How to take the first step?

NeverendingDMP

I know it's confusing things a bit but do you want to be responsible for your debts yourself as opposed to sharing the debts and jointly paying them off.no judgement either way it's just a query as if you want to work through them yourself it might be easier for you to do a soa based on what your income and your responsibilities are. I'm also in a household where we each have debts. I've tried for us to work together but he tends not to and wants to separate things out, keep his own overtime,overspend etc etc ...long story.  But anyway when I did my dmp I based my income on what I earned, what he put into the pot and what bills came out of that. It gave a clearer picture as to why we had all that money yet our debts where rising. So for yourself list your income, any extra that's shared income and then your half or mortgage, your half of bills, your childcare costs, car as I think you said you paid for just that. If you separate them this way this will give you a truer picture of how much money you have each month. And if you decide to explore a dmp you can pick the budget that suits you best when making offers to creditors 😂
Sorry to complicate matters
 Just a thought when I read your soa.

kimwp

I agree with NeverEndingDMP - at the moment your SOA shows your entire household income, but not the entire household spends - it should either show whole household income and whole household outgoings or just your income and outgoings. 

On another note, it is entirely down to what you agree with your spouse, but it seems a little unfair that your partner earns significantly more than you, yet is expecting you to pay halves on all of the bills. I liked what someone said about this on a thread once - I love my partner, why would I expect them to have a lower quality of life than me.

AnywayForward

Morning everyone.

EssexHebridean: The building insurance is in both our names. I thought so too, but when I called direct line (the company the old owners were with) they said it doesn't even if it turns out it is I'd rather have two on the house then none.

I will change the tv license to monthly.

The only reason I have been paying monthly for my car insurance is that I never have the money for the year upfront. But once I can will start putting money aside for the year up front.

For the car I would need to put aside £30 a month to the maintenance of it. and £66 per month for the car insurance providing it's £800 per year.

For the holiday that's just the trip, it's all inclusive so on top of that I would need an extra £200 for parking, and any unplanned expenses.

The emergancy fund I want to do but will need to cancel the direct debits for things that I can avoid not paying. What would you suggest?

Energy bills we are getting the smar meter installed but equally on the fixed tarrif.

The food I rounded up our weekly shop is approx £50 and any takeaways my boyrfirend buys with his surplus.

NeverendingDMP: He's already helped a lot, he paid for the solicitors, and allowed me to use his credit card which he's paying off and on top helping me get a car. I personally feel I should take on this responsibility as much as I can, I feel bad despite us being a team I feel like I am not pulling my weight. I will do another SOA on just my finances as well, which I have added below.

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

Monthly Income Details[/b]

Monthly income after tax................ 1506

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

Benefits................................ 55

Other income............................ 162[b]

Total monthly income.................... 1723[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 870

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

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

Management charge (leasehold property).. 0

Council tax............................. 79

Electricity............................. 75

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

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

Water rates............................. 28

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

Mobile phone............................ 26

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

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

Internet Services....................... 11

Groceries etc. ......................... 120

Clothing................................ 5

Petrol/diesel........................... 100

Road tax................................ 48

Car Insurance........................... 74

Car maintenance (including MOT)......... 0

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

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

Childcare/nursery....................... 180

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

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 32

Buildings insurance..................... 57

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

Life assurance ......................... 31

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

Presents (birthday, christmas etc)...... 0

Haircuts................................ 0

Entertainment........................... 22

Holiday................................. 150

Emergency fund.......................... 167[b]

Total monthly expenses.................. 2088.25[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 275000

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

Car(s).................................. 7000

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

Total Assets............................ 282000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 275000...(870)......0[b]

Total secured & HP debts...... 275000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Santander......................3961......116.......0

Plata..........................7979......150.......0

Hyandai........................7992......258.......0[b]

Total unsecured debts..........19932.....524.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 1,723

Expenses (including HP & secured debts). 2,088.25

Available for debt repayments........... -365.25

Monthly UNsecured debt repayments....... 524[b]

Amount short for making debt repayments. -889.25[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 282,000

Total HP & Secured debt................. -275,000

Total Unsecured debt.................... -19,932[b]

Net Assets.............................. -12,932[/b]

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

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

EssexHebridean

Remember that your fixed tariff for energy just means that your unit prices and your standing charge costs will not change, it doesn't fix the actual amount you will pay for your energy as that relates to how much you use, of course  - and you still need to ensure that the DD amount is correct for your actual use. So make sure that you submit readings once a month until the smart meters are installed, and once they are, change that monthly prompt to being the time you check the readings and compare them with what is on your bill. That way you will keep on top of any risk of accruing debt, and also make sure that you don't end up with more credit on the account than you need.

Looking at that SOA, your biggest issue is that right now, your income doesn't meet your expenditure, and is without the debt payments being taken into account... Something has to give here, as where you are right now is that your debt will still be increasing. 

kimwp

Thank you for redoing your SOA to show just your finances. Hopefully it is clear to you that without considering payments to existing debts, you are overspending relative to your income and would need to cut back by £365 a month even your debts suddenly disappeared.

I also think £5 a month for clothing and shoes for an adult and growing child is meagre, even buying everything from charity shops, so I think that spending category probably is bigger than you think.

I suggest that you put a more reasonable sum in your SOA for clothing, think what you can cut back on, if there's any way you can earn more and then if it still doesn't balance, sit with your partner to discuss whether he can take on a higher proportion of the bills. I know you want to shoulder your burden and he has helped a lot, but at the moment you can't afford your outgoings without your debts, let alone with them.

AnywayForward

I have started a new job and it has commission but it takes a while to have that role in. With all that said is there anything I can do?

kimwp

I would wait for other input before taking action, but I think your options are to cut back/adjust the financial split with your partner until you can afford your debts or cut back until you can afford your outgoings and default on your debts and start a dmp (debt management plan). 

You need to bear two things in mind -
1. Defaulting will affect your credit history. This will make it more difficult to get credit for a while. For a while you will only be able to remortgage with the same provider.
2. What your likely income is going to be. If it makes your debt affordable, it may be worth not defaulting yet to avoid affecting your credit history.

The key thing is that your income on your SOA needs to be larger than your outgoings. As there are quite a few arrangements you can make with your partner*, I suggest that you have a think about where you can realistically cut back**, what you can adjust with your partner and repost with your proposed SOA.

*Perhaps he pays into a joint emergency fund and/or he contributes to the mortgage and bills proportional to his income.

**What are your options for not going on holiday? Can you recoup any of the money paid so far?

enthusiasticsaver

Your soa shows that even without the debt you are in deficit so you have not option other than to default on the debts and at the moment you probably would not even be able to do a DMP.  You cannot afford the holiday so can any of those costs be recouped or at least you not go any further into debt? Whilst I agree with building an emergency fund you do not have £167 to go towards it so that has to go and the insurances all need looking at as they are all way more than expected. Are they basic cover only and do you use comparison sites? 

To be honest I am amazed you were given that size mortgage with the amount of debts you have and on that income.  What interest rate are you paying? 

As @kimwp says the only other option is for your partner to shoulder more than 50% of the mortgage given that size of mortgage was probably only given to you both as he earns more than you and presumably does not have that level of unsecured debt.  You also have a child and are covering all childcare costs and what appears to be fairly low child maintenance presumably from your previous partner? 

AnywayForward

Hi everyone,

@kimwp I spoke to a mortgage advisor about what would happen should I default, they mentioned like you said if I remortgage after my fixed fee in 5 years they shouldn't check my credit so that's what I intend to do.

Easyjet and loveholidays in general are so difficult to recoup money from, someone else is taking my place and we will split the name change and they'll pay me back the money I have already paid so that's just under £200 paid back.

On average It's an additional £200 per month, and I am hoping to get rid of my car by the end of this month so would free up at least the 258 that I am paying towards it.

@enthusiasticsaver I did the 100%mortgage which takes into account the rent you pay and with both me and my partner our rent was just under 2k a month, he gets paid more then me but I had the better credit score (simply because he tends to pay things outright) and our rate is about 4.6 because we got the mortgage back in July. This was also when I was at my old job and my commission was usually £800 - 1500 a month.

I get 162 from my child's dad which always goes straight to after school clubs.]

I've looked into stepchange which has suggested a payment relief which I believe seems like a good alternative. It'll help me put money aside for when I have to return to paying.

enthusiasticsaver

The mortgage would have been agreed assuming your finances are merged when in fact your partner earns more than 1.5 times your salary but you are splitting the mortgage and bills 50/50. That is unsustainable for your finances. You should be splitting according to income not sharing equally. 

I would talk to him about splitting the mortgage and bills more fairly. Well done on addressing the holiday situation.