Freezing credit card interest, payments and consolidating

EssexHebridean

Berries2014 said:

Hi All, 
My SOA below.  Any reviews and advice appreciated.  At the moment my car is off the road.  It looks like it is unrepairable and covered neither by insurance or warranty which leaves me £500 worse off - I am in the process of selling and using a hire car (more expense). I am hopeful the sale will cover the HP then I will lease direct from work.

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 1

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

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

Monthly Income Details

Monthly income after tax................ 4390.88

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

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

Other income............................ 0 Should there be some form of child support from your ex here? (I appreciate that sometimes the stress involved in getting this is over and above the benefit you would receive from it)

Total monthly income.................... 4390.88

Monthly Expense Details[/b]

Mortgage................................ 672

Secured/HP loan repayments.............. 487

Council tax............................. 300 You are getting single person discount on this, are you? It's very high! 

Electricity............................. 60

Gas..................................... 68.66 

Water rates............................. 40.04 If this is metered then have a think about how it can be cut back.

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

Mobile phone............................ 22

TV Licence.............................. 13 This should be £13.37 - it's a risky game rounding down on your SOA as it means that over the whole document you could be out by a significant sum - it also suggests that you're only treating the £'s as important, not the pennies... 

Satellite/Cable TV...................... 0

Internet Services....................... 91 - includes TV TOOOOOO high - have a think about how you can haggle it down, changing supplier, reducing the TV package etc. 

Groceries etc. ......................... 300  

Clothing................................ 0 Nope - you might think you're spending nothing, but as a household of 4, with three of those being children, you definitely are. what about school uniforms, for a start?! 

Road tax................................ 41 Are you paying this monthly? That's an expensive way of doing it. If you think you're saving it each month to pay annually, are you really doing that, especially allowing that you're showing zero cash assets... 

Car Insurance........................... 60 Assume you've checked this is the best price you can get. If not follow Martin's guide for reducing. 

Car maintenance (including MOT)......... 30 Again - I suspect this is not really being saved...? 

Petrol ............................ 300 Ouchy - this is high - long commute? Or lots of other journeies that may be able to be combined in some cases? 

Childcare/nursery....................... 885 Do you follow the guidance for getting the most benefit from what you pay for this? Not my area but others will be able to advice if you're unsure.

Other child related expenses............ 50

Medical (prescriptions, dentist etc).... 20 If this is prescriptions then consider a pre-payment certificate. 

Pet insurance/vet bills................. 30

Buildings insurance..................... 20

Contents insurance...................... 20

Life assurance ......................... 0 As a homeowner with three kids I'm going to suggest you might need this...

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

Presents (birthday, christmas etc)...... 100 Again - I suspect this is not really being saved...? 

Haircuts................................ 10

Entertainment........................... 100 

Holiday................................. 0 Never? Not even a weekend away, or a visit to family? 

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

Total monthly expenses.................. 3769.7

Assets

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

House value (Gross)..................... 307000

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

Car(s).................................. 12000

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

Total Assets............................ 319000

Secured & HP Debts

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

Mortgage...................... 181415...(672)......1.89

Hire Purchase (HP) debt ...... 10714....(487).....5

Total secured & HP debts...... 192129....-.........-   

Unsecured Debts

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

MBNA CC........................10000.....279.......24

Halifax CC.....................8746.19...219.4.....24

Santander......................4400......213.2.....19

Thanks in advance

Usual additions in bold above. 

I suspect that fatbelly is right about you needing to look at a DMP - out of interest have you checked your eligibility to see if you might be able to get the cards onto 0% (Although I suspect the total balances of the first two are going to give you a problem there as they are high). There are savings you can make on the SOA - but I suspect there is also stuff missing, and some amounts which are down as regular money being put aside which actually doesn't happen - leaving you short wen the big annual spends come along. 

Where is the hire car cost that you've mentioned in that SOA? I may be missing it but it doesn't seem to appear? And have you checked to be sure you can actually get enough for your unrepairable car to cover the outstanding finance? It would seem unlikely to me allowing for the amount involved...
 
This is NOT the SOA of someone who should be even considering risking their home by consolidating debt to their mortgage IMO - it would just be way too risky. 

Berries2014

Thanks for all your responses.
The £91 is for Sky and internet. No subscription to anything else but I will call them and negotiate.
£300 council tax is correct unfortunately.  I have checked.
I have rounded up the MBNA card by 56p, the rest are accurate.
No clothing for me, I am just making do at the moment.
Entertainment is for me and the kids - soft play, skating, cinema the odd coffee.  I can definitely cut this back though.  Not so much time down the pub, I am female but friends have been great and come to me.
My current mortgage is on 1.89 and the rate finishes in 2 years.  I have 20 years on the term.  I am conscious that a DMP may hinder my ability to remortgage when the time comes?  I spoke to my bank last week about the draw down, it seemed straight forward until the electoral role error.
My car is essential for my work and to get the children to and from childcare daily.  I need something reliable or my job would be affected. I already feel I am juggling this on a knife edge!
In the next two years my childcare costs will reduce as I will get 30 hours free which will help alot.
I have considered selling and renting or buying something smaller but can't get the figures to stack up.

So, I think my action plan for now will be to call my credit cards and see what they can do for me, have another look at my bills and review from there?

EssexHebridean

What is your plan for the replacement of the car?  It seems unlikely that you're going to get enough to settle the outstanding finance AND purchase some form of replacement? 

No clothing for you is one thing - but what about the kids? they are presumably growing, and so are going to need stuff replaced on a regular basis - now some things can be done on a real budget particularly for young kids - hand me downs from older ones, and from other family members kids, or cheap bundles from ebay/charity shops, but they'll still need underwear and shoes...you need to start budgeting for this. (And even for yourself, you need to set aside a nominal sum for when knickers or underpinnings need replacement!) 

moving_forward

Being a bit naive if the car is the hp costs could you get an electric one in replacement which could reduce fuel cost or is this not a possibility seeing how your fuel bill suggests high mileage.

kimwp

Berries2014 said:

.
My car is essential for my work and to get the children to and from childcare daily.  I need something reliable or my job would be affected. I already feel I am juggling this on a knife edge!

My first car (second hand) lasted ten years and only eventually got scrapped because I hadn't looked after it properly and was going to cost too much to repair. I've had my second car three years now. The only breakdowns were when I left the lights on in the car so the battery had drained.

EssexHebridean

Second hand, older cars can undoubtedly be reliable too. MrEH's last car was bought at 9 years old for £2300 (Less a small amount of part-ex on his previous, which we owned for a similar amount of time and for not far off the same mileage) - we got rid of it last summer at 16 years old purely because with the ULEZ coming in in London we had no choice (It was a diesel) - it was still sound enough and was happily passing MoT tests. It gave us in the region of 100,000 miles of relatively trouble-free motoring - just the usual small things you might expect for a car doing reasonably high mileage. We even got £300 part-ex for it which we really weren't expecting due to its age and mileage! 

moving_forward

Wow that was good EH. We are put off older cars as had a newer but still second hand model that cost thousands in repairs (alot under warranty luckily) but we let it go when it was going to cost thousands more to fix and have stuck with one car since.

fatbelly

The chaps on the motoring board will always point you in the right direction for a mse car. There is a long running thread on bangernomics

enthusiasticsaver

Berries2014 said:

Hi All, 
I am new to the forum and wondered if anyone could help advise.  Post relationship break up I have been left with significant debt, all in my name.  The debt is historic and I have had a conversation with my mortgage lender about drawing down and adding to the term which for me is the best solution as I have significant equity.
The application was initially refused as an error on my credit file indicated I wasn't on the electoral role ( I think).  I am having this amended.
If I approach my credit card companies and ask them to freeze interest / payments will this adversely affect my credit score?  I am paying 24% interest, and struggling to make minimum payments at the moment.  Thanks in advance.

Adding unsecured debt to your mortgage is not the best solution for you even if it were approved. Even if the debt were historic adding £23k to your mortgage effectively turning unsecured debt into secured and possibly risking your home would not be a good move. Freezing credit card interest will affect your credit rating. Given you are unable to move to 0% deals and are struggling I think a DMP may be needed. Phone step change, a free debt charity for advice. 

TheAble

It's been asked before but are you really sure on that council tax? Assuming a 25% single person discount it equates to nearly £5000 a year. On a 300k house? It can't be right.

Also if the car sale does cover the HP it will free up several hundred of cash flow. Get a cheap lease though to replace it - you can get a good small car for £150/month. Likely this will reduce fuel and insurance costs too; no mot or tax  and your only maintenance will be the annual service.