Debt has reached £20,000!

Cat_Addict

What a lovely person to take the time to tell you that just when you're feeling crap. Sure sign of a good soul. Well I do feel sorry for you. It's a horrible trap and it is like one step forward and two steps back. Especially when you have kids and there are things you must buy and there is no choice. Now that my credit card is paid off I am phobic of it and am taking steps never to become entrapped again. That's no help to you I know, but I wish you all the very best x

katsu

How much was your debt when you and your wife separated your finances?

As you can't make ends meet and have estimated items in your SOA I would recommend discussing it with her to work out what you both can do to address both your debts.

Good luck

Claree__x

Okay so the "dept" thing was annoying me too but I wouldn't say I don't feel sorry for you - how awful!

Well done on facing up to your debts though, I'm sure you'll work it out with the help from the lovely people on here.

As long as you're meeting your minimum payments at the moment I'd be reluctant to look into offers to creditors unless you're really struggling - it can have a huge impact on your future finances as I'm sure you've read x

Zack_Smith

Complete an SOA to start with so we can see where you stand.

[Deleted User]

tony1976 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................ 1700
Partners monthly income after tax....... 200
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1900

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 530
Management charge (leasehold property).. 0
Council tax............................. 150 - If this is over 10 months, switching to 12 will reduce it to £125pm.
Electricity............................. 40
Gas..................................... 60
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 15 - Once you are straight on this, it'll reduce to £12-12, or you could watch catchup and pay nothing.
Satellite/Cable TV...................... 0
Internet Services....................... 30
Groceries etc. ......................... 500 - This is very high. Moving down a brand or two, and cutting out luxury items (eg. alcohol) should allow you to reduce it a lot.
Clothing................................ 50
Petrol/diesel........................... 100
Road tax................................ 20
Car Insurance........................... 25
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 50 - What does this actually cover?
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 - You really should have this. It needn't cost much.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 30
Entertainment........................... 25 - Cut this out for the time being, and do free things instead.
Holiday................................. 0
Emergency fund.......................... 0 - You could do with something in here, to avoid going back to credit, if something happens.
Baby (Nappies etc)...................... 50 - What does this actually cover?
Body Care (shampoo, soap etc)........... 25 What does this actually cover?

Total monthly expenses.................. 1865


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................2947......57........6.9
MBNA...........................1807......25........0 - Is this really 0% APR? If so, for how long, and what will it then go to?
Bank of Scotland...............2137......25........0 - Is this really 0% APR? If so, for how long, and what will it then go to?
Barclays Overdraft.............450.......15........0 - You're paying anything (fees/interest) on this?
Barclays Loan..................12000.....241.......5
Tesco Credit Card..............1500......25........7
Total unsecured debts..........20841.....388.......-


Monthly Budget Summary
Total monthly income.................... 1,900
Expenses (including HP & secured debts). 1,865
Available for debt repayments........... 35
Monthly UNsecured debt repayments....... 388
Amount short for making debt repayments. -353

Personal Balance Sheet Summary
Total assets (things you own)........... 500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -20,841
Net Assets.............................. -20,341

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

My comments/questions in red.

Little_Miss_Winner

Zack_Smith wrote: »

Complete an SOA to start with so we can see where you stand.

He has done - see above!

I agree with the previous posters - you and your wife need a plan of action. ALL monies in V All monies out.

Then seperate essentials need to be drawn out in cash, and not spent over - such as groceries, toiletries, baby?

If you cant reduce any outgoings at the moment - how about upping the income? ebay is a great way of decluttering the house and earning cash at the same time. I m sure with 5 of you theres gotta be stuff not worn/used.

Wishing you all the best

HappyMJ

I think £500 plus £78 a month for 5 people for groceries including food, cleaning, baby, personal hygiene is a reasonably fair amount for 5 people. It's only £3.80 per person per day. That's quite reasonable. A creditor would not dispute that figure if it were to appear on a SOA submitted to them requesting reduced repayments.

What I would ask though is can you start keeping receipts for all of your grocery trips...including all the little trips to pick up a few more items from every source possible and look at it yourself and just ask yourself if it is reasonable or not. I couldn't support a family of 5 on £300 a month which has been suggested. I could do it for a month or two if I had a store cupboard and stocks of cleaning stuff stored but assuming that's purchased every month then £578 is more than reasonable.

Cancel the TV licence.....are you mad. Children need to watch live TV not really "need" but it's pretty much a "need".

DandelionPatrol

tony1976 wrote: »

She's gives me £200 - £250 a month and she has her own depts to though. If all the money came to me her depts would not get paid. That said, I am going to have another sit down with her and go through it. She is not unreasonable but the reason we have seperate finances was because she was really bad at managing her money.

To be fair, your SoA looks not to bad. Of course there are things which could be trimmed, but it seems you at least know what is happening with your money.

I think that the 2 of you do need to pull together on this, because it seems to me that however much you get your finances in order, she will be in a position to take up your slack, spend it and keep you both in the same old mess.

family_time

Hi having recently worked through the entitled to calculator with my brother in law on a very similar income have you checked to see if you are entitled to any housing benefit to help with your rent? Also your wife must be getting approx £700 a month combined tax credits/child benefit. Where does this go is she reducing her debt by this much each month or are your total spends far higher on groceries etc?

Transformers

You and your wife need to sit down and work out a JOINT set of household accounts.

Once you have kids together then you need to plan finances as a family unit.

To get started you need FULL DISCLOSURE from both of you. You both need to know how much the TOTAL HOUSEHOLD DEBT amounts to. Only then can you move properly onto dealing with it. Worst case scenario is that her debts are more than you expect.

By all means have a personal allowance for spending for each of you BUT everything else needs joint consideration.

Plus, you need to have an honest chat about your wife finding a job to bring in extra money. Even if she works evenings in a supermarket while you mind the kids.

You both need to start working as a team.