What a Right Pickle!

nomoredebtplease

Bravehearted wrote: »

OP, if you don't mind, how old are your children? If still quite young, Perhaps you could consider the best free school TILL you pay down the debt. The truth is without the debt, you are absolutely able to afford the private school.

If your children are still a long way till GCSE stage, then I wouldn't expect a couple of years in state to hinder them. In fact, it may be good for them - character building and all that? Help teach life lessons etc?

My two children (twins) are 5 and have just started at school. They have however, been going to the same private school since they were 3 (in the nursery classes).

It would break our hearts to pull them out of a class of 8 and put them into a class of 30. I know this is all emotive rather than practical but, given the massive effort we went to to have them (IVF), the joy we get seeing them develop in such a lovely school is really worth it.

merlot123

http://www.moneysavingexpert.com/banking/setting-off

Very important to read this before you open a new bank account.

nomoredebtplease

merlot123 wrote: »

Thinking:

Do you have any PPI on any current loans or had it in the past for any loans?

If you have been declined any credit in the past few months, DO NOT try again for a while to get a 0% card, it will impact on your credit rating.

Is your mortgage on interest or repayment? Is it on a fixed deal or the SVR? This is important, if you enter into a DMP, you may find it difficult to get a good mortgage deal in the very near future, as it will impact on your credit rating.

Do you have mortgage life/assurance cover? Do you have Life Insurance Cover with work if not a stand alone policy.

Another question: What is your other asset of £5K?

Sorry to bombard you with such questions so late and on the first day of your new beginnings.

merlot123

I've been very aware of PPI for a number of years and have always refused it with credit cards etc. However, I have been thinking recently that it may be worth sending some letters off to previous creditors just to see. I don't think I do have any claims to be made there though.

Our mortgage is a repayment, 2 year base rate tracker that we took out in September 2011. As such it's due for renewal in Sept 2013. This is one of the things that worries me most about a DMP - getting a competitive deal at approx. 80+% LTV in less than a years time. What are our current lender (Santander) likely to offer us if we take out a DMP? If we weren't able to secure a new deal, moving to Santander's SVR (which I think is 4.74%?) would cost us even more money each month!

I have life assurance through work to cover the mortgage.


Don't worry about bombarding me with questions. I am MORE than grateful for the help you are all giving us - even at such a late hour! In fact, I was so inspired by the comments I was getting I've actually got out of bed to sit at the computer and type this!

All very much appreciated....

nomoredebtplease

merlot123 wrote: »

Very important to read this before you open a new bank account.

Thanks for the link. I was aware of this so would look to set up another account with a different bank prior to setting up a DMP. In fact regardless of what we do, it would be prudent to set up this account ASAP.

merlot123

https://forums.moneysavingexpert.com/discussion/3245576

I found this thread from the mortgage board, it may help. A few financial advisors have replied to it as well, so it will be correct.

You will default on your payments if you start a DMP and you aren't paying the min payment as set out by credit card companies, so the above link is applicable.

I apologise in advance if I am telling you things you may already know, I always think it's best not to assume.

nomoredebtplease

merlot123 wrote: »

I found this thread from the mortgage board, it may help. A few financial advisors have replied to it as well, so it will be correct.

You will default on your payments if you start a DMP and you aren't paying the min payment as set out by credit card companies, so the above link is applicable.

I apologise in advance if I am telling you things you may already know, I always think it's best not to assume.

Amazingly helpful - thank you.

415SanFran

I live in a village with a very famous private school, and the house prices are silly because of it.
The knock on effect of this of course is that the state school in the village is superb up to the age of,,,,I think about 9.
Also the private school is full of American children and when English local children go there they have no friends out of school, you would not have this with a local school.
I do know how you feel I have twins but the other side of the coin is that they are in such tiny classes, do they have friends out of school or do they rely on each other for friendship? My children only went private at the age of nine, I really did not feel the need for it before that, as the schools around where we lived were so good.

415SanFran

Do you dress your children the same, or still have matching outfits from when they were small?
You could sell them through the local twins club if you have one.
Or ebay.

racing_blue

I can see four pieces to your jigsaw

1. current income
2. keeping children at their school
3. living in current house
4. paying interest on £81k of unsecured debt

I can imagine ways that any three pieces of this jigsaw could fit together, but not four.

I guess putting myself in a similar position I would feel the need to earn and set aside some emergency cash pronto. Absolute priority, otherwise one paycheck away from trouble with mortgage or school.

Probably this would lead to a focus on increasing income. Maybe seeking out unpopular but lucrative work which demanded my particular skill set.

At earliest opportunity I'd probably borrow more against house & use this to pay off unsecured debt (and never take on any more).

Best of luck taking steps to get back on track. You have a big challenge ahead and some difficult choices, but with discipline and a fair wind everything can be worked through.

homelovin

Everyone has different priorities and you have chosen to privately educate your twins, and thats ok. Now you have to make that work for you.
I would try and work this out yourself so you can continue to choose you own priority, understandbly in a way creditors would rather have their money back.
If it were me (and it isnt) I would try to close the gap. Go through everything one at a time, catching pound coins.
No holiday for this year, say, kids are young, day trips to seaside will be lovely. 200.00
No new clothes, we can manage for 6 months, priority is kids' education.
another 50.00
Budget 100 per month for entertainment and see how much you can do for that, makes you value it more.
Go an extra 2 weeks each time for haircuts
Check the utilities, they do seem high, dont use the tumble dryer, turn down the thermostat, turn off lights, share bath water. 50.00 possibly.
Grocery bill is high for your family, meal plan, eat less meat, downgrade brands, batch cook. Shave off another 100.00
Try to shave 50.00 off petrol, check for cheapst, try to combine trips, slow down.
Call all the credit cards and have a nice conversation about possibly lowering the interest rates. I did this last year, i just said I'm trying to put my financial house in order and was there anything I could take advantage of to reduce the interest. I got 2 of them to reduce it by 2 percent each. the others said no, but it lowered the min payments a bit.
I think you get further with honey than vinegar ....
You can try the same with Sky, etc
Try all these things and see how close you can get to closing that gap. Keep reminding yourself you are doing it because you feel private schooling is worth the small sacrifices .......