please please give some advice

jopage80

Hello everyone,
Me and my husband had our LBM just after christmas. Without going into loads of detail, we have spent most of our married life having what we wanted, when we wanted it. new cars, holidays etc. It now has to stop. We were HORRIFIED to see how much we actually owe in black and white. My husband is a worrier and is convinced that the only way out for us is via an IVA or bankruptcy.

I desperately want this to be fixable. I rally don't want to do anything that has a long term effect on our credit files as we will need to move house in a few years. Do we need to go down a formal route or can we deal with this ourselves?

I am taking control of this.I am the more methodical one out of the two of us. This is a mess but I am determined to do something about it.

This is our new budget. We followed this last month and it was fine. We just had to think about what we were spending a bit more.

I guess I am looking for reassurance that I can,, over time, sort out this mess.

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2600
Partners monthly income after tax....... 1900
Benefits................................ 82.8
Other income............................ 0
Total monthly income.................... 4582.8

Monthly Expense Details
Mortgage................................ 501
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 83
Electricity............................. 30
Gas..................................... 60
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 12
Mobile phone............................ 60
TV Licence.............................. 14
Satellite/Cable TV...................... 0
Internet Services....................... 22
Groceries etc. ......................... 250
Clothing................................ 50
Petrol/diesel........................... 200
Road tax................................ 10
Car Insurance........................... 21
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 120
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 13
Contents insurance...................... 10
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1811


Assets
Cash.................................... 12000
House value (Gross)..................... 175000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 194000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 80000....(501)......2.49
Total secured & HP debts...... 80000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
credit cards at 0%.............30000.....600.......0
credit card at 6.9%............7500......200.......0
hsbc loan me...................20000.....400.......0
hsbc loan husband..............15000.....365.......0
Total unsecured debts..........72500.....1565......-


Monthly Budget Summary
Total monthly income.................... 4,582.8
Expenses (including HP & secured debts). 1,811
Available for debt repayments........... 2,771.8
Monthly UNsecured debt repayments....... 1,565
Amount left after debt repayments....... 1,206.8

Personal Balance Sheet Summary
Total assets (things you own)........... 194,000
Total HP & Secured debt................. -80,000
Total Unsecured debt.................... -72,500
Net Assets.............................. 41,500

zippygeorgeandben

Welcome to the forums.
I'll post something more substantial in a bit but £250 a month on food for three of you? £200 on entertainment per month? That ship has sailed unfortunately. Need to live within your means.
It's so much easier though if you both tackle these debts and work through it together. Forget to being the 'methodical' one in the relationship, he's 50% responsible for the debt so has to work just as hard as you.
People will be along shortly!

jopage80

zippygeorgeandben wrote: »

Welcome to the forums.
I'll post something more substantial in a bit but £250 a month on food for three of you? £200 on entertainment per month? That ship has sailed unfortunately. Need to live within your means.
It's so much easier though if you both tackle these debts and work through it together. Forget to being the 'methodical' one in the relationship, he's 50% responsible for the debt so has to work just as hard as you.
People will be along shortly!

Hello and thanks for commenting.

Hubby is on board but her overreacts and would have us in a IVA or bankruptcy out of sheer panic. I don't believe we need to do that yet.

Upsidedown_Bear

Hello and welcome to MSE :wave:

Do have a read of this. It's one of the most thanked posts on The Debt Free board and rightly so. Totally inspiring :T
11 years a slave

Others will be along soon to help

angelpye

Hi! Have you really got £1200 left at end of the month? If so you need to start an emergency pot and then use the rest to pay down the debt - use the snowball calculator to work out how best to tackle. If not then a spending diary is needed. Well done on facing the debt and setting a budget, as time goes on you may find you want to cut budgets further but its an excellent start!

zippygeorgeandben

As angelpye says - well done on facing the debt. We can advise along the way

jopage80

I guess the main question I have is do we need to go down a formal debt management route? We are not behind on payments and despite our debts being high, we are able to service them at present.

moneyfacts

You can't go bankrupt as you have more assets than debts? They would sell your house and just pay the creditors off.

It looks like you and your husband just need to pay back what you took. More importantly however; you need an absolute change in lifestyle and how you see money. Your incomes are very good and therefore you have simply lived beyond your means.

We earn almost exactly the same and save £3,300 each month. Our mortgage is £600. This gives you an idea of how frugal you can be.

January2015

jopage80 wrote: »

I guess the main question I have is do we need to go down a formal debt management route? We are not behind on payments and despite our debts being high, we are able to service them at present.

You appear to have quite a bit left after expenditure to repay towards your debt.

Put your debts in the snowballing calculator and work out a palan to attack the debts.

If you can do this and stick to it you will not need to go down a debt management route. You both need to be strong and work together to pay down your debts. It can be done and well done to you both for recognising your problem whilst it is still at a level you can do something about before you need to seek any debt management advice.

Good luck. Perhaps open a diary in the diary section of the forum and that will help with the motivation to keep at this.:j

LabRatty

Hi,
From your SOA you have £12K in cash assets. I would pay £7.5K of this to the credit card at 6.9% and clear it.

This leaves you £4.5K as a healthy emergency fund and also frees up another $200 pcm to pay towards the other debts/loans.

What are the interest rates on the loans, and how long do they have left to run?

All the best,
LR

jopage80

Thanks for all the post folks. I will respond to them later on when I have more time. This morning I feel really sort of lonely. I can't really describe it but I feel like everything is ruined. I know the debt is relative to income but seen it on paper makes our situation look totally insurmountable. I guess I'm just looking for some reassurance that we will be able to pay this off without risking a home or having to go bankrupt or having to go into IVa or DMP