SOA, it's all a mess and I think we are in too deep

YORKSHIRELASS

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 0

Number of cars owned.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 1825

Partners monthly income after tax....... 1000

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 2825[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 349

Secured/HP loan repayments.............. 650

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 146

Electricity............................. 91

Gas..................................... 0

Oil..................................... 50

Water rates............................. 28

Telephone (land line)................... 125

Mobile phone............................ 0

TV Licence.............................. 0

Satellite/Cable TV...................... 0

Internet Services....................... 0

Groceries etc. ......................... 350

Clothing................................ 20

Petrol/diesel........................... 120

Road tax................................ 3

Car Insurance........................... 35

Car maintenance (including MOT)......... 30

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 10

Pet insurance/vet bills................. 15

Buildings insurance..................... 15

Contents insurance...................... 15

Life assurance ......................... 50

Other insurance......................... 0

Presents (birthday, christmas etc)...... 20

Haircuts................................ 20

Entertainment........................... 25

Holiday................................. 25

Emergency fund.......................... 50[b]

Total monthly expenses.................. 2242[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 185000

Shares and bonds........................ 0

Car(s).................................. 3000

Other assets............................ 0[b]

Total Assets............................ 188000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 16706....(349)......1.05

Secured Debt.................. 28235....(650)......4.74[b]

Total secured & HP debts...... 44941.....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Halifax........................8267......207.......27.2

Halifax........................3687......92........4.94

Halifax........................1178......29........18.95

Next...........................487.......22........23.9

Barclaycard....................10716.....274.......20.2

MBNA...........................12268.....174.......3.95

Virgin.........................7437......142.......20.01[b]

Total unsecured debts..........44040.....940.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,825

Expenses (including HP & secured debts). 2,242

Available for debt repayments........... 583

Monthly UNsecured debt repayments....... 940[b]

Amount short for making debt repayments. -357[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 188,000

Total HP & Secured debt................. -44,941

Total Unsecured debt.................... -44,040[b]

Net Assets.............................. 99,019[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Hi all, this is our current situation.  We started last year to make some inroads into our debt, then our eldest son was diagnosed with cancer.  Five months of him being in hospital 65 miles away, the cost of travelling there and back, and lost earnings because of my husband not being able to work at his self employed job has hit us hard.  Now we are faced with my husband only getting 80% of his income due to the coronavirus, both sons being at home (youngest son was self sufficient at university), and only two of us currently bringing in an income.  

The income from my husband is realistically what he is earning at the moment.  He is very reluctant to give up his self employed job and look for work elsewhere.  DS1 has not been contributing anything, but he is getting a small amount of sick pay and we have said he will have to pay something towards his keep, we dont know yet if he is clear of the cancer, so have no idea when he will return to work.  DS1 is also very vulnerable to catching the coronavirus so we are all in lockdown for at least 12 weeks, but when this is over DS2 intends to go back to university and our grocery bills will be lower.  

The secured loan of £28235 is our Mortgage Reserve.  This has to be paid off in 4 years so I have calculated that we should be paying £650 a month to clear it in that time.  At the moment my husband's entire income is going on debt repayments and I think that a DMP is our only option.  We have got used to living within quite a tight budget but we just cant make it work anymore.

Any advice welcome, please be gentle though, these are tough times for us.

sourcrates

Hi,

Tough times for a lot of people just now, and in the coming months, basically, your priority debts must be paid first, that`s mortgage, secured loan, council tax, utilities, and food etc.

Anything else can wait, credit cards, unsecured loans, any form of unsecured credit, is all non essential, the debt charities are inundated with people asking for help just now, if you are capable of writing a letter, then i suggest you do this yourself, and save yourself a lot of hassle.

Work out your budget, after priority debts have been paid, and you have kept enough money to live on for the month, what`s left can be offered to your unsecured creditors as payment in a debt management plan.

You must write and explain your circumstances, you can take 30 days (currently- but soon to be extended to 90) as breathing space, save a small emergency fund for the things that are bound to happen, then offer them what you can afford, ask for their payment details, pay when your paid, job done.

Don`t fret about acceptance of the arrangement, or not, if they are not happy, they will simply sell the debt, or assign it to a collector, you keep paying whoever is writing to you basically, and you pay what you can afford, not what they may ask for.

Remember, lots of folk will be in similar situations, so debt collection will not be much of an issue, keep your creditors informed, and just do your best.

fatbelly

My thoughts, in no particular order:
1. Yes it looks like a dmp at approx £600 per month, repaying 44k debt  so about 6 years which is not ridiculous. Stepchange or Payplan or do-it-yourself
2.Some of those expenditure items look high. Groceries for 2 adults would be about 240 per month so if you are feeding the boys, they need to be contributing on the income side. Land line at £125 is high - have you read the guides on this site?
3. Do you need 2 cars?
4. Are you paying council tax over 12 months?
5. The mortgage looks good and you have a ton of equity. However the secured overdraft is a bit of a disaster. You could (a) look at remortgaging to clear it or (b) try to move it to a personal loan. That might be difficult not because of your credit history but because of your income/expenditure.
6. You need to be banking where you do not have debts.

Fireflyaway

I agree with sourcrates. When I was first in a lot of debt I was so worried about denting my credit score I agreed to whatever payments my creditors demanded. Sometimes I walked in the rain unable to afford a bus ticket to work. I didn't eat properly and I hid debt letters. My point is you need to take care of yourselves first. Eat, keep warm, keep the roof over your head. Most creditors will be understanding especially in the current climate. Do a proper written budget and see what you can realistically afford ( with some wiggle room for emergencies built in) and approach them all with an offer. The one thing that did seem high was the phone bill. Could you look at a different package? I think you could also save on groceries. Set a budget for food and go shopping with cash so you can't overspend. 

YORKSHIRELASS

Thanks all, really helpful advice.  When DH and I were on our own we were managing groceries for £200 a month.  Eldest son does need to contribute something out of his sick pay and we need to have a chat with him, youngest son being here is only temporary.  I might be able to do food shopping for less than £350, especially with food shortages at the moment!  We need 2 cars, no public transport of any sort where we live.  The £125 is for landline, all 4 mobiles, and internet.  Again we need to get the boys to pay for their own mobiles.
Its a scary thought but I need to do something now before things get any worse.

JayRitchie

Hi. Could I ask how old you and your husband are? You have about 4 years to go to pay off your mortgage?

YORKSHIRELASS

JayRitchie said:

Hi. Could I ask how old you and your husband are? You have about 4 years to go to pay off your mortgage?

Hi, yes, we are both 48. 

YORKSHIRELASS

I have been reading information about a DMP, and the advice is that you open a new bank account.  We have all our bank accounts and mortgage with Barclays, including DHs business account and DH also has a Barclaycard.  DH already has a Monzo account that he can probably use for the business for now, but I am not sure if it is going to be possible to able to open a new joint account at the moment as we cant go to the bank, could this be a problem?

RAS

You can open a co-op basic account on-line.
 https://www.moneysavingexpert.com/banking/basic-bank-accounts/#best

JayRitchie

YORKSHIRELASS said:

JayRitchie said:

Hi. Could I ask how old you and your husband are? You have about 4 years to go to pay off your mortgage?

Hi, yes, we are both 48. 

Hey, that's great news - you'll have a great debt free and mortgage free future when this is over. Please look over advice regarding DMPs. You own a home (and will really own it soon), and in reality your biggest problem is with interest rates rather than the level of debt.

EimearF

What are the minimum payments on the mortgage reserve? you cant afford to be spreading the payments out evenly for 4 years if you dont have to. Once you clear you debt you can ramp up clearing that off.