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

Karmacat

Hi carolinep1
Welcome to mse. I've just read through this thread, and I'm glad to hear you're cutting Sky to the basic and cutting down on dd's clothing, with prices for kids being so low cos of the competition between George, Tesco and Primark, there's no way she needs any more than £25. Other things still stand out tho:
- the hairdressing - I'm sure you'll be able to cut down there - trimmers, as people have said.
- you don't mention the mobiles and phone bill that you pay, that can come down.
- you can gradually trim down your food bill - look on the thread on here, moneysaving old style, its called. There's loads and loads of things you can do, without sacrificing variety.
- can you ring your credit card people, and just ask for a lower rate of interest? It takes persistence, and you don't always get it, but if you get a reduction of 5%, that can start to add up, along with the other things that you can do.
- its little, but you probably should join cashback sites, like quidco - you get a cashback payment on things that you'd have bought anyway, like insurance.
- online surveys, the pigsback site, will bring in little tiny bits - you can exchange points for gift vouchers - I've had £20 from pigsback now (search the site and you'll find the thread) which I take in johnlewis vouchers - which I spend at Waitrose for their pesto - I'm addicted to it.

Thats all I can think of for now. You know, the debt grew over a fair old space of time, it will take a while to bring it down too. But you can, honestly. Following up all of this will take quite a while, just take it bit by bit, do as much as you can each day.

Best of luck - and keep posting, use this thread as your anchor on mse. Bye for now.......

fiveyearplan

CCCS told me the same thing, there is nothing they could help me with unless I increased my earnings.

poppy10_2

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
Childcare £484

This is the elephant in the room that no-one is mentioning. Your joint net income is just £1946 per month (the £484 should be seen as a work expense, as you wouldn't be paying it if one of you weren't working, so deduct that from your income calculation).

So you are currently paying £980/£1946=over 50% of your take home pay, just to rent your house from your bank.

No amount of switching lightbulbs off is gonna solve this one. You simply can't afford such a huge mortgage on such a low income. You'll end up sinking further and further into the red.

You say the house was derelict when you bought it, and you have spent a fortune doing it up. So you should have a huge chunk of equity in the house.
Sell up, use the profit to pay off all your debts, rent somewhere for half the price of your mortgage, and live comfortably for the next few years. When you are in a better financial position, you can buy again - even the most optimistic of forecasters (the Council of Mortgage Lenders) are saying house prices won't rise by more than 5% a year for the next few years, so you won't lose anything from stepping off the property ladder for a short time.

Good luck

carolinep1

Karmacat wrote: »

Hi carolinep1
Welcome to mse. I've just read through this thread, and I'm glad to hear you're cutting Sky to the basic and cutting down on dd's clothing, with prices for kids being so low cos of the competition between George, Tesco and Primark, there's no way she needs any more than £25. Other things still stand out tho:
- the hairdressing - I'm sure you'll be able to cut down there - trimmers, as people have said.
- you don't mention the mobiles and phone bill that you pay, that can come down.
- you can gradually trim down your food bill - look on the thread on here, moneysaving old style, its called. There's loads and loads of things you can do, without sacrificing variety.
- can you ring your credit card people, and just ask for a lower rate of interest? It takes persistence, and you don't always get it, but if you get a reduction of 5%, that can start to add up, along with the other things that you can do.
- its little, but you probably should join cashback sites, like quidco - you get a cashback payment on things that you'd have bought anyway, like insurance.
- online surveys, the pigsback site, will bring in little tiny bits - you can exchange points for gift vouchers - I've had £20 from pigsback now (search the site and you'll find the thread) which I take in johnlewis vouchers - which I spend at Waitrose for their pesto - I'm addicted to it.

Thats all I can think of for now. You know, the debt grew over a fair old space of time, it will take a while to bring it down too. But you can, honestly. Following up all of this will take quite a while, just take it bit by bit, do as much as you can each day.

Best of luck - and keep posting, use this thread as your anchor on mse. Bye for now.......

Thanks Karmacat, you are right, it will take time, but I am going to try and make changes each day to increase the earnings and cut the spending. Once I've got a handle on this I will then contact payplan/cccs re:a dmp.

I've enquired with avon about becoming a rep - could do this early evenings with DD in tow, I know my friend makes on average £150 per month - anyone else got experience with Avon?

Another worry is when I come to change my horrendously high rate mortgage in 2.5 years time, I will struggle getting a remortage because I'm on a DMP.

It's so good to speak to supportive and non-judgemental people. and also people who have been or are going through the same thing. I love this site!

I've been trying to convert my materialistic work colleagues for a while but the still want to shop at M&S, Debenhams, buy Crem de la Mer face cream and turn their noses up at everyone who doesn't!:eek:

fiveyearplan

I tried Avon when my children were small and lets just say it didn't work for me.

carolinep1

poppy10 wrote: »

This is the elephant in the room that no-one is mentioning. Your joint net income is just £1946 per month (the £484 should be seen as a work expense, as you wouldn't be paying it if one of you weren't working, so deduct that from your income calculation).

So you are currently paying £980/£1946=over 50% of your take home pay, just to rent your house from your bank.

No amount of switching lightbulbs off is gonna solve this one. You simply can't afford such a huge mortgage on such a low income. You'll end up sinking further and further into the red.

You say the house was derelict when you bought it, and you have spent a fortune doing it up. So you should have a huge chunk of equity in the house.
Sell up, use the profit to pay off all your debts, rent somewhere for half the price of your mortgage, and live comfortably for the next few years. When you are in a better financial position, you can buy again - even the most optimistic of forecasters (the Council of Mortgage Lenders) are saying house prices won't rise by more than 5% a year for the next few years, so you won't lose anything from stepping off the property ladder for a short time.

Good luck

Thanks Poppy

I know exactly what you mean and this was the first thing we considered. However with the outstanding mortgage, early repayment fees and the secured loan we have no equity at all (in fact the erf's mean we are in negative equity). So we would still walk away with no home and over £32K of debt.

I have spoken to a financial advisor who recommended a dmp and to struggle through the next 2.5 years until I can swap the mortgage - what do you think?

Thanks

Karmacat

Hi Caroline

Search for Avon on here - check out other people's experience - sorry it didn't work for you, fiveyearplan. But something that you can earn at that you don't have to pay for childcare has got to be worth investigating.

Two things in your post: you're borrowing trouble! You're worrying *now* about your re-mortgage application in 2.5 years time! Noooooooo!!!!!!! You have plenty of other things to occupy your time! Instead of worrying, work on getting the debt down, you'd be amazed at what you can do on the internet alone - check out hypno's thread on this board.

And the other thing is, really, don't overly concern yourself with your colleagues - you've shared it, now its up to them. After all, you've only started to take it all on board now, they haven't added theirs up - often, we can't learn from other people's experience, they want to do it their way still. They know who to come to when they need it!

findingmyownway

carolinep1 wrote: »

Thanks Poppy

I know exactly what you mean and this was the first thing we considered. However with the outstanding mortgage, early repayment fees and the secured loan we have no equity at all (in fact the erf's mean we are in negative equity). So we would still walk away with no home and over £32K of debt.

I have spoken to a financial advisor who recommended a dmp and to struggle through the next 2.5 years until I can swap the mortgage - what do you think?

Thanks

Welcome to the boards :T

As Poppy correctly posted, you are paying over £900/month + secured loan payments to RENT your house from the bank. You do not curently own any part of this house. If you sell up and have no lump sum left over, by moving to cheaper rented accomodation to might pay £400 (a guess, i dont know where you live) thereby freeing up well over £500/month to go on CC debt repayments, having already paid mortgage and secured loan off.

On your current SOA i don't think you will make it through the next 2 years. You need to make some changes and to me, the house is your biggest liability.

carolinep1

findingmyownway wrote: »

Welcome to the boards :T

As Poppy correctly posted, you are paying over £900/month + secured loan payments to RENT your house from the bank. You do not curently own any part of this house. If you sell up and have no lump sum left over, by moving to cheaper rented accomodation to might pay £400 (a guess, i dont know where you live) thereby freeing up well over £500/month to go on CC debt repayments, having already paid mortgage and secured loan off.

On your current SOA i don't think you will make it through the next 2 years. You need to make some changes and to me, the house is your biggest liability.

Thanks findingmyownway. I know this is the obvious route but it's not what I wanted to hear unfortunately. It will cost about £10K to sell the house in estate agent fees and early repayment fees on the mortgage and secured loan, this adding another £10K onto our debt. Beginning to feel like I'm stuck in a corner with no way out....

Lellylion

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
Phone - £15.00
Mobile - £30.00
Broadband - £24.99 - Your entitled to FREE broadband with your sky package. (So long as you keep either movies or sports)
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!

All the best, look forward to seeing how you get on. I too owe an absolute fortune 55K, but I snowaballed last week and I can see an end to it all at last. Good Luck