsecured debt repayments....... 1,099
Amount short for making debt repayments. -207
Personal Balance Sheet Summary
Total assets (things you own)........... 303,000
Total HP & Secured debt................. -5,000
Total Unsecured debt.................... -42,000

I think you def have enough movement there to make up the shortfall of £207, with a big of shopping around. Good luck x

xyellowx

OP what car is it ? seems to be expensive to fuel/ins my guess a bmw audi 4x4?
is it not possible to not have a car for a while ? if thats a no/no try getting a smaller cheaper to run car for a while
i got into debt swapped the 4x4 for a cmax 1.6 saved me a fortune (ins£70 p/m ,fuel £100 p/m , r/tax £250 a year ) i used that money to make over payments on the cards until id paid enough off to do balance transfer at a lower rate
you need to make some cutbacks that you maybe dont want to at first but once you do you can start chipping away at the debt

xyellowx

p.s you will be entitled to about £130 p/month for the kids doesnt matter about wages everybody gets it until kids are 16 phone up monday( you may even be entitled to back payments) but not sure so ask the question

clareabella

Thanks for replies so far, car is a 4x4 can't change it unfortunately, it's financed and the sale of it wouldn't cover that Definitely should have gone for something cheaper to run but hindsight is 20:20.... I use the car for taking kids to school, oh to train station and running around in general on weekends so can't do without it.
We have 3 phones, myself and daughter are only on £15 a month plans, oh is expensive but he has it for work. Should be able to get some back through tax next april.
You've definitely given me stuff to go on though, will be shoppping around on everything and applying for child benefit. Fingers crossed it can be sorted, it's a big help knowing i'm not the only one, it's embarrasing to admit having got into such a mess. But i'm finding that admitting it's a problem and taking control makes me feel more positive already
Thanks

NorthernLas

Could you and OH do a spending diary for a few weeks? You'd then see if the SOA was accurate and it might throw up things that you have forgotten about?

talana

Is your SOA completely accurate?
These statements don't seem to tally at the moment...

Partners monthly income after tax....... 0

Other travel............................ 450 (rail ticket for oh to travel to work)

Have you missed off partner's income?

Marisco

I think Clare might have put herself down as "partner" and the wage is her oh's. Deffo claim family allowance and also see if it can be backdated:)

Hannah_10

Hi Clare, welcome to MSE, you are very brave to post a SOA and here is my best shot at helping you claw back something...

Monthly income after tax................ 3900
Partners monthly income after tax....... 0
Benefits................................ 0 << I'm thinking Working Tax Credit probably wont help (although try it anyhow), but Council Tax Benefit might and if you're really lucky Housing Benefit. Check it here http://www.turn2us.org.uk/benefits_search.aspx
Other income............................ 0 << The Up Your Income board is a good place to start http://forums.moneysavingexpert.com/forumdisplay.php?f=145. There are ways to make money by dog walking, Avon/Betterware/Usbourne Books, party-plan selling, daily clicks and online surveys and taking alodger just off the top of my head. Oh and eBay has it's own board http://forums.moneysavingexpert.com/forumdisplay.php?f=40
Total monthly income.................... 3900
Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 105
Rent.................................... 900 << This is very, very high. I live in an expensive part of the country and even here this would be high. How come it's so much?
Management charge (leasehold property).. 0
Council tax............................. 160 << Again this is high, but would be based on the property you live in which by the look of it isn't a cheap one. Any more info on this?
Electricity............................. 50 << Even this is high for a family of four, but Gas is astronomical...
Gas..................................... 100 << Why? Any reason you know of it's so high? You can reduce this by using a comparisson site and by putting a timer on the water and heating. My water is heated for 45 minutes in the morning and 1 hour in the evening and I still have hot left most of the day. When I had a family at home it had to be two hours in the morning to cover the different getting up times and two hours int he evening to fill the bath more than once. Don't forget if your shower is electric it heats the water as it goes. So does your washing machine.
Oil..................................... 0
Water rates............................. 40 << People will say get a meter put in, yes that's a good idea, but you use £150 of gas and electric at the moment which suggests to me that you might use more than the average water too? In which case don't get a meter yet, work on general frugality first.
Telephone (land line)................... 0 << Might you save by axing all three mobile contracts, going to PAYG for text only and using the cheapest free evening and weekend calls landline service? I suspect if husband could also use the housephone for outgoing work calls that you would. There is an MSE callchecker tool to get you cheap prices abroad, to non geographics and mobiles.. http://callchecker.moneysavingexpert.com/
Mobile phone............................ 90 << I know you said you've got three of you on £15p/m contracts and hubby needs his £45 a month, but if he was really in the right mindset how many of these work calls could he get someone to ring him back or make from a landline?
TV Licence.............................. 12
Satellite/Cable TV...................... 30 << Not at the expense of living above your means. You're getting into a lot of trouble and Sky isn't worth it.
Internet Services....................... 30 << Even I can't manage to run that up and I'm in all day and on all day! If you had a landline you could be on unlimited broadband from £10 p/m. Makes a landline seem less expensive doesn't it!
Groceries etc. ......................... 400 << There are people on this board who do this for £100, really not kidding. This project http://www.cheap-family-recipes.org.uk/index.html is run by this lady http://forums.moneysavingexpert.com/member.html?u=237580 and this is the MSE thread about the project's development https://forums.moneysavingexpert.com/discussion/2384579 Have a really good read of it before you reject it as the savings from this alone could save you from the predicament you're in, but if you really find it un-doable then we also have the hero's and heriones of thrift over on the old style board who love nothing more than teaching you how to get evrything for less, from what to cook with leftovers, to repairing a chair, to how to use vinegar for 38p and not Flash for £2 to clean the kitchen... http://forums.moneysavingexpert.com/forumdisplay.php?f=33 (Oh and they're dead nice).
Clothing................................ 50 << In the trouble you're in this is going to have to be cut. I know it's one of the little things that makes life enjoyable, but being realistic here it's crunch time. I'm sorry.
Petrol/diesel........................... 250 << Can the children not walk to school? Think of thier health!
Road tax................................ 15 << Owch
Car Insurance........................... 100 << Owch!
Car maintenance (including MOT)......... 50 << Owch again!!, all in this car is costing you nearly £300 a month, whereas you could be doing it all for a lot less in a smaller car. How much do you stand to lose on the finance for sending it back? Talk to them, explain your situation, they might listen (people have tried this and got results). If you could get them to take it back and settle the debt would you? I've got a £500 car, it costs me nothing for finance, does 50mpg, minimal tax and £26 a month to insure 3rd fire & theft- think about it.
Car parking............................. 0 << Well done, even in a rural area I have to have a figure for this.
Other travel............................ 450 (rail ticket for oh to travel to work) << Have you fully explored the possibilities of discounts and railcards? Has he got a bicycle? If so can he get off the train a stop earlier and cycle the rest? Come to that can he cycle to the station? If he would save more than £10 a month doing this buy him a second hand cycle from the classifieds for £50.
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20 << Use an NHS dentist, get your glasses from £8.50 a pair online http://www.moneysavingexpert.com/family/cheap-glasses (not contact lenses- they are hellish expensive) ask the doctor to make any repeat prescriptions out for 2 months not one month please because you are broke. Check you can't buy prescription meds cheaper by asking your pharmacist.
Pet insurance/vet bills................. 0
Buildings insurance..................... 36 << Now this was the biggy for me, why are you insuring the building? You don't own the building and therefore you are not liable for the building (I am assuming this is your home you've insured). The owner takes out buildings cover, not the tennant!
Contents insurance...................... 40 << Use a comparisson site like gocompare.co.uk to check that you are on the lowest cover you can find. Take off accidental damage and new for old cover then run it again and see the cost difference. When you've done doing that register with a cashback site like quidco.co.uk and search to see if you can make money by taking it out. Then (and this is important) rong your current insurer (from someones landline) and tell them how much you have got a quote for and do they want to match it? If they say no, find out about what it will cost you to leave your current policy, then after you get off the phone factor that into your calculations. You can't afford to say "it's not worth it for that £4.20 a month it'll save us"- because you're over your means, you need every penny.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50 << You can't afford it anymore, this will have to come down.
Haircuts................................ 30 << Have you got a 6th form near you, or an indoor market? Student hairdressers under full supervision will often cut hair for free and indoor markets are good places to find a cheap hairdresser as many younger girls (and boys) set up here to raise money before buying a proper salon. Failing that some styles need less work than others and dry cuts are less expensive than wet.
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 3008


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 5000.....(105)......9
Total secured & HP debts...... 5000......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................11000.....230.......17.8
Credit Card....................10000.....190.......17.8
Credit Card....................9000......180.......17.8
Loan...........................12000.....499.......10
Total unsecured debts..........42000.....1099......-

Monthly Budget Summary
Total monthly income.................... 3,900
Expenses (including HP & secured debts). 3,008
Available for debt repayments........... 892
Monthly UNsecured debt repayments....... 1,099
Amount short for making debt repayments. -207
Personal Balance Sheet Summary
Total assets (things you own)........... 303,000 << What do you own? Can you sell it? Is this the building you have insured?
Total HP & Secured debt................. -5,000
Total Unsecured debt.................... -42,000

Last thing, try the snowball calculator to see how much quicker and cheaper you could pay your debts off if you could find even a bit of surplus in the budget. http://www.makesenseofcards.com/snowcalc.html I think you could find £500 surplus here without too much hard work, £1000 or more if you put your heart and soul into it.

dancingfairy

I would get in touch with one of the debt charities Martin recommends - like CCCS (they have a handy website calculator you can use as well), National Debtline or you local CAB.
Yes - you can pay back 42k by making cutbacks as suggested by others but you may also want to explore other options including bankruptcy - it depends on what's going to work for you.
Good Luck
df

dancingfairy

Oh and I would look into the car thing - sometimes you can hand them back when you've paid 2/3 rds of the finance and walk away owing nothing extra -it depends on whether it's a loan (that look's like HP) or it's genuine HP (aparently they are quite similar and hard to tell apart).
It could be worth investigating though with a view to getting something much cheaper to run/insure/maintain etc?
Good luck
df