confused as how to deal with this

dylansmum

Hi

I've been reading all the advice here but I am a bit confused as to what to do with my situation and I really could do with someone helping me work out the way forward - so thanks for listening. Until January I worked p/time and my OH full-time due to child-care issues. Now, I work full-time and my OH isn't working - though he is returning to nearly full-time work in january 2008 once my son is at school. Last year we took out loans strictly for home improvements which were not fancy ones but essential - ours was a 'cheap' house but has needed steady refurbishment. We took out shorter term unsecured loans to save interest, but I was already carrying huge credit card debts (fool that I was) so we switched these to a cheaper unsecured loan, too. When all this happened we did not foresee that my OH would be taking a year or so out from work - basically our son couldn't go into day-care (long story), though my own dad helps with child care.

As such, the repayments are crippling us as we have a cash flow problem and scared of credit card bill beginning again (though I didn't touch it for 18 months now using it for travel). We are cutting back on everything but here is our SOA:

My income: 1600 ( I also pay 160 to pension at work - final salary scheme, otherwise would be slightly higher take-home)
Benefits: 112
Total: 1712

Outgoings:

mortgage 468 (about to switch from halifax as deal is ending) - balance on mortgage is 64,200 and house valued at (conservatively 10-15% below average selling price for safety margin) at 135K.
Council tax: 82
OH's loan: 160 (alliance and Leicester at 5.85APR with 4 years to go), balance 6.5K
Virgin loan: 257 (can overpay once) 4 years left. Balance: 10,400
barclayloan: 149 with 9 years left (Stupid me), balance: 8,200
Travel: 240 per month (cheapest train fare)
Insurances: 22
Utilities/tv licence/phone: 69
Car (will likely sell): 74 average - tax, repairs, insurance, petrol.
Food: 303 for 3 - but will cut back further.
EGG: 32 balance 1600!!

Outgoings:1824
Balance: -112!!!

We have a short-term cash flow problem and I need to not use EGG card, but after keeping all paid I still need to get to work. We don't buy clothes (my dad helps with son's clothes) or go out. I guess we can further cut down on food and will do, but:

Although consolidation is EVIL, we were wondering out of desperation whether to remortgage the lot or some of it on a fleixble mortgage and seriously overpay as much as possible. There is no worry of creating more debt as I learnt my lesson big time. I am only using card for travel out of not having best grip on cash flow, but never spend recklessly - most of loan money spent on house.

Any advice really appreciated!

woofwoofwoof

Could your OH not get some weekend or evening work in the meantime? Then you would be there to look after your son. It would solve some of your money worries in the short term. A lot of firms like Tesco are flexible when it comes to hours.

dylansmum

Thanks, yes this is exactly what I feel, too. It is a real bind as I work quite a distance from home - specialist job (never come up in our area) and we have to factor in travel and juggle timings.

The worse thing is, he is also (while off work) doing some of his own stuff in unpaid collobaration with a multinational comany (he is designing new software); they are keen to buy it it proves foolproof and he is very close to proving that. but that means a juggle between doing that (potentially excellent outcome) and this debt.

bananakinz

Could your work do you seaon ticket loan for the travel? It would come straight from your wages and not be taxed on I believe.

Are you entitled to any tax credits?

Also if your OH is doing some work unpaid, could he not set himself up as self employed, therefore be able to claim tax credits if he is working so many hours a week and be able to put through some of the expenses. Could he ask for some sort of payment fron this multinational?

The_shuffs

Hi all im on a DMP with the CCCS and have been now for 3 years original debt was over 20,000 but is now just over 12,000 which i am really pleased about my problem is my OH debt that came with him from his previous marriage we have since got married his debt is just over 32,000 and he is paying just he min amount to them all with the help of the CCCS they said that a DMP was not suitable (all interest has been frozen) im not sure if him going bankrupt is the answer any advice out there very poor and fed up with it all

dylansmum

bananakinz wrote: »

Could your work do you seaon ticket loan for the travel? It would come straight from your wages and not be taxed on I believe.

Are you entitled to any tax credits?

Also if your OH is doing some work unpaid, could he not set himself up as self employed, therefore be able to claim tax credits if he is working so many hours a week and be able to put through some of the expenses. Could he ask for some sort of payment fron this multinational?

Season ticket is more than daily costs as I work frm home two days per week and work don't do loans for these anyway.

Tax credits: we get 39 per month which I have factored in.

Self-employed: never thought of that about tax credits - thanks, will check it out to see if it makes a difference, but I suspect the credits we get would stay the same due to the banding. Payment: the deal is he uses their data to prove software works....but at some point they do need to cough up!

bananakinz

Just had another thought re travel. If you know when you are going to be working, rather than buying tickets on the day could you buy in advance via quidco - trainline offer 1% cashback on sales over £25. Or could you go into work later so you are not travelling 'peak'

Are there are any other jobs you could do nearer to home, they might pay less, but it could even itself out once travel/time is taken into consideration, also less pay could take you into a lower band for tax credits?

There are also other items missed out from SOA, does little one have any activities, swimming, birthdays?

It might be worth calling CCCS and seeing what they say. I personally would not re mortgage as you are turning un secured debt into secured.

Have a look into the self employed side - oh might even get a grant or something for setting up a business, there will be a number of items that he could offset for tax purposes (leccy, broadband, computer) even if he makes a 'loss' if could be worthwhile. I agree they do need to pay up at some point!

dylansmum

The_shuffs wrote: »

Hi all im on a DMP with the CCCS and have been now for 3 years original debt was over 20,000 but is now just over 12,000 which i am really pleased about my problem is my OH debt that came with him from his previous marriage we have since got married his debt is just over 32,000 and he is paying just he min amount to them all with the help of the CCCS they said that a DMP was not suitable (all interest has been frozen) im not sure if him going bankrupt is the answer any advice out there very poor and fed up with it all

Hi

So sorry about this! I guess I am avoiding DMP because if OH can get some income within next three months we can manage payments and I have an excellent credit rating/history - never a late or missed payment ever. Sorry about your OH's debt - I have a close friend whose OH went bankrupt two years ago, but they are getting on their feet now but it was sooo stressful.

dylansmum

bananakinz wrote: »

Just had another thought re travel. If you know when you are going to be working, rather than buying tickets on the day could you buy in advance via quidco - trainline offer 1% cashback on sales over £25. Or could you go into work later so you are not travelling 'peak'

Are there are any other jobs you could do nearer to home, they might pay less, but it could even itself out once travel/time is taken into consideration, also less pay could take you into a lower band for tax credits?

There are also other items missed out from SOA, does little one have any activities, swimming, birthdays?

It might be worth calling CCCS and seeing what they say. I personally would not re mortgage as you are turning un secured debt into secured.

Have a look into the self employed side - oh might even get a grant or something for setting up a business, there will be a number of items that he could offset for tax purposes (leccy, broadband, computer) even if he makes a 'loss' if could be worthwhile. I agree they do need to pay up at some point!

Thanks again. Travel - I'll certianly look into re-booking tickets; sometimes it isn't possible to manage timings, but often it is. You're right - thsi needs looking at.

Jobs: oh well I am overqualifed (PhD) and inexperienced at all other things and I love my work!

SOA - my dad helps with all LO's treats at the moment - it would be seriously horrendous otherwise!

I know what you mean about secured debt, but it is cash flow problem I am trying to halt. On saying that, we need to remortgage anyway the 65K so getting a better rate will help!

Lazy_Runner

The_shuffs wrote: »

Hi all im on a DMP with the CCCS and have been now for 3 years original debt was over 20,000 but is now just over 12,000 which i am really pleased about my problem is my OH debt that came with him from his previous marriage we have since got married his debt is just over 32,000 and he is paying just he min amount to them all with the help of the CCCS they said that a DMP was not suitable (all interest has been frozen) im not sure if him going bankrupt is the answer any advice out there very poor and fed up with it all

Hi

Sorry I can't actually help. But you may be able to get more help if you post a new query on the bankruptcy board?

Hope you get it sorted.

LR

Robflh

Hi dylansmum

A re-mortgage to consolidate the £25,000 debt would make the mortgage around £625 a month over £25 years. That would save you over £400 a month.

Once both of you are in employment, you can make over payments or put money into an ISA and then make lump sum payments off the mortgage.

However, as it is a temporary short fall in cash flow, you could use the Egg card to pay for the traveling and the food. Then at the end of each month, you would pay as much as you can off the Egg card.

The debt on it would slowly build up but it is only until January and it should be less then £1,000. In the mean time, apply for a Tesco credit card. It has 0% on balance transfers for 12 Months and on Tesco purchases.

http://www.tescofinance.com/personal/finance//finance/creditcards/clubcc/apply.jsp

If you get the Tesco card, transfer all the money on the Egg card to the Tesco Card. After January, you will be able to clear the credit card in no time at all.

If things when horrible wrong, you would still be able to re-mortgage and meet your monthly financial commitments.