Help Please

Whistler_3

Hi, great site BTW.

I feel in a hopless position at the moment and hope someone can give me some advice.

I am in the process of changing companies, I have been used to earning 4-5k per month and my lifestyle has grown around this. My employer has reduced commisions etc and I have been earning more like 2k per month for the past 6 months. As a result I have borrowed more.

I am starting with a new emloyer on 10/09 and although my role is commision based and will take a few months to build this up, they have been good enough to guarentee me £3500 per month until this happens, once I have been there 6 months I should be earning around £5k per month.

my additional problem is that due to my old employer being awkward I have recieved no pay at al this month and am unable to pay any of my bills.

I want to cut back on everything, cars/house the lot, I have even considered seling the house but with redemption penalties and secured loans I owe £245k and the house is worth around £225k

I have also considered handing the cars back however I have only had them 6 months and owe more than they are worth. (the second car is my partners, who does not work as she is 5 months pregnant)

My biggest wory however is that i cannot afford to have any defaults/ccjs etc as my job involves being authorised by the FSA.

Any advise would be much apreciated.

Monthly Income
Salary this is the problem, has been £4-5K but is going to be 3k for next 4 months

Total 3k

Monthly Outgoings
Mortgage £1251 GE Money, balance £181500 interest only (high rate but tied in for 2 years
Secured loan 1 £346 EPF, balance £40000 rate 11%
Secured loan 2 £245 Welcome, balance £15000 rate 19%
HSBC Loan £200 balance £6500
CITI loan £187 balance £4500
car fiance 1 £459 Toyota, balance £20000 rate 11%
car Finance 2 £292 Toyota, balance £12500 rate 11%
Barclaycard £26 balance £1100 rate of 23% limit £1250
Copop card £150 balance £4900 Rate 0f 19% Limit £5000
Cahoot £5 balance £100
car insurance £90 2 x cars
Home Insurance £28
Mobile £82 expensed from work
catalogue £120 balance £2500
water rates £29
RAC £15
BT £14
Gym £106 have 1 year contract
Sky £63
Elec & gas £106
Food £300
Council tax
Total £4114

I've tried shuffling cards around etc but my credit rating is poor (No CCJ's defaults etc just a few late payments 18monts ago on a loan and credit card)

azjh77

Hi, someone who knows far more than me will be along to help you soon..!

In the meantime..

Monthly Outgoings
Mortgage £1251 GE Money, balance £181500 interest only (high rate but tied in for 2 years
Secured loan 1 £346 EPF, balance £40000 rate 11%
Secured loan 2 £245 Welcome, balance £15000 rate 19%
HSBC Loan £200 balance £6500
CITI loan £187 balance £4500
car fiance 1 £459 Toyota, balance £20000 rate 11%
car Finance 2 £292 Toyota, balance £12500 rate 11%
Barclaycard £26 balance £1100 What are the rates and credit limits
Copop card £150 balance £4900 on your cards?
Cahoot £5 balance £100
car insurance £90 2 x cars
Home Insurance £28
Mobile £82 expensed from work
catalogue £120 balance £2500 is this an interest free debt?
water rates £29
RAC £15
BT £14
Gym £106 have 1 year contract
Sky £63 Can you get a cheaper package?
Elec & gas £106 Seems quite pricey - have you looked at switching?
Food £300 Could probably save here too...
Total £4114


There seems to be things missing, like car tax, council tax, life insurance to cover mortgage etc..so you probably spend more than you think.

I don't really know a lot about loans or APR's and things, but I know you will be asked about them when it comes to helping with your outgoings. Have you tried card shuffling? or phoning the credit card companies and asking for a better rate?

Have a look at the old style savings board too...

Good Luck - someone will be here soon - probably at a more decent hour of the morning!

Whistler_3

Thanks

Didn't realise I'd missed the council tax. I've edited my post to show the extra info.

consultant31

Hi Whistler.
I know very little about these things, and I'm sure someone else will help you better, but one or two things jump out at me from your SOA.

Sky - can you not get rid of it?
Gym membership - how long has it to run? How about offering a lump sum to cancel (saying that you've lost your job).
Food - this is quite high for two people. Look on the MS Old Style board for ways to cut back.
Your OH is only five months pregnant, is there no way she could work part-time?
I would certainly get rid of one car unless you live way out in the sticks.

Whistler_3

consultant31 wrote: »

Hi Whistler.
I would certainly get rid of one car unless you live way out in the sticks.

Thanks Cosultant 31

Getting rid of 1 car is appealing however I owe around 6K more than its worth and handing it back to the finance company worries me as I cant afford any defaults etc on my file due to my job.

I'd be interested to know if anyone has done this and what the finance companies reaction would be.

Whistler_3

Forgot to add £100 per month nursery fees:o

sammiboo

As mentioned above you could cut your food bills quite a bit.

Are you a food snob? I used to be - brand stuff all the way but you can buy decent own brand stuff depeneding on what it is. Make things in bulk too. At my house I make a lot of chilli con carne from stratch as its easy to make and cheap.

Also a spending diary mnight be useful - i bet you are spending more than you think. Those little extras you buy soon add up.

CLAPTON

I'm not really sure what to say about this but looking at the figures it looks like this:


a. your mortgage + secured debts and guessing council tax (you dont say how much ) is about 2,000 per month

b. your unsecured debts cost you about 1,440 per month

c. general living you say about 780 but there are lots of things left out

d. so you need at last 4,000 a month

plus

1. you have negative equity in the house
2. you can't go on a DMP/IVA or bankrupt because of the job
3. temporally you have no income at all?
4. your credit rating isn't very good.


but on the positive side you will be earning 3k for the next 4 month and then maybe more.


So at the end of the 4 months period you will be something like a further 8K in debt?

So my limited conclusions are and assuming no other factors like savings/ wife returning to work etc.

a. if you expect your income to be at least 4.5k (allowing for all the things missing from your SOA) after the 4 months then it may be best just to borrow on the CCs (assuming you're not maxed out already)

b. start downsizing now... sell the house, get rid of all the luxories (why spend 100 per month on nursery with a wife at home?, gym, sky etc.), sell the cars .. you will end up with debt from the negative equity and the cars
but your minimum outgoings will also be reduced.

c. go bankrupt and get a different job.

Whistler_3

CLAPTON wrote: »

I'm not really sure what to say about this but looking at the figures it looks like this:



b. start downsizing now... sell the house, get rid of all the luxories (why spend 100 per month on nursery with a wife at home?, gym, sky etc.), sell the cars .. you will end up with debt from the negative equity and the cars
but your minimum outgoings will also be reduced.

Option B is the most apealing and i have thought of that, has anyone had any experience of selling their house and having negative equity, also how would the car finance company register this on my credit file