Dont know what to do, pls advise

Annisele

mack69 wrote: »

.
we prob do manage on £200 a month with food, kids are at school, wife, me and eldest out as well.

Are you sure that your SoA is accurate? I'm not saying that with the intention of being mean. It's just that it's very difficult indeed to work out where you can cut back / whether you can cut back until you know exactly where your money is going.

For example, presumably you eat when you're not at home? Food/grocery costs for a family of five at £200 per month works out at about £9.23 per person per week - so if your wife buys lunch at work a couple of times a week, you could be smashing that £200 per month budget.

For clothing, £20 per month for five people - £48 per year each - also looks pretty low. And £0 for entertainment, haircuts etc also seems unlikely.

How much is the "a little" that your daughter contributes, and how much does she earn? It looks as though you're in a situation where every last penny counts.

As to persuading your wife that you need help - it looks as though if you don't do anything you'll end up bankrupt anyway. Currently your total income seems to be £1,550 per month, and your debt payments are £2,020 per month - so you absolutely need to do something, because otherwise your debts will simply spiral.

I don't know whether a debt charity would be able to help you avoid bankruptcy - but if you don't go and ask them, you won't know. If you carry on with your SoA as it is - even assuming that your £200/month food and £0/month estimate for entertainment is accurate - you'll hit financial meltdown pretty soon.

Edit: Crossposted with Hannah_10.

WASHER

Hannah_10, a very good post.

OP, you need to read Hannah's post several times to digest it properly and then show your wife.

Trollfever

Insolvent as to income + Insolvent as to capital = Bankruptcy.

mack69

Thanks,
I realise its bad,
you mention selling up, the house is going on the market this week, but obviously that takes time, would my creditors wait if I paid token payments?
I know we currently have a shortfall, but hopefully that will turn around very shortly when I get work. (I've only just wrapped up my self employment)

can someone please explain an IVA in easy terms? I've read up on them but not sure if I understand them correctly.

regarding the SOA, its hard to put a figure on clothes, food etc, so I tried to average it. we dont buy clothes every month, but I agree £20 is probably not enough.
Daughter pays around £50 a month lodge, she really cant afford anymore, ( I dont want to punish her for our mistakes) and I forgot to include it in my SOA
I am also selling what I can on ebay etc at the minute to help.
We could probably get help with the council tax too, so that is worth looking into, but I know how they make you jump through hoops to get it!

Thanks

mack69

also, what happens if you have a mortgaged home and you go BR? are you forced out?

WASHER

Look at the top of this page, and Martin has a guide to IVAs, they are suited to a few people.

I do think BR is a serious thinking point.

Even if you do sell the house, you will not have enough to cover the debt, you need to get your wife to take a look at this thread, its untotally unfair for you alone to deal with this.

mack69

But if we do sell the house we could cover the 17k monthly payments.

Hannah_10

The easiest explaination of IVA's is probably Martins guide here.

IVAs are they worth it?: Free guide to download and print

IVA's ultra-quickly...
IVA's are an alternative to bankruptcy. For an IVA you would need to have some money with which to make payments to your creditors, then you're locked into a 5 year agreement to pay £x a month. If you keep your end of the deal what's left after 5 years is wiped, if you don't you're going bankrupt. They cost thousands to set up so they're not worth it unless you've got £15k or debt or more, as your debt is very high £110k, then these are worth a thought.

Sorry to be the bringer of bad news again but, if you go bankrupt then yes, your assets are sold to pay for your debt (in your case it means you lose the house).

WASHER

Rent could be higher than your mortgage repayments each month.

How do you get £17K, I got £20K without fees for selling and fees for renting, (could be my calculations are wrong).

I really don't think you have any option but to sell or go BR (and then the house will be sold to repay your creditors something), but before you take advice from a forum, take the advice of the CCCS.

Hannah_10

The one and only way I see you having any hope of keeping your house now is an IVA and unless you can drum up something for repayments then you've got no hope of that.

So for now, you need to send this SOA to every creditor you have and start £1 a month token payments. Then in between applying for jobs, attending interviews and praying to any God you've got for help, you need to consider what you're going to do out of the options available.

To my way of seeing it your options are:
Sell up, walk away now with a far smaller debt.
OR
Take out an IVA when you've got a job again and pray to said Gods that you wont be made redundant again before your five years are out. If it comes together you end up with a clean slate debt wise and still in your house paying the mortgage at the end of the 5 years.