will be able to fix this?

emmamc77

Hello everyone,

Basically after a few really awful years of IVF and other catastrophes, we have found in self in a large amount of debt (65k). Me and my husband are now both back working full time and we feel that this is our time to sort out this mess, before it robs of our future., I will do a proper SOA tomorrow when I am more awake! Here are our basic figures -

We take home £4,300 per month between us

our mortgage, all household bills and direct debits ( excl debt payments) comes to £1500

our minimum debt payments are around £1300

We need around £600 a month to cover food and fuel and childcare

We would like to save £150 as we have no emergency fud

This means that we have about £750 to add to our debt repayments. This is doable now that we are both working full time. This means that we can potentially pay 2k a month off the debts.

The debts are spread across credit cards and a loan, some at 0% and some at higher rates - we have learnt about how to do the snowball method and we are going to do this to clear the debt asap.

We have £75k equity in our house, however we don't want to use that.

Neither of us want to have to enter in to an DMP/IVA or bankruptcy - please tell us that this won't happen if we can afford to pay?? We just want to pay it off and then get on with the next stage of our lives. We don't want to trash our credit files.

January2015

Post a full SOA and the lovely folk on this forum will be able to give you some informed advice.

Don't worry - no-one would recommend you use any equity from your property.

Take a deep breath and have a good night's sleep. Come back tomorrow. Yes this is fixable.

enthusiasticsaver

Good news is you have a reasonably high income and you can easily cover minimum debt repayments so it it is fixable.

We do need to see a full soa though so post that. I will put the link up for you.

Don't take out any debt consolidation loans or use your home equity. If you can get most of it on to 0% debt you could get it paid off within 3 years.

enthusiasticsaver

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

emmamc77

So here it is. This is quite new to us as we have only just had 2 full time wages coming in. Looking at this makes me think that we can do this without anything too aggressive. I am TERRIFIED of having to go down the DMP/IVA route and I will do ANYTHING to avoid it. Please tell me that we can fix this mess ourselves.

I am thinking that even if the 0% cards start to incurr interest, we should still be able to service it by snowballing.

Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2100
Partners monthly income after tax....... 2120
Benefits................................ 82
Other income............................ 0
Total monthly income.................... 4302

Monthly Expense Details
Mortgage................................ 450
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 20
Gas..................................... 80
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 12.99
Mobile phone............................ 50
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 300
Clothing................................ 10
Petrol/diesel........................... 160
Road tax................................ 15
Car Insurance........................... 50
Car maintenance (including MOT)......... 20
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 140
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 28
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1542.99


Assets
Cash.................................... 0
House value (Gross)..................... 145000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 152000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 68000....(450)......0
Total secured & HP debts...... 68000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
cc1............................15000.....300.......0
cc2............................8500......180.......0
loan...........................20000.....489.......0
lloyds tsb.....................0.........0.........0
halifax .......................4400......50........0
creation card..................3000......88........27.9
Asda CC........................4500......100.......19.9
dh CC..........................10000.....200.......0
Total unsecured debts..........65400.....1407......-


Monthly Budget Summary
Total monthly income.................... 4,302
Expenses (including HP & secured debts). 1,542.99
Available for debt repayments........... 2,759.01
Monthly UNsecured debt repayments....... 1,407
Amount left after debt repayments....... 1,352.01

Personal Balance Sheet Summary
Total assets (things you own)........... 152,000
Total HP & Secured debt................. -68,000
Total Unsecured debt.................... -65,400
Net Assets.............................. 18,600

worriedDan

Hi, I am not really in a position to offer money advice as my situation is similar, however I wish you well.

Looking at your SOA and surplus, I would say that you can beat this. Other will give you better advice than me though

armchairexpert

Hi! Well done, and welcome. Firstly, don't panic. You've still got a bunch of options here, and I think it's eminently fixable just looking at your surplus, and how many cards are still on 0% - you don't want to rely on them staying there, but you've got some room to move for now IF you start getting this fixed.

I'm not your girl for a detailed analysis of the SOA, but a few things jump out:

1) You can get groceries down quite a bit from 300, especially assuming your child is young. I reckon you could shave 100 off.
2) You need an emergency fund and something for entertainment. It's not a sprint, it's a marathon
3) Your clothes, presents and haircuts are very low, which is great BUT I wonder if it's a teensy bit aspirational? You obviously don't really have 1300 left over a month, or you wouldn't have 7 different forms of credit. Be careful that your SOA doesn't go so far into "what you'd like to be true" that it fails to be realistic. If, of course, you have a friend who cuts your hair, a talent for making your own gifts out of twine and good intentions, and a passion for charity shops, feel free to correct me. But that's VERY low as it is.

Hit the Creation and Asda cards first - they're also the smallest balances, which is handy! - but also have a look at what the APR of the others will be when the 0% period runs out, so you've got a plan for the next ones.

Good luck!

emmamc77

I have had a really frantic day worrying about this. I have been on the stepchange debt remedy tool and they just reccomend a monthly payment plan as we can afford the minimums and we have a surplus.

I know that the cards may not always be at 0% but I still feel that we can service by this debt by throwing a large overpayment at it. I would much rather do this than go down DMP route and trash my credit rating for 6 years.

Is this doable?

National_Debtline

emmamc77 wrote: »

I have had a really frantic day worrying about this. I have been on the stepchange debt remedy tool and they just reccomend a monthly payment plan as we can afford the minimums and we have a surplus.

I know that the cards may not always be at 0% but I still feel that we can service by this debt by throwing a large overpayment at it. I would much rather do this than go down DMP route and trash my credit rating for 6 years.

Is this doable?

Hi Emma

The DMP and insolvency routes you’ve mentioned are for people who can’t afford the minimum contractual payments on their debts, as the debt remedy tool confirmed. You aren’t in that position at all so it isn’t something you need to worry about.

Make sure the outgoings are realistic and sustainable on your SOA, so that you can stick to it in the long term, and you have a plan to clear your debts.

James
@natdebtline

angelpye

Hi Emma, have you tried using the snowball calculator to work out a payment schedule? It will ask for all your APRs including the ones your 0% deals will turn into. It will work out the most efficient way of paying down your debts i.e. how much to throw at what and when. It will also give you a debt free date (DFD) which is a great focus to have. Just make sure you are realistic with yourselves - I am on my third debt free journey and I think some of that is down to ignoring why I get into debt and also being too hardcore on myself - is your car maintenance budget enough? You need to allow money for 'fun' and to put money aside for emergencies so you are not tempted to put things onto credit when the inevitable scenario of the washing machine or boiler breaks down.

Good luck, you can do this!

Fireflyaway

You can manage this. Might be worth speaking to your creditors to see if you can agree on a set amount each month ( smallest amount they will accept) and then concentrate on one debt at a time check out Dave Ramsey snowball method. That might show on file that you have an arrangement in place though. Even if you don't decide to follow the method I would really recommended watching some debt free screams on YouTube its really inspirational. Why not do your emergency fund in one hit? Then its done.