Advice wanted 30k unsecured debt

Pixie5740

Is the mortgage in your name only?

dk250

Yes she knows about the loans etc but they are my debts which is fair enough , both names are on the mortgage even though im paying the majority of the costs with a £400 contribution from her.

Any ideas for the best and quickest way to clear it ? I've read about the pros and cons of borrowing more on the mortgage especially on a new build

Pixie5740

Presumably you needed to the gifted deposit in the first place because you couldn't meet affordability without it unless there was some other reason? So if you needed the loan to meet affordability then I doubt you'd meet affordability for an even higher LTV less than 12 months down the line with an additional £20k of unsecured debt not to mention the ERC you could face.

According to your SOA you have £379 left each month so snowballing your debts would be the quickest, and cheapest, way to repay them. If you're willing to cutback on some of the things mentioned in your SOA then you'll get them repaid even quicker.

You keep describing them as your debts but the £20k loan sounds as though the money was used for both of you as well as any debts accrued for purchases for the house. So I don't think it would be unreasonable for you and your OH to pool your resources and do an household budget which includes the debts but that's up to you.

enthusiasticsaver

If you are moving £200 across to an account to pay for gym etc then where does that appear in your soa? That means a spare amount of £179 not £379 and at repayment at the current rate you will take more than 7 years to clear the credit cards assuming 0% interest rates. No emergency fund is not a good idea bearing in mind you have a house and 2 cars unless your pcp deal includes repairs.

warby68

I think a key question is how much does your partner have left for herself compared to you?

If she has a larger surplus but has benefitted equally from the money spent to buy and equip your home, what are the reasons for that arrangement?

Did you disagree on how much to spend? Did she say 'well if you want this much, you pay for it'? Is it pride? Did she put in a deposit and you had to borrow your share? Do you not want her to know you can't quite afford everything? Is there some family issue where she isn't happy about the way you had to repay the deposit?

The obvious 'solution' is to pool finances and tighten your joint belts to deal quickly with unsecured debt (essentially the Tesco loan which is what you couldn't really afford and probably went against the basis of your mortgage agreement and will likely prevent you re-mortgaging also). If people understood why you aren't entertaining that it might help. Your partner may of course have other commitments of her own.

If you really want to go it alone then your insurances, mobile and tv/broadband may all have a bit of potential for savings.

Otherwise you might have to bumble along until you can start extricating yourself from the various contracts (car/phone/sky/broadband/holiday) and choose cheaper options.

dktreesea

dk250 wrote: »

Yes she knows about the loans etc but they are my debts which is fair enough , both names are on the mortgage even though im paying the majority of the costs with a £400 contribution from her.

Any ideas for the best and quickest way to clear it ? I've read about the pros and cons of borrowing more on the mortgage especially on a new build

What interest rate does the Mbna card revert to after April 2017? I would be throwing as much money as you could onto that card between now and then, and maybe even hunting around for another 0% interest card you can transfer the balance onto come April. if the interest rate reverts to their usual 18.9% and you still owe £6k on it, you're looking at an interest bill of £94 a month.

enthusiasticsaver

dk250 wrote: »

Yes she knows about the loans etc but they are my debts which is fair enough , both names are on the mortgage even though im paying the majority of the costs with a £400 contribution from her.

Any ideas for the best and quickest way to clear it ? I've read about the pros and cons of borrowing more on the mortgage especially on a new build

Do you really think more borrowing is the answer here? I would strongly disagree considering you have little to no equity. Putting unsecured debt on to a secured basis is never a good idea.

I do not mean to be harsh here but you need to really rein in on this debt and certainly not put more on the mortgage. Only answer to debt is to either earn more or spend less. There are ways you can reduce your expenditure so my suggestion would be you explore that first and set up a disciplined monthly repayment plan for the debt you have.

enthusiasticsaver

dk250 wrote: »

Statement of affairs

b]

Household Information[/b]
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 2

Monthly Income Details[/b]
Monthly income after tax................ 2300
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 400
Total monthly income.................... 2700

Monthly Expense Details[/b]
Mortgage................................ 705
Secured/HP loan repayments.............. 243 when does this finish and will you need to take out another pcp deal?
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 167
Electricity............................. 35
Gas..................................... 35
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 0
Mobile phone............................ 30 - move to sim only. I pay £11 per month.
TV Licence.............................. 12
Satellite/Cable TV...................... 51 This is high. Ring and ask to reduce package.
Internet Services....................... 25
Groceries etc. ......................... 0
Clothing................................ 25 Can you not buy clothes for 6 months and put this towards your debt instead?
Petrol/diesel........................... 100
Road tax................................ 20
Car Insurance........................... 55 - This is high £660 per year. Can it be reduced by using comparison sites?
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 30
Buildings insurance..................... 15
Contents insurance...................... 0
Life assurance ......................... 55 This is high. Use comparison sites to reduce it.
Other insurance......................... 45 What is this for?
Presents (birthday, christmas etc)......25
Haircuts................................ 10
Entertainment........................... 25 If you transfer £200 to your personal account what is this for? Can you reduce your personal expenditure to £50 per month for a year until debt under control?
Holiday................................. 50 Is this already booked?
Emergency fund.......................... 0 You need something in here.
Total monthly expenses.................. 1758


Assets
Cash.................................... 0
House value (Gross)..................... 232000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 232000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 175000...(705)......2.29
Hire Purchase (HP) debt ...... 22000....(243)......6.3
Total secured & HP debts...... 197000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Tesco loan ....................23000.....447.......7.1
Mbna ..........................6800......85........0 (when do the 0% deals finish? At £85 per month this will take you 80 months to clear)
Tesco..........................3000......31........0
Total unsecured debts..........32800.....563.......-


Monthly Budget Summary
Total monthly income.................... 2,700
Expenses (including HP & secured debts). 1,758
Available for debt repayments........... 942
Monthly UNsecured debt repayments....... 563
Amount left after debt repayments....... 379 Do you really have this left or are you deducting your personal spends from this leaving £179?

Personal Balance Sheet Summary
Total assets (things you own)........... 232,000
Total HP & Secured debt................. -197,000
Total Unsecured debt.................... -32,800
Net Assets.............................. 2,200

I calculate you could easily reduce expenditure by reducing your personal expenditure, cable, mobile phone, insurances and clothing amounts. If you put £100 per month into an emergency savings accounts, stop using credit cards and put an extra £200 towards the credit cards you could have them cleared in 31 months assuming they remain at 0%.

dk250

Thanks for replies

Car pcp finishes in sept 2017 but will need a similar arrangement
Mobile in contract until May 2017 then can go sim only
Sky tv is a 12 month contract until March 2017
Can save on the clothing fair point
Car insurance is the Cheapest I can find on every comparison website has gone up due to Change in address
Life insurance is for 2 and includes income protection and critical illness cover
Other insurance is medical cover for 2 as can't afford to be off work for to long and had a 2 year wait on the nhs to solve knee problem previously
Entertainment funds to be included in personal funds
Holiday already booked for sept 17 £50 a month
Mbna runs out April 2017 and tesco card Dec 2017 - I can hope to change them when they run out to other 0% cards and currently have an excellent credit history with no missed payments .

Now im moving £200 into a spare account i only have £179 left not £379

We both have similar amounts left after all bills and payments

Pixie5740

Just because you're in contract with Sky and your mobile network provider that doesn't mean you can't negotiate a lower monthly bill. Give it a go, what have you got to lose?