181k in Debt - Need Help

daniellemaire

Kakiste said:

Following you.
Awesome work on the nails- I do lots of sewing and my husband does metalwork and woodwork to raise extra income. That's worked well as a motivator for if we want to do something more expensive such as eat out or go somewhere pricey. 'Have to raise £40 today so we can do X, what can I make to do that?'

Are you a beautician/nail technician(?) as your main job or is this a side project?

Thank you so much :-) 

So I work for my parents business full time (on furlough atm) which is specialist cleaning services and also sales and running the websites, and data analyzing etc!  And then I have a salon in my house (which is closed as well) which does nails and eyelash extensions in the evenings and weekends and then in my spare time I do press on nails now also - so a lot of work! 

Previously all sales I would make from my businesses, once I take out expenses etc, would all go on paying off our holidays, but since buying a house the plan was once we reopen the money can go towards paying off loans and debts, and overpaying the mortgage etc. 

Luckily we have a holiday booked already, which was a Christmas present (meant to be on holiday in Spain now!), the flights were a christmas present from my partners parents and the villa rental was a christmas present from my parents, these have been rescheduled to September, so luckily we don't have to spend any money on a holiday this year, other than spending money but we wouldn't need much anyway.  

I think until loans are paid off this will be our last holiday for a couple of years! 

daniellemaire

Todays been very productive!  
Whilst my partner was painting the house, I decided to be "lazy" and sit down and just read up on things that we can do to help ourselves out of the situation that we are in (lots of outstanding loans and credit card bills). 
Step 1 - I put together an excel spreadsheet which shows all outstanding debts and loans and payments we've made and it shows we've currently paid off just 0.93% off our debts. 
Step 2 - We received another "invoice reminder" in the post today, which is one of the suppliers of the old owner.  I went through EVERY letter I've received since buying the property back in January and although it was a reminder, I definitely was never made aware of the invoice!  It was for £126.83 - so I've paid this off in full. 
Step 3 - With my partners permission, I managed to gain access to his old bank account from years ago.  I updated all of his contact details and ordered him a new bank card.  This is his new bank for his business, so customers can pay him in one place to make it all easier.  I also created a savings account for his hmrc payments which I have a query on if anyone can help me out, I've listed this information right at the bottom of his post.  Once we can work out roughly what he will have to pay in January we will make sure he puts enough money over to cover it!
Step 4 - I also managed to get into my old Natwest account, and tomorrow I will be transferring all direct debits over to that account.  So like I said above, once a month we will both be transferring money over from our accounts to cover the bills.
Step 5 - I emailed all of my partners customers with outstanding invoices the new bank account details. 
Step 6 - I also put together a spreadsheet which shows all of our direct debits per month.  I did work it out roughly a few weeks ago but I have done it properly this time and with all loan payments, credit card payments etc, our monthly expenses are £1990.39, which is A LOT.  About £800 of this is debt payments. Tomorrow I will work out our other expenses including our cats medication (£200 a month), my medication which should be free but I always try to pay for it (£50 a month), food, petrol etc.
---- think I've done something else today but I can't remember......---- 
HMRC Query
Both myself and my boyfriend are self employed, however I also have a full time job.  Jamie has had 1 tax return so far, whereas my first one is due this year, which is why I'm so confused by how much he should be saving - haven't even looked into mine yet!
Jamie's first tax return was £2858.88 and payment on account in 2 payments £1352.74 and £1352.74.  He has literally invoiced the same this year as he did last year (about £100 difference) so can we expect the exact same payments to be due, or will he only have 1 payment on account this year??  His second payment on account is due at the end of July, which is £1352.74 of the payments on my outstanding spreadsheet. 
Payday is 5 days away......  .... I also need to work out a way for us to put some money away so we aren't always relying on wages!

blue_eyed_girl123

With your medication/prescription, could you save with a pre-payment certificate? £30 for 3 months or £100 for 12 months - https://services.nhsbsa.nhs.uk/buy-prescription-prepayment-certificate/start

Kakiste

I find HMRC baffling also. My husband was self employed for 4 years and then went back into teaching last year (great timing on his part given the current situation!) I did his taxes and they always reminded me of that scene in black books where Bernard Black is doing his taxes and reads from the form;  "If you live in a council flat by a river but are not blind....WHAT?!?!"

Mumoffourkids

daniellemaire said:

Todays been very productive!  
Whilst my partner was painting the house, I decided to be "lazy" and sit down and just read up on things that we can do to help ourselves out of the situation that we are in (lots of outstanding loans and credit card bills). 
Step 1 - I put together an excel spreadsheet which shows all outstanding debts and loans and payments we've made and it shows we've currently paid off just 0.93% off our debts. 
Step 2 - We received another "invoice reminder" in the post today, which is one of the suppliers of the old owner.  I went through EVERY letter I've received since buying the property back in January and although it was a reminder, I definitely was never made aware of the invoice!  It was for £126.83 - so I've paid this off in full. 
Step 3 - With my partners permission, I managed to gain access to his old bank account from years ago.  I updated all of his contact details and ordered him a new bank card.  This is his new bank for his business, so customers can pay him in one place to make it all easier.  I also created a savings account for his hmrc payments which I have a query on if anyone can help me out, I've listed this information right at the bottom of his post.  Once we can work out roughly what he will have to pay in January we will make sure he puts enough money over to cover it!
Step 4 - I also managed to get into my old Natwest account, and tomorrow I will be transferring all direct debits over to that account.  So like I said above, once a month we will both be transferring money over from our accounts to cover the bills.
Step 5 - I emailed all of my partners customers with outstanding invoices the new bank account details. 
Step 6 - I also put together a spreadsheet which shows all of our direct debits per month.  I did work it out roughly a few weeks ago but I have done it properly this time and with all loan payments, credit card payments etc, our monthly expenses are £1990.39, which is A LOT.  About £800 of this is debt payments. Tomorrow I will work out our other expenses including our cats medication (£200 a month), my medication which should be free but I always try to pay for it (£50 a month), food, petrol etc.
---- think I've done something else today but I can't remember......---- 
HMRC Query
Both myself and my boyfriend are self employed, however I also have a full time job.  Jamie has had 1 tax return so far, whereas my first one is due this year, which is why I'm so confused by how much he should be saving - haven't even looked into mine yet!
Jamie's first tax return was £2858.88 and payment on account in 2 payments £1352.74 and £1352.74.  He has literally invoiced the same this year as he did last year (about £100 difference) so can we expect the exact same payments to be due, or will he only have 1 payment on account this year??  His second payment on account is due at the end of July, which is £1352.74 of the payments on my outstanding spreadsheet. 
Payday is 5 days away......  .... I also need to work out a way for us to put some money away so we aren't always relying on wages!

That was a very productive day. Well done.

On the HMRC front. If as you say he has invoiced roughly the same and if his expenses are roughly the same, then in theory his profits should be roughly the same. Say his tax due is actually £2900 for the second year. The amount due in January 2021 will be £2900-£1352.74-£1352.74. The. He will have the first payment on account due for tax year 2020/2021 on 31 January 2021 of £1450 and another payment on account due July 2021 of £1450. 

In theory, if your profit remains consistent year on year, you should pay half your tax in January and half in July. I hope my explanation makes sense but feel free to ask anymore questions.

daniellemaire

It's pay day.  I paid my council tax bill, and my account now shows as -£277.68. How depressing!! 
Council tax - There's something strange going on with the council tax payment, I tried to pay the full amount of £289.55, but it then said "thank you for your payment of £161.00".  So I then tried to pay the remaining amount of £128.55 and it then said again "thank you for your payment of £161.00", so apparently I've now overpaid my council tax bill, which is fine as it can go against the next bill but no idea what was going on there! 
Direct debits for the month ahead - Well, this is even more depressing.  My bills for the month ahead come to £1392.91 and my available overdraft is only £1022.32, so lets hope we have some miracle and can get through this! ...... and that's not including food etc!
The loan of £36,500 - So I spoke to my parents about the loan that they gave us to buy our house, as the plan was to remortgage so they can get their money back asap.  Well, luckily they understand that it's probably not the best time to remortgage, so we are planning on waiting until early 2021 to make a proper decision, but they would like it paid off as soon as possible.  So £500 a month is great, but if I can over pay it that would be sooo much better for them as they are hoping to help my brother out with a deposit for a property (I don't think they are looking yet thankfully). 
Emergency fund - I created a new barclays everyday saver and renamed it "Emergency Fund", I've put £20 in as well to get it started, but once we are both back to work and on our feet again we will hopefully put regular payments over.

Starting Value Of Loans & Debts	£182,963.4
Amount Paid Off So Far	£1,996.38
Currently Outstanding	£180,967.1
Loan Name	Loan Amount	Amount Paid	Amount Existing
Mum & Dad	37000	500	36500
Mum & Dad - Boiler	1399.8	0	1399.8
Works Loan	4000	1000	3000
Barclays Loan	2837.82	0	2837.82
Overdraft	1273.18	0	1273.18
Overdraft	1000	0	1000
Barclays Loan	3757.11	0	3757.11
Car Finance	2815.37	0	2815.37
Mortgage	124486.5	0	124486.5
Credit Card	2098.72	0	2098.72
Credit Card	445.77	0	445.77
HMRC	1352.74	0	1352.74
PAID IN FULL Electric Bill	80	80	0
PAID IN FULL Council Tax Bill	289.55	289.55	0
PAID IN FULL Eon	126.83	126.83	0

katsu

I think your parents may need to accept that they've taken a risk with a £37k loan and it might be tricky for you to borrow that much extra on your mortgage. 

Concentrate on reducing your other debts as much as possible and that will help. 

Well done on cancelling Netflix etc etc. That's a great start. 

It's harder to shop cheaply at this time but do what you can to use everything up and not waste food,  to avoid purchases etc

You've been advised to look at pre paid prescription certificates,  that's a good option if your medical needs are prescribed by the NHS.  You said you try to pay £50 for this - why? 

Consider posting a full SOA here so that people can advise you on other options to save money. We are all here to help  

Sarahwithlove

I agree you need to do a statement of affairs because if you're gonna be spending more then you are getting in then you need to be looking at where you can make cut backs. 

Whilst I understand your parents wanting the money back as soon as possible I think it's important you come up with a realistic monthly budget and have an honest conversation with them about how the current climate is effecting you. And if that makes you need to be paying them less back each month then be honest with them about it. 

daniellemaire

katsu said:

I think your parents may need to accept that they've taken a risk with a £37k loan and it might be tricky for you to borrow that much extra on your mortgage. 

Concentrate on reducing your other debts as much as possible and that will help. 

Well done on cancelling Netflix etc etc. That's a great start. 

It's harder to shop cheaply at this time but do what you can to use everything up and not waste food,  to avoid purchases etc

You've been advised to look at pre paid prescription certificates,  that's a good option if your medical needs are prescribed by the NHS.  You said you try to pay £50 for this - why? 

Consider posting a full SOA here so that people can advise you on other options to save money. We are all here to help  

Thank you very much, I'll be honest I had to Google what an SOA is, so I hope I've done this correctly! 

[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.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 1500

Partners monthly income after tax....... 2000

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

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

Total monthly income.................... 3500[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 379.6

Secured/HP loan repayments.............. 217.80000000000007

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

Management charge (leasehold property).. 0

Council tax............................. 165

Electricity............................. 33

Gas..................................... 33

Oil..................................... 0

Water rates............................. 49.77

Telephone (land line)................... 0

Mobile phone............................ 108.45

TV Licence.............................. 30.9

Satellite/Cable TV...................... 33

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

Groceries etc. ......................... 100

Clothing................................ 0

Petrol/diesel........................... 30

Road tax................................ 10.93

Car Insurance........................... 34.18

Car maintenance (including MOT)......... 0

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

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

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

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

Medical (prescriptions, dentist etc).... 37

Pet insurance/vet bills................. 7.41

Buildings insurance..................... 0

Contents insurance...................... 8.19

Life assurance ......................... 10.57

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

Presents (birthday, christmas etc)...... 0

Haircuts................................ 0

Entertainment........................... 0

Holiday................................. 0

Emergency fund.......................... 20

Putting away for Tax.................... 1400

Postcode Lottery........................ 10

Experien................................ 14.99[b]

Total monthly expenses.................. 2733.79[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 215000

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

Car(s).................................. 4500

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

Total Assets............................ 219500[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 124634...(379.6)....1.45

Hire Purchase (HP) debt ...... 2815.3...(217.8)....11.3[b]

Total secured & HP debts...... 127449.3..-.........-   [/b]

[b]Unsecured Debts[/b]

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

Mum & Dad .....................36500.....500.......0

Mum & Dad (Boiler).............1399.8....0.........0

Work Loan......................3000......0.........0

My Credit Card.................2098.72...73.56.....30.34

Jamies Credit Card.............405.77....40........30.34

Barclays Loan..................3646.54...164.2.....23.9

Barclays Loan..................2758.19...129.9.....23.9[b]

Total unsecured debts..........49809.02..907.66....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,500

Expenses (including HP & secured debts). 2,733.79

Available for debt repayments........... 766.21

Monthly UNsecured debt repayments....... 907.66[b]

Amount short for making debt repayments. -141.45[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 219,500

Total HP & Secured debt................. -127,449.3

Total Unsecured debt.................... -49,809.02[b]

Net Assets.............................. 42,241.68[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

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

Sarahwithlove

That's showing you as not having enough money coming in on a monthly basis.
How long is left on your phone contracts as that's a lot of money. 
Have you looked to see if you have any balance transfer cards you might be eligible for? You can do calculators to see what your chances are? If you use clear score they sometimes show one's you are eligible for automatically.
Im guessing the SOA is based on you not getting anything from your nail business?