We're in trouble

Stuki

Today is the day that I have admitted the truth. We are in a financial mess and if we are honest we have known for quite a while. Having read a number of other threads on here we have clearly fallen into the ignorant trap of believing/hoping that things will sort themselves out. Clearly they will not, unless I do something about it.

The reason it has all come to a head is because one of our debts has been referred to a DCA, Triton Credit Services. (who don't appear to be very friendly from my brief dealings and reading some other threads on them).
They want money that we simply cannot afford to give them.
Our problems started when we decided to move, and fatally borrowed more than we should have. Not only was our mortgage too big, but as a result of some money we were expecting not materialising we had to borrow further on credit cards to pay stamp duty and solicitors etc.

I have posted a SOA below, it does not make for good reading.

Any advice people can give would be gratefully received
Monthly Incomings:

My salary - £1,850 can vary up to approx £2200 but £1850 is minimum
Partners salary - £292.50
Benefits - £556.40

Total - £2,698.90

Monthly Outgoings:

Mortgage/Rent - £1280 (interest only)
Council Tax - £294 (paying arrears)
Gas - £53 (paying arrears)
Electric - £57 (paying arrears)
TV License - £10
Sky £30
Phone/Broadband - £42
Food - £200
Car Insurance - £26
Petrol - £10
Mortgage Insurance £58
Loan - £263 (50 payments left)
CC debts - 3385

Total: £2,762.

On a basic month we cannot afford to pay everything

immoral_angeluk

My salary - £1,850 can vary up to approx £2200 but £1850 is minimum
Partners salary - £292.50 Your partner needs to get a better paying job ASAP. IS there any reason their only working part time?
Benefits - £556.40

Total - £2,698.90

Monthly Outgoings:

Mortgage/Rent - £1280 (interest only) Can you downgrade your house? Is there any equity?
Council Tax - £294 (paying arrears)
Gas - £53 (paying arrears)
Electric - £57 (paying arrears)
TV License - £10
Sky £30 If you're out of a minimum contract period then cancel ASAP. You can't afford this luxury right now. You can pick up a freeview box for £10 now.
Phone/Broadband - £42 Cut down your package to the bare minimum.
Food - £200 For how many of you? Check out the money saving old style board for tips how to cut this down.
Car Insurance - £26 Is this the cheapest you can get?
Petrol - £10 If you hardly use the car is it worth actually keeping it????
Mortgage Insurance £58 Is this the cheapest you can get?
Loan - £263 (50 payments left)
CC debts - 3385 Can you break this down into min payments, balances and aprs?

Total: £2,762.

jude47

Hi Stuki

First things first - debt collection agencies like to talk big, and believe me they'll threaten all kinds of things - none of which they can legally follow through. If (when) they ring again, tell them you require all future communication to be in writing and request they remove your number from their files. If (when) they fail to do so, contact your phone provider and change your number. If you tell your provider you're getting nuisance calls, they'll act quickly for you.

There are loads of people here who will be more than happy to help you but I think you need help from one of the debt advice charities:

Consumer Credit Counselling Service 0800 138 1111
Citizens Advice Bureau - http://www.citizensadvice.org.uk
National Debtline - 0808 8084000

Just to make sure you're getting the best advice for your situation.

Good Luck, Stuki and keep posting!

sparklymessygirl

Hi Stuki,

Well done for facing your situation. I would echo the comments re the car. I also was being nosy and looked at an earlier post of yours (:o ) and I wonder whether you have gone ahead with your planned holiday booking? If you haven't then - thank goodness - if you have - is there any way of cancelling and cutting your losses?

Hope this doesn't touch a raw nerve but I figured it might be something you would have to address

Anyway - wishing you all the best
Sparkly

Stuki

Thanks for the replies
In answer to some of your questions
We have two children, the youngest of which is not yet at full time school

Reluctant to move again having lived in a less than desirable area before, didn't really want the kids growing up in that environment.

Will definitely get rid of Sky in a couple of months once contract is up

I have a company car which the wife tends to use where possible, obviously I am not always around so has to use hers from time to time. However it maybe worth considering selling, although we probably wouldn't get a great deal for it.

We didn't go ahead with the holiday we were looking for an incentive to save as we haven't had a holiday in years. As I said in my first post we were in denial at the time and now realise that the money would be much better used paying off debts

gallygirl

On your basic month you're not far short of your outgoings and you should have extra left over other months. I suspect you don't! 1st thing you should do is start a spending diary. Write down every penny you all spend and then see how much is wasted on packets of crisps, cans of drink etc. It's this unbudgeted spending which I suspect is causing you problems.

Your wife is not earning a lot - can anyone advise on the site which calculates how much benefits you're entitled to - maybe she could earn a bit more without it all being clawed back?

Re your wife's car - you haven't budgeted for car tax, MOT, repairs etc. maybe when that is taken into account it would be worth getting rid of?

Gas, electric, council tax arrears - how much extra are you paying on each of them, & how long till paid off? If you are needing a short breathing space, and your credit rating is already damaged, would it be worth speaking to your mortgage co for a brief payment holiday for a few months?
Sign up for quidco & other cash back sites - they will bring in a little, for luxuries. Same with paid surveys - get your wife doing these, the odd £10 Boots or M&S voucher will give you a treat.

Welcome & good luck!

solventguy

Stuki wrote: »

Today is the day that I have admitted the truth... Not only was our mortgage too big,

IMonthly Incomings:

My salary - £1,850 can vary up to approx £2200 but £1850 is minimum
Partners salary - £292.50
Benefits - £556.40

Total - £2,698.90

Monthly Outgoings:

Mortgage/Rent - £1280 (interest only)

Welcome to the Forum.

I suspect you know the problem: you can't afford your mortgage. Everything else is a detail.

Your mortgage is almost 50% of your income, and you're just paying interest. This house will hobble you for the rest of your lives. Sell it, rent, or buy something cheaper, and start building again.

I wish you the best.

Gemmzie

Take the credit cards and loans out of the main outgoings and you have a total of £2060, so that leaves £900 to pay your debts. This is very do-able.

What we need is a list of each card or loan, it's total balance, it's APR and the minimum payment.

Stuki

I really appreciate people trying to help. the last thing I want to do is have to move, so if there is a way out of this I will be delighted

I am trying to get to grips with tha APR's and I will ring the companies involved tomorrow, but in the meantime

Bank Loan
Bank Loan - £262.44 a month (includes £55 protection, should I get rid of the protection) 50 payments left

Credit Cards
Virgin - £5000
Mint - £6050
Barclaycard - £1650

We did also have a store card which thankfully we paid off with money we got back through reclaiming bank charges.

madmoney_2

hi there suki, personally i would get rid of the ppi, and have a look on the main page for more on claming back ppi payments, they are normally mis-sold, martin explains it better!!
Also, ebay ebay ebay!! anything you dont need, old toys of the kids etc will be better off sold and de clutter your house, either that or a car boot. I know how u feel about wanting to bring your kids up in a better environment, i was in the same boat this time last year n i couldnt be happier where i am now, as is my son.
good luck!
xxx

Phill_555

There's a few items missing from your SOA which, when they crop up, may cause problems as you haven't budgeted for them: Presents (Xmas and birthdays); Clothes; Dentists(?).

Have you looked into getting your house's Council Tax band reviewed?