Help I have been stupid

foxy-stoat

Best speak to your parents and let them know the trouble you are in, doubt their money will be included in the IVA so you wont be able to make payments to them for a few years.

You will have to change your lifestyle to make it work out but hopefully you will be able to.

I wouldnt sign up for any upgrades to your mobile phones now, you can get sim only deals for £10 a month, maybe keep your iphone 7 for a few years longer and dont get the lastest iphone 12 or whatever.

MissReckless

Hiya
Thank you

My parents know everything very disapointed in us tbh.
Mobiles are contracted for A further year unfortunately.
Just my worry is so much debt was created in a short space of time 6months.
What is the worse case scenario do you think
Could they force us bankcrupcy
Im so worried i have been up all tbeoufg the night with worry and havent gone into work
Because i have so much on my mind.

saveupandbuy

I sympathise, I think what drove you was the voice in the back of your head telling you putting money into a house, bricks and mortar is okay which is true for the mortgage only.

mumtoomany

Hi, I don't often post on here, but something about you made me want to. So, here's what to do.
1: put the kettle on and chill. No debt is worth getting this stressed over, it's only money.
2: reading through what you have written, I don't think you have been in this house long, so I'm guessing there is little equity in it. Why would any company try to make you bankrupt if they will not get there money back from the house sale?
3. Start cutting back on anything/everything you can from TODAY.
4. Think about how to make more money, even if only a little. I'm guessing you work opposite shifts as you've no childcare costs, so longer hours may not be possible. Get over to the "Boost your income" board, find out how to make money from surveys etc. Even £10 or £20 would help, especially as Christmas is almost upon us.
5. Keep posting on here, and maybe even start a diary, for lots of moral support and ideas.

And last STOP worrying. This problem is fixable. Sending lots of love, mumtoomany.

foxy-stoat

Doubt they will make you bankrupt if you went IVA route - I seriously wouldn't worry about it as you have reached a point where you cannot continue and you know it, shame you spent so much on your garden as you could of come back from this.

How much equity will you have in your property in 5 years time and is there any chance of getting increases in salary do you think?

EssexHebridean

Comments in red as usual

MissReckless wrote: »

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 750 Supplement this with anything you can - online surveys can be a good way of earning vouchers or a bit of extra cash.
Benefits................................ 209 have you checked that this is your full entitlement?
Other income............................ 0
Total monthly income.................... 2559

Monthly Expense Details
Mortgage................................ 585
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 116 is this split over 10 months or 12? If currently on 10, then ask to switch to splitting over 12 months from the new financial year.
Electricity............................. 60 Your energy costs don't look all that high but it is worth checking whether you are definitely on the best tariffs and also keep a check to make sure that you're not using more power than you need to.
Gas..................................... 60
Oil..................................... 0
Water rates............................. 59
Telephone (land line)................... 0
Mobile phone............................ 75 Very high - make a diary note for a few months ahead of the end of your contracts to ring about changing to a cheap sim only deal - you may well get let off the final few months of the contracts to retain you as a customer.
TV Licence.............................. 12 There should be some pennies here as well - be very careful rounding figures down on a budget as this means that there is actually more money going out than you are accounting for!
Satellite/Cable TV...................... 0
Internet Services....................... 50 This is crazy-high - why so much?
Groceries etc. ......................... 600 Also crazy high - you can easily take at least a third off this, and with a little more work you can be spending less than half this amount.
Clothing................................ 50 Not needed every month - essentials only, use second hand for everything aside from underwear - make sure that kids clothes are looked after so they can - as far as possible - be passed down the line.
Petrol/diesel........................... 140 Read Martin's guide to driving economically and only make essential journeys - walk where you can.
Road tax................................ 14
Car Insurance........................... 80 Why is this so high? Have you gone through the comparison sites at renewal?
Car maintenance (including MOT)......... 50 You state zero in cash assets so where is this being saved?
Car parking............................. 10 Bluntly - park further away for free and walk.
Other travel............................ 15 Allowing that you are running the car, can this be saved by amalgamating whatever it is being used for with existing car journeys?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15 Is this "essentials" or something else?
Pet insurance/vet bills................. 35
Buildings insurance..................... 18 Please tell me this also includes contents?
Contents insurance...................... 0 If the answer to the question above is NO then stop what you are doing right now and get this sorted - it is one of the very worst false economies you can make.
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40 First question I would ask here is whether this is what you do actually spend. Even assuming that you only buy presents for the children, and not even for their friends for birthdays through the year, that means a spend per occasion, per child, of £80 - and while that sounds more than realistic to me, I know very few parents who actually spend that little on their kids!
Haircuts................................ 35 This is a lot - invest in clippers for male hair, and girls can grow theirs long and just have a trim a couple of times a year when money is tight. It's an easy way of saving a few £'s!
Entertainment........................... 50
Holiday................................. 50 Again - no cash assets so where is this being saved? Do you actually go on a holiday that only costs you £600 for a family of 5?
Emergency fund.......................... 20 Again - no cash assets so where is this being saved?
Total monthly expenses.................. 2269


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 6000
Other assets............................ 0
Total Assets............................ 6000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 147000...(585)......0
Total secured & HP debts...... 147000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................9200......400.......0
Loan...........................8500......400.......0
Loan...........................17000.....270.......0
Parents........................14000.....0.........0 As someone else has said you need to ensure that your parents are aware they're not seeing this back for a while.
Store Credit...................4000......95........0 the store credit and loans are not at 0% interest, are they...
Credit card....................1500......40........0
Total unsecured debts..........54200.....1205......-


Monthly Budget Summary
Total monthly income.................... 2,559
Expenses (including HP & secured debts). 2,269
Available for debt repayments........... 290
Monthly UNsecured debt repayments....... 1,205
Amount short for making debt repayments. -915

Personal Balance Sheet Summary
Total assets (things you own)........... 6,000
Total HP & Secured debt................. -147,000
Total Unsecured debt.................... -54,200
Net Assets.............................. -195,200

We have 3 kids 5 3 1.
Mobiles are high i know
Contracted for a further year unfortunately.

Well the good news here is that you can cover your living expenses easily from within your income. It is the accumulated debt - as is so often the case, that is tipping the balance. Once you have sorted out things like the food spending you will actually have a reasonable amount to pay towards the debts - but the loans 1 & 2 are the killer here., Are they the recent ones?

Assuming that you were truthful on your application for the guarantor loans I do wonder whether there is a chance that you have a case against the provider for irresponsible lending here - it's not really my area but someone else will likely have a view on that.

A DMP does look like a decent way forwards for you though - getting the interest frozen is going to make a huge difference. Delay the start of it to ensure you can save a proper emergency fund - but then make sure you don't dip into that for day to day living.

It is vital that you do start to get your budget under control - and if you are going onto a DMP this is all the more true. Start thinking about everything you spend, make sure that your food is cooked from scratch and use up the foodstuffs you have before buying more, think about energy use, car journeys, and accept that you need to learn to save for things not just pay for them on finance. As I said above, ultimately your day to day living expenses are covered by your stated budgeted figures - but this in turn also suggests that the figures you state are not what you have actually been spending!

On the grocery budget, check out Aldi & Lidl for their weekly fruit and veg offers and plan your meals around these where you can. If you currently eat meat 7 days a week cut to 4, learn about nutrition so that you can be confident that everyone is still getting the right balance of fats, protein & carbs. Stop buying branded - drop down to store brand or to value ranges. Think about batch cooking so you cook once and make meals for several days (things like curry, stews and bolognese sauces are great for this) and be wary of buying things out of habit - shop to a list and make sure that list is populated by making a meal plan - only buy what is needed. If necessary shop alone so that you don't get pressured to add extras.

MissReckless

Thank you all for your lovely And helpful messages.
I have tried to sell the house in the past year for what i paid for, it would not sell offers were 20k below that would have put us in negative equity.
Even thou its valued at xxxx house is only worth what someone is prepared to pay.
We paid top dollar and was done by cowboy builders , we spent money on everyfin windows carpets garden boiler etc.
In 5 year time im
Not so sure tbh maybe 10k all being well.
I prefer the iva route if possible i cant believe i have ended up like this:(

MissReckless

Hi
The budget i did was a rough estimate as i have never budgeted before.
Groceries included nappies which is 12 a day
Baby wipes calpol etc, my son also has a dairy intolerance and my husband lives the keto lifestyle i could be off with the budget it was just a quick guess.
Clothes i dont think thats too much for a family of 5 but if you think its high i will take your word for it.
Car insurance sadly no
Total rip off i know.
Internet includes netflix for the kids we got rid of insurance is contents included and council taxover 12 month.
Holiday we have never been on holiday in over 5 years.

EssexHebridean

Again - in red...

MissReckless wrote: »

Hi
The budget I did was a rough estimate as i have never budgeted before. OK - first off go and collect up a years worth of bank and credit card statements. Then sit down and go through again working out your actual spends - that way you get an accurate picture not just a guess.
Groceries included nappies which is 12 a day
Baby wipes calpol etc, my son also has a dairy intolerance and my husband lives the keto lifestyle Bluntly, he probably needs to stop then if this is leading you to extra costs. Unless he is one of a tiny number of epileptics who have been pointed to a keto diet to help control seizures then there is NO health benefits whatsoever to him eating that way, and there is also a school of thought that he is being a poor example to your children and potentially setting them on the road to a disordered relationship with food. Tricky to encourage them to eat a good and balanced diet if one of their parents is doing anything but!

On the Calpol thing - check out whether you can get that for free - I seem to recall there is a scheme that allows this for those who are struggling financially. i could be off with the budget it was just a quick guess.
Clothes i dont think thats too much for a family of 5 but if you think its high i will take your word for it. If you had no debt it would be entirely reasonable...but you have, so you need to trim down wherever you can. currently!
Car insurance sadly no
Total rip off i know. Why is it this high though? If it is age related how close are you to hitting a level where it will drop a level?
Internet includes netflix for the kids we got rid of insurance is contents included Still not sure - but if you don't have contents insurance then PLEASE sort this out ASAP! and council taxover 12 month.
Holiday we have never been on holiday in over 5 years.So what is the £50 a month going towards then?

You definitely don't want to sell the house - you are able to meet the mortgage payments and ultimately you do need a roof over your heads. Selling the house to clear the debts would be crazy - I suspect in the longer term you will be extremely grateful that you didn't take that path.

Take a breath - there are always ways to fix things. As was said earlier you've taken the hardest step by acknowledging the issues.

fatbelly

OK, so £290 surplus and 54200 of debt.

I know that you could liberate a bit more surplus but for a dmp on that debt you would really be wanting a lot more (say £900), and then be able to sustain that for 5 years.

I do think an IVA is worth looking at here. I just did a rough calculation and came up with a figure of £298 per month. You should talk to a few IPs. Can't recommend anyone obvs but Debt Camel is very helpful

https://debtcamel.co.uk/choose-iva-firm/

Edit: just noticed you have a 6k car. That shouldn't be an issue in an iVA, and gives you a fighting chance of not needing another one for 5 or 6 years