In need of some desperate advice

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BellaBoo0704
BellaBoo0704 Posts: 3 Newbie
First Post
in Debt-free wannabe
Hello everyone

This has been very hard to face up to but me and my partner have really got ourselves into such a mess with out finances. We bought our first house nearly 2 years ago and as we were starting from scratch we ended up getting loans to furnish it and pay for anything that needed doing to it. The boiler ended up breaking so that ended up on the credit card and 2 years worth of building up debt on various other silly things we are now in a situation where our mortgage rate is going up and we are going to be barely making the minimum payments let alone trying to pay things off! We really wanted to tackle this ourselves, sell some things and get the CC payments down atleast but I just don't know where to start. I have reached out to stepchange and a DMP was advised but I am dubious about entering one of these with the damage to our credit ratings it will cause. I just feel so guilty, all this spending and our children have only been one 1 holiday in their lifetime. I have done my SOA below from when the mortgage goes up in April. Any advice would be greatly appreciated, thank you.

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

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

Monthly Income Details[/b]
Monthly income after tax................ 1450
Partners monthly income after tax....... 2500
Benefits................................ 160
Other income............................ 0[b]
Total monthly income.................... 4110[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 1080
Secured/HP loan repayments.............. 230
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 165
Electricity............................. 77
Gas..................................... 77
Oil..................................... 0
Water rates............................. 55
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 13.25
Satellite/Cable TV...................... 0
Internet Services....................... 40
Groceries etc. ......................... 450
Clothing................................ 30
Petrol/diesel........................... 50
Road tax................................ 12
Car Insurance........................... 60
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 16
Buildings insurance..................... 24
Contents insurance...................... 0
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 0
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 2529.25[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 230000
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 0[b]
Total Assets............................ 238000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 198000...(1080).....5.6
Hire Purchase (HP) debt ...... 12900....(230)......0[b]
Total secured & HP debts...... 210900....-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Lloyds loan....................0.........362.......0
Lloyds loan 2..................0.........368.......0
Lloyds loan 3..................0.........150.......0
Solar panels...................10000.....180.......0
V12............................0.........36........0
Newday.........................0.........35........0
Creation.......................0.........31........0
Cc 3 ..........................1100......45........0
Cc 2...........................1900......60........0
Credit card 1..................4000......159.......0[b]
Total unsecured debts..........17000.....1426......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 4,110
Expenses (including HP & secured debts). 2,529.25
Available for debt repayments........... 1,580.75
Monthly UNsecured debt repayments....... 1,426[b]
Amount left after debt repayments....... 154.75[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 238,000
Total HP & Secured debt................. -210,900
Total Unsecured debt.................... -17,000[b]
Net Assets.............................. 10,100[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
«1

Comments

  • Grumpelstiltskin
    Grumpelstiltskin Posts: 4,317 Forumite
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    I don't think your SOA is anywhere near correct.

    Never spend anything on the car? Never use a car park? Never travel on a bus or train? Never spend anything on the children? Never have a haircut? That is just to start.
    If you go down to the woods today you better not go alone.
  • Martico
    Martico Posts: 1,000 Forumite
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    edited 7 February at 10:00PM
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    SOAs are difficult things to do, and almost impossible to get right first time. It's worth thinking through further, going back through bank statements etc to get to the reality. But it's also good, I think, as you've done, to factor in the upcoming mortgage cost. 
    If you can rejig it with actual spends, as well as with debt totals where they're missing (as well as APRs on the various cards) then I think you'd get some good advice
  • elsien
    elsien Posts: 32,940 Forumite
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    edited 7 February at 10:03PM
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    I agree, there are probably some gaps. You have nothing in there for car maintenance  either an annual service replacement tyres, MOT?  

    How old are your children? Because the difference between younger children and hollow-legged teenagers could make a difference to the food amount. 

    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
  • Floss
    Floss Posts: 8,299 Forumite
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    Have you put accurate figures for your income? They both look very rounded to me.

    Mobile phones - are they out of contract?

    I'm not sure £360 a year for clothes would buy shoes & school uniform for 2 kids plus new socks / knickers / tights for 2 adults.
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  • BellaBoo0704
    BellaBoo0704 Posts: 3 Newbie
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    Yes sorry I understand what you are saying, I have adjusted what I think would be right. I can't fill out all the outstanding amounts and APR of my OHs debts at the moment as he is not here but this is what I have. My children are 6 and 9 and phone contracts unfortunately are both in contract for another 10 months. 

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

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

    Monthly Income Details[/b]
    Monthly income after tax................ 1458
    Partners monthly income after tax....... 2510
    Benefits................................ 160
    Other income............................ 0[b]
    Total monthly income.................... 4128[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 1080
    Secured/HP loan repayments.............. 230
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 165
    Electricity............................. 77
    Gas..................................... 77
    Oil..................................... 0
    Water rates............................. 55
    Telephone (land line)................... 0
    Mobile phone............................ 60
    TV Licence.............................. 13.25
    Satellite/Cable TV...................... 8.99
    Internet Services....................... 40
    Groceries etc. ......................... 450
    Clothing................................ 60
    Petrol/diesel........................... 50
    Road tax................................ 12
    Car Insurance........................... 60
    Car maintenance (including MOT)......... 40
    Car parking............................. 5
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 15
    Pet insurance/vet bills................. 16
    Buildings insurance..................... 24
    Contents insurance...................... 0
    Life assurance ......................... 30
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 5
    Entertainment........................... 30
    Holiday................................. 0
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 2653.24[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 230000
    Shares and bonds........................ 0
    Car(s).................................. 8000
    Other assets............................ 0[b]
    Total Assets............................ 238000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 198000...(1080).....5.6
    Hire Purchase (HP) debt ...... 12900....(230)......0[b]
    Total secured & HP debts...... 210900....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Lloyds loan....................20478.....362.......0
    Lloyds loan 2..................17893.....368.......0
    Lloyds loan 3..................8946......150.......8.08
    Solar panels...................10000.....180.......14.9
    V12............................0.........36........19.9
    Newday.........................652.......35........29.9
    Creation.......................0.........31........29.9
    Cc 3 ..........................1100......45........12.42
    Cc 2...........................1900......60........0
    Credit card 1..................4000......159.......0[b]
    Total unsecured debts..........64969.....1426......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 4,128
    Expenses (including HP & secured debts). 2,653.24
    Available for debt repayments........... 1,474.76
    Monthly UNsecured debt repayments....... 1,426[b]
    Amount left after debt repayments....... 48.76[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 238,000
    Total HP & Secured debt................. -210,900
    Total Unsecured debt.................... -64,969[b]
    Net Assets.............................. -37,869[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]


  • fatbelly
    fatbelly Posts: 20,675 Forumite
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    That's better.

    So you have 64k of unsecured debt and are only just able to meet the contractual payments.

    You are reluctant to enter a dmp because of the effect that defaults will have on a remortgage. Is that a new fixed rate in April? How long is it fixed for?

    I am also thinking that you are close to needing a dmp. There is a bit of wriggle room in your soa but not much. The car is a big drain and you do have termination rights if you can find a way to ditch it.
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,675 Ambassador
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    I assume that some of those debts are not really 0%? There are a few savings you could make on groceries but you are very close to needing a DMP. If you can increase income that will help but otherwise a DMP would freeze interest and set a more manageable repayment. Your credit rating will be affected though but further borrowing is obviously not advisable anyway. 
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment 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.
  • Green_hopeful
    Green_hopeful Posts: 642 Forumite
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    If you have any space in your house you could perhaps get a lodger. You can earn up to £7500 per year tax free. It’s not going to pay enough for everything but it could soften the effect and give you a bit more money. It might be that your kids have to share a room but actually that can be ok. 
  • Andyjflet
    Andyjflet Posts: 564 Forumite
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    Morning, well done to facing up to your debt, its a lot for your income but you have taken the first step. Couple of things..... No contents insurance? So you would lose everything if the worst happened? Get that sorted ASAP

    Get your balances correct, not knowing how much you owe someone is just not where you need to be, get the balances on the SOA however hard it is to swallow.

    To me the monthly expenses for bills etc doesn't seem too bad, the issue is you have obviously continued to borrow and borrow until its become a situation where you have no room to breath, next step IMO is to call stepchange and get some free advice on where to go from here. 
    Baby Step 6/7 - £64000 saved for emergency fund DEBT FREE !!!
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  • Mr.Generous
    Mr.Generous Posts: 3,425 Forumite
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    I'd suggest both of you need to look at your spending. I know some things are an emergency or an essential, but that's a lot of credit card spend on too many different cards to make money management easy. You have a fair income between you, but it must be stressful to be in this position. The way out of it for me would be to talk about it with partner and agree that the spending stops now. A 12 month tough economy drive where you save every penny you can and establish a mindset that you can't just use a CC or a loan when you want something. Any old toys / music / clothes or old gold you can sell to kick things off?
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