Statement of Affairs

moo2moo

Contrary to the other posters views of frivolous and excessive spending your SOA looks reasonable (I know shoot me down in flames now!). There are places you can cut back and these are areas you have acknowledged. Theres a balance between debt busting and having some semblancce of a life. The biggest problem seems to be the monthly debt repayments. Are you on a DMP or are you paying interest at 17+% each month?

dancingfairy

Hi as others have said - there are 2 things - 1 you need to make sure you outgoings are less than your incomings - some areas need to be trimmed a bit - especially the kids activities
the other thing is to work out what the CSA would expect your OH to pay and if it's more than he wants to pay maybe you could point that out to him - otherwise if he's offering more than CSA then I guess you just have to try and negotiate with him
Right:
Incoming
Earnings £414
Self employed earnings £375 (based on last year’s self assessment)
Maintenance Payments £640 (proposed reduction to £405)
Tax credits £840
Child benefit £188
Total £2457

Outgoing
Mortgage payment £935
Council Tax £108 single person discount?
Electricity £50 you need to try and reduce this and gas as much as you can - perhaps mands can give you an idea of whehter you're in credit or not and by how much to give you a rough idea?
Gas £50
Water £34 is a water meter a viable option? have you considered it?
Telephone (landline) £20
Mobile Phone £35 how many? if just yours can you downgrade a package or 2?
TV Licence £12
Sky (broadband & basic TV package) £36
Groceries (food, nappies, household items & cat food) £340
Petrol £60
Road Tax – none saved due next month you probably need an amount in here so you can see what you need to save each month
Car Insurance £38 have you shopped around? is this the best price you could get? if you swap try a cashback site and try and shop around at renewal time
Car Maintenance – none saved mot due next month try and work out an average to put in here
Childcare – varies between term and holiday but approx £60pm
Other child related expenses £150 (cash slush fund for clubs, pocket money, school trips, chickens, guinea pigs, glasses, swimming, misc costs) can you cut this at all?
Building & Contents £39
Life insurance £25
Presents – no budget at present you probably want to put something in here
Haircuts £33
School uniforms, shoes, coats, kids clothes – no budget at present and here
Clothes – no budget at present and here
Entertainment – no budget at present some of the kids stuff is entertainment?
Holiday – no budget at present and here
Household Emergency – no budget at present not sure if you can afford this?
Total £2025

O.K you may think some of my comments are harsh but I would suggest going back to the SOA calculator and putting in all the expenses you ned to see how the budget is shaping up - at the very least you need to be able to balance just paying the basic bills before debt repayments.
Personally it seems to me that you either need to a) increase income and decrease expenses as best you can or b) consider maybe doing a debt management plan with one of the charities - try contacting Consumer Credit Counselling Service or National Debtline or one of the other charities Martin recommends.
Make sure the budget is realistic though as you will need to live on it for a while as you can't increase your debt so you will need to budget for things like MOT, presents etc etc.
I wish there was an easy answer for you.
Good Luck
df

dancingfairy

The other thought that occurred to me was maybe taking a mortgage holiday or switching to interest-only for a short period (obviously be extrremely careful on this and seek advice as I am not an expert and would hate to see anyone put their home at risk) ? If you could pay off virgin this would free up 100 a month from you SOA and you could perhaps see if they will offer any decent balance transfer rates?
How much is the max. you can have for an overdraft and what are the apr's on your debts?
df

RubySewSew

I have redone my debts to show you what interest rates I'm paying

Debt repayments
Mortgage £154000 £935 - 7% (repayment mortgage, self certified, fixed for 5 years - 3 years to go)
Sainsbury’s Bank Loan £3000 £117 - 7.7%
Sainsbury’s Credit Card £5000 £100 - 0%
Santander Credit Card £5000 £100 - 0%
Virgin Credit Card £400 £100 - 17.9% (this was an admin error on my part, had intended to do monthly shop and pay off in full each month but set the credit limit too low to achieve this! Doh! Hence, paying it off asap)
Overdraft £2800 (not sure what monthly charges are)
Student Loan (deferred) £7500
Total £417

My house is infact a small 3 bedroomed terrace. Houses don't really come any cheaper in Brighton and I have already moved slightly out of area to maximise value for money. I can't remortgage. I could sell the house but would lose £10k of my equity in redemption penalties. For this reason, I would prefer to keep the house and re-evaluate in 3 years. And sadly, renting isn't any cheaper just less responsibility.

My income has reduced over the last 2 years. My self employed income used to be 800-1200 pm but is now an unreliable £375. This is also not the first time the ex-OH has reduced maintenance payments. His reasons for reduction are to support his new family. I plan to fight him on this having compromised on everything else. The house is in my sole name - the family house was sold and funds re-allocated to me. I also used to earn pockets of extra income for university work, writing etc. This would ensure cash flow for all the unbudgeted extras throughout the year. Unfortunately this extra work has all dried up. I also used to get more in tax credits but am now repaying a debt accrued due to ongoing administration errors.

I dearly want to budget and save for all the extras but with what? I end every month at the limit of my overdrafts. There isn't room for anything else.

The £150 slush fund is intended as a buffer to soak up the extra, unpredictable costs associated with running an house and a family. It is intended to prevent me increasing my debt. I could help myself by working out exactly what it gets spent on. I am trying to be realistic.

Water is rates - meter would be more expensive for us.

Mobile is contract - will find out when I can cancel it

Sky is out of contract - will cancel.

I have been to CAB about debts before but they indicated there was nothing I could do whilst I owned my own house. I have rounded up debts for expedience - my signature shows a more update to statement.

Freda - your advise about budgeting for presents made me laugh

I know that I need to prioritise but don't feel like I've got enough to go around as it is - I have looked at this so many times.

Guinea pigs and chickens probably cost less then £15 pm. And one day, so I'm told, I will have lots of lovely eggs! And extras to sell.

I have tried cutting hair before - it didn't end well! Also, having my hair cut is my one luxury. Nice hair finishes off the cheapest of outfits

School uniform is paid for although not budgeted for. Because I am self employed I get fluctuations in cash flow which allows me to cover one off costs like this on an adhoc basis although not reliably. It is crap, I know. But that's why I'm asking for help.

HappyMJ

RubySewSew wrote: »

I have redone my debts to show you what interest rates I'm paying

Debt repayments
Mortgage £154000 £935 - 7% (repayment mortgage, self certified, fixed for 5 years - 3 years to go) This is a very poor rate even for self certified and a fixed rate. You may need to look into refinancing this to a lower rate even if it means paying a fee to exit the deal early. You will need to speak to a financial advisor on this one to see what deals are available to you and if it's worth it. You could even consider selling and renting. At this price point it's usually cheaper renting than paying horrendous amounts in interest.
Sainsbury’s Bank Loan £3000 £117 - 7.7%
Sainsbury’s Credit Card £5000 £100 - 0%
Santander Credit Card £5000 £100 - 0%
Virgin Credit Card £400 £100 - 17.9% (this was an admin error on my part, had intended to do monthly shop and pay off in full each month but set the credit limit too low to achieve this! Doh! Hence, paying it off asap)
Overdraft £2800 (not sure what monthly charges are)
Student Loan (deferred) £7500
Total £417

My house is infact a small 3 bedroomed terrace. Houses don't really come any cheaper in Brighton and I have already moved slightly out of area to maximise value for money. I can't remortgage. I could sell the house but would lose £10k of my equity in redemption penalties. For this reason, I would prefer to keep the house and re-evaluate in 3 years. And sadly, renting isn't any cheaper just less responsibility. I know of nowhere in this country where a landlord will get that return on a property. I did a quick search on rightmove and there are plenty of 3 bed properties for less than £900 per month within 10 miles of Brighton. That £900 will include property maintenance costs and buildings insurance. On your income you may be entitled to housing benefits. Not sure about the asset test though. You will then have money to clear the rest of the debts and have a bit left over.

My income has reduced over the last 2 years. My self employed income used to be 800-1200 pm but is now an unreliable £375. This is also not the first time the ex-OH has reduced maintenance payments. His reasons for reduction are to support his new family. I plan to fight him on this having compromised on everything else. There is probably very little you can do about his in the short term. So you'll have to adjust the budget. As he's got his own company and can control his income whatever you get is up to him to declare and not the CSA to guess.

The house is in my sole name - the family house was sold and funds re-allocated to me. I also used to earn pockets of extra income for university work, writing etc. This would ensure cash flow for all the unbudgeted extras throughout the year. Unfortunately this extra work has all dried up. I also used to get more in tax credits but am now repaying a debt accrued due to ongoing administration errors.

I dearly want to budget and save for all the extras but with what? I end every month at the limit of my overdrafts. There isn't room for anything else.

The £150 slush fund is intended as a buffer to soak up the extra, unpredictable costs associated with running an house and a family. It is intended to prevent me increasing my debt. I could help myself by working out exactly what it gets spent on. I am trying to be realistic. Start the spend diary. I've done it all year and it's great working out exactly where all the pounds go.

Water is rates - meter would be more expensive for us. Not by much but savings can be made to reduce even further.

Mobile is contract - will find out when I can cancel it

Sky is out of contract - will cancel.

I have been to CAB about debts before but they indicated there was nothing I could do whilst I owned my own house. It's probably because you have too much equity in your property. The creditors will expect you to release some equity or they won't play ball. They know they can always go for a charging order and get the full amount anyway. I have rounded up debts for expedience - my signature shows a more update to statement.

Freda - your advise about budgeting for presents made me laugh

I know that I need to prioritise but don't feel like I've got enough to go around as it is - I have looked at this so many times.

Guinea pigs and chickens probably cost less then £15 pm. And one day, so I'm told, I will have lots of lovely eggs! And extras to sell. It's still a lot to spend. Are you giving them all the kitchen scraps and buying the food in 15kg bulk bags?

I have tried cutting hair before - it didn't end well! Also, having my hair cut is my one luxury. Nice hair finishes off the cheapest of outfits Cutting hair for boys isn't that hard to do yourself. Buy a set of clippers and clip it all off. simples. Anyway, 6 weeks between cuts can be pushed out to every 3 months without them looking too scruffy. Try 8 weeks to start with then move it to 10 weeks.

School uniform is paid for although not budgeted for. Because I am self employed I get fluctuations in cash flow which allows me to cover one off costs like this on an adhoc basis although not reliably. It is crap, I know. But that's why I'm asking for help.

I'll just repeat what everyone else has said...mortgage costs are too high (it should be less than a third of your income) and there is too much discretionary spending that needs reducing to nil so that you can stay where you are.

HappyMJ

Is it possible for you to use the calculator on this site http://www.makesenseofcards.com/soacalc.html and fill that one in. It allows you to save the figures and post in a format for MSE. It's much easier to read and make sense of your situation.

RAS

Hi

You ex should be paying 25% of his income in maintenance. Are you dealing with the CSA. There are allowed reductions if there are other children in the family. You need to post on the Child Support forum to get better advice on this.

freda

How could you increase your income? You mention university and writing, which implies a good education. Could you teach maths, english, a language or literacy privately? That is easy work and nets c. £20 per hour, maybe more in Brighton once you've got a good reputation.

How old are the boys (excuse me if you've already said and I've missed it). If one is old enough to babysit the others, can you get a part time job for a few evenings? Could you get more reliable, employed work during school hours?

I think it boils down to the fact that your income isn't high enough, even without you budgeting for the things you should save each month for. So you either need to increase income or reduce spending (or both).

Have you tried contacting CCCS or Payplan to talk about a debt management plan? That would reduce the amount you pay each month on debts, enabling you to get back on your feet saving for annual spends as well as maintaining a reasonable standard of living for you and your children.

Also, talk to the CAB about what benefits you'd be entitled to if you were renting. I don't know much about it, but I'm pretty sure that if you rent, as opposed to paying a mortgage, you are entitled to help with rent due to your low income. If you knew the actual figures, you could use that to help you make a decision as to whether it would be worth selling up.

Got to run now. Best wishes.

SouthCoast

Having problems with your mortgage payments?

http://mortgagehelp.direct.gov.uk/default.aspx