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Partner earning less than 8k but has debts of 18k - please help.
lacoste1985_2
Posts: 182 Forumite
Hi
I am writing this on behalf of my partner who has debts totalling double his wages [approx. 18k]. The debt consists of credit cards, loans, hire purchase and has accumulated over the last few years. Up until June last year he was working 25 hours a week as a Personal Trainer [employed] on a salary of around £11,300 a year. On 6th June he got dismissed from his job after a disagreement with his boss. He spent 4 months working as a cleaner, averaging around 10 hours a week for min wage and decided to turn a bad situation around by signing up to a degree in Computing with OU to start in Jan 2016. On top of this he got a job delivering indians on a Friday night for £20 a week cash in hand [plus petrol and tips]. He has also taken on casual bar work at our local football stadium with fairly regular work a few times a month. He took a full time job on in November last year but after a few weeks realised it wasnt for him and that he would be unable to work 45 hrs a week and study the degree at the same time [which demands 16-18 hrs a week study]. He managed to get one of his old cleaning jobs back and is now averaging 16 hours a week + has also got a 2nd delivery job on a Sunday delivering Chinese’s.
Current income is as follows:
cleaning - approx £107 a week (this can be more, but can also be less as he is on a part time contract with a min of 2 hrs work a week)
delivery work - guaranteed £44 a week [plus tips and petrol which usually equate to around £30-35 a week on top of the £44)
casual bar work - approx £40 a month, sometimes more, however this job is seasonal and only runs Sept - May in line with the football season.
Remaining current debts are as follows:
Hire purchase agreement on car: £1581 (final payment due August 2018)
Hire purchase on sofa: £450 (final payment due Aug 2018)
Bank of Scotland credit card: £1593 (interest free until 3/6/16 & then 17.95% APR)
MBNA credit card: £2774 (interest free until 18/1/17 & then 19% APR)
Tesco credit card: £2086 (currently paying interest at 1.31% a month)
Barclaycard credit card: £2875 (interest free until 5/5/18 + then 18.9% APR)
Tesco personal unsecured loan: £6882.48 (final payment due 5/9/19)
Partner is currently paying the following towards all of the above [per month]:
Hire purchase agreement on car: £51
Hire purchase on sofa: £15
Bank of Scotland credit card: £16.25 (min payment)
MBNA credit card: £28 (min payment)
Tesco credit card: £85 (which covers the cost of 2 petrol fill ups a month and is the only thing he is using a credit card for)
Barclaycard credit card: £66 (min payment)
Tesco personal unsecured loan: £156 a month (fixed amount)
Other regular monthly commitments:
Denplan (dentist subscription) = £18
Mobile phone (sim only plan) = £12
Bank account fee = £10 (which provides phone insurance, breakdown cover that he needs and has used before)
Car funds (towards car insurance, tax, MOT etc) = £80
Xmas funds £20
Social allowance = £20
The situation my partner is in is that he is no longer earning the same amount he was when he was a Personal Trainer and received a guaranteed salary every month. He has spent the past 3 or so years getting balance transfer card after bal trans card and moving money round all the time to avoid paying any interest, which was all very well and good until he lost his job. We recently filled in the bal transfer pre eligibility checker on this site to see if he would be eligible for a new bal transfer card once the promotional rate ends on the Bank of Scotland card in June 2016 but the checker said he was unlikely to get any [we’re presuming due to his low wages] and the fact he already has so much debt. Once 3rd June arrives we’ve worked out he will have a remaining balance on the bank of Scotland card of £1544 + interest on top of this. He is only paying the min payment at the moment as this is all he can afford. 6 months after this in Jan 2017 the interest rate on the MBNA card will also end and we will be in the same predicament with a balance of £2466 also earning interest.
The Barclaycard we are not too worried about as this is interest free until May 2018.
The personal loan with Tesco is also a fixed amount and will not change.
The hire purchase agreement on the car is fixed until Aug 2018.
The HP on the sofa is interest free. So these things we are not so worried about.
We have looked into DMP’s but all credit cards have to be surrendered once you go onto one and because my partner needs his car for all his work, there are times when he might have to fill up more than 3 times a month. His boss pays his petrol to and from cleans but she is not always around to fill up his car when he needs it. So as a rule of thumb because his petrol allowance varies, he only uses his Tesco credit card for this to ensure he is never caught short. If he went onto a DMP he would not have this ‘luxury’ and would have to turn down work if he did not have funds to get there.
We considered consolidating all his debts with one consolidation loan. We contacted Tesco bank to see if they could offer him one big loan of 15k to cover most of the debt but he got rejected. We then tried a further 2 websites where he got rejected again. We gave up trying after this because it could be detrimental to his credit file.
We do not want to consider bankruptcy as we feel this is possibly the worst option.
We currently live together in a private rented flat of which I pay everything as he does not have any spare money to contribute to any of the bills plus I would rather he use all his wages towards his debt. I have 3 jobs myself and do not have any spare money to pay my partners debts for him. It is a struggle just paying rent plus bills and everything for 2 people let alone paying someone elses bills!!
He is also not in a position to give up his course with the OU. He has worked as a personal trainer/fitness instructor all his life and has been on a salary of around 11k since I have known him [7 years] so he is doing this for a change of career and to better himself.
We do not know what to do, what we should be paying off first. Weeks where he gets extra cash from delivering we are taking it all to the bank and using it to pay chunks off his Tesco card as this is the one he uses the most. The other credit cards have not been spent on, were purely obtained to transfer balance onto.
Please can someone help us.
I am writing this on behalf of my partner who has debts totalling double his wages [approx. 18k]. The debt consists of credit cards, loans, hire purchase and has accumulated over the last few years. Up until June last year he was working 25 hours a week as a Personal Trainer [employed] on a salary of around £11,300 a year. On 6th June he got dismissed from his job after a disagreement with his boss. He spent 4 months working as a cleaner, averaging around 10 hours a week for min wage and decided to turn a bad situation around by signing up to a degree in Computing with OU to start in Jan 2016. On top of this he got a job delivering indians on a Friday night for £20 a week cash in hand [plus petrol and tips]. He has also taken on casual bar work at our local football stadium with fairly regular work a few times a month. He took a full time job on in November last year but after a few weeks realised it wasnt for him and that he would be unable to work 45 hrs a week and study the degree at the same time [which demands 16-18 hrs a week study]. He managed to get one of his old cleaning jobs back and is now averaging 16 hours a week + has also got a 2nd delivery job on a Sunday delivering Chinese’s.
Current income is as follows:
cleaning - approx £107 a week (this can be more, but can also be less as he is on a part time contract with a min of 2 hrs work a week)
delivery work - guaranteed £44 a week [plus tips and petrol which usually equate to around £30-35 a week on top of the £44)
casual bar work - approx £40 a month, sometimes more, however this job is seasonal and only runs Sept - May in line with the football season.
Remaining current debts are as follows:
Hire purchase agreement on car: £1581 (final payment due August 2018)
Hire purchase on sofa: £450 (final payment due Aug 2018)
Bank of Scotland credit card: £1593 (interest free until 3/6/16 & then 17.95% APR)
MBNA credit card: £2774 (interest free until 18/1/17 & then 19% APR)
Tesco credit card: £2086 (currently paying interest at 1.31% a month)
Barclaycard credit card: £2875 (interest free until 5/5/18 + then 18.9% APR)
Tesco personal unsecured loan: £6882.48 (final payment due 5/9/19)
Partner is currently paying the following towards all of the above [per month]:
Hire purchase agreement on car: £51
Hire purchase on sofa: £15
Bank of Scotland credit card: £16.25 (min payment)
MBNA credit card: £28 (min payment)
Tesco credit card: £85 (which covers the cost of 2 petrol fill ups a month and is the only thing he is using a credit card for)
Barclaycard credit card: £66 (min payment)
Tesco personal unsecured loan: £156 a month (fixed amount)
Other regular monthly commitments:
Denplan (dentist subscription) = £18
Mobile phone (sim only plan) = £12
Bank account fee = £10 (which provides phone insurance, breakdown cover that he needs and has used before)
Car funds (towards car insurance, tax, MOT etc) = £80
Xmas funds £20
Social allowance = £20
The situation my partner is in is that he is no longer earning the same amount he was when he was a Personal Trainer and received a guaranteed salary every month. He has spent the past 3 or so years getting balance transfer card after bal trans card and moving money round all the time to avoid paying any interest, which was all very well and good until he lost his job. We recently filled in the bal transfer pre eligibility checker on this site to see if he would be eligible for a new bal transfer card once the promotional rate ends on the Bank of Scotland card in June 2016 but the checker said he was unlikely to get any [we’re presuming due to his low wages] and the fact he already has so much debt. Once 3rd June arrives we’ve worked out he will have a remaining balance on the bank of Scotland card of £1544 + interest on top of this. He is only paying the min payment at the moment as this is all he can afford. 6 months after this in Jan 2017 the interest rate on the MBNA card will also end and we will be in the same predicament with a balance of £2466 also earning interest.
The Barclaycard we are not too worried about as this is interest free until May 2018.
The personal loan with Tesco is also a fixed amount and will not change.
The hire purchase agreement on the car is fixed until Aug 2018.
The HP on the sofa is interest free. So these things we are not so worried about.
We have looked into DMP’s but all credit cards have to be surrendered once you go onto one and because my partner needs his car for all his work, there are times when he might have to fill up more than 3 times a month. His boss pays his petrol to and from cleans but she is not always around to fill up his car when he needs it. So as a rule of thumb because his petrol allowance varies, he only uses his Tesco credit card for this to ensure he is never caught short. If he went onto a DMP he would not have this ‘luxury’ and would have to turn down work if he did not have funds to get there.
We considered consolidating all his debts with one consolidation loan. We contacted Tesco bank to see if they could offer him one big loan of 15k to cover most of the debt but he got rejected. We then tried a further 2 websites where he got rejected again. We gave up trying after this because it could be detrimental to his credit file.
We do not want to consider bankruptcy as we feel this is possibly the worst option.
We currently live together in a private rented flat of which I pay everything as he does not have any spare money to contribute to any of the bills plus I would rather he use all his wages towards his debt. I have 3 jobs myself and do not have any spare money to pay my partners debts for him. It is a struggle just paying rent plus bills and everything for 2 people let alone paying someone elses bills!!
He is also not in a position to give up his course with the OU. He has worked as a personal trainer/fitness instructor all his life and has been on a salary of around 11k since I have known him [7 years] so he is doing this for a change of career and to better himself.
We do not know what to do, what we should be paying off first. Weeks where he gets extra cash from delivering we are taking it all to the bank and using it to pay chunks off his Tesco card as this is the one he uses the most. The other credit cards have not been spent on, were purely obtained to transfer balance onto.
Please can someone help us.
0
Comments
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Has he made inquiries, regarding challenging the dismissal?
As to the debts, I suggest posting a SOA.
http://www.stoozing.com/calculator/soa.php0 -
Depending how far into his course he is, and his general IT knowledge, can he not look for IT jobs like helpdesk, noc/ops or something, to increase his salary and will help improve his experience. As even if he completes the degree it won't mean he's guaranteed to walk into a job at the end.MFW OP's 2017 #101 £829.32/£5000
MFiT-T4 - #46 £0/£45k to reduce mortgage total
04/16 Mortgage start £153,892.45
MFW 2015 #63 £4229.71/£3000 - old Mortgage0 -
Yes we have challenged the dismissal back in June when it happened but because he was only employed for 14 months by the company he did not qualify for "unfair dismissal claims".0
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pathtofreedom wrote: »Depending how far into his course he is, and his general IT knowledge, can he not look for IT jobs like helpdesk, noc/ops or something, to increase his salary and will help improve his experience. As even if he completes the degree it won't mean he's guaranteed to walk into a job at the end.
he is 3 days into his IT degree and has a background of no IT experience hence why this is a change of career for him. He understands there will be no guarantee of a job at the end of it but at least his prospects will be better than they are now. He is willing to start from the bottom in the IT industry and work his way up to the top. Surely being qualified in IT is better than being a cleaner for the rest of his life....thanks you for the suggestion though0 -
1) You are really on the ball with all those dates and figures so well done for that.
2) I'm no expert, but if you can find a work around for the credit card/fuel for work issue I think the DMP is worth looking at again. Monthly payments would probably be lower than now, meaning fuel costs wouldn't make it so tight??0 -
Bedsit_Bob wrote: »Has he made inquiries, regarding challenging the dismissal?
As to the debts, I suggest posting a SOA.
http://www.stoozing.com/calculator/soa.php
Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 604
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 604
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 66
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 12
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 120
Road tax................................ 10.83
Car Insurance........................... 22.5
Car maintenance (including MOT)......... 53
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 18.27
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Bank account fee........................ 9.95
Total monthly expenses.................. 352.55
Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 2031.....(66).......0
Total secured & HP debts...... 2031......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Bank of Scotland...............1593......16.25.....0
MBNA credit card...............2774......27.74.....0
Tesco credit card..............2086......54........15.72
Tesco loan.....................6882.48...156.......9
Barclaycard c/card.............2875......28.75.....0
Total unsecured debts..........16210.48..282.74....-
Monthly Budget Summary
Total monthly income.................... 604
Expenses (including HP & secured debts). 352.55
Available for debt repayments........... 251.45
Monthly UNsecured debt repayments....... 282.74
Amount short for making debt repayments. -31.29
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -2,031
Total Unsecured debt.................... -16,210.48
Net Assets.............................. -18,241.48
Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.0 -
He took a full time job on in November last year but after a few weeks realised it wasnt for him and that he would be unable to work 45 hrs a week and study the degree at the same time [which demands 16-18 hrs a week study].
Why on earth would he say no to 45 hours of work per week if he's 18k in debt? Couldn't he do his OU degree at a slower pace or just suck it up and work + study at the same time? I just don't see how he can justify it unless he hasn't had his LBM yet?Mortgage Oct '20: £615k
Mortgage Feb '24: 590k
Debt Feb'24: £35,501.540 -
You don't pay any Mortgage/Rent, Council Tax, Electricity, Gas, Water, Food, etc. :huh:0
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lacoste1985 wrote: »Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 604
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 604
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 66
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 12 - Is this the lowest possible Sim only deal he can get? I only pay £7.50 per month
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 120
Road tax................................ 10.83
Car Insurance........................... 22.5 - Make sure he shops around at renewal time to get cheapest deal and use a cashback site
Car maintenance (including MOT)......... 53 - this seems really high; have you gone through all bills to get this figure?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 18.27 - this is high; perhaps until he has settled his debts this needs to go; will have to use NHS if needs it
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 - This has to go until he's paid off debts. Whoever he currently buys presents for will understand
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Bank account fee........................ 9.95 - You say he has used breakdown cover once? Breakdown cover can cost as little as £30 for a whole year. He simply cannot afford to be paying a bank account fee
Total monthly expenses.................. 352.55
Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 2031.....(66).......0
Total secured & HP debts...... 2031......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Bank of Scotland...............1593......16.25.....0
MBNA credit card...............2774......27.74.....0
Tesco credit card..............2086......54........15.72
Tesco loan.....................6882.48...156.......9
Barclaycard c/card.............2875......28.75.....0
Total unsecured debts..........16210.48..282.74....-
Monthly Budget Summary
Total monthly income.................... 604
Expenses (including HP & secured debts). 352.55
Available for debt repayments........... 251.45
Monthly UNsecured debt repayments....... 282.74
Amount short for making debt repayments. -31.29
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -2,031
Total Unsecured debt.................... -16,210.48
Net Assets.............................. -18,241.48
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.
Okay; currently he has a smallish shortfall to make up; which could be made up if he follows the suggestions I have made above.
I know he his studying at the moment to better himself; but while he has so much debt I agree with Petal that he is in no position to turn down any work while he has these debts. He needs to fit studying around working; he needs to bring in money to pay off the debts; the quicker he can pay them off the better. Then he can start contributing to your living expenses
He could turn this around and get the debts paid off; it is not easy but it is doable.
Also what is the credit limit on the Barclaycard? When the other cards 0% ends in June it may be possible to move some / all of the outstanding debt to the Barclaycard if there is enough credit limit available (Barclaycard normally make offers to existing customers to do balance transfers)Current Mortgage 01.10.17 £113,513.88
MFW Start Mortgage: £114,794.64
Current MED: 2036:eek: Target MED: 2026
Overpayment Target for remainder of 2017: £2,000
Mortgage overpayment savings: £684.80
MFW No 124 :money:0 -
Bedsit_Bob wrote: »You don't pay any Mortgage/Rent, Council Tax, Electricity, Gas, Water, Food, etc. :huh:
I didnt include this as the SOA is just my partners incomings and outgoing. I pay all the bills out of my salary.0
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