Need help not slipping further into debt.

Happy_Sloth

3 years ago I have a good job and income and bought the house of my deams... it's perhaps not everyones cup of tea it was a very rundown edwardian townhouse that had seen better days.  When we bought it we knew it needed work and we got it at a bargain price because of the amount of work it needed,  it's a big house and we knew renovations would be expensive but there was no-way we could afford a house like this if the work had already been done.  When we moved in we thought most of the renovations would be cosmetic and we didn't mind the idea of living on a building site because we knew we would do the jobs as we could afford it. 

Over the past couple of years we have invested every penny we've earned into making the house livable but many of the renovations where urgent and none cosmetic. We remained debt free until august last year,  when 3 disasters hit.  1) The roof started leaking badly and needed to be entirely replaced as the whole roof was rotten.  2) the boiler died and when we had a fitter come and replace it, he wrote off our electrics.. when i say this i mean he turned them off and told us the electric's in the house where no-where near safe or compliant.   3) we came home one day to find a large portion of the gable wall was no-longer attached to the house and it was raining in the hall. 

Because none of these jobs could wait we have to get a unsecured loan of around £20,000 ... because we where idiots we underestimated how much we would need and put another £15,000 on credit cards.   At the time I wasn't worried, we had a good income and the re-payments where manageable.  

There is still work to do on the house thats deemed to be important, but honestly we can't even think about that now.. for example none of the upstairs water works, we have no flushable toilets, shower or working bath.  Because they are all filled from a header tank that doens't fill,  we use buckets going up and down 3 floors to manually fill it.  The shower is a no-go area as even when the header tank is filled the drip tray leaks into the kitchen.  So at present we have 4 adults who are restricted to taking a bath, but filling the tank enough for a bath takes 40 minutes of going up and down stairs with buckets. 

in the last 6 months our income has nose dived.. I'm a small business owner barely clinging on to my business and my husband is furloughed in a job that is more likely to go redundant than see him back at work.  The bills on our house are high,  because it's a big house in a nice area,  we've cut back on everything we realistically can.   

I honestly don't know what to do at this point,  our income has dropped by about £50,000 a year and this house was not made to run on our current income and with the debt we got into last year we are barely keeping our head above water.   I've just started a temporary job to try and help pay some of the bills but with my new wages and my husbands furlough we don't even cover the essentials and the mortgage break is due to end at the end of june.  

I just don't know what to do. 

LordSomebody

Sorry, I don’t mean to be unhelpful, but couldn’t some or all of this stuff be claimed on insurance?

joshiesaunt

I would have investigated claiming on the insurance for the gable wall.  Can you post a statement of affairs?  Have you considered selling up and downsizing to a cheaper property.

Happy_Sloth

LordSomebody said:

Sorry, I don’t mean to be unhelpful, but couldn’t some or all of this stuff be claimed on insurance?

Because the house was in a bad state when we bought it, most of the damage was considered wear and tear caused by a lack of maintenance and therefore not covered by insurance.  Unfortunately the lack of care was by the previous owners not us.  We knew it was in a bad way, i guess we got blinkered by the fact that we fell in love with the house and naively thought we could fix it a little bit at a time.  

The gable end was covered, the insurance company repaired the wall.. but the damage was caused by the incorrect render being applied to the house 50 years ago.  We still have to address the render because most of the house still has the wrong render which is badly blown and letting damp in on many of the walls and causing further damage.  

However the state of the electric's and roof was deemed to be caused by a lack of care/maintenance so it wasn't covered by insurance.  The electric's for example had not been updated since world war 1,  some area's of the house didn't even have electric's.  So when the boiler guy said what we had wasn't safe we needed to get the whole house re-wired. Granted we could have just had it made safe, by having a part rewire to the rooms that needed it, but as most rooms only had one socket or no sockets we decided to get a loan and get the whole lot done.  However it also added cost of getting a new kitchen, because when the re-wire was done the kitchen was pulled out and it was so old/knackered it couldn't go back in. 

Andyjflet

OK, taking it back to what we are all here for, post an SOA and lets see what costs you have against income and see what we can help with.
Be accurate with spends etc.

Happy_Sloth

Andyjflet said:

OK, taking it back to what we are all here for, post an SOA and lets see what costs you have against income and see what we can help with.
Be accurate with spends etc.

Is there a template I should use? 

Happy_Sloth

Nm I found it.... read the stickies... go me. 
[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 4
Number of children in household.........
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 1700
Partners monthly income after tax....... 1800
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 3500[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 1124
Secured/HP loan repayments.............. 292
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 195
Electricity............................. 201
Gas..................................... 56
Oil..................................... 0
Water rates............................. 53
Telephone (land line)................... 0
Mobile phone............................ 100
TV Licence.............................. 13
Satellite/Cable TV...................... 130
Internet Services....................... 0
Groceries etc. ......................... 500
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 15
Car Insurance........................... 130
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 400
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 25
Buildings insurance..................... 33
Contents insurance...................... 10
Life assurance ......................... 60
Business Expenses (accountancy fees, insurance etc)......................... 162
Presents (birthday, christmas etc)...... 150
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Care plan for Appliances................ 10[b]
Total monthly expenses.................. 3779[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 350000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0[b]
Total Assets............................ 365000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 153000...(1124).....3.5
Secured Debt.................. 7616.....(292)......4[b]
Total secured & HP debts...... 160616....-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Credit Card 1..................773.......19.31.....0
Credit Card 2..................2979......73.05.....0
Credit Card 3..................6523......65.9......0
Kitchen........................6500......160.......0
Car............................8500......160.......0[b]
Total unsecured debts..........25275.....478.26....-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 3,500
Expenses (including HP & secured debts). 3,779
Available for debt repayments........... -279
Monthly UNsecured debt repayments....... 478.26[b]
Amount short for making debt repayments. -757.26[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 365,000
Total HP & Secured debt................. -160,616
Total Unsecured debt.................... -25,275[b]
Net Assets.............................. 179,109[/b]

[i]Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

PurpleFairy26

Well done for posting your SOA and getting a thread started on here. Some folks with more knowledge than me will be along soon but in the meantime can you provide some further info so we know the details:

you say 4 adults live in the house but only 2 incomes?
you have £400 for child related costs but show no dependants
have you made all payments up to now? 

Is this what you think you spend or did you go through bank statements to get the figures?
what is the APR on the debts? 

Are you in debt with your electric bill?
business expense - shouldn’t this be included with your business accounts?

Fireflyaway

Looking at your outgoings, I'd say you could save a lot on groceries. I think you could get it down to £300. Your tv looks high as well. Are you paying extra for sports or movie channels etc? Then presents and Christmas could be cut back a bit. Mobile is also high but I'm guessing you are tied into a contract? I only pay £8 a month for mine! 
The obvious first step is no more borrowing. Sounds easy and obvious, but it's sometimes hard not to take the easy way and use credit. Master no more borrowing and it gets easier. Don't spend unless you have the cash saved up. 
Might be worth trying to get a small emergency fund together as well. I think most of us live close to the limit. The more you make, the more you spend! Especially in these uncertain times we all need to be prepared. Have you started to look for more work? There is quite a bit of temporary work about that could boost your income. 

Grumpelstiltskin

Presents £150 a month, sorry but you can't afford this. Tell adults you are not doing presents this year and children, how many do you buy for? how old are they?

kazwookie

What is the £400 child expenses for?

You say 4 adults going up with buckets to fill the tank...........................what do the other 2 adults pay each month?