How to get out of a bad situation...

bach230

My husband and I are in quite a bit of trouble with our overdraft, constantly being in it or even going over it now. We pay around £1600 into the account, more dependant on mostly my husband's wage, which covers pretty much everything just about. Unfortunately my husband is a dreadful spender and not only do we need money from somewhere to cover the joint account, my husband is now going over his own overdraft and has credit cards/store accounts which he is paying minimum payments on to.

The total debt works out, according to my husband, to be around £8000.

He's tried for loans before but can't get them due to him having poor credit history. We've been into our bank about things but they are unable to help due to the fact that last October I extended my existing car loan to help the account out then. There was also the fact that I now only work 25 hours a week instead of 35 that I used to due to us having a young son.

My husband doesn't think I would be able to extend my existing loan again due to already doing so and not working enough hours - would this be right?

The only ways therefore that hubby believes we can get out of this mess - that he created - is to go for one of two things...

1. Get a guarantor loan
2. Ask someone to take a loan out themselves and we pay them back the monthly payments

Whether either of these are possible with family I don't know but unfortunately it's damaging our relationship and putting us in a situation which we fear we cannot get out of. (we are unable to take out any loan on our house as its shared ownership).

Any advice/help therefore greatly appreciated xx

(Previously posted on Loans board under "liklihood of getting a loan" - see replies on there for some advice already given)

R_P_W

Read the replies to the other thread.

Why dont you post an SOA? You have only two ways to get out of the debt.

1. Earn more money to account for your spending
2. Reduce your spending to match your income

In most cases option 2 is the easist thing to do - however until you both realise that you HAVE to change your spending habits nothing will improve and the debt will only get larger.

I dont think the bank will extend your loan and it is probably the biggest favour they will ever do for you.

asparagus1968

hiya,

i'd agree with above,you really don't want another loan.

please post up your SOA,and we'll go from there.
there are people on here that have a waelth of knowledge and experience to help you.
the SOA is in the help for newbies sticky,am sure someone will post a link,
thankyou

bach230

Unless i take on a second job then we are unable to add more income to the account and due to my husband's varying shifts every week this wouldn't be easy as we rely on family to look after our son on certain occasions and they all work/live too far away/are too elderly and obviously have their own lives to lead regarding social activities.

I pay out a fair chunk of my wages to a childcare voucher scheme for our little boy so that hits us hard as well.

I will try and do another SOA (have done one previously) and post one later today.

dancingfairy

Hmm. The trouble could be that you have identified your husband as being a dreadful spender. If you do an SOA - perhaps that will make him realise things are tight and he needs to cut down on his spending?
I think the first step is to do an SOA and assess the situation. If it shows you can manage then maybe you need to set up a new bank account for your husband and then set up a standing order to pay off the overdraft (like you would with any other debt).
If you can't meet all your payments then you may need to consider something like a dmp but an SOA is definitely the first step.
Best of Luck
df

arcon5

Firstly, I would change banks and setup a cash account or similar which doesn't allow you to become overdrawn. This will give you better control over your finances.

Write to the banks in question asking to negotiate a payment plan, freeze interest & charges on the account for an agreed time. Explain you are in financial difficulty and perhaps include details of your income/expenditure.

R_P_W

Exactly the point i was trying to make (that getting addiitonal income is the harder option). So reducing your expenditure is the only remaining option.

It is not easy, you will have to make sacrifices.

bach230

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1350
Partners monthly income after tax....... 690
Benefits................................ 81.2
Other income............................ 0
Total monthly income.................... 2121.2

Monthly Expense Details
Mortgage................................ 269
Secured/HP loan repayments.............. 0
Rent.................................... 165
Management charge (leasehold property).. 0
Council tax............................. 113
Electricity............................. 26
Gas..................................... 26
Oil..................................... 0
Water rates............................. 20.64
Telephone (land line)................... 26.08
Mobile phone............................ 41
TV Licence.............................. 12.12
Satellite/Cable TV...................... 48.2
Internet Services....................... 15.97
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 80
Road tax................................ 170
Car Insurance........................... 26.43
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 378
Other child related expenses............ 80
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 46.41
Contents insurance...................... 30.56
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1774.41


Assets
Cash.................................... 290.64
House value (Gross)..................... 135000
Shares and bonds........................ 0
Car(s).................................. 1250
Other assets............................ 0
Total Assets............................ 136540.64


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 60964....(269)......3.5
Total secured & HP debts...... 60964.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Car loan.......................3200......146.3.....12.9
Jacamo.........................419.87....30........0
River Island...................188.......8.........0
Amazon.........................1900......70........0
Barclaycard....................1500......50........0
BOS............................700.......33.54.....0

I hope this makes sense to everyone. There are some payments which are estimates - both of our wages change each month, mine (the lesser) by a small amount but my husband's can be anything up to £1900 dependant on the shifts he has worked, though this amount is fairly rare.

The £170 car tax is a yearly amount.

The amounts owed to the various companies are all hubby's, except the car loan (which comes out of the joint account), but again these are rough estimates, close but rough.

Car Insurance comes solely out of my money.

"Other child related expenses" is money going into an ISA account for our son.

Any queries, please let me know x

bargainbetty

According to your figures, you have sufficient funds to meet your expenses, but only if your husband stops wasting spare money.

Perhaps sit down with all the figures, work out the full expenses (including a sum of savings) and show him how much money is left over each month. Give him that much in an account, and shut off everything else from him. If he gets a decent amount of overtime, half goes to the house, and he can have the rest - seems fair enough.

If he complains, tell him the household comes first. If he wants something and doesn't have the money, then he works overtime or sells what he already has.

Asking someone to stand guarantor/take out a loan for you before he has got his head out of his backside and learned that he can't have everything whenever he wants and has to live within his means is utterly shameful of him. Why should someone pick up his mess?

This is your second thread, and the responses are all the same here - loans are not going to help, he needs to grow up, or hand over control.

Good luck, again.

opinions4u

Buildings and contents insurance. Why are these so expensive?

Line rental. Why is this so expensive?

Life cover zero? Really?

Mobile. Could this go to a £10 a month type SIM only deal?

Pay TV. I'd suggest Freeview and the DVD collection you already have.

Credit cards. Pay £1 more than minimum payments. It may have benefits in the long run.

While a lot of your spend appears controlled, other parts don't.

By the way, I'd start saving for your son when you're debt free. That £80 would be better allocated to debt reduction.

Your overdrafts appear to be excluded from your unsecured debts. You need to break down annual stuff like car tax to monthly.

CLAPTON

1. for expenses that are yearly; you must divide by 12 and enter the monthly amount


2. your house and contents insurance are massive ... are they correct?

3. you must put something in for MOT and servicing etc for the car

4. unfortuantely you have cut off the bottom off the SOA so the total unsecured debt doesn't show nor the net amount left over

5. in the next year do you really expect to spend zero on cloths? if not add a monthly amount

6. groceries of only 200 per month is good but is it correct?

7. you have a child; do you really spend nothing on birthday presents (no parents, family etc) or xmas.. again work out a yearly total and divide by 12 and put the monthly amount in


start keeping spending diaries: today is a good day to start and see exactly where the money goes