SOA Advice

jplissken

Hi, finding it hard to post/talk about all of this so i'm just biting the bullet. Posted in the DMP mutual support thread.
I live with my wife and 3 small children.

Me and my wife currently have £38k of unsecured debt. £35k credit cards and a very account. 4 of my credits cards have ran out of their 0% this past month increasing the minimum payment quite a bit. We have also recently been told we have been overpaid £2000 in child tax credits last year, waiting for a letter to say how this needs to be paid.

We had been looking into getting a secured loan (which all seem to be variable rate) against our house for about £20k. Then transfering the remaining credit cards which will hopefully offer me a 0% deal. Advice someone kindly gave us and everything I have read mentions avoiding changing this into secured debt. 

I have frozen most of our cards at the minute due to covid and i'm putting that money aside and not using it (especially knowing payments will go up with the additonal intrest) We have also had a holiday on the mortgage payments which we will be using to make an offer on my wifes Aqua card. Any advice on how to make a full and final payment offer on this would be appreciated. 

I was due a payrise in April of about £200 a month which has been frozen due to the current situation, I think i will get that when work gets back to full speed again (Hopefully sometime in July). I was due a bonus which has also been frozen, im not sure on the exact figure but previous ones have been between £5 and £10k before tax. I would use all of this towards debt. Weve done this before and then built the debt back up again, I think we've seen the error in our ways now and can stop this occuring again. However the bonus is a maybe at the minute as well. My wife is currently searching for a new job. One thing that is costing me a lot in the benefit in kind tax is my company car, I have 2 years left with it but I am a bit stuck because i cant afford to buy my own if i did get rid of it.

My wifes mothers has a card with £2000 on which we can transfer something to, just not sure what is best to do at the moment.
Its been good to write all of this down. I've struggled for a long time with mental health due to this, feeling suicidle at times. I feel like i've always been in debt, had to say no to a lot of things, see my friends out enjoying meals and nights out when me and my wife can't afford to do that. Every time im watching tv, reading, talking to someone i am constantly comparing my situation with others and its all i can think of. 

My wife always reminds me how lucky we are to have 3 beautiful children and a nice house but I just can't see the light at the end of the tunnel at the minute.

Anyways, here is my SOA, i've done it best I can, ive probably missed the odd trip the shops to top up bread, milk, snacks. 

Household Information

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

Number of children in household......... 3

Number of cars owned.................... 1

Monthly Income Details

Monthly income after tax................ 1772

Partners monthly income after tax....... 491

Benefits................................ 192

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

Total monthly income.................... 2455

Monthly Expense Details

Mortgage................................ 558

Secured/HP loan repayments.............. 0

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

Management charge (leasehold property).. 0

Council tax............................. 151

Electricity............................. 63

Gas..................................... 63

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

Water rates............................. 45.4

Telephone (land line)................... 10

Mobile phone............................ 45

TV Licence.............................. 13.2

Satellite/Cable TV...................... 21.5

Internet Services....................... 28

Groceries etc. ......................... 325

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

Petrol/diesel........................... 40

Road tax................................ 17

Car Insurance........................... 30

Car maintenance (including MOT)......... 15

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

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

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

Other child related expenses............ 147

Medical (prescriptions, dentist etc).... 15

Pet insurance/vet bills................. 0

Buildings insurance..................... 8

Contents insurance...................... 8

Life assurance ......................... 28

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

Presents (birthday, christmas etc)...... 50

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

Entertainment........................... 42

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

Emergency fund.......................... 0

bank account acount fee................. 17

(Unnamed monthly expense)............... 0[b]

Total monthly expenses.................. 1780.1

Assets

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

House value (Gross)..................... 195000

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

Car(s).................................. 0

Other assets............................ 0

Total Assets............................ 195000

Secured & HP Debts[/b]

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

Mortgage...................... 146000...(558)......1.89

Total secured & HP debts...... 146000....-.........-  

[b]Unsecured Debts[/b]

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

barclay card...................9982.12...230.2.....17.4

aqua credit card...............1750......60.8......30.4

very...........................3272.18...30.4......0

hsbc credit card...............5280......135.......0

overdraft......................1600......40........0

hitachi capital................622.......21........0

mbna credit card...............4026......112.......23.09

barclaycard....................3356......89........17.03

halifax credit card............4111......112.......22.05

tesco credit card..............3576......36........0

overdraft......................1150......25.32.....0

Total unsecured debts..........38725.3...891.72....-  

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,455

Expenses (including HP & secured debts). 1,780.1

Available for debt repayments........... 674.9

Monthly UNsecured debt repayments....... 891.72

Amount short for making debt repayments. -216.82

Personal Balance Sheet Summary

Total assets (things you own)........... 195,000

Total HP & Secured debt................. -146,000

Total Unsecured debt.................... -38,725.3

Net Assets.............................. 10,274.7

Thanks

jplissken

Bit of a ramble that but any advice is greatly appreciated.

mcpitman

Elec/Gas seems high
Car maintenance- how come on a company car?
Child expenses - what are these @ £147 p/m
Bank Account fee - why?
Mortgage rate appears to be fixed at c75%LTV. When does that deal end?
Is the council tax over 10 or 12 payments?
What are the CC limits on each of the cards? Could you do a grand shuffle to smaller 0% deals available?
Consolidation rarely works unless you are super disciplined and get the issue that caused the debt and address that.

jplissken

mcpitman said:

Elec/Gas seems high
Car maintenance- how come on a company car?
Child expenses - what are these @ £147 p/m
Bank Account fee - why?
Mortgage rate appears to be fixed at c75%LTV. When does that deal end?
Is the council tax over 10 or 12 payments?
What are the CC limits on each of the cards? Could you do a grand shuffle to smaller 0% deals available?
Consolidation rarely works unless you are super disciplined and get the issue that caused the debt and address that.

Thanks for the reply.
I will look into the gas& electric.
Car maintenance - Its for my wifes car, which is a bit of a old banger. I just put a bit of a place holder amount in, it hasn't needed much work but MOT is August. 
Child Expenses - Its my daughters school lunches at £15 a week, theatre/drama school she goes to and gymnastic 2 of them go to. The theatre school is something we are considering giving up but it has been so good for her.
Bank Account fee - I have a Halifax reward current account which started off as £15 fee but £10 back if you paid in £1000 a month. This ended up all getting scrapped and they charge £17 a month as well as daily OD charges which comes ot approx £40.00 a month. The account perks are a waste of time but i'm not sure how i could get out of the account with using my £1600.00 OD constantly.
Mortgage rate is fixed until April 2022
Council tax is over 12 payments

CC limits are:

	limit	balance
tesco	5200	1624
halifax cc	5000	889
mbna	4800	774
barclaycard	3700	390

Ive looked quite often are trying to shuffle this around but ill have another think, i've tried not to just jump into something.

I think we could be disciplined with the consolodation but i've also been there before.

TheAble

I might suggest a good first step would be to have a chat with an advisor from National Debtline. They will be able to offer you free advice as to how best to tackle the problem. I'm no expert on debt management plans and the like but I have an inkling that one of those could be a possible solution. All the best of luck to you.
PS I'd second the advice you've had about not taking out a secured consolidation loan. That's not the way to go - at all costs you mustn't risk your home.

Naomim

Hi and welcome to the boards.  I started my current DFW journey last November with a very similar amount of debt to you.  I had very similar feelings of jealousy that everyone else could afford what I couldn't and anxiety about how I was going to pay everything.  It's taken effort and hard work but 6 months on, I'm in a better position - certainly mentally.

First thoughts, how old are your children?  Your partners income is very low so I assume this is part time due to childcare?  Is there any chance of upping this? Doing some evening shifts at a local supermarket, selling things on eBay? Are they old enough to explain you are in a bit of a financial pickle and explain that they can't do "everything" they want to as in after school clubs?  Mine are 14 & 10 so I had this conversation with mine and they have been great really. 

Gas & Elec are high,  look at Martin's tips and join the cheap energy club.  Sign up to cashback sites, Topcashback and Quidco and see if you can get cashback for anything you purchase or switching suppliers.   Can you join survey sites? There are quite a few that pay out I believe, I only do Prolific surveys  In 6 months I have done 148 surveys and earned an exta £136.  I cash it out monthly and pay is straight off a credit card.  

I'm sure other people with far more knowledge will be along soon to help but, you are not alone and you have come to the right place to receive the help you need.

Good luck.

Naomim

Fireflyaway

Acknowledging the situation is the first step, not borrowing again the second. I'd really recommend you don't use your mum in laws card. I know you have the best of intentions but what if you did lose your job / become ill and were unable to pay it back? Don't compromise family relations for a bit of debt. Your creditors don't know you and it's just a numbers game but involving family can change things. 
I had a similar number of creditors to you. I contacted them all individually and explained I couldn't maintain my payments and negotiated a revised monthly payment. I then set up standing orders for all of them. Then you sit back and they gradually decrease each month. Just leave some wiggle room. Don't use every penny to pay debt because you will need some money for unexpected things / emergency and it's still ok to have a little for yourself. I'd recommend the snowball method ( check out Dave Ramsey on youtube). Most importantly look at what caused the situation. Do a written budget so you don't fall back into debt. My best decision was vowing to never borrow again. No credit cards, overdraft or catalogue. You feel so much better paying for stuff outright. 
Your wife has a good point. Most people have debt. It's so readily available! It almost seems like a compliment or achievement when you are offered credit ! It's really not though. It's just an opportunity for the creditors to get rich. I was paying £40 a month just to have an overdraft! I'd rather spend the £40 on my daughter than let the bank have it. 
You know what I learned. So many people might appear to be doing well but if it's on credit, it's not really theirs. I felt more content at the traffic lights in my 12 year old Vauxhall astra that was paid for than I would have in the BMW next to me that was costing £400 a month! Success to me is paying for stuff outright. Then you have achieved something. 
If you do check out Dave Ramsey, look at the 'debt free screams'! It's people who have paid off crazy amounts of debt sharing how they did it. It's so inspirational to hear how they did it.  Good luck!

mcpitman

Are any of the CC's offering 0% deals to you currently?

jplissken

Our children are 3,6 and 7. They do tend to accept when we say we can't do things for money reasons but I guess this hasn't been an issue for a bit. We may have to look into my daughter stopping the dance school, although i think it would be a regret long term so I want to try and keep that up. I cancelled my football season ticket because i'd rather that money went towards something for the children. 

My wife is looking for a new job at the minute. She works 2 days due to child care issues but we are exploring her potentially getting some work in a restaurant or supermarket.

The cards are offering any 0% at the minute but i've had a bit of a look and I think I can have a bit of a switch around to free one up which will hopefully offer me a 0% and I can do a big reshuffle. Still getting my head around it. I'm not too concerned about using my MILs card as shes is really supportive of us and I don't think it would ever cause issues.

I think once i've looked into that option I will contact the creditors and see if I can agree a set payment.

Some really really good avice, im tying to read as much as I can and i will 100% check those youtube videos out. Its funny how much better talking about it has changed my perspective of it and made me feel like there is some chance of getting out of this. 

I am 34 so would like be be debt free by 40 at the most and i think that may be possible, I just know it will be hard work.

mcpitman

A further thought, £15 a week for school lunches? You could make them yourself for under a fiver a week. (and the kids get what they like, not what school think they like).

Have a look for a free bank account too (or an alternative with the same bank that is free).

Seriously, don't mix money and family if you can afford it, it generally just isn't worth the hassle. Equally you will need to check a BT from someone else's name is even possible.

NeverendingDMP

I just wanted to ask if your summary of affairs is accurate to what you spend and you worked it out based on bank records etc or if it is what you think is an appropriate budget. I ask thst way as we are a family of 5 with 3 ptimary school children and over the years ive learnt that we spend more than we realise in certain categories. For example i budget 100 a month for clothing and shoes but it really inly just covers the basics bybthe time i factor in growing feet school uniforms normal clothes coats etc. If you consider setting up a repayment plan you perhaps need to think if the budget amounts you are aiming to live off are enough. If you are not sure about arrsngement plans could you use your mortgage break money to snowball some debts?