Sticky situation advice please

Aviator_Man

Hi all, my family are in a really sticky situation right now and I'm not sure the best way forward. I have included a snapshot of our outgoings and financial situation (EDIT. tried to but forum won't let me). As you can see, it's going to be pretty tight at the end of the month! Any advice on the best way forward or where to go for advice would be greatly appreciated.

Here's the lowdown-

Income net- £1800
Outgoing- £2239 (£600 mortgage, £685 unsecured debt)

Current account overdrawn and at the end of this month will be at it's limit.

Debt- total unsecured £29,154 (£9k loan, £20k over 2 credit cards)
Mortgage- £105,000
House value- £600,000 (currently on the market!)

We have a £15,000 vehicle that we could potentially sell and do without (wife would not be happy mind!)

Thanks

downsizer3

Can you move any of your cards to 0%?

Johnhowell

Aviator Man,

Congratulations on your Light Bulb Moment.

Others more knowledgable will be along shortly, but to assist them to help you - follow the advise by DVardysShadow:

"I suggest you do a Statement of Affairs and copy it here.

http://www.makesenseofcards.co.uk/soacalc.html

When you have filled it in, click 'Calculate' on the Statement of Affairs form, click 'Format for MSE'. This gives you a popup window. Click 'highlight text', right click on the highlighted text and copy the highlighted text including all formatting codes. Paste the copied text into a post for other posters to comment

Some people will have a go at trimming your budget. Others will have a go at the scheduling of your debt. Ideally we need to know how much longer each debt has to run."

Good luck,
John

dancingfairy

Hi. A few things that you can do to get started (if you've not done them already)
1) Go through your bank statments/ go to the bank and identify any standing orders/direct debits not required. Any insurance for products you no longer have? any magazine subscribtions you no longer read? any unused gym memberships you can cancel? Anything like this.
2) Look around - are you paying over the odds for things? is your gas/electric high? would you benenfit from a water meter? are you paying over the odds for insurance - car, house,contents or any other type of insurance?
3) Can you/your other half do a storecupboard challenge to make things in your cupbpards last a bit longer (look what's at the back of the cupboard, what needs eating up, what only needs one or 2 cheap ingreadients to make it into a meal etc.

Hopefully this will beging to give you a little 'wriggle room' whilst you start to sort things through.
One of the things that you may find useful is to apply for a basic bank account at a different bank (try co-op or barclays). You should then get all income/benefits transferred across there. This means that you have control over who is going to get paid what andwhen. This means that the bank can't just dip into your account to pay off your overdraft when you need that money to get petrol to get to work or to buy food to feed your family. Do not give details of this account to your creditors (and certainly do not set up direct debits). Standing order only (and only once you've worked out what you can realistically afford to pay each month).
Hopefully you have been ploughing through the SOA (you may need to delete the bit that says produced with permission of maksenseofcards.com as as a new user you can't post links but do keep trying to post your SOA).
IN terms of where you can go for more advice I would suggest phoning CCCS or National Debtline for advice (or popping along to your local CAB) - don't forget to have a copy of that SOA to hand.
I think that's enough to get started. Best of Luck
df

redpete

Aviator_Man wrote: »

We have a £15,000 vehicle that we could potentially sell and do without (wife would not be happy mind!)

Is she happy with the alternative? (E.g. the monthly interest charge o the loan, CC and OD, defaulting on repayments with the associated affect on your credit record. Bette to change your lifestyle now when you have some control than to be forced into it in a few months time.

RAS

Please speak to one of the debt charities as a matter of urgency.

And sell that car if you can.

Barbeduk

Sell the car! If you get close to its value the debt will be drastically reduced. It's a no brainer if you don't need it. You can easy get another one when you sell the house.

theoretica

I think the problem with posting your SOA is probably that it puts a weblink at the end- as a new user you need to delete this before posting.

I agree with downsizing the car.

What is your credit report like at the moment? If it is still good and this is important to you this is a situation where it might be worth thinking (very carefully) about taking extra borrowing on your mortgage if you can get it at an easily affordable monthly fee. This is only worth it if your monthly spending would then be comfortably in the black and you cut up all cards. If your house weren't on the market it would be a different matter. How priced to sell is your house?

DVardysShadow

theoretica wrote: »

I think the problem with posting your SOA is probably that it puts a weblink at the end- as a new user you need to delete this before posting

Statement of Affairs and Personal Balance Sheet

Monthly Income Details

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

While there is a link, I don't think this should be a showstopper even for a newbie? I thought the link just got edited out?

Aviator_Man

Hi all, thanks for the advice to date...really appreciate it. I didn't know about the SOA calculator...previously spent an afternoon on excel! I've tried to be as accurate as possible but there are a couple of unknows, i.e. how much my wife spends on her hair and bingo...probably £50/month but our agreement is that her basic pension covers the food shop. She does tend to buy other things such as bird seed and what not but this will have to stop so she can afford fuel for her vehicle. Also left out pet expenses as we've recently just paid out £500 (one put to sleep and another required surgery and is not insured) Anyway, here is the outcome:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1831
Partners monthly income after tax....... 600
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2431

Monthly Expense Details
Mortgage................................ 610
Council tax............................. 264
Electricity............................. 110
Gas..................................... 110
Water rates............................. 55
Telephone (land line)................... 29
Mobile phone............................ 35
TV Licence.............................. 13
Satellite/Cable TV...................... 45
Internet Services....................... 15
Groceries etc. ......................... 600
Clothing................................ 0
Petrol/diesel........................... 140
Road tax................................ 21
Car Insurance........................... 60
Car maintenance (including MOT)......... 50
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 24
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Overdraft fee........................... 35
Account fee............................. 10
Total monthly expenses.................. 2226


Assets
Cash.................................... 0
House value (Gross)..................... 625000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 640000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 105853...(610)......2.5
Total secured & HP debts...... 105853....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Lloyds loan....................3658......165.......6
Lloyds loan2...................5142......138.......6
Barclaycard....................12507.....250.......20
Lloyds card....................7847......131.......20
Total unsecured debts..........29154.....684.......-


Monthly Budget Summary
Total monthly income.................... 2,431
Expenses (including HP & secured debts). 2,226
Available for debt repayments........... 205
Monthly UNsecured debt repayments....... 684
Amount short for making debt repayments. -479

Personal Balance Sheet Summary
Total assets (things you own)........... 640,000
Total HP & Secured debt................. -105,853
Total Unsecured debt.................... -29,154
Net Assets.............................. 504,993

Created using the SOA calculator at.

I think I could probably switch the credit card debt to 0%, although I feel something more decisive is required. My credit score according to experian is "excellent" but having briefly spoken to C&G about remortgaging they weren't too receptive to the idea due to relatively low earnings. I think I need to do some more research about remortgaging or switching mortgage provider. The house is priced to sell although I feel we made a mistake opting for sole agency as they are yet to get anyone through the door.

In terms of maximising income I am thinking along the lines of pausing pension payments and trying to change to an interest only payment on the mortgage, although I believe there are complications with this, need to show that you are able to repay it?

I've done a direct debit audit to ensure there's nothing unnecessary (sky should go) but yes perhaps switching utilities provider could be a good idea. Our house is quite cold and we seem to spend a fortune heating it...so much so we are quite reluctant to switch the heating on.

I think selling the car is a good idea, I'll have to see if my retired wife minds losing some independence for a little while.

Thanks again for the advice during this tricky time.

blossomsuz

Hi Aviator Man,

Sorry to hear of your circumstances, few quick questions, there are three adults in the property, is one not contributing? if so why?

Also your grocery shopping bill is massive! This can be easily cut down.