Don't know where to start and it just gets worse and worse.

Moobag

Hello

I've decided to post on here after reading the info about debts on the website. I really don't know where to go with my debt at the minute and I'm spiralling. I bought my first home five years ago and started off just needing furniture, which went on the cards. I also started a new job which involved taking service users out in the community so needed a new car as my old one wasn't reliable, again more debt. Then there was the child care costs for two kids. I got to the point where I was only meeting minimum payments each month but was so short on cash that I was then having to use the cards to buy food and petrol and then whenever christmas and birthdays came around, I was having to rely on them or store credit to buy stuff for my kids. I'm not looking for sympathy, just trying to show (myself mainly) how it's got this bad. I'm now £25k in debt and thinking about it constantly. I really don't know what to do any more. I can't get a consolidation loan as I've been told I won't qualify, I can't remortgage as I'm locked into a deal and even if I did, it wouldn't be enough to pay it all off. I thought about IVA etc but scared of the impact on my credit rating for if I ever do want to re mortgage. I can't even afford to pay into my work pension scheme and with only another 20 years or so of work left me, I'm now in a total panic. My age is also another factor into why I'm worried about not being able to re mortgage if I have IVA/debt management on my records. Any advice would be greatly appreciated. Thank you.

AlwaysWorking

Hi. Could you possibly post a SOA so people can advise better?

https://www.lemonfool.co.uk/financecalculators/soa.php

Format for MSE after completing and then post in the thread and the very knowledgeable people on here will try to help. Good luck.

Misslayed

@Moobag You've taken the first step by posting on here, well done. I'm not really in a position to help very much, but I didn't want to read and run, and there a lot of very helpful, knowledgeable and kind people here who will help and support you. 

pinkshoes

 @Moobag well done for getting this far!

Sounds like you need to do an SOA to work out how much money you have coming in, and where it is going.

This will then help other people point out where money is being wasted and could potentially help you pay off the debt.

Lots of people struggle between WANT and NEED when it comes to purchases e.g. I'm assuming you bought new furniture for the house when you could have spent very little on second hand furniture? Was the car brand new too? Is it possible to sell this and buy something cheaper? We got a metallic yellow Citroen once (yuck!) for £600 (garage trade in that they didn't have the space for) that we got 15 months of driving out of before scrapping it for £80!

Here is a link to do the SOA:

https://www.stoozing.com/soa.php

tacpot12

Don't worry about your retirement - 20 years is a long time. When I was 35, I had £12K of debt and a mortgage that I was paying 9.99% interest on (this was 24 years ago). I managed to retire at 53!

All the readers of this board know how easy it is get into the habit of using debt to pay for essentials. Don't beat yourself up over it. The main thing is that you are here now. You will be able to sort out your debt problem, and once sorted, you will be able to provide for yourself and your children better, and ultimately will be able to continue to save for your retirement.

Have you checked that you are receiving any benefits that you are entitled to? As you have children and child-care costs you might  find you are entitled to a small amount of help from Universal Credit. You can check your entitled at entitledto.co.uk or turn2us.org.uk.  if you are already receiving Working Tax Credits or Child Tax Credits, you still might want to consider moving to Universal Credit as you don't have the potential for under or overpayment with UC that occurs with Tax Credits. 

Do you get paid mileage when you take the service users out in your personal car? You should because your are providing the fuel and incurring the extra wear and tear on your car, and you have the extra cost of business insurance - do check that you have the correct insurance to take service users in your car if you aren't sure about this. 

Please post a Statement of Affairs (SoA) so we can see what other changes might be necessary. 

sourcrates

Hi,

Well done for posting.

Debt is the one thing people tend to panic about, yes it can be a shock when you can`t meet your financial obligations, but honestly there is no need to worry, in this country we have a number of formal, and informal debt solutions, they are easily accessible by anyone, creditors readily accept them, the solutions are there, all you have to do is access them via one of the free debt advice agencies.

The option you choose depends on your personal circumstances and the amount of debt you have, your SOA will tell us pretty much what to expect.

You say you are worried about re-mortgaging, well if a debt solution is necessary, then so be it, your credit file will have to take the hit, people who were bankrupt have since obtained mortgages, all you need to do is use a good broker, so don`t let that be a barrier to you asking for help.

The worst you would have on your file in debt management would be a few defaults, whose impact would diminish with age, and will vanish entirely after 6 years, so to make an omelette, you gotta smash some eggs.

Moobag

Thank you all so much for replying and not making me feel judged ( I do a good enough job of that myself). I will complete one of the SOA forms and post it once completed. Thank you again, I really appreciate you taking the time to help.

Moobag

Hello

So i've completed the form as discussed but I don't feel its an accurate reflection as my partner and I keep our finances very separate. We pay equal amounts into the joint account for the mortgage and utilities but my debts are paid out of my own wage along with food as my partner is only home 2 days a week and buy's food when he's here so the calculation for the food is for me, the two boys (who are now both teens and eat a lot!) and the dog. So where it looks like there's more disposal income, it's not my income, it's his. Do I need to do a separate form and if so, do I only put my half of the mortgage and utilities?

[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.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 2057

Partners monthly income after tax....... 2800

Benefits................................ 140

Other income............................ 425[b]

Total monthly income.................... 5422[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 709

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

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

Management charge (leasehold property).. 8

Council tax............................. 175

Electricity............................. 165

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

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

Water rates............................. 63

Telephone (land line)................... 15

Mobile phone............................ 105

TV Licence.............................. 12

Satellite/Cable TV...................... 65

Internet Services....................... 24

Groceries etc. ......................... 375

Clothing................................ 100

Petrol/diesel........................... 200

Road tax................................ 40

Car Insurance........................... 43

Car maintenance (including MOT)......... 50

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

Other travel............................ 100

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

Other child related expenses............ 370

Medical (prescriptions, dentist etc).... 25

Pet insurance/vet bills................. 25

Buildings insurance..................... 23

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

Life assurance ......................... 130

Other insurance......................... 25

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

Haircuts................................ 80

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

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

Emergency fund.......................... 0[b]

Total monthly expenses.................. 2977[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 214000

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

Car(s).................................. 1000

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

Total Assets............................ 215000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 161000...(709)......0[b]

Total secured & HP debts...... 161000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

HSBC me........................4954......150.......0

HSBC partner...................900.......80........0

Barclaycard me.................1213......30........0

Overdraft me...................1100......30........0

Overdraft joint................650.......70........0

Paypal me......................1027......30........0

Next me........................989.......50........0

Amazon me......................1493......50........0

Barclaycard 2 - me.............5600......100.......0

Very me........................400.......20........0

Aqua partner...................5869......70........0

Aqua me........................6302......70........0

Tesco partner..................5317......125.......0

Tesco me.......................1738......65........0

Halifax partner................4878......125.......0

Halifax me.....................5214......125.......0

Barclaycard partner............7605......100.......0[b]

Total unsecured debts..........55249.....1290......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 5,422

Expenses (including HP & secured debts). 2,977

Available for debt repayments........... 2,445

Monthly UNsecured debt repayments....... 1,290[b]

Amount left after debt repayments....... 1,155[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 215,000

Total HP & Secured debt................. -161,000

Total Unsecured debt.................... -55,249[b]

Net Assets.............................. -1,249[/b]

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

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

Vinknut

If they're separate, you need to remove your partner's income and their debt payments and just put yours, including any partial amounts you pay (ie. if you pay half the mortgage, put down £355).

You can then do a separate one for your partner.

kimwp

Well done for posting on here and making really positive steps. I think if you keep your finances separate and you are solely responsible for your debts, then it makes sense to re-do your  SOA with only your income (including child benefit if you manage that) and only your parts of the bills. Where you are paying parts of the bills, write a note to state this by the number once you have pasted it in here so then we can advise on whether it's worth trying to reduce it.

Also, if you can add your APRs, this will help with how to tackle this. 

enthusiasticsaver

If your partner and you have separate finances then I would redo the soa with just what you are responsible for and your income alone.   You can presumably remove his debts too as I assume you are only paying towards yours? Is the other income child maintenance?

A separate one can be done for your partner and you need to  put interest rates in as they will dictate as to the best way of tackling this.  Normally you would target the most expensive first.  Usually very (unless on 0%), next and amazon are expensive and relatively low balances so I would tackle those first then close them. Overdrafts are also usually very expensive too so clearing those should be a priority.   I am not sure how the benefits/other income is allocated between you but I assume it is to cover the child related expenses which should also cover clothing and some of their food?  Your debt comes to around £30k with presumably minimums at £720 per month.  On first glance I would say that you could get the expenditure down on mobile phones, cable tv, groceries and clothing.  There is nothing on entertainment though so do you not do takeaways or meals out etc? If you are paying out for other travel do you need two cars or is that problematic because your partner is away from home? 

The debt is relatively high but I am guessing that you may not have budgeted in the past and now the payments are a fairly substantial part of your income you are finding it hard to stretch the money.  The first thing you have to do is stop using cards.  You may need to use some sort of debt solution like a DMP but without the soa reflecting the true picture it is difficult to say if that would be your best option.  The interest rates are critical as  even though you are paying over £700 per month towards the debt a lot of that may just be covering interest/overdraft fees etc.  If this is the case then approaching stepchange with a view to a DMP  may be your best choice.