Not sure what to do

IgglePiggle03

Well, we've got ourselves into a right financial mess and have got to the point where we're not sure what to do next. We have 2 young children (4 & 2), I work part-time and my dh works full time in sales. It is a commission based job so our income varies a great deal depending on how good a month hes had but the bad ones have helped push us into the black hole we find ourselves in now.

We moved house 2 years ago, paying off a chunk of our debt (but not all) and took on a bigger mortgage which in hindsight we should never have done but we wanted a better house, to clear some debt and to make a fresh start. Its exactly 2 years down the line and although we've never missed our mortgage or loan payments, last month for the first time I couldn't make all the credit card payments and had to do some ringing around.

My part-time job is a few hours a week which i mainly do from home and fit in around my childrens school/preschool runs. I have been selling off old baby stuff to make some money (and clear some room), changed over our utility providers etc, claimed bank charges & mortgage exit fees, used quidco for as much as possible, do on-line surveys etc as well as running the house & caring for the children during the day. DH takes over the childcare once he gets home but thats often not until 7pm when hes started at 8.30am. Its a case of if a customers around theres a sale to be had so he can't afford to miss it.

If its been a bad month then any cash i make will be spent on diesel (we run 2 cars but trying to downgrade mine to get rid of the car loan) or top up food shops but i'm just so so sick of struggling all the time. We just never have any spare money. My mum & dad paid for ballet lessons for my daughter for her birthday as there was just no way we could have afforded it. The frustrating thing is my dh earns a good wage overall but our debts are crippling us.

Anyhow feel slightly better for typing that so going to try to do my SOA.

Income (PM)

DH £1,800 - £2,900
Me £150 - £200
CB £120
TC £45
Sales £75

Total £2,190 (min) - £3,345


Outgoings

Mortgage £1069 (currently owe £182,000 - house worth about £230,000)

Loan 1 £167 (11.9% still owing £8,356)
Loan 2 £151 (8.9% still owing £7,090)
Car Loan £124 (8.9% still owing £4,400) in process of selling car, will
raise enough to pay it off and buy another)

TOTAL LOANS PM £442

CC 1 £42 (£1,800 o/s 16.9% can't get any lower)
CC2 £45 (£2,000 o/s 16.9% can't get any lower)
CC3 £75 (£3,500 o/s 24.9% they won't reduce % & i don't have
anywhere to transfer it)
CC4 £70 (£2,700 o/s 16.9% can't get any lower)
CC5 £85 (£1,750 o/s 5.9% for life)
CC6 £34 (£1,490 o/s 5.9% for life)
CC7 £113 (0% until June08)
CC8 £47 (£2,100 o/s 5.9% for life)

TOTAL CCs PM = £512


Talk Talk £20 recently changed, incls rental, b/band & reduced calls
Life Assur £29.49 to cover mortgage
TV licence £11.67
dh mobile £25 can't change til jan
me mobile £18 can't change til jan
B&C insur £12 did thro quidco so actual cost was £40 for year!
Council tax £113
water £40 can't get it any lower as wouldn't cover usage
electric £28.50 changed a few months ago thro quidco
gas £30 as above
car insur dh £13.73 did thro quidco
car insur me £15 ish Paid up front last time so est amount, due jan08
contact lens £24 tried to get cheaper but i need aftercare from optician
which would cost lot extra otherwise
road tax £ don't make any provisions for at the moment!
life insur £13 if i don't claim they will refund all prems at end of term
food £160
diesel £130

TOTAL PM = £670

TOTAL FOR MONTH = £2,693

I know we're obviously spending more than we earn if its a bad month but as i said i do anything i can to bring in some extra cash during the month and the amounts vary. Obviously the living beyond our earnings is whats helped get us where we are now.

we don't have any provisions for anything else but if dh has a good month the money is used for road tax, birthdays & xmas as and when. I save up vouchers, coupons etc as well.

Something we have been thinking about is selling up, which will clear all but one loan, then moving into rented for a while in order to get some savings together to buy agan. It goes against everything i've ever thought, i.e dead money but the thing is our mortgage is interest only so nothings coming off that either! we have of course made some money in the house but the way the housing markets going at the moment who knows whats going to happen. One problem we have is that we are tied in to next November with a redemption penalty of £10,000 but realistically i really don't know if we will get that far and i don't want to have the house taken off us.

Can't believe how much i've written but its a relief to unburden myself i must admit. Although me & dh are in this together it has caused a lot of stress and tension and i'm also worried what the children pick up on. They would never go without & luckily my parents & dh's mum help us where they can but they've not loaded & i feel so ashamed that we're in this predicament.

Anyhow thanks for getting this far and any ideas would be greatly received.

IP

Scarlett.1974

Hi there IP and welcome to MSE

You've made the first, very brave, step of facing up to your situation and getting it all written down in black and white. You've also done already a lot of things that would be advised, such as changing utilties etc... so big well done there.

I would very strongly recommend you contact one of the FREE debt charities, such as Payplan or CCCS for advice on your debts. They WILL be able to help I promise The might suggest an DMP or maybe an IVA, but they're the experts and they will go through everything with you. They are on your side and their only concern is doing and advising what's best for you.

One quick question - are any of your loans secured?

chevalier

My comments are in blue. My part-time job is a few hours a week which i mainly do from home and fit in around my childrens school/preschool runs. Is this during the day then? Does this mean you could get an evening job after the children have gone to bed? I know that this is not ideal with the hours your OH is working, but needs must for say the next 6 months.

I have been selling off old baby stuff to make some money (and clear some room), changed over our utility providers etc, claimed bank charges & mortgage exit fees, used quidco for as much as possible, do on-line surveys etc as well as running the house & caring for the children during the day. Well done on all of this. Have you also thought about signing up to do mystery shopping? There is a thread about this on this forum.

DH takes over the childcare once he gets home but thats often not until 7pm when hes started at 8.30am. Its a case of if a customers around theres a sale to be had so he can't afford to miss it. Has he thought about changing jobs so he gets a salaried one? Then you would know for definite how much you could budget on.

Anyhow feel slightly better for typing that so going to try to do my SOA.

Income (PM)

DH £1,800 - £2,900can he do surveys and clicks as well as you?
Me £150 - £200as above ref getting an evening job.
CB £120
TC £45Is this correct or is it paying back arrears
Sales £75

Total £2,190 (min) - £3,345


Outgoings

Mortgage £1069 (currently owe £182,000 - house worth about £230,000)

Loan 1 £167 (11.9% still owing £8,356)can you overpay on any of these if the opportunity arose?
Loan 2 £151 (8.9% still owing £7,090)
Car Loan £124 (8.9% still owing £4,400) in process of selling car, will
raise enough to pay it off and buy another)Have you asked permission of the loan provider about selling the car. Some car loan providers have this in their terms and conditions.

TOTAL LOANS PM £442

CC 1 £42 (£1,800 o/s 16.9% can't get any lower)
CC2 £45 (£2,000 o/s 16.9% can't get any lower)
CC3 £75 (£3,500 o/s 24.9% they won't reduce % & i don't have
anywhere to transfer it)
CC4 £70 (£2,700 o/s 16.9% can't get any lower)
CC5 £85 (£1,750 o/s 5.9% for life)
CC6 £34 (£1,490 o/s 5.9% for life)
CC7 £113 (0% until June08)
CC8 £47 (£2,100 o/s 5.9% for life)
Is there any room on any of these cards to balance transfer the 3.5k that is at 24.9%? As this would save you a lot on interest. Also is the £113 you are paying off CC7 just the minimum?
TOTAL CCs PM = £512


Talk Talk £20 recently changed, incls rental, b/band & reduced calls
Life Assur £29.49 to cover mortgagewas this take out with the mortgage provider? If so did they make it seem as if you had to take out their product to cover the mortgage? If so this is misrepresentation as you can take out assurance to cover the mortgage from anyone. So you maybe can get this refunded, and also find a cheaper provider. There is a good article by martin:money: on the main site about this.
TV licence £11.67
dh mobile £25 can't change til jancan you make do with pay as you go from then?
me mobile £18 can't change til janditto
B&C insur £12 did thro quidco so actual cost was £40 for year!:j
Council tax £113you can ask for this to be paid over 12 months rather than 10 to spread the cost
water £40 can't get it any lower as wouldn't cover usagehave you got hippos in your cistern? Saves a litre a flush. Also a water butt for rain water? You can use this to rinse the car when washing it rather than tap water.
electric £28.50 changed a few months ago thro quidcobut save further by ensuring appliances are not left on standby as this uses nearly as much electricity as the appliance being fully on
gas £30 as aboveif this is your central heating/hob cooker? then check that the temperature on your thermostat is no more than 21 degrees. This will save you about £70 if you turn your heating down 1 degree. Also experiment with turning veggies/potatoes off a minute earlier than usual as the water will be hot enough to still keep the food cooking. If the water is coming out of your hot tap scalding, then look at turning down the temperature for that too.
car insur dh £13.73 did thro quidco :beer:
car insur me £15 ish Paid up front last time so est amount, due jan08you could be checking nowish to see which provider pays you the most cash back:D . Also there are other cash back sites such as topcashback.co.uk, greasypalm, britishrewards etc to check as well (they also do the free 10p click throughs as well)
contact lens £24 tried to get cheaper but i need aftercare from optician
which would cost lot extra otherwise
road tax £ don't make any provisions for at the moment!
life insur £13 if i don't claim they will refund all prems at end of term
food £160This is pretty good for a family of four. But don't forget about batch cooking so that there is plenty in the freezer. Meal plan so that the shopping list is already done, with no extras etc.
diesel £130

TOTAL PM = £670

TOTAL FOR MONTH = £2,693

we don't have any provisions for anything else but if dh has a good month the money is used for road tax, birthdays & xmas as and when. I save up vouchers, coupons etc as well.I would suggest that you factor in these ie dividing each of them by 12 to get a realistic view of what your monthly budget is. When you have a good month, this could then go into a separate bank account, for emergencies.

One problem we have is that we are tied in to next November with a redemption penalty of £10,000 but realistically i really don't know if we will get that far and i don't want to have the house taken off us.I would imagine that the 10k penalty may well wipe out a lot of the profit, if you sell up now. How the market is behaving really depends on where you live, as overall I think the market rose ON AVERAGE about 2%, but in some areas it went down and some it went up more than this.So whether you should sell depends on what your local area is doing.

Is there anyway that you parents could help with childcare so that you could work more. Even if the just did the school runs for you a couple of days a week, this would free you up to do more work.
Anyhow thanks for getting this far and any ideas would be greatly received.

IP

Good luck
chev

montycake

Hi IP

I would strongly advise contacting a debt counselling service such as CCCS, National Debtline, etc.

Couple of things to consider: I wouldn't sell if you have a 10K penalty, it will wipe out any benefit. You should contact your mortgage provider to explain the situation as the worst thing you can do is not keeping them informed!
Also you have lots of credit, so you do need to discuss this with someone - if lower monthly payments can be negotiated, so much the better (Creditors can be ok if you explain things to them). Your food bill seems very low though?

Good luck
Montycake

IgglePiggle03

chevalier wrote: »

My comments are in blue. My part-time job is a few hours a week which i mainly do from home and fit in around my childrens school/preschool runs. Is this during the day then? Does this mean you could get an evening job after the children have gone to bed? I know that this is not ideal with the hours your OH is working, but needs must for say the next 6 months. Yes i have been looking around and applied for a couple but haven't heard anything back as yet.


I have been selling off old baby stuff to make some money (and clear some room), changed over our utility providers etc, claimed bank charges & mortgage exit fees, used quidco for as much as possible, do on-line surveys etc as well as running the house & caring for the children during the day. Well done on all of this. Have you also thought about signing up to do mystery shopping? There is a thread about this on this forum. Will go & have a look at that thanks


DH takes over the childcare once he gets home but thats often not until 7pm when hes started at 8.30am. Its a case of if a customers around theres a sale to be had so he can't afford to miss it. Has he thought about changing jobs so he gets a salaried one? Then you would know for definite how much you could budget on. We've talked about it a lot and hes had a few ideas which we could consider. The thing is the good months help us out immensely. For example the income we had this month meant we could pay double for most of the credit cards to make up for the missed ones. It s a nightmare when its a bad month though so yes a salaried job would make life easier budgetwise.

Anyhow feel slightly better for typing that so going to try to do my SOA.

Income (PM)

DH £1,800 - £2,900can he do surveys and clicks as well as you? I've signed him up to do this too now
Me £150 - £200as above ref getting an evening job trying to
CB £120
TC £45Is this correct or is it paying back arrears No the basic amount is all we're entitled to unfortunately
Sales £75

Total £2,190 (min) - £3,345


Outgoings

Mortgage £1069 (currently owe £182,000 - house worth about £230,000)

Loan 1 £167 (11.9% still owing £8,356)can you overpay on any of these if the opportunity arose? I don't know tbh, will have to check the paperwork. Theres never been any danger of being able to do that so far anyhow!
Loan 2 £151 (8.9% still owing £7,090)
Car Loan £124 (8.9% still owing £4,400) in process of selling car, will
raise enough to pay it off and buy another)Have you asked permission of the loan provider about selling the car. Some car loan providers have this in their terms and conditions. Yes we're able to do it. Dh works in the car industry so knows more about it than me.

TOTAL LOANS PM £442

CC 1 £42 (£1,800 o/s 16.9% can't get any lower)
CC2 £45 (£2,000 o/s 16.9% can't get any lower)
CC3 £75 (£3,500 o/s 24.9% they won't reduce % & i don't have
anywhere to transfer it)
CC4 £70 (£2,700 o/s 16.9% can't get any lower)
CC5 £85 (£1,750 o/s 5.9% for life)
CC6 £34 (£1,490 o/s 5.9% for life)
CC7 £113 (0% until June08)
CC8 £47 (£2,100 o/s 5.9% for life)
Is there any room on any of these cards to balance transfer the 3.5k that is at 24.9%? As this would save you a lot on interest. Also is the £113 you are paying off CC7 just the minimum?
TOTAL CCs PM = £512


Talk Talk £20 recently changed, incls rental, b/band & reduced calls
Life Assur £29.49 to cover mortgagewas this take out with the mortgage provider? If so did they make it seem as if you had to take out their product to cover the mortgage? If so this is misrepresentation as you can take out assurance to cover the mortgage from anyone. So you maybe can get this refunded, and also find a cheaper provider. There is a good article by martin:money: on the main site about this. No this is one we took out independently & was the cheapest we could get. I used to work in financial services (ironically!) so had a good idea of what we needed. Its to cover the mortgage if anything were to happen to me or dh and ensure its paid off. Have been looking on quidco though and they're paying £80 for this kind of policy but i'm not sure if i could take out a new one, get the cashback then cancel the old one? Its with the same company as well so unsure whether it would work.
TV licence £11.67
dh mobile £25 can't change til jancan you make do with pay as you go from then? Its likely they'll offer a better deal for us to stay on a contract with them so i'm hoping we can conitnue with a cheaper one each as then get a free phone and can resell old ones.Also we get so many free minutes per month which we've both been utilising recently. The home phone package we've got now means daytime calls aren't free anymore so have been using mobile more for free. Will see whats best option come jan i think.
me mobile £18 can't change til janditto
B&C insur £12 did thro quidco so actual cost was £40 for year!:j
Council tax £113you can ask for this to be paid over 12 months rather than 10 to spread the cost didn't know if you could do this, hope so that'd be a real help.
water £40 can't get it any lower as wouldn't cover usagehave you got hippos in your cistern? Saves a litre a flush. Also a water butt for rain water? You can use this to rinse the car when washing it rather than tap water. dh takes the cars to wash at work as its free:T and also we don't have a grarage/driveway so a bit awkward to do at home.
electric £28.50 changed a few months ago thro quidcobut save further by ensuring appliances are not left on standby as this uses nearly as much electricity as the appliance being fully on I've been making a real effort to do this recently and seem to be constantly switching things off after people! didn't know it used nearly as much energy though, flippin heck
gas £30 as aboveif this is your central heating/hob cooker? then check that the temperature on your thermostat is no more than 21 degrees. This will save you about £70 if you turn your heating down 1 degree. Also experiment with turning veggies/potatoes off a minute earlier than usual as the water will be hot enough to still keep the food cooking. If the water is coming out of your hot tap scalding, then look at turning down the temperature for that too. yes its heating & hob, not sure what temp its at will go check. I try to switch heating off when we're not using it but tbh i'm not sure if it uses up just as much energy heating everything back up again? I have been ringing B.Gas at the end of each month with my readings so that i know exactly what the balances are & hopefully aviod huge quarterly bills. Seems to be working but now the heatings being used more the next bill will prob be interesting.
car insur dh £13.73 did thro quidco :beer:
car insur me £15 ish Paid up front last time so est amount, due jan08you could be checking nowish to see which provider pays you the most cash back:D . Also there are other cash back sites such as topcashback.co.uk, greasypalm, britishrewards etc to check as well (they also do the free 10p click throughs as well)will do that, thanks
contact lens £24 tried to get cheaper but i need aftercare from optician
which would cost lot extra otherwise
road tax £ don't make any provisions for at the moment!
life insur £13 if i don't claim they will refund all prems at end of term
food £160This is pretty good for a family of four. But don't forget about batch cooking so that there is plenty in the freezer. Meal plan so that the shopping list is already done, with no extras etc. Since the childen started at school we've been eating meals more with my mum and dad during the week and started doing a joint online shop. Mum tends to pay for the meals we plan for the week so its not costing me quite as much as it would. I've also recently been diagnosed with coeliacs (gluten intolerant) so had a big diet shake up and we eat a lot healthier now and cook from scratch which is cheaper. Got to sort out my gluten free prescription this week which of course i will have to pay for as we're too rich to be exempt!
diesel £130

TOTAL PM = £670

TOTAL FOR MONTH = £2,693

we don't have any provisions for anything else but if dh has a good month the money is used for road tax, birthdays & xmas as and when. I save up vouchers, coupons etc as well.I would suggest that you factor in these ie dividing each of them by 12 to get a realistic view of what your monthly budget is. When you have a good month, this could then go into a separate bank account, for emergencies.yes i know i should be doing that, i do have a few bank accounts for diffent types of expenditure but they all seem to depleting faster than they should!

One problem we have is that we are tied in to next November with a redemption penalty of £10,000 but realistically i really don't know if we will get that far and i don't want to have the house taken off us.I would imagine that the 10k penalty may well wipe out a lot of the profit, if you sell up now. How the market is behaving really depends on where you live, as overall I think the market rose ON AVERAGE about 2%, but in some areas it went down and some it went up more than this.So whether you should sell depends on what your local area is doing. This is why we're unsure about it all, its a bit of a vicious circle really as even factoring the £10000 loss (which i hate to think about) we could theoretically clear all but one of the debts and not wreck our credit completely. Life would be a lot easier, we'd be paying someone elses mortgage of course, but not have such huge outgoings and i'd be able to go back to working more full time in a couple of years once our youngest starts school. I'm also worried that say we manage to last out til next november when the rate changes what if the payment shoots right up or we couldn't get a good rate. Arrrrgh so many ifs and buts, we definately need to go and talk to someone.

Is there anyway that you parents could help with childcare so that you could work more. Even if the just did the school runs for you a couple of days a week, this would free you up to do more work. Yes i have spoken to them about working a few evenings a week and they have said they would look after the children in the evening till dh comes home if it would help out. They do help us an awful lot with this that & everything else and i am really grateful for that.
Anyhow thanks for getting this far and any ideas would be greatly received.

IP

Good luck
chev

Thank you your advice has been really helpful

IgglePiggle03

Forgot to say that the loans are no secured, thankfully

Homework

The money you are paying to loans and credit cards as a percentage of your household income is huge. The houshold expenidture is not huge.

I agree to try and increase your income but at the same time I would consider Payplan or CCCS and get all your debt into a manageable payment so that you are not stretched all the time. It must be nice when he earns more money, do you overpay some things when that happens or is it catch up time?

Payplan or CCCS would calculate how much you can afford to pay on normal earnings and you would pay them that each month. They would then pay your debts pro rata until they were paid off. In the mean time you would have a regular amount left each month so you could afford things. If he earned more money then you could put that aside and offer it to Payplan or CCCS as additional money you have received every now and again in order to pay the debt off faster.

Payplan or CCCS would allow for road tax, food etc and it takes the pressure off when you know you have enough money to live and still paying towards debt.

Hope things go well for you

nearlyrich

DH takes over the childcare once he gets home but thats often not until 7pm when hes started at 8.30am. Its a case of if a customers around theres a sale to be had so he can't afford to miss it. Has he thought about changing jobs so he gets a salaried one? Then you would know for definite how much you could budget on. We've talked about it a lot and hes had a few ideas which we could consider. The thing is the good months help us out immensely. For example the income we had this month meant we could pay double for most of the credit cards to make up for the missed ones. It s a nightmare when its a bad month though so yes a salaried job would make life easier budgetwise

I work in sales and have had jobs where earnings fluctuated widely depending on promotions and commissions etc. What worked for me was setting a budget based on basic worst case scenario wage and trying to save a proportion of the extra on a good month to get me through the lean months.

I know that's not very helpful right now but you will get through this as I did and it might help to keep you on budget in future, good luck with sorting out your debts, the guys on here are wonderful.

GeorgeUK

I would definately try contacting one of the free debt charities such as payplan or CCCS

(Taken from Fermi's signature)

Professional, free and impartial advice on debt problems can be obtained from several charitable and 'not for profit' organisations. They never make a penny from the advice they give, which means it will be given with only your best interests at heart. You can contact:

Your local CAB Office and ask to speak to a 'money advisor' *** The Consumer Credit Counselling Service (CCCS) - Tel: 0800 138 1111 *** National Debtline - Tel: 0808 808 4000 *** Payplan - Tel: 0800 917 7823

Not really read much about it on the forum, but as an alternative to selling your house, could you let it out while renting somewhere else? You would need to thoroughly investigate this as i only recall someone else mentioning it as a possibility. Hopefully others will have more details.

Chevalier seems to have done a pretty good job at covering everything else.

Remember to keep paying the most to the highest CC APR and just the minimum to the others. Hopefully you will be able to clear them quicker - then after a few months of the card being cleared, call to cancel it and hopefully they will offer a LOB or 0% deal. Try crunching the numbers on the snowball calculator http://www.whatsthecost.com/snowball.aspx

Also check http://www.entitledto.co.uk/ to see if you are claiming your full benefits.