New & In Debt, Help much appreciated!

Digby_Watt

Hello,
I would like some help if possible. I have 2 houses with mortgages, one is my own and one was a rental property (both on the market for sale) hence very high mortgage and utilities below. I also haven't added council tax in for other as i have been fortunate to have a tenant, now left.
I have visited a debt counsellor yesterday but she increased all of my monthly outgoings to what she said were more realistic, i.e. shopping £70 a week so when the sums were done, there was no way of repaying the debt. I am currently in month 1 of bother, this is the first month I have missed 5 direct debits, i have now cancelled them as i am incurring additional bank charges.
I have always worked very hard in good jobs, but have made some silly mistakes in the past, sadly at times through alcohol. I now do not drink and am trying very hard to turn my life around. This said, it looks like i will lose my job tomorrow, due to the company struggling, i am being very pro active and am meeting two people today to talk about work, this work will pay less, but i hope that my working tax credits will increase?!

Please see my SOA below, any help hugely appreciated. I have re read this and am incredibly ashamed to be in this position, but i know the first step is the hardest as they say!
Many thanks for reading, Justine.





Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 0
Benefits................................ 487
Other income............................ 200
Total monthly income.................... 2487

Monthly Expense Details[/b]
Mortgage................................ 622
Mortgage 2............. 354
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 104
Electricity............................. 45
Gas..................................... 42
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 42
TV Licence.............................. 13
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 30
Road tax................................ 0
Car Insurance........................... 30
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 842
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 17
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2351


Assets
Cash.................................... 0
House value (Gross)..................... 167000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 167000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 134000...(622)......0<
mortgage 2.....................106000...(354)......0
Total secured & HP debts...... 240000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
barclaycard....................3500......100.......0
santander......................9000......254.......17
ikea...........................1100......168.......0
overdraft......................4700......62........0
car loan.......................4000......130.......0
Total unsecured debts..........22300.....714.......-


Monthly Budget Summary
Total monthly income.................... 2,487
Expenses (including HP & secured debts). 2,351
Available for debt repayments........... 136
Monthly UNsecured debt repayments....... 714
Amount short for making debt repayments. -578

Personal Balance Sheet Summary
Total assets (things you own)........... 167,000
Total HP & Secured debt................. -240,000
Total Unsecured debt.................... -22,300
Net Assets.............................. -95,300

toothfairybuttkicker

Didn't want to read and run. I'm not very good at the advice thing much better at the moral support.

Could you not get on the rent a room scheme and fill all the spare rooms in both properties with lodgers????

I hope some good peeps pop on soon to give you some sound advice.

Digby_Watt

Hello, thank you tooth fairy. Good idea but unfortunately the house i live in is just 2 bedrooms, one for me and one for my daughter, the other house is unfurnished, tenants left last week, it is 2 bedrooms but it is hard to rent whilst it is on the market.
Thank you for your help.

downsizer3

Well as a single mum of one with childcare costs (and income) like yours you have my sympathy to start with!!
Have you moved either mortgage onto interest only?
What would be the benefit (if any)of letting out both and renting?
Presumably the various card lenders are aware of your situation - have you written to them all and explained the situation and agreed minimum repayments?
How old is your child - just wondering if childcare could be reduced - but I do understand that its hard to compromise for your wee ones care.
I know Citizens advice are great in contacting the various creditors and can help get interest frozen until you sold one property - it may effect your credit rating but if you can buy some time to sell one property and pay them off the all the better. Its time you need really.
Hows the property market in your area?
With two properties you are better off than many - just got to keep everything crossed for a buyer. Have you 'prettied' them up to entice people?
Fear not - there will be a way out of this - some people on here are really knowledgable - just give them time to find your thread.

DizzyDizzy

I don't know why she (debt advisor) thought £70 per week was reasonable for groceries for 1 aduly and 1 child; I can feed a family of 4 on that! With a bit of meal planning and home cooking etc you could get that down to £30 a week for the two of you, that's what I would be aiming for.

dancingfairy

Hi - clearly you can't afford to pay much towards the debts at the moment. If things do go badly with regards to the job I would make sure I got redundancy (if appropriate) and also that I claimed all the relevant benefits (JSA contributions based). You probably won't get much but it will all help - also check out the mortgage(s) and see whether you can get any help whilst unemployed.
I would be tempted to try and make token payments to the debts (of 1 pound whilst unemployed).
Selling the house sounds like a good plan - are the estate agents marketing it well? can you afford to drop the price for a quick sale? Is there any equity in it?
It might also be worth getting in touch with the people who you have the mortgage with for the rented out house and ask if you can stop making payments for a while (due to selling) or whether you can go interest only, or make up payments at the end of the term or take a payment holiday or well anything whilst you get yourself sorted.
You might also want to contact CCCS or National Debtline or your local cab and hopefully they will be more helpful than the previous person you spoke to.
df

Digby_Watt

Thank you both for your kind replies. Yes Dizzy, I thought £70 way too high also.

Downsizer - Renting both houses is almost impossible as both on the market, plus one is our home, if we rented we would pay 600-700 pm and that's is same as my mortgage. The rental income I would generate on both would just clear each mortgage. Both of the mortgages are interest only.
I live in Edinburgh, my second mortgage is in Dumfriesshire. I have had great feedback on the schedules, I have even been lucky enough to get a feature on my home here so I do know that I am doing something right!
It's a slow market, but I am still getting viewers, its early days, and you are right once they a sold, the debt will be gone and I can rent and start my life again. I know I am fortunate compared to many others.
Hoping childcare will reduce by £170 a month in the next few weeks, that too will help. I haven't contacted anyone yet, I guess I have just faced up to my problems. If they would take into consideration that I'm selling property that would be a huge help.
Thank you again.