Help - in serious trouble.

cashlessmummy

Hi everyone, I'm new and can only apologise for long panic-stricken rant that is about to follow. I'm a married mum of two girls (aged 2 and 15 weeks). I'm not going to lie - my husband and I have never really had any money but now the proverbial is really hitting the fan.
We have had difficulties keeping on top of everything financially for the last couple of years particularly but now with our second daughter arriving we are really facing problems.

When I return to work in October the best off we will be is over £700 a month in the red - mainly due to a combination of massive debt repayments and dropped hours/childcare bills (the dropped hours are the cheaper option than working full time - sad but true). We have no contingency for clothing, car maintenance, things breaking down etc and it is frankly scary.

Our current plan is to sell our home, in which we have some equity, and pay off a large portion of our debts - either renting for a while or buying a cheaper house (we have quite a big house in a nice area which is quite old and a total money pit). BUT - it takes time to sell a house and it is not quite ready for the market (we are trying to get the work done as quickly as possible but it's difficult with the little ones and a husband who works such long hours) so we are realistically going to run into problems before we can sell up.

I've done the budget thing on here and am really struggling to see where we can cut back much more - I only spend £60 or less on food and household per week (for a family of 4 with two dogs). I use soapnuts for laundry and make my own kitchen cleaner etc to save money. We don't really have any treats. Pretty much all of our money goes on bills - over £1000 a month just for our loans and credit cards. We have swapped our insurances, phone and broadband to cheaper options and are looking at gas and electric etc. We both travel long distances to work and therefore can't cut down the amount of petrol we use (I already walk rather than use the car where I can).

Can anyone make any suggestions? I tried applying for a new loan to pay off the old one and make monthly payments cheaper (long-term more expensive but only to help until the house is sold) but got turned down. I am left thinking my only option is to contact our lenders and ask for reduced payments for a few months until we can sell up but are they likely to agree to this? Plus if they do agree does this ruin our credit rating meaning we might not get another mortgage?

I am so scared and confused - any advice is really appreciated.

cashlessmummy

PS - also I am trying to get the PPI thing sorted but presumably the bank isn't going to look kindly on giving me a break with my payments and then having to refund my PPI payments?!

PPS - sorry for waffling on!

Chai_2

Hey Lovely,

Sending a huge hug your way. Just a thought but why not post you SOA so that we can see a clearer picture of anything else that can be cut as sometimes a fresh pair of eyes really will help.

There isnt much point getting a loan to pay a loan so trying to agree a reduction in payments seems to be a better option. It wise of you to seek help regarding moving as im not sure the impact that the debt restructuring will have but in any case good luck and I look forward to seeing you come out the other side of this. xx

*zippy*

Don't panic huni, it is usually sortable, seems like you have done the usual things like cutting your grocery bill etc so contact one of the debt charities tomorrow and get their advice, CCCS is a popular one and you can start the ball rolling with their debt remedy tool

https://debtremedy.cccs.co.uk/start.aspx?domain=camp0808.moneysavingexpert.com


There are other free ones and there is a list here

https://forums.moneysavingexpert.com/discussion/2077631

Good luck x

cashlessmummy

Thanks for the kind words. SOA below. I tried the CCCS debt tool thingy - it randomly came out reckoning I have over £200 spare per month (whereas I am actually about £700 in the red) and still recommended an IVA - which reading it there is no way we could go for as we would lose cars etc which we need for work. Plus that seems like a really scary option!

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 3,115.00
Income from Self Employment (before tax). . . . . . . . . . . . . . . . . . . . 0.00
State Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Pension / Annuity Payout. . . . . . . . . . . . . . . . . . . . . . . . 0.00
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 143.00
Income From Savings & Investments . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gifts From Family / Friends . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Monthly Expense Details
In Your Home
Mobile Phone(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.00
TV Licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.13
Internet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.00
Home Phone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.00
Cleaning Products/Cleaner . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.00
Garden Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.17
Household Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.33
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.00
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00
Council Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140.00
Overdraft Cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00
Bank Account Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00
Home Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 670.00
Plumbing/Boiler Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00
Mortgage Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Mortgage Payment Protection . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00
Food and Household Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 260.00
Drinks for Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Motoring & Public Transport
Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476.67
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00
Car Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
Car Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.00
Car Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.67
Rail/Bus/Taxi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Breakdown Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Debt Repayments
Credit Card Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320.00
Hire Purchase Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.00
Personal Loan Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 700.00
Car Loan Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Savings & Investments
Pension Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00
Buying Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mini Cash ISAs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Lump Sum Saving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Regular Saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family
Pet Food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School Trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School Meals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pocket Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Nappies/Baby Extras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Laundry/Dry Cleaning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Children's Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Baby Sitting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Childcare/Play Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600.00
Pet Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Travel Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Entertainment
Satellite/Digital TV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family Days Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cinema/Theatre Trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Books/Music/Films/Computers . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big Days Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Shopping for Fun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Hobbies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
IT/Computing (eg Anti-virus etc). . . . . . . . . . . . . . . . . . . . . . . . 0.00
DVD Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.00
Drinking Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Eating Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Clothes, Health & Beauty
Complimentary Therapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Optical Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Beauty Treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Healthcare Cashplans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dental Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Medical Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Fitness/Sports/Gym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Work Clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New Children's Clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New Clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Education & Courses
University Tuition Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.00
School Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Your Courses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big One Offs
Funeral Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Wedding Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Sofa/Kitchen/TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Winter Holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Summer Holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Odds & Sods
Newspapers & Magazines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Tax & NI Provisions (self-employed only). . . . . . . . . . . . . . . . . . . . 0.00
Regular Charity Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Meals at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Smokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Coffees/Sandwiches/Snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,258.00

Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,017.96

cashlessmummy

Oh, I was going to ask (sorry - again!) - is it better to go directly to creditors etc first and ask for a period of lower payments or to go straight to one of the charities?

firestronaut

It's worth asking for lower payments, if you explain your hardship. Some companies recognise that you're trying to pay off your debts, even if it's not at the rate they would like.

Have you checked that your electric and gas is on the cheapest tariff with the cheapest company? Same with your insurances. Use cashback sites!
Is your water on a meter, if not, check into whether getting a meter may work out cheaper for you.
Is paying for your bank account essential? If not, downgrade to a basic!
Can you use public transport for 1 or 2 days a week?

Are you paying off your higher rate creditors more than your lower ones?

A lot of questions, sorry, but these are the things that stood out to me straight away

ellesbellesxxx

Things that also stood out to me:
Gas/elec v high - good you are looking into switching/turn things off when not being used.
Even cleaning products seems quite high, use sparingly
are mobile phones being switched to cheaper options?
Life ins seems huge! Def switch this - esp as you have mortgage life ins as well - 70 a month going on this!
Have you got 2 cars? Just wondering about 30 tax
Are the uni fees from student loans? If so, take this out as this comes off of wages? Gives you more accurate picture

Just a few pointers anyway - good luck!

wannabee_in_credit

Don't you get any help at all with childcare costs? I would have thought that with a £600 a month nursery bill you should...
Thing is though, it's your debt repayments that are crippling you. I think you should consider lower payments, or contacting one of the debt charities for advice. I don't really know much about IVA's.
The other thing is that you're spending almost £500 a month on petrol - I assume that is completely necessary?

fatbelly

cashlessmummy wrote: »

Thanks for the kind words. SOA below. I tried the CCCS debt tool thingy - it randomly came out reckoning I have over £200 spare per month (whereas I am actually about £700 in the red) and still recommended an IVA - which reading it there is no way we could go for as we would lose cars etc which we need for work. Plus that seems like a really scary option!

You're £700 in the red because of £1000 of non-priority credit repayments. You have £200-300 available to your creditors. I think that's what Debt Remedy was saying.

So the usual option is a debt management plan. We don't know full details of your debts but I'm guessing that you have around 40k non-priority and that's the sort of scenario where you would be looking closely at an IVA, to get debt free in 5 years rather than 15-20. This is not my specialist subject as I don't tend to meet people with your level of income (or debts!?) but there is an IVA board here where you will get more specialist advice. I'm not aware that cars cause a problem in an IVA, unless perhaps you're running a couple of 2012 Bentleys. Have a look at Martin's IVA guide

http://images2.moneysavingexpert.com/attachment/ivaGuide.pdf

If you wanted to post a full soa, could you use this calculator and format for mse - you'll need to remove any links.

http://www.makesenseofcards.com/soacalc.html

Don't rush into any strategy. Take time to research your options. There's always a way forward. It's just a case of finding which is best for you.

cashlessmummy

Thanks for the help everyone - you really have helped me panic slightly less!

Sadly there is nothing we can do about car and petrol costs as that's getting to work and back! We are considering moving slightly closer to one or other of our workplaces though.

I did remember that the life insurance total I put on is what we WERE paying but we have rearranged those now and saved ourselves quite a bit (sorry, blame the baby brain).

We have booked a payment break on our loans for next month, which gives us a bit longer to suss out what to do (agree that rushing into anything is not the way forward!). Does anyone know if mortgage companies offer the same thing?

Next step is to contact the cccs and ask for some help with a debt management plan I think - hopefully as our situation is temporary, i.e. we will be able to repay our debts once our house is sold the lenders will be lenient and we can avoid anything as formal as an IVA.

Right, I'm off to check gas and electric tariffs and to ring to get my tax credits checked (they stopped a while back but I'm not sure they should have done so am going to check for sure).

Thanks again everyone! All your advice is very welcome and it is much appreciated that everyone has refrained from telling me what a plonker I am for getting into this state in the first place (I know by the way!)