Debt advice please

berryjar

Hi, I wanted advice from people who may have been in My situation. I have a young family. For various reasons I am in 38,000 debt - 3 loans +1 credit card. I have a mortgage too. I have about 35,000 equity in my house. At the moment I am paying too much back monthly on all loans so I'm thinking of remortgaging to bring my monthly payments down. Or I could sell my house ..pay off debts and remaining mortgage and have enough for a deposit on a new build with government help to buy or take out a larger mortgage. I have a very stable job at the moment with a decent salary earning 40k plus and my wife is now working too. What do you think I should do?

kazwookie

berryjar wrote: »

Hi, I wanted advice from people who may have been in My situation. I have a young family. For various reasons I am in 38,000 debt - 3 loans +1 credit card. I have a mortgage too. I have about 35,000 equity in my house. At the moment I am paying too much back monthly on all loans so I'm thinking of remortgaging to bring my monthly payments down. Or I could sell my house ..pay off debts and remaining mortgage and have enough for a deposit on a new build with government help to buy or take out a larger mortgage. I have a very stable job at the moment with a decent salary earning 40k plus and my wife is now working too. What do you think I should do?

You need to do a SOA so you can see exactly where your money is going,

If you earn £40K and your wife earns as well, the debts should be going down, so you are over spending somewhere.

Also write down in a book or similar everything you and your wife spend in cash / on cards to see what 'extra' you are spending, believe me it all adds up.

-taff

I agree with the above. I think you should look at your budget and see exactly where you are spending tis extra money because if you don't know where it's going, and you're not prepared to rein yourselves in, then even if you did remortgage to add it to that [ very bad idea by the way, turning unsecured into secured debt] then you'll be in the same place again in a couple of years.

berryjar

Thanks for the replies. The extra money got spent when my wife was ill and off work for a year, my mum was also ill abroad and I had to pay medical expenses and our boiler system packed up in the middle of last winter so all this involved having to take out an additional loan of nearly £15,000. This monthly repayment is taking up all of our spare money. We don't use our bank cards anymore at all. Everything is budgeted, no days out unless free etc.

-taff

If your wife is now working and you can service the bills then do that. If you went for a DMP or something like that you'd muck up your credit rating so wouldn't be abe to remortgage very easily anyway.
Have you pared your budget down as much as you can by checking your gas and electric pricing, moving your council tax and tv licence to monthly, cutting out any unecessaries [ not saying forever, just for a six or twelve month period while you throw some more money at the loans and CC] like SKY, cutitng down on Christmas presents etc?
I'm not trying to be funny but as you've already found out, circumstances can really change rapidly, so best to be prepared in case aything else goes wrong.

If you want help with your budget, post an SOA here.

FTBuyerGlasgow

Hi, you are in the right place, there are many others on the forum that are in the same place as you or who have come through owing just as much.

I would not remortgage to pay the debts off, you are then turning non-secured debt into secured debt.


Get an SOA done, manage your budgets and get a plan to pay it off or contact one of the free debt charities.

fatbelly

berryjar wrote: »

Hi, I wanted advice from people who may have been in My situation. I have a young family. For various reasons I am in 38,000 debt - 3 loans +1 credit card. I have a mortgage too. I have about 35,000 equity in my house. At the moment I am paying too much back monthly on all loans so I'm thinking of remortgaging to bring my monthly payments down. Or I could sell my house ..pay off debts and remaining mortgage and have enough for a deposit on a new build with government help to buy or take out a larger mortgage. I have a very stable job at the moment with a decent salary earning 40k plus and my wife is now working too. What do you think I should do?

I think you may need to look at a debt management plan, but post a statement of affairs here first.

Calculator:

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

Please format for mse.

You've got a good income. You could see if you can get a better deal on your mortgage without using it to raise money. That would make sense but may prove difficult as your credit report will tell the whole picture.

If you do have to default on the loans and cards, it's no big deal - those are non-priority debts, which is why everyone is saying do not consolidate.

Anyway, post a soa and let's have a look at it.

berryjar

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

Monthly Income Details
Monthly income after tax................ 2100
Partners monthly income after tax....... 500
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2600

Monthly Expense Details
Mortgage................................ 630
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 150
Electricity............................. 30
Gas..................................... 50
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 17
Satellite/Cable TV...................... 25
Internet Services....................... 15
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 160
Road tax................................ 40
Car Insurance........................... 80
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 10
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 5
Contents insurance...................... 5
Life assurance ......................... 4
Other insurance......................... 0
Presents (birthday, christmas etc)...... 5
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1508


Assets
Cash.................................... 0
House value (Gross)..................... 165000
Shares and bonds........................ 0
Car(s).................................. 1800
Other assets............................ 0
Total Assets............................ 166800


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 100000...(630)......2.8
Total secured & HP debts...... 100000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................8000......300.......9.8
Personsl loan..................13000.....313.......3.8
Personal loan..................13000.....300.......4.2
Personal loan..................10000.....290.......9
Total unsecured debts..........44000.....1203......-


Monthly Budget Summary
Total monthly income.................... 2,600
Expenses (including HP & secured debts). 1,508
Available for debt repayments........... 1,092
Monthly UNsecured debt repayments....... 1,203
Amount short for making debt repayments. -111

Personal Balance Sheet Summary
Total assets (things you own)........... 166,800
Total HP & Secured debt................. -100,000
Total Unsecured debt.................... -44,000
Net Assets.............................. 22,800

Grumpelstiltskin

You have 2 cars worth a total of £1800 yet you pay £40 a month road fund? What sort of cars are they.

TV licence shouldn't be £17 a month it should be less that that.

You never buy any clothes for any of the family?

Never pay to park cars anywhere?

Never have a prescription?

fatbelly

At first glance this doesn't look too bad and if you could switch a crdit card (pref 0%) with a lower minimum payment, your budget would balance.

However, I suspect that your soa is a bit optimistic. Nothing for clothing, £10 per month for car maintenance, less than £50 a week for food for 4, £60 presents for the year, no entertainment, no holiday.

If you keep accurate records for a few months you can come up with something you can live with long term and at that point you will probably decide on a debt management plan.

Grumpelstiltskin

Another thought, no Child Benefit?


Council tax paid over 10 or 12 months?