Need help and advice :(

jysmystry

Hi all,

Been lurking here for a while and have decided this is good place for honest advice and opinion on my sorry situation.

My wife and I separated a while back but it has caused us both financial difficulty. I now live separately in private rented accommodation and she is currently in our former matrimonial home. We have two wonderful children and I am pleased (and very proud) to say that we have managed to be as amicable as it is probably possible to be so that we can both be the best parents we can. We are both also much happier now and personally I feel like I am a much better parent now than I was in the relationship.

My SOA is below but in a nutshell I have approx. £12k of credit card debt and on top of that I have a joint unsecured loan with my ex-wife to the merry tune of £28k which we took out as part deposit for the house and part debt consolidation.

Our house is valued at £140-142k and we plan to sell. Taking the equity from the property away from the outstanding debt there is a shortfall of between £4-6K. My wife feels I should pay that and her proposal is we split the equity, she pays £10k of that onto the joint loan and I pay the rest of the loan.

We both earn decent wages (both on £34k wages) but are both just treading water.

I am currently able to cope, just, but I know the extra new debt from the joint loan will tip me over and I will struggle to cover the minimum payments - it looks to me like an impossible job paying off £16-£18k of debt by just covering the minimum payments.

I have spoken to StepChange today and they have recommended a DMP on the basis that I pay £246 per month until the house is sold then they will try to negotiate full and final settlements using the equity on the rest of my debts. They also talked about an IVA as an alternative and even bankruptcy.

I am worried about this and I suppose I have difficulty accepting the damage to my credit record but I suppose we are past the point where my credit record can be preserved really. I also want to be the best dad I can and I'm worried about what is best to do for my kids to make sure both me and their mum are in the best financial position in the future. I can't afford all this debt though and it will take me 13 years to pay it off at minimum payments. If I go for an IVA or bankruptcy my ex will be chased for the money instead and that wont be good for my kids.

I don't know if a DMP is right for me or the best for my kids longer term. Am I better of trying to recover things myself? I am very worried about this and I know my situation is a lot better than others on here but I feel like I don't know where to turn. My ex's family are buying her food and getting it delivered by Tesco home delivery and I want to be able to help her more but I have £7 to my name until the end of the month and am powerless to do anything. I feel quite desperate and like a failure as a dad.

Any advice or feedback on my situation and what StepChange are proposing would be very welcome

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 2
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1989
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1989

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 700
Management charge (leasehold property).. 0
Council tax............................. 158
Electricity............................. 53
Gas..................................... 0
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 26
TV Licence.............................. 24.25
Satellite/Cable TV...................... 0
Internet Services....................... 27
Groceries etc. ......................... 250
Clothing................................ 25
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 63
Childcare/nursery....................... 30
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 10
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 10
Child Maintenance....................... 255
Total monthly expenses.................. 1736.25


Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 140000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................10449.9...104.......0
lloyds.........................1700......76........0
Together Mortgage Loa..........28000.....158.......7.4
Total unsecured debts..........40149.9...338.......-


Monthly Budget Summary
Total monthly income.................... 1,989
Expenses (including HP & secured debts). 1,736.25
Available for debt repayments........... 252.75
Monthly UNsecured debt repayments....... 338
Amount short for making debt repayments. -85.25

Personal Balance Sheet Summary
Total assets (things you own)........... 140,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -40,149.9
Net Assets.............................. 99,850.1

Reproduced on Moneysavingexpert with permission, using other browser.[/i]

andyfromotley

Hi JY,

Jpw much equity is in your house, this is unclear from your SOA?

jysmystry

The house is valued at £140-142k and there is £116k left on mortgage so best case £26k worst case £24k. With fees etc taken into account probably £21-23k

mum2one

jysmystry wrote: »

Hi all,

Been lurking here for a while and have decided this is good place for honest advice and opinion on my sorry situation.

My wife and I separated a while back but it has caused us both financial difficulty. I now live separately in private rented accommodation and she is currently in our former matrimonial home. We have two wonderful children and I am pleased (and very proud) to say that we have managed to be as amicable as it is probably possible to be so that we can both be the best parents we can. We are both also much happier now and personally I feel like I am a much better parent now than I was in the relationship.

My SOA is below but in a nutshell I have approx. £12k of credit card debt and on top of that I have a joint unsecured loan with my ex-wife to the merry tune of £28k which we took out as part deposit for the house and part debt consolidation.

Our house is valued at £140-142k and we plan to sell. Taking the equity from the property away from the outstanding debt there is a shortfall of between £4-6K. My wife feels I should pay that and her proposal is we split the equity, she pays £10k of that onto the joint loan and I pay the rest of the loan.

We both earn decent wages (both on £34k wages) but are both just treading water.

I am currently able to cope, just, but I know the extra new debt from the joint loan will tip me over and I will struggle to cover the minimum payments - it looks to me like an impossible job paying off £16-£18k of debt by just covering the minimum payments.

I have spoken to StepChange today and they have recommended a DMP on the basis that I pay £246 per month until the house is sold then they will try to negotiate full and final settlements using the equity on the rest of my debts. They also talked about an IVA as an alternative and even bankruptcy.

I am worried about this and I suppose I have difficulty accepting the damage to my credit record but I suppose we are past the point where my credit record can be preserved really. I also want to be the best dad I can and I'm worried about what is best to do for my kids to make sure both me and their mum are in the best financial position in the future. I can't afford all this debt though and it will take me 13 years to pay it off at minimum payments. If I go for an IVA or bankruptcy my ex will be chased for the money instead and that wont be good for my kids.

I don't know if a DMP is right for me or the best for my kids longer term. Am I better of trying to recover things myself? I am very worried about this and I know my situation is a lot better than others on here but I feel like I don't know where to turn. My ex's family are buying her food and getting it delivered by Tesco home delivery and I want to be able to help her more but I have £7 to my name until the end of the month and am powerless to do anything. I feel quite desperate and like a failure as a dad.

Any advice or feedback on my situation and what StepChange are proposing would be very welcome

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 2
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1989
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1989

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 700
Management charge (leasehold property).. 0
Council tax............................. 158 is that single person discount - could you pay over 12 mths? save £22
Electricity............................. 53
Gas..................................... 0
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 26 could u do sim onlyy / payg £15 spend save £10
TV Licence.............................. 24.25 (6 mths then reduce t0 £12.12 (save £12
Satellite/Cable TV...................... 0
Internet Services....................... 27 - reduce this (£15 max - save £12
Groceries etc. ......................... 250 - could you brand drop / save £50
Clothing................................ 25 - seems low
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 63
Childcare/nursery....................... 30
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 - need this
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 10
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 10
Child Maintenance....................... 255 does that take into account the children being with you pt
Total monthly expenses.................. 1736.25


Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 140000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................10449.9...104.......0
lloyds.........................1700......76........0
Together Mortgage Loa..........28000.....158.......7.4
Total unsecured debts..........40149.9...338.......-


Monthly Budget Summary
Total monthly income.................... 1,989
Expenses (including HP & secured debts). 1,736.25
Available for debt repayments........... 252.75
Monthly UNsecured debt repayments....... 338
Amount short for making debt repayments. -85.25

Personal Balance Sheet Summary
Total assets (things you own)........... 140,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -40,149.9
Net Assets.............................. 99,850.1

Reproduced on Moneysavingexpert with permission, using other browser.[/i]

With a nip here and a nip there you could recover £80 pm.

As for stepchange - there really good would highly recommend them. x

jysmystry

Thanks mum2one,

My phone I am tied in for a fair while otherwise I would

Shopping - I am ready sticingk to lidls and have it about as cheap as I can go. This budget includes nappies and everything and id struggle to get that lower.

Child maintenance is way over what the CSA would require - I pay as much as I can - their mum is getting food parcels from her family on this amount, I couldn't reduce it and still feel like a man afterwards, cant see my kids eating on donations from others

andyfromotley

On the face off it your wifes propasal seems unfair. (but i do accept that these can be complex situations)

Equity should be split evenly (or all be paid to debt). The remaining debt needs to paid off as decided in your divorce agreement. However as a staring point the debt should be split evenly if it was incurred as part of the marriage. This doesnt change who is legally responsible for the debt but is just a way of reflecting the net position upon the dissolution of the marriage. This works better when their are assets to be split. If you cant agree to this then you need to see a solicitor.

Finally, do not confuse obtaining a fair financial settlement (even if it is in the face of some resistance) with your abilitiy as a father. The two things are not linked. Guilt and an unwillingness to upset the mother/father of your kids has led many many people to terrible financial settlements.

Dont be dashing to a DMP just yet. With a bit of jiggling you can service your debt until the picture becomes a bit clearer, trashing your credit history unless absolutely necessary may make building your new life difficult. It may be necessary in the end but for now just take your time.