Overwhelmed by debt

joneedshelp

I’m new to this but I have secret debt from family and friends and I am so overwhelmed. 

In March 2020 my mental health post baby deteriorated and I got diagnosed with PND my partner had to give up work to support me and our child. I was put on sick leave which meant we struggled financially.  I’m now in £27500 of debt and I cannot cope knowing I have failed so badly. 

I’m now back at work and make an ok amount £2100 usually after tax.  My partner has had to stay off work to care for our child and makes approx £600 a month working when I’m on days off.  

I’m so ashamed.  Loans equal £17,500
and credit cards £10,000

i own my home with a mortgage of £600 a month.  

I’m so overwhelmed I don’t know where to start

someone please help me 

sourcrates

Hi,

Don`t feel ashamed, there are lots in the same boat as you are, first thing to do is fill out your SOA (statement of affairs) available from here -

SOA Calculator (stoozing.com)

Then we know what figures we have to play with.

Debt is just a number, no one is beating down your door to be paid, I guess, so try and relax, if the debt can`t be tackled by better budgeting, then debt management may be the way forward.

As a homeowner your choices are limited, but the debt remedies exist, and only have  to be accessed, creditors are well used to such arrangements, its really just another problem to be solved, that`s all.

You have a good income, and 27k of debt, 4 to 5 year DMP @ a possible £500 a month (depending on SOA) the debt will be gone, even sooner if you can save as well for full and final settlements.

Your actually in quite a strong position from what you've said so far.

joneedshelp

Thank you for the reply 

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary	Amount(£)
Total monthly income	2,785
Monthly expenses (incl. HP & secured loans)	1,100
Available for debt repayments	1,685
UNsecured debt repayments	518
Amount left after debt repayments	1,167

Personal Balance Sheet Summary	Amount(£)
Total Assets (things you own)	190,000
Total Secured & HP Debt	-126,000
Total Unsecured Debt	-28,100
Net Assets	35,900

Household Information

Number of adults in household	2
Number of children in household	1
Number of cars owned	0

Income, Expense, Debt & Asset Details

Income	Amount(£)
Monthly income after tax	2100
Partners monthly income	600
Benefits	85
Other income	0
Total monthly income	2785

Expenses	Amount(£)
Mortgage	600
Secured/HP loan payments	0
Rent	0
Management charge (leasehold property)	0
Council tax	120
Electricity	40
Gas	0
Oil	0
Water Rates	0
Telephone (land line)	0
Mobile phone	20
TV Licence	13
Satellite/Cable TV	0
Internet services	35
Groceries etc.	200
Clothing	15
Petrol/diesel	0
Road tax	0
Car Insurance	0
Car maintenance (including MOT)	0
Car Parking	0
Other travel	0
Childcare/nursery	0
Other child related expenses	0
Medical (prescriptions, dentists, opticians etc.)	30
Pet Insurance/Vet bills	10
Buildings Insurance	0
Contents Insurance	0
Life Assurance	17
Other Insurance	0
Presents (birthday, christmas etc.)	0
Haircuts	0
Entertainment	0
Holiday	0
Emergency Fund	0
Total monthly expenses	1100

Secured & HP Debt Description	Debt(£)	Monthly(£)	APR(%)
Mortgage	126000	(600)	0
Secured & HP Debt totals	126000	-	-

Unsecured Debt Description	Debt(£)	Monthly(£)	APR(%)
Mbna	7300	0	0
Post office	5000	178	0
Admiral	2500	117	0
Barclaycard	3300	0	0
Natwest	10000	223	0
Unsecured Debt totals	28100	518	-

Asset Description	Value (£)
Cash	0
House Value (Gross)	190000
Shares and bonds	0
Car(s)	0
Other assets (e.g. endowments, jewellery etc)	0
Total Assets	190000

joneedshelp

Both mbna and Barclaycard are 0% so I can pay any minimum payment I usually pay £200 on mbna and £100 on Barclay 

TheAble

I suspect the SOA is missing a few areas (no travel costs, water rates or insurance premiums for example) but broadly it seems you have quite a healthy surplus. You should include the APRs of the non-0% stuff as it will give you a steer on how best to allocate payments.

joneedshelp

My water rates are part of my device charge which I’ve just realised I forgot to put sorry.  My travel costs to work are taken from my wages before final pay. 

ratrace

joneedshelp said:

Both mbna and Barclaycard are 0% so I can pay any minimum payment I usually pay £200 on mbna and £100 on Barclay 

Hi welcome to the board i think you need to edit your soa to reflect the above payments as this is not a true soa and makes it looks like you have a lot more than you do

plus some of the categories have 0's such as water. gas, haircuts, entertainment etc.......  

joneedshelp

Sorry I’m not very good with the forms.  Please be aware building insurance and water is part of my service charge.  Travel expenses come out of my pay before the £2100 final amount.  

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary	Amount(£)
Total monthly income	2,785
Monthly expenses (incl. HP & secured loans)	1,224
Available for debt repayments	1,561
UNsecured debt repayments	818
Amount left after debt repayments	743

Personal Balance Sheet Summary	Amount(£)
Total Assets (things you own)	190,000
Total Secured & HP Debt	-126,000
Total Unsecured Debt	-28,100
Net Assets	35,900

Household Information

Number of adults in household	2
Number of children in household	1
Number of cars owned

Income, Expense, Debt & Asset Details

Income	Amount(£)
Monthly income after tax	2100
Partners monthly income	600
Benefits	85
Other income	0
Total monthly income	2785

Expenses	Amount(£)
Mortgage	600
Secured/HP loan payments	0
Rent	0
Management charge (leasehold property)	99
Council tax	120
Electricity	40
Gas	0
Oil	0
Water Rates	0
Telephone (land line)	0
Mobile phone	20
TV Licence	13
Satellite/Cable TV	0
Internet services	35
Groceries etc.	200
Clothing	10
Petrol/diesel	0
Road tax	0
Car Insurance	0
Car maintenance (including MOT)	0
Car Parking	0
Other travel	0
Childcare/nursery	0
Other child related expenses	0
Medical (prescriptions, dentists, opticians etc.)	30
Pet Insurance/Vet bills	10
Buildings Insurance	0
Contents Insurance	15
Life Assurance	17
Other Insurance	0
Presents (birthday, christmas etc.)	5
Haircuts	0
Entertainment	10
Holiday	0
Emergency Fund	0
Total monthly expenses	1224

Secured & HP Debt Description	Debt(£)	Monthly(£)	APR(%)
Mortgage	126000	(600)	0
Secured & HP Debt totals	126000	-	-

Unsecured Debt Description	Debt(£)	Monthly(£)	APR(%)
MBNA	7300	200	0
Barclaycard	3300	100	0
Post office	5000	178	0
Admiral	2500	117	0
Natwest	10000	223	0
Unsecured Debt totals	28100	818	-

Asset Description	Value (£)
Cash	0
House Value (Gross)	190000
Shares and bonds	0
Car(s)	0
Other assets (e.g. endowments, jewellery etc)	0
Total Assets	190000

Naomim

Hi,

Please don't feel ashamed. You are in the right place for help. Many of us have been through it and still going. Once you get a plan into place, it really is like a great weight has lifted from your shoulders. 

Do you know how the debt built up? Was it holidays and large purchases or day to day living, mix of both kind of things? 

You have £5 listed for presents - is this realistic to cover the whole family or have you cut out a lot of buying?

Does £200 groceries cover pet food and baby items like nappies etc? Also nothing in child related expenses, no toddler groups, baby swim classes - anything?  Do you buy a coffee when you're out and about? Do you have any takewaways, take packed lunches to work?  These small spends in general are the ones that trip us up

You also need to think about trying to get something put down for an emergency fund so you don't need to turn to credit when the washing machine inevitably breaks down.

The SOA is a great start and then you can start to fine-tune. As mentioned, please try and get the APR rates of the debts so you can look to see where you need to concentrate the efforts for maximum impact.

Good luck and keep posting.

Naomim

Andyjflet

Hi, I was in your position a couple of years ago and now in my last 24months of debt payoff using the snowball method. Can you sell anything you bought using the cards? I had a coffee machine and a bike financed, ridiculous I know, but I haven't used a card for over two years now. 
Start with the lowest balance first and throw everything at it, increase your income by getting a side hustle. Think of the freedom you will have when that £800+ a month is all yours and your paycheck just goes towards what you want to do in your life.