Advice Please, what would you do?

gibboking

Right we have a couple of options at the mo.
but a bit of background first as I know you guys will ask for it if i dont put it on.
Hubby and i got into a bit of debt 2 years ago (£23k:eek: ) after remortgaging to consolidate various debts and ccs. 1 month after doing this hubby was made redundant, in and out of work and benefits for 6 months not enough cash coming in so we dived back in to debt to live.
We are now on a DMP with CCCS paying the following:

Alliance & Leicester OB £201 payment £5 CB £171
Abbey OB £2577.32 payment £19.84 CB £2497.96
MBNA OB £2758.00 payment £12.49 CB £2683.06
CO-OP OB £7275.00 payment £33.12 CB £7076.28
Equidebt OB £9567.73 payment £26.55 CB £9434.98
Droyds OB 126.00 payment £5.00 CB £101.00

Total OB £22,505.05 payment £102 CB £21,964.28
Estimated debt free in 17 years:eek:

Now
Income
Me £650
OH £1600
CB £70
TC £135 (reducing to £40 in May)
Total £2455

Outgoings

Mortgage Northern Rock £800.00 CB £123000
Current house value £140000

CCCS £102
Ctax £134 (missed a payment so making up)
water £15
TV li £12
Gas £25
Elec £55 (paying back from last year when they let us pay much lower)
Pet ins £35 (for 2 dogs who love going to the vets!! springer spaniels)
Car ins £40
Van ins £16
Life x 2 £20
B&C ins £25
Internet £18
Mobiles x 2 £60
Petrol £80
Food £200 (for me, son and dogs and hubby at weekends)
Ciggies £240 (not me oh the more i nag the more he smokes:mad: )
Gym £16.00
Work away £200 ( hubby is away mon-fri and stays in hotels etc paid for by boss but he has no choice but to eat out as there are no fridges in rooms, this allows him £10p/d for food and drink)
Child care £65
Tax stamps £10

Total £2168
CCCS made it more than this as they allow for going out, clothing etc which TBH i wait until xmas and bday to get kitted out through presents.

Now option A see if we can try and do an IVA and be debt free in 5 years

B carry on as we are, miserable and boring (friends stopped asking us out as we always say no)

or
My sister has who works for C&G mortgages did a mortgage app with me (her boss okd it and listened in) we all knew it would be refused and reffered to their specialist people which it was, and we have been offered a mortgage of
£132,770.00 over 35 years repayment, 3 years fixed and tie in @ 6.590% which is high I know but it will give us aprx £13000 to pay off above debts by making reduced settlement offers (some have already offered excellent lower settlements but we never had the cash to accept)

New mortgage will cost £810 pm which I know is only a saving of £90
but our credit score which is still okish will get repaird and after 3 years we will be able to swith to a much better deal, over a shorter time.

So what do you think?
Thanks in advance for reading this loooooonnnngggg post

gibboking

just bumping myself back up

lynsayjane

i dunno what to say to this really toots. there are a few areas you could possibly cut back on with your soa. tbh if it were my oh i'd sew his gob shut so he couldnt smoke. he spends more a month on them than you do feeding your whole family

the mobiles could be lower, i know it's hard, i struggle to use my lower call allowance and usually go over, but i'm still saving £20 a month.

can you cancel the gym or are you still tied in?

what are tax stamps? are they essential?

you may be able to drop your food down a bit actually, especially if oh isn't there all week, have you found the old style board yet? great advice on meal planning etc. i'm on my own but following this plan i spend a maximum of £10 a week on food, and that includes cleaning stuff!

i'm afraid i can't advise on the mortgage stuff, i know folk on here don't like securing debt onto houses, especially if it's not secured int he first place iyswim!?! but i can see how it would make sense. if you did do it would you be tryin to save up and overpay on your mortgage to get it back down sooner? i guess there is a lot to consider in that kinda thing. i've sure thought about doing it to mine, i'd only need a couple of grand, there is more than enough equity in the flat, and i'm only 25, i won't be in a one bed flat for much longer. hopefully someone with more advise on this side of things will be along soon.

whatatwit

Unless i am reading your statement wrong, you currently have a surplus each month.
I think your husband has the best deal, £10 a day for food and drink and money on top for his fags.
Does his employer not provide any subsistence allowance?
Who is the gym membership for, can that be cancelled to free up a little more money.

jessicamb

I'm not up with all the terms - DMP/IVA etc, but is it not better to get the IVA and be debt free in 5 years than to load up the mortgage for 35?

Sorry if I've missed something totally fundamental out...

lazza_w

Just a couple of initial thoughts...

Car + Van Insurance - depends on your situation but changing insurer via a comparison site such as confuzed.com or money supermarket may be an idea. Also look at the Post Office or other insurers who will give you cashback for changing insurer through them - look at the threads elsewhere on the site.

Life insurance - shop around. What is it for (mortgage I expect)? Is there a cheaper option? One idea is to use an insurance broker like Cavendishonline, who charge you an upfront charge to set up a new policy but will rebate the commission that they get from the policy each month (ie you pay £30 to set up the policy , but get the same cover as before for £5.00 less per month, saving you £30.00 in the 1st year then £60.00 a year therafter).

Internet - is this broadband? If it is, decide whether you get enough out of it to justify the charges. Personally I think it is worth it, but for people who only use it occasionally dial up may be better.

Mobiles - Do you really need them. PAYG may be cheaper. If you want a contract, and your renewal date is coming up, try getting a 'cashback deal'. Basically you pay the monthly contract, but a certain times during the year you send in a copy of your bills and you get reimbursed all of your contract charges. Try Mobileshop or e2save, but there are plenty of others around. If you do it correctly that is £720 per year you can chuck at your debts.

Petrol - walk! (or at least decide whether you need to use the car every time you are about to get into it)

Ciggies - obvious, really.

Gym - do you need this. How about saving on this and the previous one by combinine 'bonuses' for not smoking with 'bedroom exercises' to keep you both fit!

Work away - £10.00 buys an awful lot of Weetabix, bread and fillings. If there is no fridge it is still probably cheaper to throw them away at the end of each day than go to Macdonalds.

Pet Insurance - left this till last as I am a vet, so have a bit of interest in this. Unless you would put them to sleep if anything happened, financial planning is a good idea. If you don't have enough access to emergency funds to pay for unexpected illnesses the insurance is you only option. If they have ongoing illnesses (or have had problems in the past that could reoccur) then changing insurance companies is a bad idea as they will be excluded from any new policy (the equivalent to deciding to take out house insurance once you house is already on fire). If not then feel free to shop around but PLEASE check what is covered by the poicy, not just the price. The main difference will be how long a condition will be covered for. Some policies will cover a condition for the rest of an animal's life wherease others will have a limit (eg 12months or a certain amount of money). The latter may not be bad value for money (they policy should be cheaper) btu make sure you know what you are getting 1st.

Good luck!

lazza_w

Oh all right - an entire essay!

Rgc_3

Hi

keep an eye out on tuesday as there is an expected base rate hike of .25 % on its way and further speculation that base rate could rise to 6 % in time.(which would have a short term knock on effect if you have to take a high apr mortgage deal...could cancel out alot of your £90.00 saving and back to square one

I personally would nt go for the 35 years it relies too heavily on mortgage interest staying down and no housing market slump which would put you into negative equity.....no one can predict these two things of course but in my opinion its on the cards.

An IVA could result in equity being swallowed up when it comes to time to realise equity for creditors(year4 i think it is)

I know its not your favourite idea but id plug on just now with the DMP and make any savings you can but in turn allow a little for a night out as it cant be all about debt all the time and look at any money making ideas to get a bit more coming in

best wishes

gibboking

thanks guys
I need the car as my job is 8 miles away, out in the stickx not on a bus route, and hubby needs van sometimes to get to work.
£10 a day is a lot for food for hubby, but he is working on building sites and usually the only places around for food etc are fast food places, at the mo all he has near him is mcdonalds! which isnt good!! its not that much every week but he is doing a physical job and needs to keep energy up (mcdonalds doesnt help) I do by him tins of stew etc and if he is lucky he might have a micro in his room.
Hubby is self employed on a subcontact basis, so he just has to look out for himself at work.
I dont want to cancel my gym membership as it is the only real me time i get and it helps keep me fittish.
The mobile are our only form of communication with each other when oh is away as we cancelled the home phone to save cash.
car ins has gone up cos some ******* caused an accident then said it wasnt his fault so we hadto go 50/50 as no witnesses etc.
Food bill includes toiletries, dog food, the odd prezzie to put up for xmas, (i start early to spread the cost)
Pet ins is high as my dogs went through a spell of taking it in turns evry 6 months or so getting themselves an injury or illness and they always decided to do it on a bank holiday so we would get the call out fee and bank holiday rates slapped on.
injuiers range from sprains to gashes and illnesses gastrointirits (over xmas!!!) and arthrits (ongoing) so it is not worth risking not insuring them as we would never be able to afford it and we wouldnt get a much better deal anyway.

Thanks

gibboking

Also we are hoping to move in a couple of years and going into an IVA isnt going to be too helpful when trying to do this.

RGC
We would only be on mortgage for 35 years for the first 3 (tie in period) when our credit score is sorted, hopefully we will be able to move and change mortgage providers on to a better deal at the same time.

hope this make sense