Drowning in debt

System

wheezy57 wrote: »

I have just done the SOAStatement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1034
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1034

Monthly Expense Details
Mortgage................................ 96
Secured/HP loan repayments.............. 239
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 77
Electricity............................. 37
Gas..................................... 30
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 35
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 23
Internet Services....................... 0
Groceries etc. ......................... 30
Clothing................................ 10
Petrol/diesel........................... 35
Road tax................................ 7.5
Car Insurance........................... 15
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 12
Contents insurance...................... 0
Life assurance ......................... 1
Other insurance......................... 15
Presents (birthday, christmas etc)...... 5
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 724.5


Assets
Cash.................................... 0
House value (Gross)..................... 180000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 182000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 65000....(96).......0
Secured Debt.................. 17000....(239)......0
Total secured & HP debts...... 82000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................5000......5.........0
Credit Card....................6000......5.........0
Credit Card....................2000......1.........0
Payday loan....................700.......129.......0
Total unsecured debts..........13700.....140.......-


Monthly Budget Summary
Total monthly income.................... 1,034
Expenses (including HP & secured debts). 724.5
Available for debt repayments........... 309.5
Monthly UNsecured debt repayments....... 140
Amount left after debt repayments....... 169.5

Personal Balance Sheet Summary
Total assets (things you own)........... 182,000
Total HP & Secured debt................. -82,000
Total Unsecured debt.................... -13,700
Net Assets.............................. 86,300

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

Hi wheezy57 and thanks for posting.

I just came across your thread and wanted to offer some advice.

There could be various solutions available to you and we’d be happy to offer free and impartial advice. We’d also help you put together a realistic budget especially in regards food.

The first thing to do is visit our online debt advice service Debt Remedy (http://www.cccs.co.uk/ref/drcu) to help you find a solution to your debt problem quickly.

Debt Remedy will assist you in completing a financial statement with information on your household, employment, income, expenditure and debts. From this the service will automatically determine your options.

To help you fill in the form, it’s best to gather together information about:
• Your income
• Your expenditure
• The creditors you owe money to

You’ll receive a downloadable advice booklet providing a tailored solution for you based on your current circumstances and advice on ways you may be able to improve your situation.

If you’re not confident with computers or would like to speak to an advisor then you’re welcome to ring our free Helpline on 0800 138 1111. We’re open Monday to Friday 8am - 8pm and Saturday 9am until 3.00pm.

If you phone us it may be possible to refer you directly to a counsellor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

I hope this helps.

Kind regards,

Mat

neas

I'd have thought bankruptcy wasn't possible though due to the stonking amount of cash hidden in the house?

Even if he sold up paid off all debts he'd have around £60,000 to £80,000 remaining to help living until his pension kicks in?

Could rent somewhere in the meantime or apply for council housing later?

Certainly transferring over the property would (im no expert btw) be probably seen as what it is doing.. hiding cash that could be used to settle all debts and leave a big surplus.

Personally i would sell the house move into rented for 6 months to a year and then take stock then with 0 debt. Try and live within means and dont touch savings .

dancingfairy

O.K so you've got about 100k equity sitting in your house and owe 13,700 in debts.
The most obvious solutions would be:
1) a long term dmp (which is what you're doing) but it doesn't look like you are currently allowing yourself enough money to live off properly and eat well.
2) to sell up and downsize
3) to release some equity via an equity release scheme or
4) to remortgage and/or extend the term of the secured loan and add the unsecured debts.

Now clearly none of these options is entirely straightforward and they all come with their own pros and cons. Equity release can be a mindfield but as long as you reasearch,reasearch,research and understand what you are getting into then fine. Again with remortgaging and securing debts against the houe- this is generally not recommended because obviously if you miss payments then your house could be at risk and you are eating up your equity, however if you really can't face moving and are very strict with your budget and struggling with being hassled by creditors then this may work for you. Basically you need to research, research, research all the options and make the best decision for you and your circumstances. You may also want to try and include some long term planning in there, for instance if you want to release some of the equity while you are still young enough to enjoy it, or do you want to retire early, do you plan on leaving your house to your children, if you are likely to downsize when would be the right time for you to do it (sooner to get the debts shot and so you can settle in a new house or are you ok with putting it off for 5 to 10- years) etc etc.
You actually have plenty of choices which is good.
Best of Luck
df

alastairq

Hi Wheezy...welcome to the forum!

I can fully sympathise with your plight, especially the different issues we oldies face, when looking at debt, and the [limited] future.

Long-term [financial] planning takes on a whole new colour!

We have to face up to the fact that, probably within the next 10 years [I am but a couple of years older than you!] our incomes will drop off dramatically as we cease work and fall into the world of pensions.

And this is not the best time to still be saddled with major debts?

More and more of us are going to find our 'secure financial future' in retirement was but a wet dream......

Owning property isn't quite the ideal situation to be in when facing an uncertain future, as pensioners do..[how long before we need care and support, for example?]

So about 'now' is the time to revue how you will become domestically secure....and your debt situation has been the catalyst to get you thinking?


If I were in your boots, I'd sell up ASAP......find a buyer at a decent price, rather than waiting for that mythical spring-time market enhancement....it may not come at all [mine didn't!]!

Try renting a property whilst you can...and whilst your credit rating is still in reasonable condition.

Or, if unappealing, look [ as others have advised] to get something smaller and more easily managed, by someone whop will, from now on, only find aches and pains more commonplace.

[remember, if one gets old, and has but a pension or two as income only, then finding the funds for that roof repair gets ever harder........at least if one is renting, then the roof repair is someone else's pigeon! I look at 'renting' as 'purchasing a service'....a good tenant is worth their weight in gold to a land-lord.]

In any event, use the equity in your current property to get rid of any outstanding debts.

Quickly!

This is important, as, like so many of us, the cloud of debt hanging over you is affecting your health and well-being.

And this is far more important to you than providing some inheritance for the kids!

[they don't need it anyway].

And just to try and cheer you up, think on...once past 60, you then become entitled to.....winter heating allowance!

Now, £200 for simply being old and cynical isn't half bad, is it? [don't like the lying cheating way the qualifying dates are organised, though]

At age 60, your prescriptions become free...so that's at least another £100 a year saved? So, the day after your 60th, get down the doctors, and see how much stuff you can wheedle on repeat prescriptions?

At age 60 [subject to qualifying dates...biggest con and fiddle from the Govt. yet!..I didn't qualify until I was past 61!]....you also can get a free bus pass!


Still intending to work past 65? Why not? Your NI contributions will cease, so you get to see more for your labours!



So, if your body gets to 60 before your mind, the world suddenly can become a more pleasant place to enjoy.


BTW, bankruptcy..or rather, insolvency, is a state where an individual can no longer service their debts.

The value of assets owned has nothing to do with the ability to petition BR.


If the value of assets realised by the OR is in excess of debts owed, and the costs of administering the BR, then the BR individual will receive the balance of any monies realised.

[this, however, may not be a lot!]

wheezy57

Hi everyone. I am not reading and running. Its just that I havent time tonight to answer all your really really helpful posts. I will get back at the weekend. You guys out there are amazing though..

Thank you sooo much

wheezy57

alastairq wrote: »

Hi Wheezy...welcome to the forum!

I can fully sympathise with your plight, especially the different issues we oldies face, when looking at debt, and the [limited] future.

Long-term [financial] planning takes on a whole new colour!

We have to face up to the fact that, probably within the next 10 years [I am but a couple of years older than you!] our incomes will drop off dramatically as we cease work and fall into the world of pensions.

And this is not the best time to still be saddled with major debts?

More and more of us are going to find our 'secure financial future' in retirement was but a wet dream......

Owning property isn't quite the ideal situation to be in when facing an uncertain future, as pensioners do..[how long before we need care and support, for example?]

So about 'now' is the time to revue how you will become domestically secure....and your debt situation has been the catalyst to get you thinking?


If I were in your boots, I'd sell up ASAP......find a buyer at a decent price, rather than waiting for that mythical spring-time market enhancement....it may not come at all [mine didn't!]!

Try renting a property whilst you can...and whilst your credit rating is still in reasonable condition.

Or, if unappealing, look [ as others have advised] to get something smaller and more easily managed, by someone whop will, from now on, only find aches and pains more commonplace.

[remember, if one gets old, and has but a pension or two as income only, then finding the funds for that roof repair gets ever harder........at least if one is renting, then the roof repair is someone else's pigeon! I look at 'renting' as 'purchasing a service'....a good tenant is worth their weight in gold to a land-lord.]

In any event, use the equity in your current property to get rid of any outstanding debts.

Quickly!

This is important, as, like so many of us, the cloud of debt hanging over you is affecting your health and well-being.

And this is far more important to you than providing some inheritance for the kids!

[they don't need it anyway].

And just to try and cheer you up, think on...once past 60, you then become entitled to.....winter heating allowance!

Now, £200 for simply being old and cynical isn't half bad, is it? [don't like the lying cheating way the qualifying dates are organised, though]

At age 60, your prescriptions become free...so that's at least another £100 a year saved? So, the day after your 60th, get down the doctors, and see how much stuff you can wheedle on repeat prescriptions?

At age 60 [subject to qualifying dates...biggest con and fiddle from the Govt. yet!..I didn't qualify until I was past 61!]....you also can get a free bus pass!


Still intending to work past 65? Why not? Your NI contributions will cease, so you get to see more for your labours!



So, if your body gets to 60 before your mind, the world suddenly can become a more pleasant place to enjoy.


BTW, bankruptcy..or rather, insolvency, is a state where an individual can no longer service their debts.

The value of assets owned has nothing to do with the ability to petition BR.


If the value of assets realised by the OR is in excess of debts owed, and the costs of administering the BR, then the BR individual will receive the balance of any monies realised.

[this, however, may not be a lot!]

For some obscure reason I cant 'thankyou' for your post. But you so speak the same language as me.

I will reply at weekend.

Again, I thank you sincerely for your time and input. I was chuffed at the thought of free prescriptions but to get winter fuel allowance - well thats another cherry on top of the pie. Free transport would mean I could get rid of car!!

wheezy57

neas wrote: »

I'd have thought bankruptcy wasn't possible though due to the stonking amount of cash hidden in the house?

Even if he sold up paid off all debts he'd have around £60,000 to £80,000 remaining to help living until his pension kicks in?

Could rent somewhere in the meantime or apply for council housing later?

Certainly transferring over the property would (im no expert btw) be probably seen as what it is doing.. hiding cash that could be used to settle all debts and leave a big surplus.

Personally i would sell the house move into rented for 6 months to a year and then take stock then with 0 debt. Try and live within means and dont touch savings .

Hi and thanks for posting. I do live within my means and I dont have any savings. Unfortunately selling ones house takes an age. And I think your right about the transferring over the house to my kids. I would see it as a hiding mechanism actually if I was on the other foot...! It was an idea to try and do something positive. What do they say - 'Asset rich, cash poor'. Could not have put that better if I had tried!!

wheezy57

The only pension I will get is the state one. So I shall work until then at least. My ex husband took a massive pension in his name only well before we divorced. I couldnt touch it. He is a tight fisted man with no compunction on watching me struggle. He also managed to get all his financial assets off-shore so that couldnt be touched either. I have been waiting however for that 'what goes round comes round' or the other one 'the worm will turn'. Neither has happened. In fact, instead of him being bitter and lonely - its me!! Still, onwards and upwards. I have to be a realist- and thats why I am trying to get to grips with this problem which as been going on for a few years now, but gets more acute when one gets older. Sorry to ramble on.

Anyone want to buy a lovely little cottage north of England with a sweet garden and 2 bedrooms. It has fields all around and is very idyllic!!

Thanks for everything to all your kind and helpful posts..

Jox

Sod the ex, I'm sure there will be karma to pay!

I googled room to let Cumbria and can see that rents seem to be £65 or £80 a week, can you put an advert on Gumtree or a website like this and see if you get a nice lady for example to move in maybe just for 6 months to see how you get on?

That could bring in around £1700 - £2,000!

http://www.spareroom.co.uk/flatshare/cumbria/

Lou67

tiggerbodhi wrote: »

You have come to the right place, no judgements made or spitefulness, just help and empathy, a lot of us have been there

Wishing you well in whatever you decide :)

I beg to differ. I put a thread on here today asking if people find peoples attitudes toward them rather bad, (after they have gone bankrupt,) and said someone was rather nasty to me on a message forum... and there were some very judgemental and spiteful comments on my thread. I was quite stunned as this is supposed to be a bankruptcy support board, and the sticky at the top of the page, states, "this is for help not judgement." I reported the thread and asked for it to be deleted, as the provocative and trollish comments got out of hand. Thankfully, it has now gone. I foolishly responded to the bait. I won't make that mistake again. :beer:

Re; the OP's comment. Yes, go for it! There is no feeling like having no debt, and you can start afresh completely! Myself and my husband have slept soundly ever since and have never been so happy. We don't own our own home now, we rent; but we don't care, as the house was bleeding us dry anyway; with constantly forking out 1000s of pounds worth of repairs. As soon as we spent 1000s on something, there would be something else!

I wouldn't buy again if my life depended on it. Renting all the way! Freedom, no repair bills and someone else can fork out for insurances and all that crap!

Since we were discharged a year ago, my husband got more hours at work, and we have now got £3,000 savings, (which we have saved in 9 months!) We have no credit cards, a basic bank account, and no storecards, and no debt whatsover! We save for stuff when we need something and have an 18 year old car, but NO DEBT! Our daughter is nearly 18, and the world is our oyster with NO TIES! :T

(To be honest, I think this is what gets up peoples' noses; they're a bit jealous and bitter that people who go bankrupt are free of debt TOTALLY) And this is what encourages the spiteful remarks.