Where to start? SOA

Celesse

Myself and my husband have a lot of debt. And we are now at the point where its going up each month. We have a lot of credit available but have reached the point where we can only just about cover the essentials and bills, and by essentials I'm talking basic food and nothing else. Problem is that if there is just a tiny little extra expense we have the credit available there. If we were to max out all our credit cards and over drafts we could probably achieve another £20k debt!

Here's our SOA.

Child #3 is expected in July and not here yet.
If my partners wages remain unchanged our Child Tax credit, Child benefit and Housing benefit increase by a combined total of £400 a month when baby arrives. He is however due to a pay rise this year but as yet unknown so benefits will change accordingly.

TV, Internet and phone are all through Virgin and cost £68 a month so I've divided them between the categories the tool I used gave me. Contract is until Sept this year and is too expensive to get out of.

And yes.... electricity is stupidly high. We are in contract with Scottish until May 2015 with a £50 get out payment. We are high usage but are working on our energy saving.

I'm not sure of the exact interest rates. the 3600 CC is 0% interest until Sept. The other is pretty low. Over draft is the highest interest rate.

My current thinking is we are heading towards a DMP or IVA. Though IVA doesn't seem the best option as over the next 5 years I'm likely to re-enter the workforce and my partner is likely to move up his career (and therefore wage) ladder.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1687
Benefits................................ 326
Other income............................ 0
Total monthly income.................... 2013

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 695
Management charge (leasehold property).. 0
Council tax............................. 152
Electricity............................. 140
Gas..................................... 60
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 20
Mobile phone............................ 56
TV Licence.............................. 12
Satellite/Cable TV...................... 20
Internet Services....................... 20
Groceries etc. ......................... 300
Clothing................................ 25
Petrol/diesel........................... 100
Road tax................................ 15
Car Insurance........................... 60
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 28
Childcare/nursery....................... 16
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 5
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 15
Entertainment........................... 25
Holiday................................. 40
Emergency fund.......................... 25
Total monthly expenses.................. 1937


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................15000.....312.......0
Barclaycard....................3600......100.......0
Barclaycard....................3200......100.......0
Barclays over draft............1000......0.........0
Total unsecured debts..........22800.....512.......-


Monthly Budget Summary
Total monthly income.................... 2,013
Expenses (including HP & secured debts). 1,937
Available for debt repayments........... 76
Monthly UNsecured debt repayments....... 512
Amount short for making debt repayments. -436

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -22,800
Net Assets.............................. -20,800

Created using the SOA calculator at.
Reproduced on Moneysavingexpert with permission, using other browser.

Tixy

Hi Celesse and welcome to the forum

With your figures as they are at the moment then it does look like a DMP may well be a serious option. Although it does sound like you will be financially better off once new baby arrives as they shouldn't put £400 on your current living costs.

Its best to try to include known costs in your budget (so an estimate of things like car maintenance for MOT, servicing new tyres etc).

Are you sure your benefits figures are correct and that you are getting all your are entitled to? it doesn't seem very high (even given that you only have 2 children currently). I would have expected wtc, ctc and cb to add up to more than that given OHs salary?

Your council tax bill seems quite high as well (compared to rent cost) - is that repaying any arrears or just the normal monthly cost?

Is there no options at all with Virgin? I don't have any experience with whether they give any flexibility in terms of reducing package such as cancelling the paid tv etc but worth a call and explaining that you simply cannot afford the cost any longer.

Hopefully there will be ways you can reduce your electricity usage, especially with summer coming - have you looked through the online tips on keeping your usage down (or even considered borrowing an electricity usage meter - I think some libraries will lend them out).

Are your mobiles in contract? (they are not massively high but obviously any saving helps).

In terms of the £40 for holiday - if you haven't got anything booked you really need to remove that and reduce the monthly shortfall.

How soon might you expect/hope to be working again?

Have you spoken to any of the debt advice charities yet?

Celesse

The car is OH's, I'm an avid bus catcher! So I wasn't sure what the costs would be.

Benefits are correct. £134 CB, £139 CTC and £52 housing. I think we got caught by the newish don't amend if a bit lower rules on the tax credits when my maternity pay ended last year.

Council tax is correct. Its a band D house, detached, but been a rental for a while so its not up to date on a lot of things and cheap. Our contract on the house ends in September (at which point I'll have a 2 month old) and I'm expecting the land lord to increase the rent as there is nowhere in the area that is a nice as what we have and as cheap. I looked at price comparison to see if it put in the right bracket and it estimated we should be in "E".

Fingers crossed we can do something about the Virgin costs. We don't want to do anything that will extend the contract so we have the option to end it completely, especially if we end up moving when the the house contract is up.

We have an electricity monitor. We had a few non saving bulbs in which are now changed. Our biggest issue seems to be the running on computers and pcs all at the same time. We've also got a Fridge, a Freezer and the house came with an old fridge-freezer, all of which we have running. Currently trying to eat down the frozen stuff so we can switch off the old fridge-freezer.

The mobile bill is for both. Mine is new contract but quite low (£12 a month? ) and OH has a couple of months until his is up with plans to go for a much lower tariff.

Holiday is booked and paid for. Camping in Cornwall. So its only the fuel and food we have to worry about. I tried to be realistic about how much over the year it would cost for food/fuel/pitch.

Working wise it depends. Ideally I want to return to nursing, which involves a course that isn't counted as a proper student and needs self funding and would need child care. Free child care won't start until Sep 2017 for the new baby. Other option would be registering as a child minder, again needing me to spend before I'd earn, but could mean I could get started much sooner. My recent experience is in admin, but financially it doesn't make sense with me having a low wage job where we need to pay for a lot of child care.

We've not spoken to anyone yet. I guess we don't want to get the ball rolling on anything until we know what the pay rise will be and how our income will look.

[Deleted User]

Celesse wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1687
Benefits................................ 326
Other income............................ 0
Total monthly income.................... 2013

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 695
Management charge (leasehold property).. 0
Council tax............................. 152 - If this is over 10 months, go to 12 months and reduce it to £126-66 per month.
Electricity............................. 140 - I'm sure you can cut this a lot, by shopping around. Check U-Switch. If you can get it down by just £5pm (should be a lot more), you will have covered the get out fee in less than 1 year.
Gas..................................... 60 - This is high too. Check U-Switch.
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 20
Mobile phone............................ 56 - How many phones?
TV Licence.............................. 12
Satellite/Cable TV...................... 20
Internet Services....................... 20
Groceries etc. ......................... 300
Clothing................................ 25
Petrol/diesel........................... 100
Road tax................................ 15
Car Insurance........................... 60 - This is £720 pa. Is there a reason (claims, convictions, etc.) why it is so high?
Car maintenance (including MOT)......... 0 - Never?
Car parking............................. 0
Other travel............................ 28
Childcare/nursery....................... 16
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 0 - Never?
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 5
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 15
Entertainment........................... 25
Holiday................................. 40
Emergency fund.......................... 25
Total monthly expenses.................. 1937


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................15000.....312.......0
Barclaycard....................3600......100.......0
Barclaycard....................3200......100.......0
Barclays over draft............1000......0.........0
Total unsecured debts..........22800.....512.......-


Monthly Budget Summary
Total monthly income.................... 2,013
Expenses (including HP & secured debts). 1,937
Available for debt repayments........... 76
Monthly UNsecured debt repayments....... 512
Amount short for making debt repayments. -436

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -22,800
Net Assets.............................. -20,800

Created using the SOA calculator at.
Reproduced on Moneysavingexpert with permission, using other browser.

My comments in red.

National_Debtline

Hello there,

I can see that Tixy and Bob have already highlighted some of the key areas within the budget. I would second the comment about Virgin, I have anecdotal evidence that they'll offer a good deal to keep you on as a customer although it is likely that it would invole you agreeing to a new minimum contractual term.

Given that your household income is likely to increase you may wish to stick with an informal debt-related option. This will allow you greater flexibility when it comes to increasing your offers of payment. If you are busy with lots of things going on in your life, a DMP can be an excellent way to effectively manage your debts. You can read more about DMPs via our fact sheet: https://www.nationaldebtline.org/EW/factsheets/Pages/29%20EW%20Debt-management%20plans%20(DMPs)/Default.aspx

If you choose to self-negotiate via your very own DMP, you can find sample letters and a really useful personal budget sheet on the website too.

If you are going to make reduced payments you must consider switching banks (I'm assuming that you currently bank with Barclays). Please ensure that you choose a bank which isn't affiliated to any of your creditors - this is known as having a 'safe' bank account.

I hope all goes well with the new baby, I also hope you have a fab time in Cornwall. It's a great part of the world.

Best wishes,

David @ NDL.

Celesse

Bob, Car insurance is approx. Pretty sure we paid it in one go My OH has only been driving two years. Maybe I've slightly over estimated. And car maintenance I just didn't know.

Medical wise I'm always pregnant or have a baby so its a while since I've had to pay and OH is rarely ill.