Need help to get Debt Free

MissDitton

Hello,

I am looking for some advice.

I have recently purchased my own home (waiting for completeion date) so exciting! and our next challenge is to clear OH debt!

To break it down, we are not married, my credit is perfect and the mortgage is in soley my name. We are not financially linked!

He has a defaulted loan from 2008 around £8000 from Abbey (now santander) which he has not acknowledged since, will this come off his credit file this year?

He has a CCJ from 2012 for £650 we will be paying this back via a Solicitor and obtaining a satisfied certificate.

He also has car finance, which he has re financed once to the tune of £7500 and hasnt paid since last October - we would like to hand the car back to settle the mess and pay penalties for damage and excess milage etc.

Any help as to where to start or what I need to do would be amazing I would like to be in a position to apply jointly for a mortgage in the future and get married but all this needs sorting out!

(this was all accumulated as a young man in his early 20s long before we met)

Thanks All!

Miss D xx

bsms1147

If you are going to be helping him financially with these debts, post a joint SOA, paying attention to all outgoings and the debts. Phone the companies involved to find out exact debt amounts and settlement figures if you do not already know them.

SOA:
http://www.stoozing.com/calculator/soa.php

MissDitton

Hi - I hope this helps, we know all the figures just not sure where to start first!

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1136
Partners monthly income after tax....... 2110
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3246
Monthly Expense Details
Mortgage................................ 423
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 49
Gas..................................... 49
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 15
Mobile phone............................ 45
TV Licence.............................. 12
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 200
Petrol/diesel........................... 200
Road tax................................ 0
Car Insurance........................... 0
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 ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 60
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 200
Total monthly expenses.................. 1858

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 2500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 81000....(423)......5.6
Total secured & HP debts...... 81000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 3,246
Expenses (including HP & secured debts). 1,858
Available for debt repayments........... 1,388
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 1,388
Personal Balance Sheet Summary
Total assets (things you own)........... 2,500
Total HP & Secured debt................. -81,000
Total Unsecured debt.................... -0
Net Assets.............................. -78,500
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

sourcrates

Be very wary if you/he decides to hand back the car, as the usual scenario is for them to sell it at auction for the best price, this very often leaves a shortfall which he will be responsible for (other post on here today, OP was left with a massive shortfall to pay).


Unfortunately, once you hand it back, what happens next is out of your hands.


The abbey loan could well be statute barred this year, dependant on the exact date, and when the last payment/default date was registered.

MissDitton

thanks! I was under the impression that regardless of the sale value it was the Car Finance companies problem due to their Guaranteed Future Value (it was a PCP deal with Arnold Clark - creation finance is the company) we need rid of the car anyway as its old and surplus to requirements now.

We need to move into our new house so I can get him registered at an address and attack the CRA reports. I just need to know if handing the car back is the best option, or we ask for a settlement figure - and sell the car ourselves?

Thanks x

asparagus1968

Hi,
so the finance is £7500 and the car is worth £2500?
why has he stopped paying the money in October?
out of his £2110 wage, what outgoings does he have?
it's not really clear from your SOA what debts need paying as you haven't listed them? or if the £8000 becomes statute barred, and you pay the £650 off in one go, will it just be the car finance to pay?




£200 clothes ! £200 entertainment! no house/contents insurance budgeted for?
mobile phones is high
satellite could be reduced


once you have final figures of what needs to be paid off it will be much easier, glad you are not financially linked!

[Deleted User]

MissDitton wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2 - Do you really need 2 cars?
Monthly Income Details
Monthly income after tax................ 1136
Partners monthly income after tax....... 2110
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3246
Monthly Expense Details
Mortgage................................ 423
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 49
Gas..................................... 49
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 15
Mobile phone............................ 45 - This is a lot for 2 phones. Going PAYG/sim only could save you about £25.
TV Licence.............................. 12
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 200 - £2,400 pa? :eek:
Petrol/diesel........................... 200
Road tax................................ 0 -Nothing :huh:
Car Insurance........................... 0 -Nothing :huh:
Car maintenance (including MOT)......... 0 -Nothing :huh:
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 - Never?
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 - You need this. Indeed, it may be mandatory, given you have a mortgage.
Contents insurance...................... 0 - You need this.
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 - Never?
Haircuts................................ 60 - This is £720 pa, which is a lot.
Entertainment........................... 200 - This is a lot. Try to reduce?
Holiday................................. 0 - Nothing? Not even days out?
Emergency fund.......................... 200
Total monthly expenses.................. 1858

Assets
Cash.................................... 0
House value (Gross)..................... 0 - You have an £81,000 mortgage, on a house that is worth nothing :huh:
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 2500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 81000....(423)......5.6
Total secured & HP debts...... 81000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 3,246
Expenses (including HP & secured debts). 1,858
Available for debt repayments........... 1,388
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 1,388
Personal Balance Sheet Summary
Total assets (things you own)........... 2,500
Total HP & Secured debt................. -81,000
Total Unsecured debt.................... -0
Net Assets.............................. -78,500
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

My comments in red.

asparagus1968

never noticed the 0 car costs!

MissDitton

Originally Posted by MissDitton
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2 - Do you really need 2 cars? yes we both commute in opposite directions.
Monthly Income Details
Monthly income after tax................ 1136
Partners monthly income after tax....... 2110
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3246
Monthly Expense Details
Mortgage................................ 423
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 49
Gas..................................... 49
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 15
Mobile phone............................ 45 - This is a lot for 2 phones. Going PAYG/sim only could save you about £25. we are tied into contracts.
TV Licence.............................. 12
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 200 - £2,400 pa? :eek:
Petrol/diesel........................... 200
Road tax................................ 0 -Nothing :huh: all paid annually by dad
Car Insurance........................... 0 -Nothing :huh: all paid annually by dad
Car maintenance (including MOT)......... 0 -Nothing :huh: all paid annually by dad
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 - Never? Private healthcare plan pays for all and is took out of wages before we get them.
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 - You need this. Indeed, it may be mandatory, given you have a mortgage. paid annually - not considered an outgoing.
Contents insurance...................... 0 - You need this.same as above
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 - Never?
Haircuts................................ 60 - This is £720 pa, which is a lot. I have nice hair!!!
Entertainment........................... 200 - This is a lot. Try to reduce? Possible reductions there I agree.
Holiday................................. 0 - Nothing? Not even days out? Nope, we havent had a holiday in 2 years and days out are in the entertainment budget - plus OH works all weekends so usually just me.
Emergency fund.......................... 200
Total monthly expenses.................. 1858

Assets
Cash.................................... 0
House value (Gross)..................... 90,000 - You have an £81,000 mortgage, on a house that is worth nothing :huh: ammended
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 2500

Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 81000....(423)......5.6
Total secured & HP debts...... 81000.....-.........-
Unsecured Debts
Description....................Debt......Monthly.. .APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 3,246
Expenses (including HP & secured debts). 1,858
Available for debt repayments........... 1,388
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 1,388
Personal Balance Sheet Summary
Total assets (things you own)........... 2,500
Total HP & Secured debt................. -81,000
Total Unsecured debt.................... -0
Net Assets.............................. -78,500
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using IE browser.


Also there is nothing in the car section as my car was bought cash by my dad a year ago and OH car is obviously mentioned above.

He stopped paying it out of stupidity and running away from his debt not telling me and I found out when I requested documents, that is why I am taking the reigns on all of this and seeking advice.

Thanks

On_my_way

Hi

Well done you for trying to help him out. I hope that he is taking his debts seriously and is also doing a lot of research and planning to clear them.

Many people on here, including me, are taking responsibility for our debts and paying them back. I hope he has learned some valuable lessons from this. You sound very responsible so hopefully you can get him on the right track.

AFK_Matrix

MissDitton wrote: »

Originally Posted by MissDitton

Clothing................................ 200 - £2,400 pa? :eek:
Road tax................................ 0 - all paid annually by dad
Car Insurance........................... 0 -all paid annually by dad
Car maintenance (including MOT)......... 0 - all paid annually by dad
Buildings insurance..................... 0 - paid annually - not considered an outgoing.
Contents insurance...................... 0 - same as above
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 - Never?
Haircuts................................ 60 - This is £720 pa, which is a lot. I have nice hair!!!

Don't mean to be harsh but if your intent on reducing debt then your going to have to cut down on the clothes as that is a lot per month. Same with the hair, great you have nice hair but is that really more important than getting out of debt? Cut the hair amount in half or get it done somewhere cheaper.

As for the car stuff, how long is your dad going to cover these costs? I can't see it being forever and its best to start getting a pot of money together ready for when he says he can't cover these.

With the Building and Contents you can't discount these as there paid anually as what happens next year or the next time you pay it, where is the money coming from? If you take the amount you paid this year for them and divide by 12 and then start putting this amount away per month then when its due paying it is simple and no problem.

You must buy some presents surely!! I don't buy a huge amount of presents but I still have budgeted some money to this.

As for what debts to hit first you have 2 choices, either go for the highest interest debt and pay minimum to the rest then when that is paid move to the next highest interest debt, or pay off some smaller debts first as this may give you a boost and encourage you to keep going. The first method save you money on interest the second will mean you pay more in interest.