Massive level of unsecured debt....

sophiemae12

Please help and advise...
We are more than managing to pay over minimum but the level just isn't going down. Tried for a loan to get rid of cards, but it got referred and I think it will be rejected


SOA below....


Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1850
Partners monthly income after tax....... 1800
Benefits................................ 82
Other income............................ 0
Total monthly income.................... 3732
Monthly Expense Details
Mortgage................................ 557
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 129
Electricity............................. 53
Gas..................................... 40
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 30
Mobile phone............................ 60
TV Licence.............................. 12
Satellite/Cable TV...................... 50
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 50
Petrol/diesel........................... 200
Road tax................................ 33
Car Insurance........................... 40
Car maintenance (including MOT)......... 50
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..................... 20
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 0
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2016

Assets
Cash.................................... 0
House value (Gross)..................... 175000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 182000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 149000...(557)......0
Total secured & HP debts...... 149000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard 1..................7700......193.......0
Barclaycard 2..................4400......110.......0
Loan...........................4300......125.......0
Loan (joint)...................3300......105.......0
Loan (hubby's own).............12000.....215.......0
Total unsecured debts..........31700.....748.......-

Monthly Budget Summary
Total monthly income.................... 3,732
Expenses (including HP & secured debts). 2,016
Available for debt repayments........... 1,716
Monthly UNsecured debt repayments....... 748
Amount left after debt repayments....... 968
Personal Balance Sheet Summary
Total assets (things you own)........... 182,000
Total HP & Secured debt................. -149,000
Total Unsecured debt.................... -31,700
Net Assets.............................. 1,300

Powered_By_Pies

So you have £968 left after all your expenses and debt payments have been made but you're still struggling? Do you know what this is typically spent on? Do you keep any kind of spending diary?

£400 for groceries is a little much, maybe shop around for the best prices on groceries? Do you really need £200 a month for entertainment, and £50 a month for clothing? Is the amount quoted for mobile phone just for one or for two? Can you scrap the satellite TV and go for something like Free view or Freesat?

Those are the main standout areas on your SOA that you could cut back on in my eyes, from a quick look over. If you cut those down then you should be able to keep around £1000 a month left over after the repayments. Could you possibly sell one of the cars, or are they both mandatory for commuting?

P.S I wouldn't apply for any more loans in the meantime, if you think the latest application will be rejected then that means your credit rating is below the accepted limit, or the current active loans will lead other potential lenders to question why you need another loan with others still being repaid.

sophiemae12

I'm paying over the minimum, what I've put on here is minimum. OH's wages do fluctuate, so I might pay an extra £200 off here and there etc.
2 mobiles. Both van and car essential for commuting.
Honestly I have no idea where else it goes. Lot spent on car and van repairs this year
Its been racked up when I was on maternity leave, and got made redundant and then got stuck earning a part time wage for 18months (now full time)


I have sent OH this and told him this is what we are sticking to spending, and what is left is paying the cards off.

Powered_By_Pies

I'd recommend recording a spending diary for a month so you can keep track of what's spent and where - I did this last month and was staggered at the pure guff I was buying without even realising. It's helped me re-work my budget for this month already.

YNAB (You need a budget) is something a lot of users rave about on here - I haven't yet used it myself but I think I might have a dabble with it later on.

The key is to set a budget and stick to it. This is where I kept going wrong before I hit the brakes and started a DMP. I'd just hand my card over and not even think about what I was paying, and none of it was high-priced consumer goods, so I didn't even have anything to show for my over-spending at the end of each month.

Do you have anything you could stick on eBay or take to Cash Converters? You'd be amazed at what people will buy. I went to a cash converters with a few DVD's last month and made £20, I wasn't expecting anything like that so it's a welcome surprise.

susieq87

perhaps keep a spending diary to keep track of your outgoings, this will give you a clearer view on where your money is going because you still have £900 left over after the minimum payments. imo your groceries are wayyyyyy too much for 2 people and a child, i would say £200 maximum which means you can add the remaining £200 to your debts leaving you with £1168 to go towards them and perhaps put a little bit into the emergency fund too.

Powered_By_Pies

Another thought - are both Barclaycard CC's on 0% interest? If not, would it be worth visiting your local branch and asking what your options would be to help with the repayments to those cards? I admit I'm not that hot on credit cards, only ever had two, both are now in a DMP (although one was being repaid at the correct rate, it was still added) :-s

sophiemae12

£50 a week for 2 adults and a child (I forgot the cat as well!) honestly that doesn't sound do-able. I could try to cut it to £70-£80 but I cant see £50 being realistic.
Budget starts right now.
I do have a few things to sell so will have a look at that, thanks

sophiemae12

Powered_By_Pies wrote: »

Another thought - are both Barclaycard CC's on 0% interest? If not, would it be worth visiting your local branch and asking what your options would be to help with the repayments to those cards? I admit I'm not that hot on credit cards, only ever had two, both are now in a DMP (although one was being repaid at the correct rate, it was still added) :-s

no neither are on 0%, I have had them years.
I might try calling them. Its the interest that's the killer for me.

BillJones

Can I check, how did the debt come about? Your SOA suggests that you have spare money each month after living expenses, so was the borrowing from a time before you eared what you now do?

sophiemae12

BillJones wrote: »

Can I check, how did the debt come about? Your SOA suggests that you have spare money each month after living expenses, so was the borrowing from a time before you eared what you now do?

I went on mat leave 4 years ago, hubby's job (at the time) was v unstable and he earned v low wages that year... I got made redundant whilst on mat leave, I had only been with the co 6 months so I got sod all. Then I got a part time job to start with (only one I could get) and got myself stuck there for 18 months before getting my (current) full time job 2 years ago.


Since then it hasn't increased, I never put anything on them, its just not coming down. I think we have both overspent though, which stops right now.

FireWyrm

sophiemae12 wrote: »

£50 a week for 2 adults and a child (I forgot the cat as well!) honestly that doesn't sound do-able.

I can assure you it is. I feed 5 (including a baby) on £250, so it is entirely possible. The trick is to meal plan well in advance. Perversely, the best think I ever got was a white board with 35 slots on it. I mark up the meals for the month at the beginnng of the money and only buy what is necessary.

sophiemae12 wrote: »

I could try to cut it to £70-£80 but I cant see £50 being realistic.
Budget starts right now.

What are you using for a budgeting tool? There are various excellent excel sheets online for free (PM for link) as well as various paid/free applications, MS Money, You Need a Budget (ynab) and some others on smart phones. You have nearly a thousand pounds a month notionally free, so you need to get a grip on where this is, whether it is true, and throw it at your debts wholesale. You ought to be out in about 31 months if that is the case, but you have to get a grip now.

You could also see about other money saving ideas like paying your insurances up front for the year (scratch 34% APR on those) and dropping to freeview (£25-75 saved) as well as dropping TV altogether (subtract £12 for the license).