Serious debt and dont know where to turn

Andy8127

Hi folks,


Basically I've got a combined debt of around 23k in the form of 2 overdrafts, 2 credit cards and a Tesco loan with an APR of around 12%. The monthly payments for all of these come to around £380 a month of which about £90 of that is just interest
I've always had some level of debt for as long as I can remember but its got worse in the last two years since I split from my wife and had out move out of the house we owned in joint names. We have 3 young boys, the eldest being severely disabled so money was tight even before moving out. Ive had to rent a house big enough so that I can have the boys round whenever they want and also to accommodate my disabled son. I always make the monthly payments on everything, but recently I started up a monthly planner to see exactly how much i'm spending and where, and it showed that I was spending more than I bring in.
I've tried going to the bank for a consolidation loan but they don't want to know, I've tried credit cards to shift the debt onto interest free and again they're not interested.....im basically stuck and not sure what else to do. Im trying to cut back on spending but I cant see it making a significant dent on my problems.
Sorry for waffling on but its taken a while for me to pluck up the courage to write this, im sure no-one likes to admit they're in trouble financially, and then sharing it with others is harder still, but im hoping someone on here can help point me in the right direction.


thanks for listening

pbsmiles

Well you have admitted there is a problem which is the start so well done on that. My recommendation is ring Stepchange and see what your options are. they are a debt charity and will ease your pain believe me. I separated from my husband with a interest only mortgage of 122k and 90k of load and credit card debt nearly 10 years ago. I am still in my house, although selling it currently to pay off the remaining 38k of debt. There is a solution believe me but you need to understand how you can be helped. Its hard to admit you have an issue but the relief when you know you can do something about it is amazing. Good luck. xx Paula.

Puddylove

Hi
I'm not an expert on debt - but it seems to me that there are a few points I could suggest.
1. Contact Stepchange or one of the free debt charities - they will help you.
2. Post a Statement of affairs (SOA) - someone will help you out with a link. A SOA does two things - it helps you to understand your financial position, and allows others to make suggestions to help.

National_Debtline

EDIT - crossposted with Puddylove


Hi Andy

Welcome to the forum.

Working out your monthly finances was a good place to start. If you complete this SOA (statement of Affairs) template you can post your figures in the forum here. That way you can ask the forum regulars to go through your figures and offer suggestions of where you may be able to budget more efficiently.

www.stoozing.com/calculator/soa.php

If it looks like you still can’t afford your monthly debt payments, and taking out more credit isn’t an option, you may need to look at options such as a debt management plan (DMP). A DMP is where you pay an affordable monthly payment to an organisation who then negotiates with creditors on your behalf. You would default on your debts but get the interest and charges stopped. Although it would negatively impact your credit file for 6 years you could focus on clearing the balance of your debts at an affordable rate. If you decide on the DMP route make sure you use a free provider such as Stepchange, rather than pay a fee.

James
@natdebtline

EssexHebridean

Hi Andy - god advice already given above there but didn;t want to read and run.

Get that SOA completed - do it as accurately as you can but it *must* reflect things as they are right now - no good doing it as you think we want to see - if you reckon you're budgeting for stuff but clearly you're not we'll know! "Format for MSE" and post in here and we can go through it - and it's a rare one where we can't point the poster to savings, trust me!

Once you've done that, you'll have a solid monthly budget to work from, and you'll know where your finances really stand - and both of those things are key to moving forwards.

Andy8127

Thanks for the help guys.....I think ive done this right and tried to put in as much info as I could think of.....if I can think of anything else i'll put it down


thanks again, the help is very much appreciated






Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 3
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1675
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1675
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 201
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 83
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 23
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 13
Satellite/Cable TV...................... 39
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 20
Petrol/diesel........................... 200
Road tax................................ 16
Car Insurance........................... 35
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 35
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 14
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 25
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1514

Assets
Cash.................................... 500
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 13000....(201)......11.5
Total secured & HP debts...... 13000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
CREDIT CARD....................4000......82........0
CREDIT CARD....................2820......63........0
JACAMO.........................230.......22........0
OVERDRAFT......................2300......35........0
OVERDRAFT......................1000......15........0
Total unsecured debts..........10350.....217.......-

Monthly Budget Summary
Total monthly income.................... 1,675
Expenses (including HP & secured debts). 1,514
Available for debt repayments........... 161
Monthly UNsecured debt repayments....... 217
Amount short for making debt repayments. -56
Personal Balance Sheet Summary
Total assets (things you own)........... 1,500
Total HP & Secured debt................. -13,000
Total Unsecured debt.................... -10,350
Net Assets.............................. -21,850

MrsLWW

Hi Andy,

Well done, big step! There are a couple of options you can do. You can contact you debtors and negotiate with them on an individual basis - i.e. tell them that you are having difficulty paying and see what they say - they might default you but the might freeze the interest also. The other possible alternative is to contact a debt management company or someone like Citizens Advice who could help you through the process.

The only other way to tackle it, if you're in for the long haul would be tackling the smallest debt and then snowballing (i.e. once you've paid it off, use the money you were putting towards the smallest debt towards the next debt).

I'll mark some comments in red next to you SOA:

Andy8127 wrote: »

Thanks for the help guys.....I think ive done this right and tried to put in as much info as I could think of.....if I can think of anything else i'll put it down


thanks again, the help is very much appreciated






Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 3
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1675 Do you have any ability to increase your earning - overtime or a second job?
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1675
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 201
Rent.................................... 500How long is left on your lease? And is there any possibilty of renting somewhere cheaper?
Management charge (leasehold property).. 0
Council tax............................. 83Make sure you're getting a single person discount
Electricity............................. 30Double check you're on the cheapest tarrif
Gas..................................... 30as above
Oil..................................... 0
Water rates............................. 23
Telephone (land line)................... 0
Mobile phone............................ 25Again check you're on the cheapest tarrif, when it comes up for your contract change to sim only
TV Licence.............................. 13
Satellite/Cable TV...................... 39Do you absolutely need this? How far along are you in the contract?
Internet Services....................... 0
Groceries etc. ......................... 200Make sure you're being as canny as you can - farmfoods is great for deals, Also you an sign up for vouchers which get e-mailed to you every month
Clothing................................ 20Can you forgo this for a few months
Petrol/diesel........................... 200
Road tax................................ 16
Car Insurance........................... 35
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 35
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 14
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10Any friends who could cut this for you?
Entertainment........................... 25
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1514

Assets
Cash.................................... 500
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 13000....(201)......11.5
Total secured & HP debts...... 13000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
CREDIT CARD....................4000......82........0
CREDIT CARD....................2820......63........0
JACAMO.........................230.......22........0
OVERDRAFT......................2300......35........0Do you get charged for these overdrafts? If so, disregard what I say below and go to a debt management company
OVERDRAFT......................1000......15........0
Total unsecured debts..........10350.....217.......-

Monthly Budget Summary
Total monthly income.................... 1,675
Expenses (including HP & secured debts). 1,514
Available for debt repayments........... 161
Monthly UNsecured debt repayments....... 217
Amount short for making debt repayments. -56 Between you cable, clothing allowance and haircuts (if you can do without) you would have an additional £69 (if there is anything else you could do above even better). That's an additional £13/month you could put towards the Jackamo account - it'd be paid off in 7 months, then you would have £35 a month to put towards another debt and once you pay that off put the £35 and whatever you are paying to that debt to the next debt. It is long haul, but doable, if you're not getting charges added to your debts
Personal Balance Sheet Summary
Total assets (things you own)........... 1,500
Total HP & Secured debt................. -13,000
Total Unsecured debt.................... -10,350
Net Assets.............................. -21,850

Again, well done on your lightbulb moment and best of luck, you're not alone:).

HTH

EssexHebridean

OK let's take a look - comments in red as usual...

Andy8127 wrote: »

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 3
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1675
Partners monthly income after tax....... 0
Benefits................................ 0 No child benefit?
Other income............................ 0
Total monthly income.................... 1675
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 201
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 83 Single person discount applied to this? Do you pay over 10 months or 12? 12 can make budgeting easier.
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 23
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 13 12.12 - sorry, I know this seems picky but rounding up/down isn't really helpful.
Satellite/Cable TV...................... 39 Is this including internet & landline?
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 20
Petrol/diesel........................... 200 Any way of reducing this? Have a read of Martin's driving economically guide, and consider where you may be able to walk rather than using the car.
Road tax................................ 16 Do you actually pay this monthly? It costs most to do so, so would be ideal to put money aside and switch to paying 6 monthly or anually if possible. If not you need to be putting money in a separate account so it's there when needed.
Car Insurance........................... 35
Car maintenance (including MOT)......... 15 This seems incredibly low bearing in mind you're clearly doing a fairly high mileage. I'll be honest and say that I can hardly see this covering an annual service, let alone MoT test, depreciative items etc.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 35
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 14
Buildings insurance..................... 0
Contents insurance...................... 0 You MUST have this. What happens if you get home tonight and find you've lost everything in a fire? Sorry to be brutal but get this one sorted - today.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 You don't buy presents for the children even?
Haircuts................................ 10
Entertainment........................... 25
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1514

Assets
Cash.................................... 500
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 13000....(201)......11.5
Total secured & HP debts...... 13000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
CREDIT CARD....................4000......82........0
CREDIT CARD....................2820......63........0
JACAMO.........................230.......22........0
OVERDRAFT......................2300......35........0
OVERDRAFT......................1000......15........0
Total unsecured debts..........10350.....217.......-

Monthly Budget Summary
Total monthly income.................... 1,675
Expenses (including HP & secured debts). 1,514
Available for debt repayments........... 161
Monthly UNsecured debt repayments....... 217
Amount short for making debt repayments. -56
Personal Balance Sheet Summary
Total assets (things you own)........... 1,500
Total HP & Secured debt................. -13,000
Total Unsecured debt.................... -10,350
Net Assets.............................. -21,850

I think key to this is that you need to look at increasing your earnings somehow. On your level of earnings, and with 3 children to think about, you should definitely be getting child benefit and I'm guessing some other benefits too - have you checked you're getting everything you're entitled to?

There are small savings you can make - but they are only small - and currently the figures simply don't add up. It may be that a DMP might be a good option for you but I'll let one of the experts in that field tell you more about that.

For reference, I've deliberately not questioned the budget for clothing and haircusts as frankly, with 3 kids as well as yourself, I'm not convinced you could get this much lower. If the kids are all boys then investing in some hair clippers to do them and yourself might be an option, but clothes I'm guessing are already essentials only.

Andy8127

Again thanks for the replies.... in response to the red comments above..


Income - This is a set monthly wage, there is strictly no overtime or prospect of earning extra. In the last 18 months we've had 110 redundancies so money is extremely tight.


Benefits - My partner gets all the benefits going, especially the higher rate disability benefit and motability car for my disabled son. As far as benefits for myself goes, i'm unsure what I would be able to claim but I will be going to the citizens advice to check.


Rent - I will be looking to reduce this as im only in a month by month contract now. I even looked into the possibility of moving into a static caravan on a residential caravan site as growing up I was used to this but theres nothing round here so far


Council Tax - this is with single occupancy but on the ten month plan, which I will be changing to the twelve month plan next month when it becomes abvailable


Electric and gas - Only recently changed to this tariff which was the cheapest I could find at the time. The house has a water tank for the sinks and bath, but a boiler for the heating so not very economical.


Satellite TV - I'm in a contract with sky and get my landline, broadband, sky TV and line rental all for £39 at the moment


Groceries - I used to be a bit of a Tesco snob but now do nearly all my shopping in Aldi and its really making a difference, and the food is great to boot ....still working on reducing this even further though doing things like cooking in bulk and freezing


Clothing - Very rare I by new clothes, and for the kids I try to use the local sell and seek sites on ebay


Diesel - I have a 20 mile round trip to work 5 days a week, and the same to get to see my kids. Could possibly bring this down a bit


Road Tax - I had to buy a car in November as my ex partner passed her test and so got to keep the motability car, which is perfectly fine as she has to be the full time carer for our son. So forking out for insurance and tax at the same time wasn't possible. I payed the insurance in full and did the tax over 12 months


Car Maintenance - Probably very conservative with this amount but its what I've been spending roughly every month since I bought it.


Presents - Wasn't sure if this meant each month or average over the year.... averaged its probably £20 a month


Haircuts - I have mine done once a month and usually do one of the boys as well, however my disabled son will not let anyone touch his hair so I have to shave it, and even then he screams the place down




Probably should also mention the boys don't live with me, but I do see them often and have them every other weekend and every Wednesday night.
When I moved out of the joint house I took literally nothing and had to start again from scratch, I even took on all the debt we had as I already felt guilty about ending the relationship so I wanted to make sure she would be ok, especially with having to look after all 3 boys and the struggles that brings especially with my eldest who needs full time care.


I think that's everything so far.....hard to write but its strangely nice to get it out in the open.

[Deleted User]

https://www.youtube.com/watch?v=IMxciOsAoPY

Puddylove

Hi again
Is there no way you can increase your earnings with a second part time job with a different employer?
I work a FT job and then PT contracts - it's doable.