End of my tether

Londonshortbread

Hi all,

I am reaching near the end of my tether, every single month i'm chasing my backside, paying roughly £100 charges every month to the bank for going overdrawn, (on top of overdraft interest)

I recently had the bank ringing me up threatening to end my overdraft if I didn't "get my act together" , I've got a £500 council tax bill to pay by the end of march followed by the first instalment in the next tax year on 1st April, our second child is due in a few weeks so obviously my partner is unable to work at the moment, I'm self employed so my income amount can vary each month, when I asked the council for help to see if I could postpone my £500 payment over the next ten months I was told it wouldn't be possible without a court summons, I also asked the bank for help about my overdraft/going overdrawn and was told as I work there's not a lot they can do-penalised for working!

Im currently working 7 days long hours and the stress is really starting to get to me

Thanks

olivia84

hey,

i am sure you will receive lots of good advice here. most people will ask you to post up a list of your incomings and outgoings (statement of accounts or SOA i think it is referred to) that way people can help you cut back and advise you on your debts etc. why are you paying the charges you are? do you have alot of debts?

i would say that the council tax was quite important at the moment, as well as mortgage/rent, heat and light and food and anything secured on your home. any other debts could be looked at separately.

have a go at posting up your SOA here and i'm sure there will be lots of nice folk to help you.

x

Teen_the_Drama_Queen

Hiya LSB, sadly I don't think you are alone in your thinking, but have a read of some stories on here, it's good to know others are in the same situation.

Have you tried going to the Business Debtline site at all, it could be worth ringing them and explaining your situation and see if there is any way you could get your outgoings down or your income (benefits) upped.

http://www.bdl.org.uk/englandandwales.asp

Cheers, all the best LSB :beer::beer:

Angry_Bear

Your priorities are:
Rent/mortgage
Council Tax
Utilities
Food and essentials
Credit cards/overdrafts
luxuries

If you're brave enough to post up a statement of affairs http://www.stoozing.com/calculator/soa.php people will be able to give you more targetted advice.

I would say that if your bank are starting to threaten to pull your overdraft it may be worth getting a basic account with another bank (that you have NO debts with) and starting to get any income into that. You can then treat your old overdraft like any other debt and make arrangements with the bank to pay them. Your bank also shouldn't be continually adding charges if you have made them aware that you are in financial difficulty. I forget the exact rules though, so there may be some leeway with this.

As you're self employed you may need to think carefully about how you're putting money aside for tax and other costs. I'd suggest you contact one of the debt charities for advice (Payplan, stepchange or CAP are generally recommended a lot - as are National Debtline).

good_advice

Hello London
Welcome to MSE

Sorry to say we on DFW have all been in your position.
To change, you have to want to climb out of your red hole and begin a new journey.
It will not be easy. Sacrifices will have to be made.
A more simple life.

Start with your DD 's - reduce them. Yes it can be done!
Cut the sky/virgin package to the bone.
Get rid of the smart phone and buy a PAYG.
Start unplugging and cut the fuel bill.
Stop buying a newspaper and read online

Lots of things....

Good luck and tomorrow is a new beginning....

Londonshortbread

Hi all,

Thanks for the advice, I have completed a SOA to the best of my knowledge below (obviously my income changes monthly so I have used last months figures, can be sometimes little more or can sometimes be a lot less

{\rtf1\ansi\ansicpg1252
{\fonttbl\f0\fswiss\fcharset0 Helvetica;}
{\colortbl;\red255\green255\blue255;\red0\green0\blue0;\red255\green255\blue255;}
\deftab720
\pard\pardeftab720\partightenfactor0

\f0\fs22 \cf2 \cb3 \expnd0\expndtw0\kerning0
\outl0\strokewidth0 \strokec2 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.................... 1\
\
Monthly Income Details\
Monthly income after tax................ 1500\
Partners monthly income after tax....... 0\
Benefits................................ 80\
Other income............................ 0\
Total monthly income.................... 1580\
\
Monthly Expense Details\
Mortgage................................ 0\
Secured/HP loan repayments.............. 262\
Rent.................................... 820\
Management charge (leasehold property).. 0\
Council tax............................. 130\
Electricity............................. 60\
Gas..................................... 0\
Oil..................................... 0\
Water rates............................. 40\
Telephone (land line)................... 12.5\
Mobile phone............................ 40\
TV Licence.............................. 13\
Satellite/Cable TV...................... 20\
Internet Services....................... 12.5\
Groceries etc. ......................... 100\
Clothing................................ 0\
Petrol/diesel........................... 80\
Road tax................................ 0\
Car Insurance........................... 55\
Car maintenance (including MOT)......... 0\
Car parking............................. 0\
Other travel............................ 0\
Childcare/nursery....................... 0\
Other child related expenses............ 0\
Medical (prescriptions, dentist etc).... 0\
Pet insurance/vet bills................. 0\
Buildings insurance..................... 0\
Contents insurance...................... 0\
Life assurance ......................... 20\
Other insurance......................... 0\
Presents (birthday, christmas etc)...... 0\
Haircuts................................ 0\
Entertainment........................... 0\
Holiday................................. 0\
Emergency fund.......................... 0\
Total monthly expenses.................. 1665\
\
\
Assets\
Cash.................................... 0\
House value (Gross)..................... 0\
Shares and bonds........................ 0\
Car(s).................................. 4000\
Other assets............................ 0\
Total Assets............................ 4000\
\
\
Secured & HP Debts\
Description....................Debt......Monthly...APR\
Mortgage...................... 0........(0)........0\
Hire Purchase (HP) debt ...... 6000.....(262)......0<\
Family.........................3000.....(0)........0<\
Overdraft 2....................2500.....(0)........0<\
Overdraft 1....................3500.....(0)........0\
Total secured & HP debts...... 15000.....-.........- \
\
Unsecured Debts\
Description....................Debt......Monthly...APR\
Total unsecured debts..........0.........0.........- \
\
\
Monthly Budget Summary\
Total monthly income.................... 1,580\
Expenses (including HP & secured debts). 1,665\
Available for debt repayments........... -85\
Monthly UNsecured debt repayments....... 0\
Amount short for making debt repayments. -85\
\
Personal Balance Sheet Summary\
Total assets (things you own)........... 4,000\
Total HP & Secured debt................. -15,000\
Total Unsecured debt.................... -0\
Net Assets.............................. -11,000\
\
Created using the SOA calculator at. \
Reproduced on Moneysavingexpert with permission, using other browser.}


Thanks

maganan

Wow you're doing incredible well not to be worse off! Are you getting all the benefits you're entitled too? Could you pay council tax over 12 months rather than 10? Could you go without TV and watch on catch up only? How old are the children, could your partner work without childcare? Good luck and I'm sure someone with better thoughts will be along soon

Kate x

olivia84

Household Information\
Number of adults in household........... 2\
Number of children in household......... 2\
Number of cars owned.................... 1\ could you get rid of your car?
\
Monthly Income Details\
Monthly income after tax................ 1500\
Partners monthly income after tax....... 0\
Benefits................................ 80\
Other income............................ 0\
Total monthly income.................... 1580\
\
Monthly Expense Details\
Mortgage................................ 0\
Secured/HP loan repayments.............. 262\ is this for the car?
Rent.................................... 820\ this seems very high, (i know it depends where you live) could you perhaps move to somewhere cheaper?
Management charge (leasehold property).. 0\
Council tax............................. 130\
Electricity............................. 60\ are you all-electric? £60 seems quite good for all fuel. just wouldn't want you under-estimating your outgoing here.
Gas..................................... 0\
Oil..................................... 0\
Water rates............................. 40\
Telephone (land line)................... 12.5\
Mobile phone............................ 40\ can this go? (PAYG)is this for 2 people?
TV Licence.............................. 13\
Satellite/Cable TV...................... 20\ can this go?
Internet Services....................... 12.5\ can you get this cheaper?
Groceries etc. ......................... 100\ this isn't alot for 4 people! well done if you are managing this, but again, don't want you under-estimating
Clothing................................ 0\
Petrol/diesel........................... 80\
Road tax................................ 0\
Car Insurance........................... 55\ this seems high.can you get this cheaper?
Car maintenance (including MOT)......... 0\
Car parking............................. 0\
Other travel............................ 0\
Childcare/nursery....................... 0\
Other child related expenses............ 0\
Medical (prescriptions, dentist etc).... 0\
Pet insurance/vet bills................. 0\
Buildings insurance..................... 0\
Contents insurance...................... 0\ be good to have something here
Life assurance ......................... 20\
Other insurance......................... 0\
Presents (birthday, christmas etc)...... 0\
Haircuts................................ 0\
Entertainment........................... 0\
Holiday................................. 0\
Emergency fund.......................... 0\
Total monthly expenses.................. 1665\
\
\
Assets\
Cash.................................... 0\
House value (Gross)..................... 0\
Shares and bonds........................ 0\
Car(s).................................. 4000\ is this on finance? can you sell and get a cheaper model? your insurance may be cheaper as well
Other assets............................ 0\
Total Assets............................ 4000\
\
\
Secured & HP Debts\
Description....................Debt......Monthly.. .APR\
Mortgage...................... 0........(0)........0\
Hire Purchase (HP) debt ...... 6000.....(262)......0<\
Family.........................3000.....(0)....... .0<\
Overdraft 2....................2500.....(0)........0<\
Overdraft 1....................3500.....(0)........0\
Total secured & HP debts...... 15000.....-.........- \
\
Unsecured Debts\
Description....................Debt......Monthly.. .APR\
Total unsecured debts..........0.........0.........- \
\
\
Monthly Budget Summary\
Total monthly income.................... 1,580\
Expenses (including HP & secured debts). 1,665\
Available for debt repayments........... -85\
Monthly UNsecured debt repayments....... 0\
Amount short for making debt repayments. -85\
\
Personal Balance Sheet Summary\
Total assets (things you own)........... 4,000\
Total HP & Secured debt................. -15,000\
Total Unsecured debt.................... -0\
Net Assets.............................. -11,000\
\


i have made some suggestions in red. you're paying a heck of alot in rent. do you live in london? could you move to another house that's less rent every month? so the only debt you have is the £262 per month? (i take it this is for a car?) your family and and the overdrafts? are your family desperate for their money back?

if i were you, i would switch banks to somewhere you have no debts. write to your current bank and tell them you cannot afford the monthly charges or to pay the overdrafts back. you have a young family to support. offer them a token payment of £5 per month. (are both overdrafts with the same bank?) they will either: a) accept (unlikely) b)eventually, after many months, pass the debt onto a debt collection agency, who are far more likely to accept the £5 per month or c) take you to court....this is (in my opinion) not a bad thing, a judge will be able to look at your finances impartially and will be able to see you cannot afford much more than the £5 you offer. personally i think the bank will go for option b).

i really think you should get rid of your car. can you sell it? hand it back? just get a little run around if you really need a car for work? (trust me 12 year old ford fiesta's rule!)

sorry i can't be much more help. it would be good if there was a magic wand to make it alot less painful.

good luck

x

p.s...as maganan said above; are you getting all benefits you are entitled to? i don't have kids so don't know the ins and outs but surely you qualify for child/working tax credits?

downhillfast

Hi there

Well done for addressing your financial issues - we've all been there and can attest that with a bit of effort you can turn things around.

I'm not going to go through your SOA and highlight specific points but I did notice that there are A LOT of expenses where you haven't attributed a figure such as haircuts, entertainment, child related costs etc - all these little things mount up so you really need to work out exactly what you spend. £100 for food also seems very low for someone who has only just started to try to tighten a budget - congrats though if that figure is accurate, I wish we only spent that!

As someone else pointed out, check that you are receiving all benefits that you are entitled to as this could make a big difference.

And definitely get a new BASIC bank account with a new bank where you have no debt. This will at least enable you to work out how to operate 'in the black' on a monthly basis - it also sounds like your existing bank may look at removing your overdraft facility so the last thing you need is for that to happen when you've just paid your wages in!

Re your car: get rid if you can and get something cheaper as you really can't afford it. Just not having that HP payment every month will put your operating monthly budget on track and allow you to look at paying off the debt.

Good luck :cool:

bertiewhite

Angry_Bear wrote: »

Your bank also shouldn't be continually adding charges if you have made them aware that you are in financial difficulty. I forget the exact rules though, so there may be some leeway with this.

I think the gist is that the bank shouldn't be charging you if those charges would make in even more in debt. Try writing to the bank and ask for a freeze on charges or even a refund. I did and the bank refunded a months worth of charges as a goodwill gesture. Also something else that's worth trying is aksing the bank to reduce your overdraft by a small amount each month. The HSBC did that for my wife and it was a big help. Have you considered a review with your bank manager - you'll find that they'd much rather try and help out these days than put you under and lose a customer. My manager looked at my finances and suggested all sorts starting with a mortgage review which was my biggest outlay.

A different thing to consider - is your partner aware of the situation you're in? If not then she needs to be be. Part of my problem was I couldn't concentrate on soprting my debts because of family expectations on spending. You won't be able to tackle it if she is blissfully unaware and there is some truth in the saying "a problem shared is a problem halved". Or something like that anyway.

Londonshortbread

Hi all,

Thanks for all the advice, on the plus side I am now feeling a sense of relief in a way (if that sounds strange?) that I can now see it in front of me and gradually start to come on top of it

To answer some of the questions above:

Regarding getting rid of my car and getting a cheap runaround, this is something I have considered before, however the problem I've got is there would be a large shortfall as the HPI on it is worth nearly double what the car itself is worth-Not only that but if I had a cheap runaround I am worried I could then get a lot of expensive problems with it whereas at the moment (touch wood) the car I've got is only 7 years old and is reliable

Regarding the rent, I'm from the South East (Outskirts of London) and this is the very standard rent around, for a two bed flat in our area you're looking at anything from £750-£900 (At £820 ours is actually quite well priced)

Also I think I may have been underestimating the food bill, not sure why I put £100 at the time, think it is nearer £200-£250

Yes my partner does know the situation and we're in it together

Thanks all very much