My life is in tatters. I'm in £50k debt. Help!

Applewood1

Hi, i just wanted to reiterate the other comments - yes, it's an unfortunate situation, but you are not a horrid person and should not be demonised. You've been unwell and have made some errors in judgement due to this. You need to forgive yourself and know that you're doing the best you can to make things better. I also wouldn't take the loan from your dad - it complicates an already complex situation. Good luck and best wishes for future improved health

elsien

I'm glad you managed to have a decent talk with your OH and things are clearer now.
I would just add with regards to loan vs IVA, if you were not able to pay it for whatever reason - illness, redundancy, whatever, which would be the worst outcome?
Not being able to repay dad with the subsequent impact on both his finances and your relationship particularly if he gets to the point where he needs to pay for care.
or
You and your husband being potentially impacted by your poor credit score for a longer period of time.
Ideally it won't come to that, but it may if your business doesn't recover or you or your husband become unwell,  and needs to be part of your decision making process. 
(And by the by you are not a jerk.)

Poppy1984

You are NOT a jerk, you're human and you have made some mistakes like we all do. Now is the time to put your big girl pants on and learn from them. Borrowing from your Dad although feels like it'll solve your problems it won't in the long run. 

Here is a summery of how I have paid back nearly £17,000 in 2 and a bit years, I hope it helps and gives you a little food for thought. 

My lightbulb moment was when I realised after consolidating my debt for a second time and then continuing to spend on credit cards and buying buy now pay later I gave myself a shock and thought what the H am I doing!!!!! When reading debt free diaries a few people had mentioned Dave Ramsey so I looked him up, I watched a few of his YouTube videos and listened to some of his podcasts and what his was saying really resonated with me, in his words I was definitely sick and tired of being sick and tired! I then listened to his audiobook I think it was the total money makeover. I honestly found the book amazing it helped me so much and woke me up from the fog I had been living in! 

Dave constantly talks about having a budget, so I downloaded the spending tracker app on my phone. Which I confess I'd used a few times but never really stuck to. This time I was determined! It might sound a bit odd the way I have mine set up but it works really well for me. 

Spending tracker: I have 3 "accounts" on my spending tracker 1: Bills 2: Shopping 3: Spending money. So in my bills account I have my total monthly income as and when it comes into my account. 

I then have ALL my outgoings. That's every Direct debit, standing order etc. In the bills account I also have £200 for Shopping, which is all groceries and household cleaning products, toiletries etc. And I have £200 spending which is anything else that I may need to spend money on either for myself or my son that doesn't fall under the category of groceries. 

In the 2nd account I have an income of £200 for shopping And outgoings are every shop that I spend money on that falls under that eg food shopping, cleaning products, toiletries etc. Tracked in that account. When it's gone it's gone so I aim to spend around 40 a week.  

In the 3rd account I have £200 income and any other spend that isn't a bill or groceries gets recording in this account. Again when it's gone it's gone. So it really helps to focus my mind if I know I have some costs coming up that month.

At the end of my month (14th, day before pay day) if there is any money left in my spending or shopping budget I use that to over pay my loan. It means every penny is accounted for. 

As well as the spending tracker, i have also set up a few saving pots for expenses that pop up every year. Eg I have a car expenses account that I put a monthly amount in enough to cover my insurance, tax, MOT and a little bit of money if the car requires work at its MOT. 

I have a xmas/gifts account which I save enough to cover Xmas presents, bday presents and any socialising for myself and son over the festive period. 

I have a school uniform account because he needs that every year, although this year will be the last as he will leave school next spring. 

I have a holiday account which I only put a small amount of money into each month for cheap breaks away. 

I have an emergency fund account which I like to have £300 in minimum. Although after the roof scare I feel as though I might like to have it bolstered up to £500.

To try and keep my costs to a minimum for food shopping I cook a lot from scratch and I meal plan. I keep a list of what I've got in the freezer.  Check what's in the cupboards and fridge and make a meal plan from that listing anything I need to buy to go with. I try and get yellow sticker stuff where possible and fill the freezer. I batch cook a lot also. 

If we go on days out I take picnics and flasks of tea and coffee we very rarely have anything in a cafe these days. 

I don't get on too well with survey sites I hate it when you answer questions and it says you're not eligible. I do like prolific though and have made over £270 on there which I either use to overpay my loan or sometimes to pay for a treat and not feel guilty. I also use receipt scanning apps shoppix and zip zero. 

I have switched current accounts twice to get the switching bonus, it's a little bit of an inconvenience but worth it for the free money, I've earned £375 doing that. 

I also look around for the best deal every time a utility bill is out of contract and switch to the best deal for any regular bills I'm paying. 

Please be kind to your self, you aren't going to beat yourself into becoming debt free! There are so many people on this site that can give you amazing advice, if you could take some time to complete a full Statement of affairs and post it on here I guarantee you it will really open your eyes and give you a starting point. You will get some amazing advice on your SOA on here. It may feel daunting but trust me it's worth it. 

Take care sweetie

Poppy

Bubbles82

My goodness thank you everybody. I've felt really alone. My husband tells me he's always there for me and to also talk to my friends but I can tell he's struggling to be around me. I've done up a SOF based on only what I spend. My husband covers everything else.

[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......... 2

Number of cars owned.................... 0[b]

Monthly Income Details[/b]

Monthly income after tax................ 1299.8

Partners monthly income after tax....... 0

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

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

Total monthly income.................... 1299.8[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

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

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

Management charge (leasehold property).. 0

Council tax............................. 0

Electricity............................. 0

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

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

Water rates............................. 0

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

Mobile phone............................ 65

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

Satellite/Cable TV...................... 69.9

Internet Services....................... 32.5

Groceries etc. ......................... 0

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

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

Road tax................................ 0

Car Insurance........................... 38.86

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

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

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

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

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

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

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

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

Contents insurance...................... 0

Life assurance ......................... 0

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

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

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

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

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

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

(Unnamed monthly expense)............... 0

Spending Money.......................... 200

Company Stationery...................... 5

Computer Protection Software............ 5.83

Accountants............................. 83

Company Website......................... 15

Business Insurance...................... 42.71

Car Lease, Tax & Servicing Cost......... 210.99[b]

Total monthly expenses.................. 808.79[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 0

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

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

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

Total Assets............................ 0[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

Loan to my dad.................30000.....100.......0

Mobile phone handset ..........750.......0.........14.9

Government loan................13450.....0.........2.5

Loan...........................6489.13...0.........9.9[b]

Total unsecured debts..........50689.13..100.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 1,299.8

Expenses (including HP & secured debts). 808.79

Available for debt repayments........... 491.01

Monthly UNsecured debt repayments....... 100[b]

Amount left after debt repayments....... 391.01[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 0

Total HP & Secured debt................. -0

Total Unsecured debt.................... -50,689.13[b]

Net Assets.............................. -50,689.13[/b]

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

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

kazwookie

What are the terms of the gov. loan?

How did the £30K build up, what type of things were you buying, can you sell any of them, FB / ebay/ car boot when they get going again etc?

Good luck

117pauline

Hi Bubbles
This is just my take on your situation.  I think your husband would be most reassured if he can see you working towards getting rid of the debt.  From your SOA, it appears a lot has to do with your businesses. Could you manage to spend an hour a day going back through your bank accounts looking to see where the spending has happened and recording it so you can allocate it different areas of spending. If you can't face an hour, do 30 minutes. But do something everyday to get a clearer picture of where it happened otherwise it could happen again.
I'm confused about the loan of 30000 from your dad. Did you take it for a specific reason?  When did you receive it and how much did you agree to pay back monthly?
I am sure you are aware that your internet/TV package is expensive as is your phone. Can you find a cheaper package and perhaps get a cheaper phone, even selling the expensive one and replacing it with a cheaper model.
All these questions are for you. You don't have to share the answers if you don't want to.
Finally I would suggest having a finance meeting every week so you and your husband can start to work together. To get a real picture of your finances, a family SOA is more helpful. Perhaps agree to a short update and then follow it with a nice meal so you can start building the trust back.
Good luck, take care
Pauline

Karonher

Just one question - what is the £200 spending money? Is that something that can be cut?

ZaSa1418

Hi Bubbles, on your SOA there is no benefits, do you not get child benefit? 

Andyjflet

Hi, well done for posting, you have got this. I'm another advocate of Dave Ramsey and its changed my life, I havent spent on a Credit card since November and am clearing down my debts. I wont ever go back to consumer credit, Ive wasted years of payign interest for nothing, I have nothing to show for it.
Quick couple of points about your SOA, you seem to be missing loads of categories ? Or is this because hubby pasy some of the bills ?
Also, and sorry for the tough love, youve put down £200 spending money, you cant afford any spending money, this needs to go into the debt categories.
I would advise watching and listening to Dave Ramsey podcasts and on you tube, my whole mindset has changed and the system really works I promise. 

enthusiasticsaver

I  think personally you should not borrow from your Dad.  Money and family do not mix and he is 70 so presumably retired on a fixed income.  If you were unable to repay him due to your business failing then this might affect your relationship.  Is the £30000 loan to repay existing debts or have you already taken the money from him?  I personally would look at a DMP instead. 
You presumably run your own business in which case is that income the profit or the total income the business brings in each month?  How variable is that?  Really if you run a business you should be having a business account and all of those business costs like insurance and accountants would come out of that and you should be putting money aside for tax and paying yourself a salary based on average income. It looks like you have mixed your personal and business finances. 
Your soa shows a fairly substantial cable/satellite tv subscription.  Can you cancel that or is it still in contract? 
What is the £200 spending money?  Breaking down what you spend into food, eating out, clothes, hair etc is better than this general category when you are in debt and should be watching every penny. 
Why do you have a hefty mobile phone contract and also a loan for a handset? Is that in contract too? Why are there no payments on the mobile phone handset?  Can you give it back and get a cheaper one? 
You have a fairly high car lease cost.  Leasing a car is the most expensive way of organising transport.  Do you just have one car between you or do you have one each?  Do you need the car? 
When do you have to start paying that government loan back? 
The accountant is also expensive for what seems like a very small business.  What service do you get from them to pay almost £1000 a year when your income only appears to be £15k gross. Are they auditing accounts and submitting tax returns?