Really worried about debts

jessonline

Dear members

Firstly i attach ,my SOA for your information.

My husband became disabled over 5 years ago and i contiued to live of credit cards and balance transfers, i just can not continue this way, but i now need to sort this out, but we are very worried about losing our house etc, we have 3 children and my husband is on dla and Incapacity, while i juggle a full time job and care for my husband between my son and sister in law.

we just do not know how to start and have been advised to go on a DMP, but wanted to know what happens if this is rejected by the lenders and we are forced to become bankrupt by them, as this will take 19 years to repay, unless we win the lottery etc, we also have a reduced mortgage rate which we currently pay 550pm but have noted this below as 646 as this is due to go up once the reduction is finished in July 2007, is this ok or will we be in trouble.

Do i also have to declare the hire purchase of a frigde and settee seperately as a debt even though i have listed in the budget sheet as repayments.

The figures in this budget are based on those supplied by you during the preparation of your Debt Remedy.
Your Income Amount
Your take home pay £940
Your partner's take home pay
Rent/board received
Pension received
Any other income received
Income Support
Jobseekers Allowance
Your Income Amount
Incapacity Benefit £405
Disability Living Allowance £306
Working Tax Credit
Child Benefit £156
Child Tax Credit £398
Child Support
Total income £2,205
Housing Amount Comment
Rent
Mortgage £646
Secured loans/2nd mortgage
Mortgage endowment premium £136
Service charge/ground rent
Water £26
Council tax £109
Gas £66
Electricity £55
Other household fuel
Household services
Building and contents insurance £32
Telephone, mobile & internet £35
TV licence £11
Satellite
Repairs and maintenance
Household appliance rental
Child maintenance
Childcare
Fines, CCJs, Decrees
Life insurance/pensions
Medical/accident insurance
Hire purchase £120 27 months left
Transport
Vehicle spares and servicing
Road tax £11
Motor insurance £35
Vehicle breakdown cover £7
Fuel & parking £90
Public Transport £15
Food & housekeeping
Food, toiletries, cleaning £415
School meals/meals at work £53
Pets, pet food/insurance £20
Tobacco
Misc. goods & services
School trips/activities £15
Medicines/prescriptions £10
Dentist/opticians £14
Hairdressing
Union/professional fees £6
Laundry/dry cleaning
Education fees
Personal & leisure
Clothing & footwear £35
Newspapers/magazines
Sports, hobbies, entertainment
Children's pocket money £15
Church/charity donations
Sundries/emergencies/other costs
Sundries/emergencies £25
Loan from family/friend £50 Total Owed £5500
Other
Total expenses £2,052
Additional information Comment
No of adults 2
Dependants 3
Totals Amount
Total income £2,205
Total expenses £2,052

Surplus (Deficit) £153 left over for loans


Your Creditor List
Ownership
of debt
1 American Express Credit Card £8,850 £225 My Partner
2 Barclaycard Credit Card £2,500 £45 My Partner
3 Barclaycard Credit Card £5,400 £146 MyPartner
4 Capital One Credit Card £1,100 £30 MyPartner
5 Egg Credit Card £7,500 £156 Joint
6 Northern Rock PersonalLoan£10,200 £306 MyPartner
TOTAL £35,550 debt TOTAL monthly repayments now £908

i dont know what to do as we also have a buy to let property with a mortgage of 85k owned by us and two of my brothers, the value is 178k.

we have declared all debts apart from the loan on the above rented property as this is not ours in total, please advise.

we also have 3 clear credit cards which have no balances on them, but did not wish to give these back as we have not defaulted on them and did not know what to do.

Can we be forced in to bankruptcy by the creditors, or would they accept the proposal made by CCCS or payplan as above.


I look forward to your kind words of wisdom and knowledge to help me get out of this unrepentant mess.

Jess

pandaonmyshoulder

I'm no expert but have you thought of a pre-payment for prescriptions, £92 for a year per person? or I think they do it 3 monthly too.

Storm

If you have a buy-to-let property is this included in your income? Could'nt see it listed separately...

Are you entitled to carers allowance for looking after your OH?

Would you consider selling your share of the BTL to your brothers to free up a lump sum to throw at the debt?

You could probably save money on the food/toiletries/cleaning bit of your SoA - switch to own brand, go to ALDI, LIDL etc and try the Old Style Board for recipe ideas.

Your utility bills are high too - try USwitch to see if you're getting the best deal, and turn those lights off!

Can the fuel & parking be reduced - walking or cycling instead of driving etc?

Good luck, and welcome to the boards :hello:

lynzpower

hi there, Im going to go through this and mark on my thoughts

Your Income Amount
Your take home pay £940

Incapacity Benefit £405
Disability Living Allowance £306
Working Tax Credit
Child Benefit £156
Child Tax Credit £398

Total income £2,205

Mortgage £646
Mortgage endowment premium £136
Water £26
Council tax £109
Gas £66 ( these seem quite high, look at est.org.uk for energy saving tips. You can get free energy saving lightbulbs given your hubbys on benefits)
Electricity £55 ( again, seems high)
Building and contents insurance £32 ( this is high, i pay 21 with CIS)
Telephone, mobile & internet £35 ( can you break this down for us is this a package?)
TV licence £11
Hire purchase £120 27 months left ( whats the A)Pr on this?
You do need to put something away for car servicing
Road tax £11
Motor insurance £35 ( checked this is the cheapest)
Vehicle breakdown cover £7 (there is cheaper I think, immoral angel should know she was talking about this the other day)
Fuel & parking £90 ( can you cut down these journeys)
Public Transport £15
Food & housekeeping
Food, toiletries, cleaning £415 (for 5? I suspect this is one area you can cut down massivley, to 250 quid I reckon)
School meals/meals at work £53 ( needed? cant people take pack ups? )
Pets, pet food/insurance £20 ( checked this is the cheapest?)
School trips/activities £15
Medicines/prescriptions £10 ( a prepay cert might be good here, are you sure on incapacity he doesnt get free preescriptions?)
Dentist/opticians £14 (is this for contact lenseS? could glasses be worn, or contacts can be got cheaper big discussion on the health moneysaving board)
Union/professional fees £6

Clothing & footwear £35
Children's pocket money £15 ( do you have to do this? can the kids do paper rounds/ car washing etc instead?)

Sundries/emergencies £25
Loan from family/friend £50 Total Owed £5500

Have you looked at the savings possible?

I suggest you look at the old style board "getting started" threads, they are very useful for cheap and healthy meal making.

Has you hubby had an assessment by social services- direct payments nad carers allowance are 2 incomes that spring to mind that he should be entitled to)

angelavdavis

Hi jess, welcome to the board.

I have taken the liberty of stripping out the zero value items to make easier reading and have some suggestions on how you can at least cut down and a conservative estimate of the potential saving that could be achieved. If my calculations are correct, I make this a total of £233 savings per month on your expenditure. I am not knowledgeable on benefits, etc but I am sure someone will post some help on this front:

Your Income Amount

Your take home pay £940
Incapacity Benefit £405
Disability Living Allowance £306
Child Benefit £156
Child Tax Credit £398
Total income £2,205

Mortgage £646
Mortgage endowment premium £136
Water £26 Are you on a meter? You might benefit from being on a meter, it would be worth checking this out. My water bill for a seven bedroom house is £19 per month on a meter - down from £55.
Council tax £109
Gas £66 I appreciate your partner is at home, but this is very high, have you looked at comparison services such as Uswitch to see what deals you can get? Possible saving=£10
Electricity £55 Again, this is very high, check out Uswitch and get the family switching off lights, no standby, etc Possible saving=£10
Building and contents insurance £32 Shop around and see if you can get this down Possible saving=£5
Telephone, mobile & internet £35 This is a bit high, is this for all three?
TV licence £11
Hire purchase £120 27 months left Is this the sofa cost? What is the interest rate, can you pay this off early at all?
Road tax £11
Motor insurance £35 This seems high - shop around and see if you are getting a good rate Possible saving = £5
Vehicle breakdown cover £7
Fuel & parking £90
Public Transport £15
Food, toiletries, cleaning £415 This is a bit high, check out the Old Style forum to find ideas on spending less Possible saving £100
School meals/meals at work £53 This is not essential - sandwiches or a flask of soup and a roll will be much cheaper. Possible Saving £53
Pets, pet food/insurance £20
School trips/activities £15 See comment below about pocket money
Medicines/prescriptions £10
Dentist/opticians £14
Union/professional fees £6
Clothing & footwear £35 This is not essential and could come down - look at charity shops, ebay or check out your local freecycle - particularly good for children's clothes Possible Saving £10
Children's pocket money £15 Together with school trips/activities, this is £360 a year of spending that is one months loan repayment to Northern Rock. Could you review this and try to reduce? Possible Saving £15
Sundries/emergencies £25 What is this for? Possible Saving £25

Loan from family/friend £50 Total Owed £5500

Other
Total expenses £2,052


Additional information
No of adults 2
Dependants 3

Totals Amount
Total income £2,205
Total expenses £2,052

Surplus (Deficit) £153 left over for loans

Your Creditor List

1 American Express Credit Card £8,850 £225 My Partner
2 Barclaycard Credit Card £2,500 £45 My Partner
3 Barclaycard Credit Card £5,400 £146 MyPartner
4 Capital One Credit Card £1,100 £30 MyPartner
5 Egg Credit Card £7,500 £156 Joint
6 Northern Rock PersonalLoan£10,200 £306 MyPartner

What are the interest rates for the above? You need to prioritise these by their interest rate.

TOTAL £35,550 debt TOTAL monthly repayments now £908

Are the credit cards with zero balance in your name?

With the spending patterns on the credit cards above, I would also suspect you have some things you could ebay to raise some funds. Have you looked over the house to see what you can sell to raise funds? The capital one card could be wiped out with some effort and tightening the belt. £233 x 12 is £2796 a year savings. Ok, a small percentage, but it would certainly boost the confidence!

You should also indicate earning from the other property in your calculations.

Good luck!

melaniec_2

Hi

I really think you need to look at asking your brothers to buy you out. You could really benefit from the profit which could go a long way to clearing your debts. that way in the long term you could be saving and not have the risk of being made bankrupt.

crawley_girl

Have you checked out https://www.entitledto.co.uk just to double check that you haven't missed anything?

Are your kids entitled to free school meals?

Bestthingsinlifearefree

If you sell the BTL property and get your 3rd of the equity out of it, that will pay of all the debts.

Or am I missing something ?????

iolanthe07

I don't think you're in a strong enough financial position to be a BTL landlord. What happens if urgent repair or maintenance is needed, or you have an extended period with no tenant, or one who decides not to pay the rent? Are your brothers prepared to absorb your share of costs? I agree with Bestthingsin lifearefree.

jessonline

we have already taken our share of the BTL money to buy our house last year this was 29K, we have a small interest in the property remaining as we could not remove our name from the mortgage, but most of the equity has been used already in our house purchase.

jess