Problem debt

trevorsw

I have filled in the form below but basically I have £45k problem debt with repayments of just over £1000 each month. We are trying to decide what the best way to deal with this is.

We have a good credit rating and we are prepared to budget our way through this but not sure wether a consolidation loan or IVA or personnal loan etc is the best way forward.

we would like to keep our house so bankruptcy is not an option.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 2455
Partners monthly income after tax....... 860
Benefits................................ 808
Other income............................ 0
Total monthly income.................... 4123
Monthly Expense Details
Mortgage................................ 1269
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 129
Electricity............................. 105
Gas..................................... 0
Oil..................................... 0
Water rates............................. 37.29
Telephone (land line)................... 51
Mobile phone............................ 0
TV Licence.............................. 13.78
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 70
Petrol/diesel........................... 250
Road tax................................ 18
Car Insurance........................... 30
Car maintenance (including MOT)......... 20
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 10
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 125
Haircuts................................ 5
Entertainment........................... 30
Holiday................................. 50
Emergency fund.......................... 20
Total monthly expenses.................. 2713.07

Assets
Cash.................................... 0
House value (Gross)..................... 173000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 173500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 169000...(1269).....4.99
Total secured & HP debts...... 169000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................9800......212.......6.9
credit card ...................26993.....704.......18.9
Total unsecured debts..........36793.....916.......-

Monthly Budget Summary
Total monthly income.................... 4,123
Expenses (including HP & secured debts). 2,713.07
Available for debt repayments........... 1,409.93
Monthly UNsecured debt repayments....... 916
Amount left after debt repayments....... 493.93
Personal Balance Sheet Summary
Total assets (things you own)........... 173,500
Total HP & Secured debt................. -169,000
Total Unsecured debt.................... -36,793
Net Assets.............................. -32,293

vintagegirl

you get all that in wages and still get £808 in benefits?

Tixy

Hi and welcome

Well at the moment it looks like you can meet your minimum repayments and still have an extra £494 spare a month, so you probably wouldn't qualify for an IVA based on that SoA.
That said you might also struggle to get any new credit such as a consolidation loan/personal loan due to the high level of your existing debts.

Do you have the £494 spare each month? Are you using that to overpay your most expensive debt? If you dn't have that money spare then you need to work out where it is being spent. A spending diary for a couple of months for you both should help with that.

Looking at your outgoings you could also look to reduce your grocery spend a bit and presents spends to free up more for debt repayments.

CH27

Do you really spend £1500 on xmas & birthdays?

£493 is a healthy surplus. Use it to pay down your debt.

Pollycat

Hi
As Tixy and CH27 say, your almost £500 surplus could make a big dent on your biggest credit card debt.

That, of course, assumes your SOA is accurate and you really do have that much left over.

If you don't, you need to start right now to see where that spare money is going.

Spending diary - record everything that isn't in your SOA.
That might include takeaways, coffee and muffins out, glossy mags, lottery, pocket money for the kids etc.

Your land line seems high at £51 per month.
Does that include other stuff like broadband?

You could (imho) shave some off your groceries, although I notice you have pets so maybe there's costs in there to cover pet food.
For 2 of us, at home most of the day, I spend an average of £170 per month on groceries.
That includes a 400gm can of cat food a day, toiletries/cleaning and beer/wine.
AND, we eat very well.
I'm a careful shopper, check out the 'Reduced' counter, menu plan to avoid food wastage and buy BOGOF deals when they're on.

Do you really need to spend £840 per year on clothes?

I agree with CH27, £1500 on gifts?
If you buy for lots of people, maybe consider asking if they'd be happy to stop buying or maybe just buy a token gift.

wessex12

I'd have to agree with Vintage Girl! We bring home just less than that and all we get is Child Benefit. How do you manage to get £808 in benefits?

FBaby

That's a lot of benefit with such an income. Only thing I can think of is DLA.

somethingcorporate

One thing that screams "look at me!" is the credit card with £26k on it. If you can get any more credit (at a decent rate) you should really make this the priority to reduce as at 18.9% it really is racking up *a lot* of interest.

Even if you can tart only £5k of this balance to a cheaper / no interest card then it will save you some hefty interest cost in the long run. You have very few sources of debt (2 cards, 1 mortgage) which does make your life quite simple. Throw everything spare at the highest interest and work your way down, although with the card I mention above it will take you a while to clear this. Before racking up any credit searches is there any spare capacity on your other card? 6.9% is a very decent rate and would make a noticeable improvement on your existing commitment.

Good luck!

shiny76

Your mortgage payments seem to be rather high compared to the amount. Are you paying over a shorter term (than 25yrs)?

If so perhaps this extra money would be better directed towards the credit card debt!

JCS1

You wouldn't necessarily lose your property if you went bankrupt, but looking at your figures the OR would expect a large Income Payment Agreement.

Deeperblue

Welcome to the board

The things which jump out at me:
Agree with what other people say about the £800 benefit a month. Have your circumstances changed? If your claiming more than your entitled too you may end up paying it back. (omg that sounds like the advert!)

Land line does seem quite high, even if it's including internet I would think.

Food bill could come down a bit too. Could check out the 'Old style' board.

Don't you have contents or life insurance? I thought life insurance was needed with a mortgage?

No mobile phones or sky tv? Well done!

As suggested, a spending diary is priceless.