Had a bit of a shock & need to get debts sorted

icklepiggle

Hi everyone

have lurked on the board for a while but never really cracked dealing with mine & DH's debts permanently, as we've always managed despite a high cost each month on payments.
But today he told me he thinks his boss can't afford to pay him this month, which is a huge wake up call. He has just started (last month) for a small company, really just a sole trader, so it was a risky move, but he was determined ........ I know our cc debts are £ 20.8k, but I know that DH has one of his own & I don't know how much is on that one. I think we can manage in the short term but really need to get cracking on this....

So where do I start - I feel like it's a huge issue & I need some straight talking from you lovely people to give me a kick up the behind

Loubell83

Hi,

I did not want to read and run. there will be knowledgeable people along soon with advice! they will tell you to post a SOA from the stickys so they can help look at your outgoings, so you might want to do this.

I just wanted to say that I know where you are, I had my LBM 5 months ago and made huge strides after a big wake up call. I just wanted to say good luck and listen to the advice given. It really helps x

Tixy

Hi

As said above the best starting point is to do the usual statement of affairs to see where you stand on a normal month (ie if your husband is paid). http://www.makesenseofcards.com/soacalc.html

And then consider the impact of what will happen if OH does not get paid for a month - will you be able to pay all your essentials and debts if you spend any on luxuries? and for how many months could you carry on with no income from OH?

What has his employer said to him regarding his wages? and what did OH say in reply? presumably he has said that he must be paid to be able to afford his mortgage/rent etc?

icklepiggle

title says it all - it's gone from 'we're not sure we can pay you', to 'we have no money & are letting you go' He's only worked there for 3 weeks ... so nothing in terms of rights etc.. He has asked for 4 weeks pay in lieu of notice so hopefully we'll have some money this month & he is writing his cv & looking at jobs as I type.

I've started pulling our SOA together so just need to do somemore work on that & get it posted up here

thanks
Emma

DCFC79

Well your at least making a start and now you have had a knock back with him losing his job.

icklepiggle

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.................... 2
Monthly Income Details
Monthly income after tax................ 2325
Partners monthly income after tax....... 1500
Benefits................................ 134.8
Other income............................ 0
Total monthly income.................... 3959.8
Monthly Expense Details
Mortgage................................ 805
Secured/HP loan repayments.............. 355
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 143
Electricity............................. 115
Gas..................................... 0
Oil..................................... 0
Water rates............................. 33.5
Telephone (land line)................... 0
Mobile phone............................ 41
TV Licence.............................. 12.5
Satellite/Cable TV...................... 40.65
Internet Services....................... 0
Groceries etc. ......................... 500
Clothing................................ 150
Petrol/diesel........................... 400
Road tax................................ 32
Car Insurance........................... 80
Car maintenance (including MOT)......... 85
Car parking............................. 15
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 25
Buildings insurance..................... 33
Contents insurance...................... 0
Life assurance ......................... 31
Other insurance......................... 0
Presents (birthday, christmas etc)...... 60
Haircuts................................ 37
Entertainment........................... 200
Holiday................................. 100
Emergency fund.......................... 0
Lovefilm dvd rental..................... 6
Household improvements.................. 75
Endowment............................... 81.13
Boiler cover............................ 24.08
Total monthly expenses.................. 3499.86

Assets
Cash.................................... 0
House value (Gross)..................... 190000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 10000
Total Assets............................ 215000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 145000...(805)......6.19
Hire Purchase (HP) debt ...... 16000....(355)......12.9
Total secured & HP debts...... 161000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Nationwide credit .............2222.7....80.39.....17.9
Barclaycard gold...............7560.01...173.1.....6.9
M&S credit.....................5137.3....103.5.....18.9
Nationwide (2).................4800......99.71.....17.9
Halifax credit.................1558.22...16........0
MBNA...........................850.......25........0
Hilton Hhonors.................3450.13...101.......16.9
Total unsecured debts..........25578.36..598.7.....-

Monthly Budget Summary
Total monthly income.................... 3,959.8
Expenses (including HP & secured debts). 3,499.86
Available for debt repayments........... 459.94
Monthly UNsecured debt repayments....... 598.7
Amount short for making debt repayments. -138.76
Personal Balance Sheet Summary
Total assets (things you own)........... 215,000
Total HP & Secured debt................. -161,000
Total Unsecured debt.................... -25,578.36
Net Assets.............................. 28,421.64
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

I have left in salary for hubby

first step I think:

get rid of DH's car - it's on HP & costs a lot in fuel & road tax

icklepiggle

actually, we probably haven't got the house improvements spend right - we spend more like £200 a month now I've reviewed it....

DCFC79

The following stand out for me as being high:

Mobile phone............................ 41
Satellite/Cable TV................... 40.65
Groceries etc. ........................500
Clothing.............................. 150

How far into your mobile contract are you, you might be allowed to down grade the plan if you call the NO - network operator.

TV Again as above call sky/virgin and see if you can downgrade a package.

Groceries Maybe drop down a brand eg lose the brands and buy shops own brand or give aldi/lidl a try if not already. Stop the impulse buys and only buy essentials. Meal plan would be good.

Clothing seems high to me but im not an expert but maybe look at where the £150 is spent on.

Also notice the haircuts are £37, any chance you could reduce this ? You could buy the hair clippers from argos and save money using them(if your confident of course and people dont miond losing an ear or top half), even cheaper if you have a son or enquire at a local college about hair cuts as can be cheaper than what your paying.

Angry_Bear

icklepiggle wrote: »

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.................... 2
Monthly Income Details
Monthly income after tax................ 2325
Partners monthly income after tax....... 1500 You might want to do another version using benefits instead to work out how things will stack up if your hubby is out of work for a bit.
Benefits................................ 134.8
Other income............................ 0
Total monthly income.................... 3959.8
Monthly Expense Details
Mortgage................................ 805
Secured/HP loan repayments.............. 355
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 143 - Is this over 10 or 12 months?
Electricity............................. 115
Gas..................................... 0
Oil..................................... 0
Water rates............................. 33.5
Telephone (land line)................... 0
Mobile phone............................ 41
TV Licence.............................. 12.5
Satellite/Cable TV...................... 40.65
Internet Services....................... 0
Groceries etc. ......................... 500 - You could probably cut this in half if you tried hard - see old style board
Clothing................................ 150 - Every month? You should have plenty to ebay and not have to buy new ones for a while!
Petrol/diesel........................... 400 - Don't forget to cut this if you do a SOA for when hubby isn't working
Road tax................................ 32
Car Insurance........................... 80
Car maintenance (including MOT)......... 85
Car parking............................. 15
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 25
Buildings insurance..................... 33
Contents insurance...................... 0
Life assurance ......................... 31 - This seems high to me
Other insurance......................... 0
Presents (birthday, christmas etc)...... 60
Haircuts................................ 37 - Every month? Try spacing them out a bit more or colleges/home cuts for the kids.
Entertainment........................... 200 - You can't afford this much just now. Cut to £50
Holiday................................. 100 - Can you cancel a holiday this year? Or go somewhere cheaper?
Emergency fund.......................... 0
Lovefilm dvd rental..................... 6
Household improvements.................. 75 - Hold off on these for a while.
Endowment............................... 81.13 - What's this? Is your mortgage Interest Only? If so, will this cover the capital?
Boiler cover............................ 24.08 - You might be better just putting this in a savings account for emergencies.
Total monthly expenses.................. 3499.86

Assets
Cash.................................... 0
House value (Gross)..................... 190000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 10000
Total Assets............................ 215000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 145000...(805)......6.19
Hire Purchase (HP) debt ...... 16000....(355)......12.9
Total secured & HP debts...... 161000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Nationwide credit .............2222.7....80.39.....17.9
Barclaycard gold...............7560.01...173.1.....6.9
M&S credit.....................5137.3....103.5.....18.9
Nationwide (2).................4800......99.71.....17.9
Halifax credit.................1558.22...16........0
MBNA...........................850.......25........0
Hilton Hhonors.................3450.13...101.......16.9
Total unsecured debts..........25578.36..598.7.....-

Monthly Budget Summary
Total monthly income.................... 3,959.8
Expenses (including HP & secured debts). 3,499.86
Available for debt repayments........... 459.94
Monthly UNsecured debt repayments....... 598.7
Amount short for making debt repayments. -138.76
Personal Balance Sheet Summary
Total assets (things you own)........... 215,000
Total HP & Secured debt................. -161,000
Total Unsecured debt.................... -25,578.36
Net Assets.............................. 28,421.64

I agree with getting rid of hubbys car (replace with something cheaper if necessary). If your hubby gets back to work with a siilar salary then you should be able to make a few low-impact cuts and overpay your debts (look for the snowball calculator).

But if your hubby is out of work for a couple of months you will need to make bigger cuts. You might want to do another SOA without his income and taking JSA/reduced fuel into account.

Good luck!

rising_from_the_ashes

First of all - sorry about hubby's job TBH it stinks as surely the firm must've known a very short 3 weeks ago that things weren't exactly rosy & they shouldn't be taking on any more people:mad:

Where did he work before - any chance he could get his old job back?

icklepiggle wrote: »

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.................... 2
Monthly Income Details
Monthly income after tax................ 2325
Partners monthly income after tax....... 1500 Need to remove this & add the amount you will get in benefits
Benefits................................ 134.8
Other income............................ 0
Total monthly income.................... 3959.8
Monthly Expense Details
Mortgage................................ 805
Secured/HP loan repayments.............. 355
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 143 Switch to 12 months if currently paying over 10
Electricity............................. 115 Ensure everything's off that can be
Gas..................................... 0
Oil..................................... 0
Water rates............................. 33.5
Telephone (land line)................... 0
Mobile phone............................ 41 Get out the contracts ASAP & switch to PAYG
TV Licence.............................. 12.5
Satellite/Cable TV...................... 40.65 Sorry not essential - switch to FreeSat
Internet Services....................... 0
Groceries etc. ......................... 500 This can be cut in 1/2 (if not more) - try the Grocery Challenge. Great bunch & loads of tips & recipes
Clothing................................ 150 Sorry needs reduced - cut £100 off here. Ebay old stuff to get money for replacements
Petrol/diesel........................... 400 Is this after the reduction for DH not using the car?
Road tax................................ 32
Car Insurance........................... 80
Car maintenance (including MOT)......... 85
Car parking............................. 15
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 25
Buildings insurance..................... 33
Contents insurance...................... 0
Life assurance ......................... 31
Other insurance......................... 0
Presents (birthday, christmas etc)...... 60 Cut in 1/2
Haircuts................................ 37 Try student nights, extra week between cuts, cut the kids yourself
Entertainment........................... 200 Sorry can't afford this - reduce to £50
Holiday................................. 100 Sorry can't afford this
Emergency fund.......................... 0 Need something in here to cover things breaking down
Lovefilm dvd rental..................... 6
Household improvements.................. 75 Need to cut until debts paid
Endowment............................... 81.13
Boiler cover............................ 24.08 Hunt around for cheaper option
Total monthly expenses.................. 3499.86

Amount short for making debt repayments. -138.76

The cuts above may seem drastic but you're unfortunately not balancing the books - even before DHs salary is removed & replaced by benefits.

If you can sell his car - fantastic as that will reduce costs a bit - check the T&C of the HP agreement first.

best of luck

icklepiggle

Good idea to do SOA without DH income & add benefits instead.

Also need to take out all the discretionary stuff, so that when he does get another job we can overpay debts too.

Just in shock at the mo so it's lovely to have you guys helping us through the & being the voices of reason :j just when we need it. My DH likes his stuff so I think he will take your advice sooner than take mine