So here goes - this is bad but I need to so something about it

Hello,.

Bit nervous about this but it's time to sort it out. We have big debts and have been getting our heads around our current situation.The debt built up over many years. We funded several rounds of IVF, our wedding, house renovations etc and now we are at the stage where we have to deal with it. Thankfully we have a good enough income to get out of the hole we are in.....I think!


Here is our current SOA. 

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 4093
Partners monthly income after tax....... 1460
Benefits................................ 515
Other income............................ 400[b]
Total monthly income.................... 6468[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 520
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 106
Electricity............................. 100
Gas..................................... 186
Oil..................................... 0
Water rates............................. 32
Telephone (land line)................... 12
Mobile phone............................ 80
TV Licence.............................. 12
Satellite/Cable TV...................... 59
Internet Services....................... 0
Groceries etc. ......................... 500
Clothing................................ 50
Petrol/diesel........................... 300
Road tax................................ 5
Car Insurance........................... 58
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 100
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 36
Buildings insurance..................... 10
Contents insurance...................... 9
Life assurance ......................... 33
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 100[b]
Total monthly expenses.................. 2638[/b]
[b]

Assets[/b]
Cash.................................... 2000
House value (Gross)..................... 250000
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 0[b]
Total Assets............................ 260000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 47000....(520)......1.8[b]
Total secured & HP debts...... 47000.....-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Updraft consolidation..........28000.....630.......0
Barclayard 1...................12800.....234.......6.9
Barclaycard 2..................4800......108.......6.9
Parents........................5000......0.........0 - no pressure on this one
Drafty.........................1300......167.......0 - horrendous - something like 188%apr
Tesco CC.......................3500......35........0
Creation card..................4000......40........0
MBNA...........................10400.....325.......19.9
Halifax loan...................6800......132.......6.9[b]
Total unsecured debts..........76600.....1671......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 6,468
Expenses (including HP & secured debts). 2,638
Available for debt repayments........... 3,830
Monthly UNsecured debt repayments....... 1,671[b]
Amount left after debt repayments....... 2,159[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 260,000
Total HP & Secured debt................. -47,000
Total Unsecured debt.................... -76,600[b]
Net Assets.............................. 136,400[/b]


Please be gentle. I am deeply ashamed. We have more debt than anyone I have ever known :(


«134

Comments

  • You have made the first step by posting, so don't worry.

    What jumps out is that according to your SOA you have more than £2000 left over each month, with that you could clear Drafty in one month, so is the SOA correct?
    If you go down to the woods today you better not go alone.
  • rumpetroll
    rumpetroll Posts: 88 Forumite
    First Anniversary Name Dropper First Post
    edited 15 March 2023 at 2:29PM
    The good news is that you are in a great position to get yourself out of this, you have £3800 a month that you could put towards paying the debts off which means you could pay them all off within 2 years while still have £500-£600 a month spare. Definitely get rid of the Drafty balance straight away, then put the overpayments towards the highest APR debts.
    The one thing I will pick up on is that you don't have anything in the SOA for holidays, you have enough disposable income to put some away every month for a holiday.
  • TheAble
    TheAble Posts: 1,604 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    For all that you've put "no pressure on this one" I would try and pay your parents back before too long. You don't want that on your conscience - better to keep money and relationships separate.
  • x_raphael_xx
    x_raphael_xx Posts: 4,319 Forumite
    Name Dropper First Post First Anniversary Photogenic
    Well done for taking the first step.

    My comments in bold...
    jondebtz said:
    Hello,.

    Bit nervous about this but it's time to sort it out. We have big debts and have been getting our heads around our current situation.The debt built up over many years. We funded several rounds of IVF, our wedding, house renovations etc and now we are at the stage where we have to deal with it. Thankfully we have a good enough income to get out of the hole we are in.....I think!


    Here is our current SOA. 

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 2[b] Do you need 2 cars? Could you cope with 1?

    Monthly Income Details[/b]
    Monthly income after tax................ 4093
    Partners monthly income after tax....... 1460
    Benefits................................ 515
    Other income............................ 400[b]
    Total monthly income.................... 6468[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 520
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 106
    Electricity............................. 100
    Gas..................................... 186
    Oil..................................... 0
    Water rates............................. 32
    Telephone (land line)................... 12
    Mobile phone............................ 80 Are you in contract? Shop around for better deals. I pay £17 a month for unlimited text/calls & 60g of data
    TV Licence.............................. 12
    Satellite/Cable TV...................... 59 How much do you watch? I haven't watched TV for years, I stick to youtube & will pay for Netflix on & off when something good is on
    Internet Services....................... 0
    Groceries etc. ......................... 500 Check the Old Style boards for ways to bring this down. Batch cooking, yellow stickered stuff etc.
    Clothing................................ 50 Could this be reduced or brought to zero for a few months. £50 a month on clothes seems a lot.
    Petrol/diesel........................... 300
    Road tax................................ 5
    Car Insurance........................... 58
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 100
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 36
    Buildings insurance..................... 10
    Contents insurance...................... 9
    Life assurance ......................... 33
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 100 Make presents, buy in sales etc. 
    Haircuts................................ 20 Could you cut at home?
    Entertainment........................... 200 What does this cover? £200 a month on days out seems excessive.
    Holiday................................. 0
    Emergency fund.......................... 100[b]
    Total monthly expenses.................. 2638[/b]
    [b]

    Assets[/b]
    Cash.................................... 2000
    House value (Gross)..................... 250000
    Shares and bonds........................ 0
    Car(s).................................. 8000
    Other assets............................ 0[b]
    Total Assets............................ 260000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 47000....(520)......1.8[b]
    Total secured & HP debts...... 47000.....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Updraft consolidation..........28000.....630.......0
    Barclayard 1...................12800.....234.......6.9
    Barclaycard 2..................4800......108.......6.9
    Parents........................5000......0.........0 - no pressure on this one
    Drafty.........................1300......167.......0 - horrendous - something like 188%apr This one is your lowest balance, plus highest apr. I'd throw everything at this one to get rid asap. 
    Tesco CC.......................3500......35........0
    Creation card..................4000......40........0
    MBNA...........................10400.....325.......19.9
    Halifax loan...................6800......132.......6.9[b]
    Total unsecured debts..........76600.....1671......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 6,468
    Expenses (including HP & secured debts). 2,638
    Available for debt repayments........... 3,830
    Monthly UNsecured debt repayments....... 1,671[b]
    Amount left after debt repayments....... 2,159[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 260,000
    Total HP & Secured debt................. -47,000
    Total Unsecured debt.................... -76,600[b]
    Net Assets.............................. 136,400[/b]


    Please be gentle. I am deeply ashamed. We have more debt than anyone I have ever known :(



    Debt Free as of 17/01/2009 Turtle Power!!

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  • Sncjw
    Sncjw Posts: 3,508 Forumite
    First Anniversary Name Dropper First Post
    As others said do you have that 2k a month left over? 

    Get rid of draft first the maybe the next highest Apr. 
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • EssexHebridean
    EssexHebridean Posts: 21,371 Forumite
    Name Dropper First Anniversary Photogenic First Post
    jondebtz said:
    Hello,.

    Bit nervous about this but it's time to sort it out. We have big debts and have been getting our heads around our current situation.The debt built up over many years. We funded several rounds of IVF, our wedding, house renovations etc and now we are at the stage where we have to deal with it. Thankfully we have a good enough income to get out of the hole we are in.....I think!


    Here is our current SOA. 

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 2[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 4093
    Partners monthly income after tax....... 1460
    Benefits................................ 515 
    Other income............................ 400[b]
    Total monthly income.................... 6468[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 520
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 106 
    Electricity............................. 100
    Gas..................................... 186
    Oil..................................... 0
    Water rates............................. 32
    Telephone (land line)................... 12
    Mobile phone............................ 80 This is pretty high - how many phones? Are they all in contract? either way, make diary notes to switch to far cheaper SIM only deals once the contracts end. I'd also suggest start saving a small amount monthly against future needed purchases of replacement phones, to avoid the risk of feeling like a contract is the best option in the future. 
    TV Licence.............................. 12 Are you sure this is right? I'd expect to see £13.25 here... (And if you are understating that, probably time to check through your other monthly bills to be sure that those are all correct!) 
    Satellite/Cable TV...................... 59
    Internet Services....................... 0
    Groceries etc. ......................... 500 There is an easy win here to save a bit of money to throw extra at the debts at this is very high for a 3 person family. I'm guessing lots of branded on pre-prepared foods perhaps? 
    Clothing................................ 50
    Petrol/diesel........................... 300
    Road tax................................ 5
    Car Insurance........................... 58
    Car maintenance (including MOT)......... 0 How come nothing needed here? 
    Car parking............................. 0 
    Other travel............................ 0
    Childcare/nursery....................... 100
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 36
    Buildings insurance..................... 10
    Contents insurance...................... 9
    Life assurance ......................... 33
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 100 This is crazy high for people in your position I'm afraid. Once you are dent free, spending £1200 a year on presents might be a decent shout if that is what you want to do. For now though - halve it!
    Haircuts................................ 20
    Entertainment........................... 200 Again I'm going to say that this is too high while paying off debt I'm afraid - you need to default to free/cheap options for a while at least!
    Holiday................................. 0 Now this is a surprising one - no holidays at all for a family with you income is rare. You never go away anywhere at all, not even visiting family? 
    Emergency fund.......................... 100 Excellent - and I can see if cash assets that this is actually being saved too - well done! [b]
    Total monthly expenses.................. 2638[/b]
    [b]

    Assets[/b]
    Cash.................................... 2000
    House value (Gross)..................... 250000
    Shares and bonds........................ 0
    Car(s).................................. 8000
    Other assets............................ 0[b]
    Total Assets............................ 260000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 47000....(520)......1.8[b]
    Total secured & HP debts...... 47000.....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Updraft consolidation..........28000.....630.......0 *
    Barclayard 1...................12800.....234.......6.9
    Barclaycard 2..................4800......108.......6.9
    Parents........................5000......0.........0 - no pressure on this one
    Drafty.........................1300......167.......0 - horrendous - something like 188%apr
    Tesco CC.......................3500......35........0
    Creation card..................4000......40........0
    MBNA...........................10400.....325.......19.9
    Halifax loan...................6800......132.......6.9[b]
    Total unsecured debts..........76600.....1671......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 6,468
    Expenses (including HP & secured debts). 2,638
    Available for debt repayments........... 3,830
    Monthly UNsecured debt repayments....... 1,671[b]
    Amount left after debt repayments....... 2,159[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 260,000
    Total HP & Secured debt................. -47,000
    Total Unsecured debt.................... -76,600[b]
    Net Assets.............................. 136,400[/b]


    Please be gentle. I am deeply ashamed. We have more debt than anyone I have ever known :(


    Hello - and welcome. And don't be ashamed - deeply or otherwise - be proud of the fact that you want to tackle the issue! You definitely don't have more debt than anyone WE have ever known on here either - we've seen plenty higher! 

    You're right about the income - and allowing for that the SOA needs slightly different handling to normal I'd say. however, you do need to be sure that once you finalise your budget you then stick to what is in it and maintain the surplus for throwing at the debt. You're in an incredibly fortunate position though - if the surplus shown is correct, and can be maintained, you can be free of a quite large debt remarkably fast. 

    You're showing a really good monthly surplus - which is clearly great from the perspective of paying off debt, but of course the problem is, that you don't actually have that left at the end of a month do you? Usually it's not too easy to be sure - but in your case it is - your debt is all from traceable things, so if you really had that much money left over at the end of the month your current account would be swimming in a sea of loose notes and you'd be able to clear off the worst of the debts just using that. That you clearly don't have that sea of loose notes gives you a further problem though - and that is that your budget is probably not right. That's not a problem though - you'll find out soon enough and it is a work in progress at this stage anyway. 

    Hopefully now you have started focusing on what is being spent - that will mean that at the end of this month you WILL have enough in the pot to just get Drafty gone - so as son as you are confident that you can do so without leaving yourself short - pay it off - at that interest rate it would be daft not to. In fact, if you can be confident now that you will definitely have say £500 spare from this month, pay that against it now to reduce the accruing interest. You can always clear the rest later.


    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
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  • drjohn67
    drjohn67 Posts: 91 Forumite
    First Anniversary First Post
    Consolidate debt further to remove the debts with the highest rates to a lowest rate loan.
    Then based on the current repayments + surplus each month and it would be pretty quick.

    40000 over 3 years is 1200 month.
    If those premiums were added to the updraft consolidation then you would still be 2000 clear each month which you could use pay off the overall debt including the updraft consolidation even sooner.

    Slashing current expenditure may not be needed for repayment purposes though rationalisation of expenditure  based upon cost : value/pleasure : effort could free up more funds to accelerate repayment, for other beneficial investments/activities or simply serve as a greater contingency fund for the next few years.

  • Martico
    Martico Posts: 968 Forumite
    First Anniversary First Post Name Dropper
    Good luck - as others have said, if your SOA is accurate then you can knock that ridiculously high interest debt out straight away. 
    I'd advise against another consolidation loan - you don't get out of debt with new debt. Just focus on paying down what there is - with your disposable income, and several already on 0% deals, that seems the route to go down.
  • sourcrates
    sourcrates Posts: 28,870 Ambassador
    First Anniversary Name Dropper First Post Photogenic
    edited 15 March 2023 at 8:46PM
    Whatever you do, do not consolidate any of your debts, a consolidation loan isn't going to be the answer - borrowing your way out of debt doesn't work.

    I would suspect you don`t have 2k sat idly in your account every month either, hence why you have posted on here, would I be right in that assumption ?
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • I agree with @EssexHebridean - your debt may feel high, but your income is equally high and so you have a good chance of getting this sorted in a relatively short time IF your spending is controlled, and I'd also question where it goes if you are only sitting on £2k cash and no investments. So despite the debt, I personally don't see a big need to adjust your recorded spending... little things like getting a cheaper phone contract make a difference of course but in the context of your income the primary thing should be identifying where the leaks are and then divert as much as you can towards the debt. Once you've got rid of the crazy high interest one, I'd also focus a bit on building an emergency fund just to give yourself a bit more breathing space should something happen that requires quick financial action. Once that's done, make a plan with your partner that you are going to deal with this, calculate the time it will take if you make 'x' payments, and then agree to keep your lifestyle/spending tightly controlled until its done. 

    Well done for posting, and looking forward to seeing you post your debt free post in the not too distant future! 
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