To Dmp or self manage?

Enough17

Struggling with where to start.

Never used credit or overdraft until had our first child 10 years ago. I went back to work as part time to keep childcare costs to a min. Husband self employed so would have been a few gaps in income...and then we met 0% credit cards.. started off maybe paying for a holiday then moving the balance then hub out of work so got a transfer of cash to one of our account..and suddenly we are 50k in debt...with not a lot to show for it. We did do our house up to a point, normal decorating etc..But no big spends like kitchens or anything like that, hub does all the work himself. We were managing the debt by moving balances and making sure to stay in 0% but then husband was out of work for 4 months due to an accident and now struggling to keep up with the payments.

My salary has actually increased by 10kp.a as I am now back to working full time but more costs on travelling and childcare. If it wasn't for husbands accident and now rubbish boss for paying I think we'd be still managing well but I just feel like things are getting out of control.

I will fill out the full soa now....but the figures below are the basics -

House value 150k
Mortgage bal -95k

Mortgage 1- 620pm
Mortgage 2- 250pm

Credit card debt 50k including one loan and 2 overdrafts - approx 800-900pm payment
Gas and electricity bill 1600 - need to arrange payment plan.
Income 1 - 1700 (I'm studying also so hoping in 2 years this will
Increase (approx 10k per annum)
Income 2 - 1600 (not regular payments)

one or two of cards has come to end of 0% deal...a few more will by end of this year aswell....adding to the pressure and were no longer receiving 0% offers. Noddle score for me - 2/5. Will do hubs next.

We have so far missed 2 credit card payments (hubs name) For Feb 17 and 2 of mortgage 2 payments, Jan and Feb 17(Joint) This is due to husband not being paid for the 2nd week running (self employed and person working for doesn't like to part with his money).

If he was getting his regular weekly wage I think we'd be ok but have nothing in place for an emergency and with his payments being so sporadic we have no guarantee we can meet the payments.
Have spent the whole weekend reading posts in this site and so unsure as what to do.

I am hoping I can ring up and pay the 2 mortgage 2 payments tomorrow as husbands boss has promised to pay what he owes. So then we just owe the 2 cc payments (approx 220 for both) . I also aim to set up a payment plan for the gas and electricity bill..as long as hub gets paid all he owes. I'm assuming I'll have to make a payment over the phone.

So, do I ring credit card company and ask for more time but can't guarantee with husbands pay situation...or am
I at Dmp stage?

I'm already quite frugal with shopping etc and

Any advice would be much appreciated..

Thanks

P.s sorry for posting in wrong threads lasnight...Clairebeth, fat belly and sourcrates.

sourcrates

Hi,

Thanks for posting.

Just as a reminder, I'm sure you already know this, but your secured payments come first, before any unsecured debts.

The credit card will have to wait.

Usually a good first step is to post up an SOA (statement of affairs) then we have a better picture of what's going on :

http://www.stoozing.com/calculator/soa.php

clairebeth

I'm so pleased you managed to post your own thread! No need to apologise, we all just wanted you to get the advice you needed! I didn't want you going away after making the effort to start talking about your debts!

As I've said before, I'm not an expert on debt management, but there are plenty of people who are! Do your SOA now and the replies will come flooding in, I'm sure. Don't despair, you have a reasonable income, you will eventually be earning more, plus you don't always be paying for childcare, so things can only go up from here! Phone and pay your mortgage tomorrow though!

My biggest frugal tip is: shop at Lidl! ( This comes from someone on maternity leave :-) ).

Sazzie23

Hi

Well done for facing up to debt. It's a difficult time at the start and there are lots of routes to go down.

I think in the situation where you are struggling to pay essentials, it's probably worth considering calling the Non-essential creditors (Cc and loan), to advise that you have financial difficulty and you are seeking advice on how to proceed. You can mention Stepchange as the creditors tend to accept you are taking this seriously. They should give you at least 30 days to decide what to do, but it takes the pressure off a bit.

It will harm you credit rating though and may cause variable rates to increase and offers of increased credit limits to be removed, however in the long term that's probably a good thing as you'll reduce your credit burden.

Worth trying the Stepchange debt remedy, it's free, you don't have to speak to anyone can be done anonymously if you prefer and there's no obligation to accept their advice or help, but it does talk through your options.

Hope this helps
Saz

Enough17

Thanks very much Saz. I've done my SOA now would it be best to just post here or start a new thread?
Thanks

Enough17

Hi everyone

Got round to doing my SOA, still very unsure as to what my options are. Would I be considered for a debt management plan or is my debt too high? self managed or with Step Charity? Any advice would be much appreciated. Thanks

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 1200
Benefits................................ 137
Other income............................ 650
Total monthly income.................... 3587

Monthly Expense Details
Mortgage................................ 620
Secured/HP loan repayments.............. 250
Rent.................................... 440
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 50
Gas..................................... 0
Oil..................................... 50
Water rates............................. 0
Telephone (land line)................... 20
Mobile phone............................ 55
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 19
Groceries etc. ......................... 250
Clothing................................ 70
Petrol/diesel........................... 250
Road tax................................ 40
Car Insurance........................... 90
Car maintenance (including MOT)......... 35
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 250
Other child related expenses............ 60
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 23
Contents insurance...................... 0
Life assurance ......................... 65
Other insurance......................... 7
Presents (birthday, christmas etc)...... 40
Haircuts................................ 20
Entertainment........................... 30
Holiday................................. 40
Emergency fund.......................... 50
Total monthly expenses.................. 2866


Assets
Cash.................................... 0
House value (Gross)..................... 160000
Shares and bonds........................ 0
Car(s).................................. 2
Other assets............................ 40000
Total Assets............................ 200002


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 94000....(620)......5.99<
Mortgage - land................38000....(250)......1.99
Total secured & HP debts...... 132000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................2500......179.......0
credit cards x 8...............48000.....900.......0
Total unsecured debts..........50500.....1079......-


Monthly Budget Summary
Total monthly income.................... 3,587
Expenses (including HP & secured debts). 2,866
Available for debt repayments........... 721
Monthly UNsecured debt repayments....... 1,079
Amount short for making debt repayments. -358

Personal Balance Sheet Summary
Total assets (things you own)........... 200,002
Total HP & Secured debt................. -132,000
Total Unsecured debt.................... -50,500
Net Assets.............................. 17,502

dieselv2

£0 for council tax? Is this offset by CT benefit?

£250 for childcare...have you applied to see if you are able to get help for this? Obviously there 15 hours free childcare if in a registered business. Not sure if changed to 30 yet.

£240/yr in hair cuts?

When you say studying aswell as working do you get student loan? Have you applied?

Enough17

C Tax - included in the rent figure (rates where we are). We own a property and rent that out and we are renting elsewhere....
Childcare, that's just after school for 2 children for 2 hours per day x 4 days. We both work full time.
OOps the hair cut figure is definitely wrong. Ill amend below. Should only be approx 10 per month.
I don't think I do but will check this out, it's for a professional qual whilst working full time (company pay for this).
Thanks

Enough17

Updated with amended haircut figure

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 1200
Benefits................................ 137
Other income............................ 650
Total monthly income.................... 3587

Monthly Expense Details
Mortgage................................ 620
Secured/HP loan repayments.............. 250
Rent.................................... 440
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 50
Gas..................................... 0
Oil..................................... 50
Water rates............................. 0
Telephone (land line)................... 20
Mobile phone............................ 55
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 19
Groceries etc. ......................... 250
Clothing................................ 70
Petrol/diesel........................... 250
Road tax................................ 40
Car Insurance........................... 90
Car maintenance (including MOT)......... 35
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 250
Other child related expenses............ 60
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 23
Contents insurance...................... 0
Life assurance ......................... 65
Other insurance......................... 7
Presents (birthday, christmas etc)...... 40
Haircuts................................ 10
Entertainment........................... 30
Holiday................................. 40
Emergency fund.......................... 50
Total monthly expenses.................. 2856


Assets
Cash.................................... 0
House value (Gross)..................... 160000
Shares and bonds........................ 0
Car(s).................................. 2
Other assets............................ 40000
Total Assets............................ 200002


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 94000....(620)......5.99<
Mortgage - land................38000....(250)......1.99
Total secured & HP debts...... 132000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................2500......179.......0
credit cards x 8...............48000.....900.......0
Total unsecured debts..........50500.....1079......-


Monthly Budget Summary
Total monthly income.................... 3,587
Expenses (including HP & secured debts). 2,856
Available for debt repayments........... 731
Monthly UNsecured debt repayments....... 1,079
Amount short for making debt repayments. -348

Personal Balance Sheet Summary
Total assets (things you own)........... 200,002
Total HP & Secured debt................. -132,000
Total Unsecured debt.................... -50,500
Net Assets.............................. 17,502

clairebeth

Well done, it always looks so much clearer when written down. I actually think you are in a position to pay this off as you have a fairly good income, but again, I've never been in your position, so others may have more sound advice than me.

A couple of things I think you could save on:

Mobile phone: change to Sim only with somewhere like giff gaff for £10 each. Save £35 a month

Challenge yourself to spend £150 a month on groceries. Take the cash out of the bank at the start of the month and limit yourself to only that. Shop at Lidl, or if there is no Lidl, go to Aldi, even if you have to go out of your way to get there. Meal plan, meal plan, meal plan. And reduce meat. Loads of ideas on Pinterest and also Jack Monroe's blog, Cooking on a Bootstrap. Save £100 a month.

£70 a month on clothing seems a lot? £840 a year? Maybe just don't buy clothes except for kids essentials for a while and buy second hand or at Asda/Primark. Save £40 a month.

Car insurance seems really steep. Have you used a comparison site recently? And I think you have to go to Admiral's own site to get a quote for their multi car discount. Save £30 a month.

Do you definitely need two cars, as it looks like a lot of money goes towards the upkeep of them?

Does your childcare provider accept childcare vouchers? If so, you could check if you can get childcare vouchers via your employer and you would then save on tax. Save £50 a month.

Do you need Life Assurance? This is not something I am familiar with as it is included in our pensions. Others will have more sound advice on this though.

The other thing is that the interest rate on your mortgage is sky high. The obvious thing to do would have been to switch deals onto one of the current really low rates, but I'm not sure you will be able to due to having missed payments, it's definitely worth looking into though. Save £250 a month.

I hope this is vaguely helpful to you!

Enough17

Am cutting down on all the things you have mentioned. Clothes that's for 4 of us and includes school uniforms, coats and shoes for 4 of us (2 growing kids) My mortgage (main) is fixed for another 4 years. Other mortgage interest is really good at 1.99 per month. Life assurance-yes need it for mortgage. May check cover as think we have critical illness in there which bumps it up. Fuel, 90% of that is my commute to work. No childcare provider doesn't accept vouchers. Thanks Clare-Beth. Wondering if I should start a new thread as no replies in terms of whether or not I can get out of this mess. Maybe the replies will happen today? Please...someone. Have credit card payments coming up and won't be able to meet all of them, not slept thinking about it all.