Need Advice Please

MAPLE

Hi all, newbie here. I have a day off today and thought I would use it to sort out our life. Basically, I'm married with 2 children, hubby and I both work. However we have large debts and we need help. To cut a long story short, hubby has been self-employed for 10 years, but 2 years ago he wound down his business because he was making continued losses. So he sold everything although this did not clear the debts. He has a business overdraft facility of £15,000 and this is at £14,000. SOA below:

Incoming

Hubby 1500 approx (this varies though)
Me 550
Child ben 120

total 2170

Outgoing

Elec & water 119
Mortgage 600
Life ins (child) 30
Pet Insurance 24
Food 300
Fuel (2 cars) 70 (We need a car each for work)
Insurance 115 (This is for house, cars and Personal Injury)
TVlic 11
Mobile 30 (This is on contract for hubbys job)
Council Tax 129
Home phone 37
Internet 17.97
Loan 1 145 (car loan)
Loan 2 136 (Loan to pay tax bill - Jan 07 £7,000 bill)!
Loan 3 180 (Business loan with bank to cover debt from
failing business)
Interest 95 (Interest on overdraft)
Credit card 65 (Minimum payment 0% - we owe £3,000)

Total 2203

We have a mortgage of £72,000 and our house is worth £185,000 (we have just had it valued). The question is do we consider re-mortgaging to pay off all our debts? We have already previously re-mortgaged to cover house improvements (our house is very old) new roof, re-wiring, central heating etc a few years ago? Does this go against us for re-mortgaging again? Please, if anyone has any advice, I would be very grateful.

Gemmzie

First thing that sticks out to me is your not claiming Tax Credits - any reason for this? You would be entitled.

Home phone seems very high since that is just for calls.

jo1972

Hi and welcome :wave:

I was going to mention the child tax credit to.. Plus you've not mentioned car tax/mot, birthdays/xmas, clothes on your list. I agree with Gemmzie that the phone bill sounds very high too.

Why not pop on over to the moneysaving old style board for some grocery shopping tips that will help bring your food budget down.

Good luck, look forward to reading other responses.

CharliesAngel

Hi Maple

Just a few ideas:

Is the pet insurance something you could cancel in the short term?
Food bills - could these be cut down by going to a 'deep discount' store (see Martin's tips on this!)?
What's the personal injury insurance? You may be already covered for this on your car insurance...
Talk to your bank re the business overdraft... see if they can freeze interest for a few months, likewise with the others...
What is your water/electricity breakdown? Is it worth getting a water meter? Changing tariff with providers?
Have you looked around for phone/broadband/television packages? Going with one provider might save a bit...

Sorry if you've heard/read all these...

Best Wishes

CA

shell_girl

Which mobile company is your husband with? If he was to switch to Orange he could get free broadband thrown in with a £30 per month contract.

CCCS_Emily

Hi Maple,

By remortgaging to clear your unsecured debts, all you are doing is moving the debt around and securing it on your property. I would suggest you look at alternative options first. However you maybe able to remortgage to get a better deal on your current secured lending to reduce your monthly mortgage payments.

Jo and Gemmzie are right about the Child Tax Credit - have a look at www.entitledto.co.uk

I would suggest you look at your budget in a bit more detail, there seem to be quite a few things missing ie school meals, clothes. We have an online advice facility called Debt Remedy available on our website www.cccs.co.uk where you can put together a detailed budget.

Hope you have a productive day off!

MAPLE

Thanks everyone for taking the time to reply. Regarding Tax Credits we are waiting to hear. The home phone is used for business purposes also for price quotes from hubbys customers etc. Car expenses and clothes etc have to usually come out of the foot budget or if hubby earns a bit extra, but that is why the overdraft is so high, all extras etc come out of that. The pet insurance could go I know. The personal injury & sickness was taken out for hubby 4 years ago after he had an accident at work and was off for 6 months. This pays the mortgage, loans etc if ever he is off due to injury or sickness. We had no income other than benefits to live on (debts built up) so we were advised to take it out.

Will also definately consider moving to Orange as he is with 02 at the moment. With regard to re-mortgaging we only moved mortgage companies 18 mths ago so are tied for another 18 mths to avoid penalties.

We are worried that when the overdraft comes up for review in Jan 08, because my hubbys income is considerably lower than last tax year, they are going to say you don't need this anymore. No matter how much we budget between now and then we will never reduce it considerably.

Thank you so much for all your replies, will be doing some homework on this or the rest of the day!