In a mess! Advice needed

EssexHebridean

First question from me would be why the contents insurance would not pay out - was there just not "escape of water" cover or was it on some technicality that you might be able to appeal? 

You've already had some good feedback on the expenditure side - I would urge you to complete the SOA that was linked earlier though as it will lay everything out in a far better format for you, too, as well as being easier for people to review and make comments on. 

For things where you are in contract and will need to cancel, check precisely what the arrangements are for cancelling them to be sure that when the time comes you deal with it as needed, then diarise for when you will need to make the cancellation. 

On the clothing - right now, "essentials" are things that I suspect you are unable to buy on vinted - literally, underwear. I understand the reasons that you are committed on the wedding/holiday costs - but in turn that means that other sacrifices need to be made, and ultimately you can't spend money you don't have. Sorry if this seems brutal, but that thinking is the ONLY way out of a debt situation. 

The pet insurance looks remarkably low for three aging animals - it may be worth checking out whether it would actually pay out anything if needed. Also on the insurance front, the contents cover is expensive - is this because of the claim that you made which was not then paid out? Do you shop around for this?

For context, you are currently paying over £200 per month on "tech" type stuff - TV (not including TV license), phones etc. that would be a lot of expenditure for a family without debt - some one with, it's just unsustainable. The good  news is that when contracts are up this can be cut down hugely - hence saying to diarise when these things can all be cancelled. 

On the food/groceries front, people with dietary restrictions mostly find the cheapest way to eat is to cook pretty much everything from scratch. Where possible it also pays to ensure that anything like GF bread etc is reserved only for you if you are the only one who requires that restriction - as this makes expensive items last longer of course. Cooking from scratch can also reduce the risk of coeliacs ending up accidentally getting something with gluten in which I imagine is a concern. Inevitably dietary restrictions can mean some higher bills, but cutting back on pre prepared stuff can help a lot of folk reduce the impact a bit. Allowing that you have a prescription pre-payment, do you make sure you utilise prescriptions for gluten free requirements you qualify for if available in your area? (I imagine the OP knows about this already, but for others: https://www.coeliac.org.uk/information-and-support/coeliac-disease/once-diagnosed/prescriptions/ ) 

MrsCanary

Hi all,

Below is our formatted SOA

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 3

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

Number of cars owned.................... 3[b]

Monthly Income Details[/b]

Monthly income after tax................ 2146

Partners monthly income after tax....... 1680

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

Other income............................ 60[b]

Total monthly income.................... 3886[/b][b]

Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 349.7

Rent.................................... 465.08

Management charge (leasehold property).. 0

Council tax............................. 102

Electricity............................. 99

Gas..................................... 100

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

Water rates............................. 53.9

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

Mobile phone............................ 49.3

TV Licence.............................. 13.25

Satellite/Cable TV...................... 39

Internet Services....................... 0

Groceries etc. ......................... 400

Clothing................................ 2

Petrol/diesel........................... 140

Road tax................................ 14.43

Car Insurance........................... 51.57

Car maintenance (including MOT)......... 20

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

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

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

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

Medical (prescriptions, dentist etc).... 41.62

Pet insurance/vet bills................. 24.97

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

Contents insurance...................... 17.17

Life assurance ......................... 19.26

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

Presents (birthday, christmas etc)...... 30

Haircuts................................ 16

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

Holiday................................. 350

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

HP Ink Plan............................. 4.49

Ring Doorbell........................... 3.49

Gym Contracts........................... 55

HMRC Overpayment........................ 30.47

Union Fees.............................. 24.99

Dryer Warranty.......................... 16.25

Jewellery Warranty...................... 2.99

Oven Warranty........................... 2.5

Amazon Prime............................ 8.99

Netflix................................. 6.99

Daughter Mobile Phone................... 53.29

Husband Mobile Phone.................... 56

Husband Car Tax......................... 13.56

Husband Car Ins......................... 27.34[b]

Total monthly expenses.................. 2704.6[/b]

[b]

Assets[/b]

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

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

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

Car(s).................................. 4000

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

Total Assets............................ 4000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 0........(0)........0

Secured Debt.................. 17536....(349.7)....26.2[b]

Total secured & HP debts...... 17536.....-.........-   [/b]

[b]Unsecured Debts[/b]

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

NEW LOOK STORE CARD............119.05....4.02......28.9

CAPITAL ONE ...................1127.34...90.35.....30.34

VANQUIS........................474.45....46.18.....59.92

STUDIO.........................785.3.....54........49.9

KALEIDOSCOPE...................204.49....7.7.......34.95

JACAMO.........................171.67....10........69.9

FINIO LOAN.....................1716......89........49.7

PAYPAL CREDIT..................500.......15........25.9

ZABLE..........................989.......28........36.15

OCEAN..........................200.......20........34.08

MARISOTA.......................2731.85...114.7.....69.9

JD WILLIAMS ...................3481......139.8.....69.9

FREEMANS ......................616.......31.66.....34.95

LA REDOUTE.....................1703......108.7.....39.9

118 118 LOAN...................2009.6....63........34.05

LIKELY LOANS...................856.32....107.......48.2

TAPPILY .......................1361......100.......0

FLUID..........................590.91....13........49.64

118 188 CARD...................473.5.....10........29.6

ZOPA...........................1752......65........36.15

WAVE...........................1215.17...80.62.....39.9

POST OFFICE....................182.66....20........30.34[b]

Total unsecured debts..........23260.31..1217.73...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,886

Expenses (including HP & secured debts). 2,704.6

Available for debt repayments........... 1,181.4

Monthly UNsecured debt repayments....... 1,217.73[b]

Amount short for making debt repayments. -36.33[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 4,000

Total HP & Secured debt................. -17,536

Total Unsecured debt.................... -23,260.31[b]

Net Assets.............................. -36,796.31[/b]

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

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

Thanks 

Grumpelstiltskin

Great now it's so much easier to see what the situation is now.

MrsCanary

Hi Essex Hebridean,

Thanks for the advice. It is all being taken on board. In response to some of your questions:

EssexHebridean said:

First question from me would be why the contents insurance would not pay out - was there just not "escape of water" cover or was it on some technicality that you might be able to appeal? No, sadly we didn't have escape of water cover.

The pet insurance looks remarkably low for three aging animals - it may be worth checking out whether it would actually pay out anything if needed. Also on the insurance front, the contents cover is expensive - is this because of the claim that you made which was not then paid out? Do you shop around for this? We do shop around, but we live in a high crime area. We haven't made any claims either, although our cover is for 25k worth of contents. I can't see an reason why the pet insurance wouldn't pay out, but will check it to be sure.

For context, you are currently paying over £200 per month on "tech" type stuff - TV (not including TV license), phones etc. that would be a lot of expenditure for a family without debt - some one with, it's just unsustainable. The good  news is that when contracts are up this can be cut down hugely - hence saying to diarise when these things can all be cancelled. We do, however we rarely go anywhere. We literally watch tv and go to the gym as social time and that is it. I know this seems unreasonable but we are all working/studying in excess of 70 hours a week each and looking after our parents for around 16 hours a week. That being said, the mobile phone contracts will be reduced in October and we will cancel Netflix and Amazon.


Thanks   

TheAble

Because you can't make minimums at the moment you're going to have to cut down on some expenses as others have said.

Definitely don't borrow any more money! It's only going to make matters worse. See if you can knock out a few smaller debts for quick wins.

Sorry if I missed it but what's that 17k secured on? If the car is it really only worth 4k?

RAS

As TheAble notes, you're going to have to cut back to break even and you really need £30 a month in an emergency fund.

Also if you've got this wedding coming up you need to think about the attached costs like airport transport, car parking, cat sitting and start putting money away now. And accept there's no buying rounds of drinks etc.

Once that's over you can start to hit Jacamo as it's small and high cost, so an easy win. Then Marisota.

Unless Tappily is even worse?

Any chance Hubbie can get a better paid job?

MrsCanary

Hi The Able,

The 17k is my car. My engine blew up last year. I had literally no money to buy another car that wasn't an absolute banger and wouldn't risk being another money pit so I decided to buy a newer car. It was a bad decision really but I haven't an MOT to pay until next year and it is saving me alot on fuel compared to before so I reason it is somewhat justified.

The 4k asset is my husband's car. Because of our work locations and hours we need to have two and we can't give any up at the moment because we both have too many commitments with our respective parents. 

MrsCanary

Hi Ras,

Thanks again for the advice. Sadly hubby's industry (steel) has taken an hammering since Brexit so jobs like his are few and far between, and the pay is appalling but it is all he knows. He is training at the moment to improve his qualifications and employability but realistically he could be looking at another 2 years until he is fully qualified and move up. 

MrsCanary

My thought process is to ask for a payment holiday of 60-90 days on the unsecured debts and use the savings there to hammer some of the smaller debts and get rid of them. But I am not sure if this is a sensible option. I really don't know what to do for the best.

RAS

You need yo be aware that if you ask for a payment holiday, the creditors may mark your credit record with arrangement to pay (AP) markers. 

Although they don't sound as bad as defaults they damage your credit record for much longer. If you can pay down £4k per year, you'll make a major impact on this debt, possibly nearly clear it if you can get some better credit card deals in the future.

Arrangement to pay markers stay on your credit record for 6 years AFTER the debt is cleared, which ain't what you need if you're after a mortgage.