Trying to avert disaster

becks818

Thanks for all of the supportive comments. We are going to sit down and sort the SOA over the next day or two

I feel better already just knowing that we are getting a plan together. I have spent a lot of time looking at the diaries of others and have now seen others with similar or higher debts than mine. I think it’s just that nobody I know owes such a large sum so it feels quite lonely

JCS1

beany_bot wrote: »

You have equity of 140K in your home and 65K of debt.

I think you know what you have to do ...

It's either that or bankruptcy and it's taken anyway.

They would not be allowed to go bankrupt as assets are more than liabilities.

EssexHebridean

beany_bot wrote: »

You have equity of 140K in your home and 65K of debt.

I think you know what you have to do ...

It's either that or bankruptcy and it's taken anyway.

No no and absolutely no. That kind of knee jerk reaction has no place here - we've not even seen the OP's SOA yet! PLEASE do not encourage people to turn unsecured debt into secured - effectively or literally - without all the facts in place. It's also extremely cruel to "threaten" them with bankruptcy when they are already clearly terrified by their situation already - that sort of reply can be the difference between someone following through on a lightbulb moment and burying their head back in the sand again in sheer fear.

EssexHebridean

Well done for facing the situation head on Becks - and you have at least already done the most scary thing - writing down that figure! You definitely aren't the highest debt figure we've seen on here either!

Get that SOA sorted - remember to make it open and accurate, it needs to reflect how your spending is right now, not what you think you should be spending or what you imagine we "expect" to see - an aspirational SOA helps no-one!

The most important thing in your original post here is the fact that you are both committed to dealing with this situation - that's the most powerful tool you have!

sourcrates

Hi,


Every now and again someone comes along who is in your position, earns good money, but still carries large amounts of debt.

You are extreamly lucky in many respects, but there is only one sensible thing you can do here to stem the tide, and that is to stop using credit to fund your lifestyle, draw a line in the sand so to speak, overpay as much as you can on the cards, and try to stick to a budget that is within your means.


This should be your Lightbulb moment, you don`t really need debt advice, better budgeting is the key to cracking this, you said yourself youve made some bad life choices in the past, start making good ones.

You are at a point where this is fixable, but, if you were to slump another 30/40k in debt, it may not be so easily fixed, so best to act now before it gets out of control.

Potbellypig

EssexHebridean wrote: »

No no and absolutely no. That kind of knee jerk reaction has no place here - we've not even seen the OP's SOA yet! PLEASE do not encourage people to turn unsecured debt into secured - effectively or literally - without all the facts in place. It's also extremely cruel to "threaten" them with bankruptcy when they are already clearly terrified by their situation already - that sort of reply can be the difference between someone following through on a lightbulb moment and burying their head back in the sand again in sheer fear.

Ignoring the bankruptcy bit, which is daft, the re-mortgaging isn't such a wacky suggestion. I'm aware the status quo on here is to not turn your unsecured debt into secured, and generally that advice is a good move. However, it can work.

OP - The first step isn't even looking at your debt and how you can tackle it. The first step is a SOA and a spending diary so that the group can help you going forward.

Pip_Boy_111

Hi and welcome

Your situation resonated with me as being similar to my own (decent income, spendy lifestyle in 20's, high level of debt but not in desperation mode) and thought i would post to offer support and some happenings for you to compare. I'm by no means in any position to offer advice......but i'm gonna :rotfl:

Disclaimer: I'm not presuming to know what you spend your money on or accusing. This is just our story for comparison. Hope it helps in some way.
When i realised our situation we were very much like you. We were bringing in £3k a month and had over £30k in debt. As a ratio it's similar enough for this post. I think one of the first big things we did was sit down and work through what it was we owed EXACTLY and then work out a budget from there, keeping a spending diary and tracking every penny. Knowledge is power here.
The next major step was a mental one. We realised that what we had done was build up debt when we were on a low income, but then failed to do anything about it when we managed to increase our income. Essentially we carried on as we had and used the extra income to buy stuff. Without actually having the conscious thought, we realised we were ignoring the debt to fund a lifestyle that we thought we should have. We were on a good income now so we had to show everyone we were. Once we realised this, a door opened. In reality what we needed to do was stop giving 2 hoots about how others perceived us to be doing financially (and actually no one really cares, it's just insecurity of the human mind) and just live a life that made us happy AND allowed us to sort out our debts before it became too late.
In other words just because we EARN £3k a month, doesn't mean we have to SPEND £3k a month. In reality we didn't need to spend this money. It's not like we're unhappy now. In fact, I would say we're happier now. Happier because we can see an end to the constant debt bills and interest payments. Happier because we know what we can live off. Happier because in less than 3 years (hopefully) we will have rid ourselves of debt and will have the spare cash to save for the future, have fun etc. without ever needing to walk the path of dangerous levels of debt again.
The other mind set change was to see this a challenge rather than a problem. I'm VERY competitive and seeing it as a challenge/game to reduce the numbers each month appeals to my (over??) competitive nature. Might this help?
In our case no one knows the level of debt we have. Certain people are aware we're "paying some stuff off", but no one knows how much. And i'm happy with this. We have a plan. We have the means. We are not in serious trouble, so no one needs to know the figures except us. I would say though, that is us. If you (or anyone) is struggling, talk to someone you trust. When we politely decline certain spendy events (because it's not budgeted for AND because sometimes I just don't want to :rotfl:) most people aren't at all put out. Some are and think I'm being tight, but I've been called worse
Our sitations aren't too dissimilar (debt:income) and i hope our story helps in some way (or helps you sleep, either way, YAY I helped :rotfl:).
So TLDR: Track every penny. Budget. Change mindset. Remember, knowledge is power.

I'm sure once you post a full SOA, the good people here will be along to offer much more practical advice. Seriously, you're in the right place for good, honest advice. This place literally changed our lives.
Good Luck. :T

enthusiasticsaver

beany_bot wrote: »

You have equity of 140K in your home and 65K of debt.

I think you know what you have to do ...

It's either that or bankruptcy and it's taken anyway.

That is very bad advice.

becks818

So here goes....

This is our first SOA and I am sure we will need to change/update it.

It was actually a useful exercise as it made us really look at our spending. I should add that the entertainment and clothes budget are estimations as we have never had any restraint in these areas.

It also highlighted that we are able to do this with a little effort and determination.

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................ 3840
Partners monthly income after tax....... 1225
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 5065

Monthly Expense Details
Mortgage................................ 509
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 125
Electricity............................. 66
Gas..................................... 90
Oil..................................... 0
Water rates............................. 34
Telephone (land line)................... 20
Mobile phone............................ 50
TV Licence.............................. 12
Satellite/Cable TV...................... 27
Internet Services....................... 15
Groceries etc. ......................... 400
Clothing................................ 50
Petrol/diesel........................... 200
Road tax................................ 5
Car Insurance........................... 82
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 120
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 24
Pet insurance/vet bills................. 0
Buildings insurance..................... 25
Contents insurance...................... 12
Life assurance ......................... 41
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2117


Assets
Cash.................................... 0
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 0
Total Assets............................ 208000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 60000....(509)......1.89
Total secured & HP debts...... 60000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
loan 1.........................13000.....275.......7.9
loan 2.........................5000......90........3.3
CC low rate....................12000.....200.......6.9
Aqua...........................800.......0.........16
Very...........................1500......105.......0
wife barclaycard...............5400......195.......18.9
CC ( another bad one)..........4400......120.......20.2
CC card ( bad one).............7000......251.......19.9
CC 0%..........................15000.....150.......0
Total unsecured debts..........64100.....1386......-


Monthly Budget Summary
Total monthly income.................... 5,065
Expenses (including HP & secured debts). 2,117
Available for debt repayments........... 2,948
Monthly UNsecured debt repayments....... 1,386
Amount left after debt repayments....... 1,562

Personal Balance Sheet Summary
Total assets (things you own)........... 208,000
Total HP & Secured debt................. -60,000
Total Unsecured debt.................... -64,100
Net Assets.............................. 83,900

elsien

Don't forget that emergency fund - you do need something in there to avoid hitting credit with the next unexpected expense.