New member - need help before we lose our dream cottage :(

cleopatra55

After moving to our dream cottage, we find we cannot afford to pay our creditors and feel selling up may be our only option. Our debts have mounted up over the past few years and with increasing interest we have fallen well behind.

Our monthly income is £1900 after deductions
Our monthly outgoings are:£3522 leaving us minus £1622 per month.

Monthly Essential Living Costs:

Bank Mortgage £498.91 (interest only, 11 yrs left to run)
Council Tax £127
Life insurances £55 (also held with same bank)
Electric £45
Telephone bills £25 (including mobile topups)
TV package £37 (Sky is essential where we live, no signal)
Dental £24 (private)
Petrol £80 (2 cars)
Food £350
Dogs £25 (including insurance, vets etc)
Totalling £1,271.91 per month

But also we have the following debts:

Secured on our property:
Equity release loan: £313.19 per month (11 yrs left)

Unsecured personal loans:
AA: £364 per month (approx 8yrs left)
Freeway: £110 per month (approx 4 yrs left)
Tesco Loan: £164 (approx 7 yrs left)
Totalling £638 per month

Credit Cards: (per month)
Capital 1: £326 (balance = £10,600)
MBNA: £112 (balance = £7,300)
Bank Gold Card: £156 (balance = £5,000)
Bank Mastercard: £200 (balance = £6,000)
Co-Op Gold Card: £200 (balance = £10,000)
Amex: £240 (balance = £9,400)
Totalling £1234 per month

Store Cards: (per month)
J.Lewis: £30 (balance = £600)
Debenham: £30 (balance = £1,300)
Argos: £5 (balance = £254)
Totalling £65 per month

This sorry state of affairs leaves us minus £1622 per month, which we have been struggling to keep up with by using credit to pay off bills, not a good ideas I realise but the only option open at the time.

We can afford the living costs, and equity loan and 2 bank credit cards- just about. We feel these are the most important as the bank holds our mortgage and we need to keep up payments with them to hold on to our house. But this leaves us nothing to pay unsecured loans and credit cards with. Hence, we feel forced into selling our house to clear as many debts as possible, but then having no money to put into another home. As we are both in our 50's we are nearing retirement and are really worried we may never own another property. We have not missed any payments as yet, but now we are up to the limit on all our credit cards we're well and truly stuck.

Any advice would be welcome, but I can't see any real way out, I just want to sell our own home before it gets taken away from us, and what about our personal belongings, can we store these safely away from bailiffs? I'll keep an eye out for any help, thanks in anticipation.

MissKJ

Cleopatra55, firstly DON'T PANIC.

You have taken the first step in your road to recovery, you are in a pretty awful position, but there are some good points. There are so many people on here who can help you, and will. There is a lot to go through on your SOA, so just bear with me, and the others whilst we chew it over.........

PasturesNew

Monthly Essential Living Costs:

Electric £45 - you should be able to cut this back a bit by making sure you turn things off, minimising the time you use things. i.e. watching TV ... don't need the light on. Probably be able to shave £15 off this quite easily

Telephone bills £25 (including mobile topups) - minimise calls, investigate cheaper calls/free calls (Skype using PC for example). Save £20.

TV package £37 (Sky is essential where we live, no signal) - Sky is essential ... a package isn't. Cut it and save £37
Dental £24 (private)
Petrol £80 (2 cars)
Food £350 - massively excessive. Should be able to shave £200 off this.

Dogs £25 (including insurance, vets etc)

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Saved: £272/month

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Others will give advice on debts. But you haven't said the interest %ages.

Can you take in a lodger? Or two? First £4200 or so per tax year is tax free.

blackangeluk

:hello:

It does sound like you are in a very difficult position with the shortfall.

On first sight the only thing you could possibly cut back on is your food, is that for 2 of you or more? I can (only now due to this site) feed a family of four and 4 pets on £240 a month so there is achance to can reduce these costs.

Have you looked around for gas/electric to make sure you are getting the best deal?

It may be that you need to try and make an agreement with your creditors for your unsecured debt as unless you either sell your house or you increase your wages there is obviously a lot to make up each month.

Give yourself a pat on the back though for facing up to this problem now. I hope others can offer more constructive help for you. Good Luck.

MissKJ

We need to know more information, like the interest rates on your debts....

Our monthly income is £1900 after deductions Is this a fixed income
Our monthly outgoings are:£3522 leaving us minus £1622 per month.

Monthly Essential Living Costs:

Bank Mortgage £498.91 (interest only, 11 yrs left to run) When did you last look at mortgage deals?
Council Tax £127 Have you checked if you are in the right band, check out MSE article
Life insurances £55 (also held with same bank) Can you get a better deal to reduce this?
Electric £45 This seems high, check out cheaper supliers, and energy efficiency articles
Telephone bills £25 (including mobile topups) Do you need mobiles? mine has ben broken for a month and haven't missed it one bit
TV package £37 (Sky is essential where we live, no signal) Yes but you can get a chea[er package. You can get free movie rentals by checking out the feebies threads
Dental £24 (private) Get an NHS dentist come hell or high water
Petrol £80 (2 cars) Car share schemes?????
Food £350 How many you feeding, this can definitely come down a lot
Dogs £25 (including insurance, vets etc) OK, so you love your pets, can they have cheaper food etc?
Totalling £1,271.91 per month

But also we have the following debts:

Secured on our property:
Equity release loan: £313.19 per month (11 yrs left) You need to go onto www.whatsthecost.com and input all your debts onto there. This will help you see the wood for the trees

Unsecured personal loans:
AA: £364 per month (approx 8yrs left)
Freeway: £110 per month (approx 4 yrs left)
Tesco Loan: £164 (approx 7 yrs left)
Totalling £638 per month

Credit Cards: (per month)
Capital 1: £326 (balance = £10,600)
MBNA: £112 (balance = £7,300)
Bank Gold Card: £156 (balance = £5,000)
Bank Mastercard: £200 (balance = £6,000)
Co-Op Gold Card: £200 (balance = £10,000)
Amex: £240 (balance = £9,400)
Totalling £1234 per month

Store Cards: (per month)
J.Lewis: £30 (balance = £600)
Debenham: £30 (balance = £1,300)
Argos: £5 (balance = £254)
Totalling £65 per month

nearlyrich

Hi Cleopatra, welcome to DFW, you have made a good start by posting your SOA.
Am I right in assuming the food is just for two? If so I am sure that a quick look at the Old Style board will show you some great ways to cut that back. We like good fresh food but spend a lot less to feed 4 adults each month, and some people are spending a lot less than me but still eat well.

The "essential" Sky package can probaly be reduced to £0 with you ditching the pay channels and getting the free to air channels via the box, it's worth a call to say you want to cancel as you will probably get 3 months free of charge, not a long term solution but a bit of a breather for you.

There are some very experienced people on here and I am sure you will soon have loads of suggestions to start you on the road to freedom from debt.

CLAPTON

how much is the house worth?
how much is the mortgage
how much is the secured loan

how much are the unsecured loans for
the CC debts are about 51,000?

benbenandme

:hello: Welcome to the dfw board, I'm not able to offer much help I'm afraid but others will be along soon who can Keep posting regularly and good luck x

MRSMCAWBER

Hi Cleopatra

Sorry your having a bad time of it at the moment ...

Take a good rummage through the Old Style board.... that will give you loads of ideas for reducing your budget...the folks on there are sooo friendly and full of ideas, im feeding myself and hubby on less than £60 for 4 weeks - and we eat really well-using about 95% fresh foods!! might seem a bit drastic, but anything you can cut back there will all be able to go towards your debts...

Good luck... you have done the smartest thing by posting on here.. now you can get some help

benbenandme

Is there ay possibility of increasing you income? The suggestion of a lodger was a good one, also is there any possibility of a second job for anyone in the household? Mystery shopping / survey sites? I know this would only help a little but it all helps

Jacks_xxx

Hiya Cleopatra, :hello:

I'm really sorry that you're having a tough time, and you're feeling low. (Most of us on here have been there at some point so we can empathise.)

There are other options open to you other than selling your home at this point. Don't panic yourself into doing something you regret.

The way I see it the options are these:


1) Sell your house. (Would you get enough money to get you straight? Would it sell? Where are you going to live?)

2) Cut back hard. / Earn more money. / Reduce what the debt is costing you.
Find out all the interest rates of your loans and cards etc and ring every single one of your creditors and ask them to freeze the interest. DON'T suggest to them that you could sell your house in order to pay, and if they suggest selling your house, mention the the equity release loan. If they say No, then go to the Citizens Advice Burea and get them to phone again on your behalf.
Sky can be cut back to £21 a month or less - and they're doing phone tv and internet deals for about £26 a month last time I looked. Ditch the mobiles, Halve the food bill etc
Manage with just one car, Get a second job, sell everything you can on eBay and Carboot sales... (Sorry hon, I didn't say any of this was going to be fun.)

3) Sort out a Debt Management Plan with CCCS or Payplan (free advice not one of those you see advertised on the telly)

4) IVA

5) Bankruptcy

Now I'm afraid I don't have any experience of the last three as we're working on door number 2 -or dealing with bailiffs either - but plenty of other people on here will do.

If you get all the debt info together and talk to the CCCS - or fill in their online questionaire - you'll be able to see things a little clearer I expect.

Here are some contact info that I "borrowed" :

Consumer Credit Counselling Service (aka CCCS)
Wade House
Merrion Centre
Leeds
LS2 8NG
Tel: 0800 138 1111
http://www.cccs.co.uk/

Payplan
Kempton House
Dysart Road
Grantham
Lincolnshire
NG31 7LE
Tel: 0800 917 7823
http://www.payplan.com/

Citizens Advice Bureau (aka CAB)
http://www.citizensadvice.org.uk/


In your place honey I'd ring the CCCs first thing in the morning and get some help as soon as possible.

Love Jacks xxx