Another newbie looking for some advice

4thekids

Hello,

I've lurked for years then had my lbm about a year and a bit ago. Worked solidly last year, doing lots of overtime but didnt make a dent in our debts. Our car died and parents lent us money to get a newer one. They dont know the mess we are in. My work has cut all overtime this year and so I've applied for casual agency work. We don't have anything to show for our debts - we have just been living beyond our means for years. I realise we cannot go on like this so any help and advice will be most welcome. We got ourselves into this mess so we will get out of it!

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1200 ( Hope to get some extra shifts soon)
Partners monthly income after tax....... 1000 ( Hubby works outside so can often get rained or snowed off at the last minute which means no pay)
Benefits................................ 216
Other income............................ 0
Total monthly income.................... 2416

Monthly Expense Details
Mortgage................................ 890
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 130
Electricity............................. 70
Gas..................................... 70
Oil..................................... 0
Water rates............................. 22
Telephone (land line)................... 30 (Includes internet)
Mobile phone............................ 50 (x2 contracts, 1 PAYG)
TV Licence.............................. 11
Satellite/Cable TV...................... 25
Internet Services....................... 0
Groceries etc. ......................... 250
Clothing................................ 0 (No clothes all year. In laws bought kids school uniforms and shoes))
Petrol/diesel........................... 150 ( Car costs just for my car as hubby is paid for by employer)
Road tax................................ 13
Car Insurance........................... 25
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 25
Contents insurance...................... 25
Life assurance ......................... 130 ( Came with mortgage from years ago but is it to high?)
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40 ( Big family but small presents)
Haircuts................................ 0 ( SIL cuts hair)
Entertainment........................... 0 ( Never go out!)
Holiday................................. 10 ( Go camping each year)
Emergency fund.......................... 0
Total monthly expenses.................. 1976

Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 6000 ( Probably not worth this much now if I sold it)
Other assets............................ 0
Total Assets............................ 226000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 165250...(890)......3.00 ( Need to check %)
Total secured & HP debts...... 165250....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................16938.....403.......8.5 ( 2yrs into 5 yr loan)
overdraft......................1300......0.........21.9
hsbc cc........................7184......180.......0 (0% until April 11 then 21.9%)
parents........................7000......200.......0
tesco cc.......................500.......25........16.9
virgin cc......................4050......25........0 (0%until Dec11 then 23%)
Total unsecured debts..........36972.....833.......-

Monthly Budget Summary
Total monthly income.................... 2,416
Expenses (including HP & secured debts). 1,976
Available for debt repayments........... 440
Monthly UNsecured debt repayments....... 833
Amount short for making debt repayments. -393

Personal Balance Sheet Summary
Total assets (things you own)........... 226,000
Total HP & Secured debt................. -165,250
Total Unsecured debt.................... -36,972
Net Assets.............................. 23,778


Should we try and go for a fixed term mortgage deal where we can add our debts into it and then overpay it?

Thank you for any advice.

Percy1983

To be honest I can't see an easy way out for you, I can see points to save money but it wouldn't be enough.

Firstly can you reduce the mobile phones down, if there is high usage you can get some sim only contracts which offer great value. TV, cut down to freeview and you can get phone/internet from Talk Talk for just over £20 if available. Holidays will have to stop and presents need to be cut right back.

The biggest problem is servicing your current debt, the only way out is to setup payment plans with them.

I am sure somebody much better than me will be along soon with more useful advice.

Good luck.

dancingfairy

Your gas and electric look high - have you shopped around and made sure you turn everything off that you can when not in use?
Life assurance also looks like a massive expense for you - I've no idea about this but I would check out the other boards and shop around to see what you actually need and what it should cost.

Re remortgaging this is a very very bad idea - at the moment your debts are unsecured which limits the actions creditors can take against you, change it to secured debts and miss a payment and your house is under threat.
You need to speak to a debt charity like CCCS or National Debtline or your local CAB to go through your options - ie dmp, IVA, Bankruptcy etc.
df

Tixy

Hi and welcome

I think remortgaging is a really bad idea. Your mortgage is already a fairly high proportion of your income. And it is never advised to turn unsecured debts into secured debts. If one of you loses your income altogether you won't be able to keep up with repaymentas and stand a much greater risk of losing the house.

There are some areas where you may be able to make a few cutbacks, but nothing that would appear to be enough to get rid of your shortfall. You really need to speak to one of the debt charities and speak to them in detail as to what they would recommend. It may be a DMP or depending on the split of the debts etc it may be that another option would work better for yourselves.

Most obvious areas you may be able to make savings-

Electricity............................. 70
Gas..................................... 70 these look quite high, do you have arrears? have you looked at switching recently
Life assurance ......................... 130 ( Came with mortgage from years ago but is it to high?) very high - often people can be paying twice as much as needed by getting from your mortgage provider

dancingfairy

At the moment you are nearly 400 a month short of servicing your debts. By cutting electric/gas and life assurance you can maybe save 100 ish (for sake of argment - perhaps more). This leaves you 300 a month short.
You have 2 council tax free months to play with, I am trying to work out if you can take a mortgage holiday, that along with the free council tax months and the above cutbacks whether you can pay off any debts in the next few months that will make you balance - at the moment I'm struggling.
Can you take a break on the loan that is 403 a month?
If you were able to get a mortgage holiday, holiday on the loan, a holiday from your parents, make the savings above and chuck in the council tax free months you may be able to make a big enough dent in your monthly outgoings to continue from there but it is obviously going to be a challenge.
df

tasha-debt

4thekids wrote: »

Hello,

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1200 ( Hope to get some extra shifts soon)
Partners monthly income after tax....... 1000 ( Hubby works outside so can often get rained or snowed off at the last minute which means no pay)
Benefits................................ 216
Other income............................ 0
Total monthly income.................... 2416

Monthly Expense Details
Mortgage................................ 890 - Could you go Interest only for a while
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 130
Electricity............................. 70 This is really high, see if youcan lower this, remember to unplug everything except fridge and freezer.
Gas..................................... 70 - Same this is really high
Oil..................................... 0
Water rates............................. 22
Telephone (land line)................... 30 (Includes internet)
Mobile phone............................ 50 (x2 contracts, 1 PAYG) - Can you lower the contracts a taffif
TV Licence.............................. 11
Satellite/Cable TV...................... 25
Internet Services....................... 0
Groceries etc. ......................... 250 - Try and trim this to £200
Clothing................................ 0 (No clothes all year. In laws bought kids school uniforms and shoes))
Petrol/diesel........................... 150 ( Car costs just for my car as hubby is paid for by employer)
Road tax................................ 13
Car Insurance........................... 25
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 25
Contents insurance...................... 25
Life assurance ......................... 130 ( Came with mortgage from years ago but is it to high?) - Look at other deals, this seems very expensive.
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40 ( Big family but small presents)
Haircuts................................ 0 ( SIL cuts hair)
Entertainment........................... 0 ( Never go out!)
Holiday................................. 10 ( Go camping each year)
Emergency fund.......................... 0
Total monthly expenses.................. 1976

Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 6000 ( Probably not worth this much now if I sold it)
Other assets............................ 0
Total Assets............................ 226000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 165250...(890)......3.00 ( Need to check %)
Total secured & HP debts...... 165250....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................16938.....403.......8.5 ( 2yrs into 5 yr loan)
overdraft......................1300......0.........21.9
hsbc cc........................7184......180.......0 (0% until April 11 then 21.9%)
parents........................7000......200.......0
tesco cc.......................500.......25........16.9
virgin cc......................4050......25........0 (0%until Dec11 then 23%)
Total unsecured debts..........36972.....833.......-

Monthly Budget Summary
Total monthly income.................... 2,416
Expenses (including HP & secured debts). 1,976
Available for debt repayments........... 440
Monthly UNsecured debt repayments....... 833
Amount short for making debt repayments. -393

Personal Balance Sheet Summary
Total assets (things you own)........... 226,000
Total HP & Secured debt................. -165,250
Total Unsecured debt.................... -36,972
Net Assets.............................. 23,778

QUOTE]

Verbatim

Although your grocery bill is not high by any means you could perhaps shave something off here. There's a thread on Oldstyle where someone has devized a meal plan for the month for a family of four eating healthily and well for around £100 a month I think. Worth a look.
Another thought was do you need 2 cars or could you manage with one?

whiteguineapig

do you really need to save £40 a month for presents? i save £5 a week so thats £20 a month but my children are older now, maybe you can cut it a bit tho , i try and think in advance and get stuff in sales

theoretica

You might be able to lower your building and contents insurance by shopping around.
You spend a lot on petrol, can you cut down your car usage at all?
You could get rid of the TV...

4thekids

Thank you for all the replies yesterday. I got myself into a real state but today I'm more positive. We are going to try and not go down the dmp route. We want to move in the next few years so need to be able to get another mortgage then.
Our plan is to cut back even more, juggle more, work more and maybe talk to our parents in 6 months or so if it still isnt looking good. We won't remortgage now or try for more credit - thanks for pointing out that would be a silly move.
Thank you for all the advice. I'll keep you updated!!

WASHER

4thekids wrote: »

Hello,


Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1200 ( Hope to get some extra shifts soon)
Partners monthly income after tax....... 1000 ( Hubby works outside so can often get rained or snowed off at the last minute which means no pay)
Benefits................................ 216
Other income............................ 0
Total monthly income.................... 2416

Monthly Expense Details
Mortgage................................ 890 - INTEREST OR REPAYMENT?
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 130
Electricity............................. 70 - A TAD HIGH
Gas..................................... 70 - A TAD HIGH
Oil..................................... 0
Water rates............................. 22 - THIS SEEMS LOW, IS THIS ACTUAL
Telephone (land line)................... 30 (Includes internet)
Mobile phone............................ 50 (x2 contracts, 1 PAYG)- REDUCE CONTRACTS AND LOOK TO REPLACE ALL CONTRACTS WITH PAYG, AND THESE ARE FOR EMERGENCIES ONLY
TV Licence.............................. 11
Satellite/Cable TV...................... 25 - YOU CANNOT AFFORD THIS
Internet Services....................... 0
Groceries etc. ......................... 250 - WELL DONE IF THIS IS THE ACTUAL FIGURE
Clothing................................ 0 (No clothes all year. In laws bought kids school uniforms and shoes))
Petrol/diesel........................... 150 ( Car costs just for my car as hubby is paid for by employer)
Road tax................................ 13
Car Insurance........................... 25
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 25 - YOU HAVE COMBINED INSURANCE OF £50 PER MONTH, THIS IS REALLY HIGH, YOU NEED TO REDUCE THIS, HAVE A LOOK INTO THIS
Contents insurance...................... 25
Life assurance ......................... 130 ( Came with mortgage from years ago but is it to high?) FAR TOO HIGH, WHAT IS THIS FOR? CRITICAL ILLNESS? OR MORTGAGE PROTECTION ETC
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40 ( Big family but small presents) - TOO MUCH EACH MONTH, TALK TO YOUR EXTENDED FAMILY AND MAKE A MUTUAL DECISION OF NO BIRTHDAY/XMAS GIFTS OUTSIDE OF YOUR OWN HOME
Haircuts................................ 0 ( SIL cuts hair)
Entertainment........................... 0 ( Never go out!)
Holiday................................. 10 ( Go camping each year)
Emergency fund.......................... 0
Total monthly expenses.................. 1976

Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 6000 ( Probably not worth this much now if I sold it)
Other assets............................ 0
Total Assets............................ 226000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 165250...(890)......3.00 ( Need to check %)
Total secured & HP debts...... 165250....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................16938.....403.......8.5 ( 2yrs into 5 yr loan)
overdraft......................1300......0.........21.9
hsbc cc........................7184......180.......0 (0% until April 11 then 21.9%)
parents........................7000......200.......0
tesco cc.......................500.......25........16.9
virgin cc......................4050......25........0 (0%until Dec11 then 23%)
Total unsecured debts..........36972.....833.......-

Monthly Budget Summary
Total monthly income.................... 2,416
Expenses (including HP & secured debts). 1,976
Available for debt repayments........... 440
Monthly UNsecured debt repayments....... 833
Amount short for making debt repayments. -393

Personal Balance Sheet Summary
Total assets (things you own)........... 226,000
Total HP & Secured debt................. -165,250
Total Unsecured debt.................... -36,972
Net Assets.............................. 23,778


Should we try and go for a fixed term mortgage deal where we can add our debts into it and then overpay it?

Thank you for any advice.

Welcome to MSE and DFW board.

I've added comments in. Could you transfer the tesco debt onto a 0% card, this will save you a little interest.

One possible solution to consider is to sell your home and buy a smaller one/cheaper area in order to completely cover your debts, seems drastic but will enable you to have a complete new slate.

You are short each month, so as others have advised, you need to speak to a debt charity a.s.a.p.

Will you lose any child tax credits shortly under the new government rules, if so, you need to factor this is in the long term.

May I suggest you take a look at your bank statements for the past 3 months and total the ATM cash withdrawals and debit card transactions for grocery shopping, you may just get a shock, it may seem like a tenner here and there, if like me, it turned out to be almost £300 per month spent on trivial items (a tenner a day).

If you currently pay your council tax over 10 months, you should get February and March as free months, use this money to pay some of your highest APR card.

WASHER.x.