Any ideas when there is no money to pay towards debt?

carolinep1

:eek:
Well as the title says I have done a budget calculation and can't seem to find any money to pay towards our debts. Currently I am swapping them all around and paying one with another but obviously this is going to come to an end when they are at their maximum.

We have high mortgage and secured loan payments and on top of this have around £32K in credit card and personal loans. This is due to my OH being self employed (low earnings) twice in last 3 years and also because we have spent a fortune doing our house up (it was nearly derelict when we bought it).

Please be gentle with me - any ideas? :eek:

ltm07

Your debts are similar to ours(we owed over £32.5k at our LBM in July,now down to just over £31.5k). Put your SOA up & there will soon be some good people on here to help you. Good luck.

carolinep1

Ok here goes:

Monthly Incomings:

My salary - £1,000
Partners salary - £1200
Tax credits - £230

Total - £2430

Monthly Outgoings:

Mortgage/Rent - £980 interest only locked in for 2.5 more years
Secured loan - £500
Council Tax - £80
Gas and Electric - £90 have already switched
TV License - £10
Sky £45.99
Phone - £15.00
Mobile - £30.00
Broadband - £24.99
Food - £200
Car Insurance - £29.00
Petrol - £70
Life Insurance £37
Water rates £20
Buildings and contents ins £20
Childcare £484
Sundries (MOT, Tax, birthdays) £30
Clothes £40
Dentist/Hairdressers £20

Total: £2725.98

Debts:

Nationwide Credit Card £9000

Barclaycard £4000

Nationwide Loan £2000

Abbey Loan 9800

nationwide overdraft £1200

Abbey overdraft £350

Beneficial Finance £1000

MBNA AO~L £600

Alliance Leicester overdraft £250

Alliance Leicester credit card £4000

Oh my word I knew it was bad......

We have thought of selling the house but there is no equity in it after paying the mortgage and secured loan.....Help!

GettingThingsDone

Hi Caroline - welcome to dfw! It's usually a bit sickening when you tot up all your debts, but that feeling will turn to one of positive action.

One thing that stands out is the Sky package - can you trim this down?

Also, have you tried putting all of your debts into the snowball calculator? This can help you see some light at the end of the tunnel and help you see the benefits of every pound you put towards your debts.

Good luck and keep posting!

gtd

evab_2

Hi Caroline, some more people will be able to help but here's my tuppence worth.

carolinep1 wrote: »

Ok here goes:

Monthly Incomings:

My salary - £1,000
Partners salary - £1200
Tax credits - £230

Total - £2430

Monthly Outgoings:

Mortgage/Rent - £980 interest only locked in for 2.5 more years
Secured loan - £500
Council Tax - £80
Gas and Electric - £90 have already switched
TV License - £10
Sky £45.99 Can you cancel or at least reduce to basic package, or even get Freeview?
Phone - £15.00
Mobile - £30.00
Broadband - £24.99 Look at some bundle deals, e.g. I get broadband and phone together
Food - £200
Car Insurance - £29.00
Petrol - £70
Life Insurance £37
Water rates £20
Buildings and contents ins £20
Childcare £484 Can you get vouchers for this, I give up part of my salary and have less tax credits to get vouchers but it makes a huge difference
Sundries (MOT, Tax, birthdays) £30
Clothes £40
Dentist/Hairdressers £20

Total: £2725.98

Best wishes Eva x

oscar52

I would get rid of Sky (if you can) - £45
Try a packeage for the phone/broadband - talktalk is £20 all in including line rental and all local national calls - saving another £20 combined.

Mobile seems a bit high - can it be brought down? if not, this gives £50 - £60 a month.

Other people may see more savings, but these stick out to me.

HairyHandofDartmoor

I agree, Sky must go as you can't afford it; use your mobile less; I'm sure your phone/broadband would be cheaper if you bundled it together. How many people are you buying food for? Can you cut out buying clothes for a bit and just wear the ones you have got?

We need to know the APR's on your debts to help you better, and also whether you are up to the limit on your credit cards.

If you could somehow clear one credit card (by paying it off or transferring money elsewhere), then you could balance transfer some money back on at a lower rate of interest (I would recommend a low life of balance rate as it lasts as long as you need it to, and saves keep shuffling or applying for new cards which can adversely affect your credit reputation.) See Martin's article on balance transfers.

HairyHandofDartmoor

Your petrol is very high too, can this be cut down at all?

Can you save money on hairdressing by trimming/colouring your own hair? (I know it sounds desperate, but my hubby cuts his own hair with a trimmer, cuts our two boys hair, and trims my hair, whilst I trim our daughters hair. It saves a fortune, and we look ok, honest. The boys all have quite short hair and our daughter and I have long hair ,so our styles are easy to cut.)

newleaf

You need to reduce your monthly spend by at least £300, and quickly. So these are my suggestions. They won't all be possible, but might give you some ideas.
Switch to pay as you go mobile (mine is with Tesco, they even do a 'value' tariff!) and use it as little as possible - we used to manage without them until recently. Buy text 'bundles' if you tend to text a lot.
Swap Sky for freeview or freesat
Get over to the Old Style board for tips on how to cut your grocery bill.
Stop buying clothes unless you really need them, get them from charity shop if poss.
Stop going to hairdresser. Try local college for cheap haircuts. Do the kids yourself. A set of hair clippers can be a good investment.
Sort out anything in your house that you don't need or no longer use. Then either Ebay it or do a car boot sale. You can make quite a bit by selling books on Amazon marketplace.
Could you get another job, a few hours in a local pub or something? Any extra money would be a help.
Wishing you luck, keep us posted

CLAPTON

As I see it you have two problems.

a. even without unsecured debt repayments you are spending more than your income:

for this you need to look at

i. increasing income - can you/OH work extra overtime or parttime job?
ii. are you getting full state benefit entitlement?
iii. can either of you get a better paying job... can you OH go permanent rather than self employed.
iv. is the income quoted correct.. I assume it varies a lot .. is it the average of the last 12 months for example.

If you cannot correct this with a combination of increasing income and reducing spending then you have no real choice but to sell the house and settle the mortgage and secured debt and reduce your housing costs so you can at least break even on your essential living expenses.

If you dont do this then addressing the problem of the unsecured debts will force you anyway to sell up.

b. Unless you can address the problem above, leaving some money to pay off the unsecured debts then your only choice is to stop paying them and default.
While you can continue for a while by borrrowing more and more you will run out of anyone willing to lend you money and you will then simply have to stop paying.

evab_2

Do you get Child benefit as well as your tax credits?