Please Help - Big Debt - I just want to cry!

giddykipper

I've just worked out our debt and I quite literally feel like crying.

We are in so deep its frightening .... we've buried our heads in the sand for far too long and have spent the last year or so borrowing from Peter to pay Paul which has done nothing at all to help.

Quick rundown:

RBS loan : £20,000 (£319 p/m until Sept 2011)
Northern Rock loan: Originally borrowed £25,000 but I think we owe around £30,000 at the moment due to interest (£392 p/m until Feb 2013)

RBS Visa : £2,500 (18.3%)
Halifax : £2,900 (0% until end of Nov then 12.9%)
Virgin : £5,987 (1.9% until 1st Feb then ??)
Egg: £4,970 (15.9%)

Other monthly outgoings are:

Mortgage - £556
Council Tax - £100
House Insurance - £25
Car Insurance - £135 (its a special traders policy for hubby which he can't work without)!
Building Society - £25 p/m - for Christmas
Telewest - £85 p/m - phone, internet & tv ( we never go out!)
Life Ins - £22
Mobile Phones - £55 (hubby's mobile which he needs for work)
TV Licence - £12

My take home wage is £1340 - hubby is self employed and his wages really vary at the moment, he generally puts £600 p/m into the account to help with bills and then also pays for day to day living essentials : food, petrol, gas, electric, water etc etc but we are really struggling as hubby's work is really quiet at the moment. The months he hasn't been able to put as much in the bank as we'd like, we've used cc's to pay for things!

As hubby is self employed - we also have to try and save for the tax man - haven't managed that yet as we're only just meeting our minimum payments on everything!

We are in such a mess I just don't know where to start!

Can anyone offer any advice?

J x

Scully's_Girl

You're in the right place. Plenty will come and give invaluable advice. There are people who have pulled themselves out of worse. You'll get through this. Hugs!

Just a thought, is Christmas really an absolute necessity this year? £25 a month is £300 you can put towards your debt. One thing you should think about is planning giving presents only to children. Advise your family & close friends of these plans. don't worry, lots of people are doing it nowadays.

Hubby's phone at £55, is there any oppurtunity for a tax advantage as he is self employed?

ckerrd

You have recognised the debt and that without doubt is the single biggest step you will take. Well done

Can you trasnfer any credit card balances to 0%
£55 p month on a mobile seems high - anyway to reduce this - new/better contract?
Telewest £85 what can come down on this? Different TV package?

There will be others along with much more useful suggestions but just wanted you to know you have started on the right path now.

giddykipper

Thanks for your fast reply Scully's Girl - its good to know that people understand on here and don't judge!

I know what you're saying about Christmas - you're right ..... I'm really very embarrassed about the situation we've got ourselves in and just wonder how I would get round not having to tell people why - or bursting into tears halfway through the conversation!

I wondered that about the phone - and the car insurance too as he can't work without his traders policy! I'll get him to ring and find out about this!

Thanks again for your reply.

J x

Annie_Fanny

giddykipper wrote:

I've just worked out our debt and I quite literally feel like crying.

We are in so deep its frightening .... we've buried our heads in the sand for far too long and have spent the last year or so borrowing from Peter to pay Paul which has done nothing at all to help.

Quick rundown:

RBS loan : £20,000 (£319 p/m until Sept 2011) Do you have PPI on any of these loans?
Northern Rock loan: Originally borrowed £25,000 but I think we owe around £30,000 at the moment due to interest (£392 p/m until Feb 2013)

RBS Visa : £2,500 (18.3%)
Halifax : £2,900 (0% until end of Nov then 12.9%)
Virgin : £5,987 (1.9% until 1st Feb then ??)
Egg: £4,970 (15.9%)

Other monthly outgoings are:

Mortgage - £556
Council Tax - £100
House Insurance - £25
Car Insurance - £135 (its a special traders policy for hubby which he can't work without)!
Building Society - £25 p/m - for Christmas How much do you have saved up?
Telewest - £85 p/m - phone, internet & tv ( we never go out!) :eek: That is horrendous amount? How long have you been a customer of theirs? Call them and say that you are considering transferring to someone else and see if they will lower this amount. I currently pay approx £23 per month for phone/tv/broadband and this is with ntl.
Life Ins - £22
Mobile Phones - £55 (hubby's mobile which he needs for work) How much does your mobile cost?
TV Licence - £12

Ideally we need a FULL SOA. You haven't included food, bills, haircuts etc.

Some questions:
Have you had any bank charges?
If hubby is not getting any self-employed work can he do something else to bring in cash? An evening job/weekend?
Could you get a second job?

giddykipper

Hi there

To answer your Q's :

No I don't have PPI on any of the loans.

I've been saving in the B/S since Jan 06 - haven't touched it was going to use it for Christmas.

The Telewest is for the HD package (a bit like Sky +) - I think we could get rid of the home phone as we never use it to make calls as we have free calls on our mobiles and I will look at cutting down the package - getting rid of movies etc!

My mobile is £25 p/m and hubby's is £30 p/m we're currently under contract but I could change my tarrif to a cheaper one - last I enquired the difference wasn't worth the hassle - but I think given our current situation - every little helps.

We've had bank charges on our overdraft but have just applied for an account with Alliance and Leicester and been accepted - its has a 0% o/d for 12 months and after that its apparently the cheapest o/d on the market.

I haven't included food etc as they get bought as and when there's anything left after paying the bills (we've been very lucky so far, there's only been a couple of weeks when we haven't had the money for shopping but we've always managed), gas and electric get scraped together as they come in quarterly.

We have no real budget to work to as hubby's wages are so hap-hazard ....... he currently leaves for work at 7am and is rarely home before 8pm - he works really hard but the work just isn't there at the moment. (he's a mechanic).

I've signed up to do mystery shopping but there's not much money in that and I'm not really sure what else I'd be able to do.

Up until now we've had our heads buried in the sand so I haven't really looked at the option of a second job to be honest - although I would imagine now would be a good time to do so.

BTW most of the debts are in my name only - so wondered if a DMP would be helpful?

I really appreciate everyone's help.

J x

richardvc

Whilst there are many more qualified people than I on here to give you some sound advice, I just wanted to wish you good luck.

All of us on this site know how you feel and the anxiety debt brings. Welcome to MSE and keep your chin up.

climbgirl

You probably aren't going to like this suggestion but I'm going to make it anyway! With debts of this size, you guys really are treading water here. And with such an irregular income from your husband, it's not going to get better anytime soon.

Perhaps it's time he considering giving up the business and getting a full-time job elsewhere? You really need a regular, dependable income to throw at these debts and you're just not getting that.

giddykipper

Yeah I know what you're saying ...... and we have thought about it long and hard ....... some months he makes more than he expected, some months he doesn't so as you say, currently we're just treading water.

Its those good months that he doesn't want to give up on - he's trying his absolute best to get things off the ground and I think he's worried that ultimately he won't make the same money working for someone else as he could possibly if things get off the ground with his business. He also occasionally sells and buys cars and when he can do this, we have months where we can throw a bit extra at the council tax or whatever so we have a couple of months respite at other times.

We'd need him to earn roughly the same as me to be getting anywhere, but mechanics in our area aren't paid anywhere near that amount!

We're going to sit down again tonight and talk things through as I don't think he realised how badly off we were. As everything is in my name, I deal with it all!

J x

dancingfairy

Can you take a mortgage payment holiday to give you a few months breathing space to get yourself sorted out? but you still have to address the problem of not having enough coming in really.

fergee

J,

The best thing you have done today is pull your head out of the sand and examine in detail exactly just how much you owe. I know it is hard but try not to let it get to you, instead look at ways to save money.

I'm sure you could take £60 per month of your Telewest bill, drop all the premium channels, look at your broadband speed and the phone package you are on. It may be beneficial to take an inclusive call package.

I currently have a company phone and £25 per month gets me 400 minutes and 200 texts. If your hubby has had the phone for a while he should look at a new contract and the prices available.

In regard to Christmas, you could tell your close friends the truth, you may be suprised at the help and support (emotional) that they will give you. The old addage that a problem shared is a problem halfed does ring true. If this is a step too far you could say that you are not giving presents this year as you have decided to donate to charity as it has become too commercial. i know quite a few people who do this, it means they don't have to buy cards or gifts etc.

With regard to your 2 loans, what is the current rate of interest? It may pay to move these loans to a lower rate. Phone your 2 loan companies and ask for your current outstanding balance. If you move your loans every 0.5% better the rate is you will save £12.

You could look at https://www.moneysupermarket.com for things such as mortgages, life insurance, gas+elec etc. I know that people on hear may only suggest small savings, but they will all gradually add up.

Good luck J and keep smiling, leave no stone unturned.

Take care