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rainbow_days
rainbow_days Posts: 4 Newbie
First Post
in Debt-free wannabe
Hi all, 
I have been reading threads for the last few weeks and have decided to post my own to gain advice for my situation. 
Over the past few years I have stupidly run up a great deal of credit card debt through overspending and living beyond my means coupled with crippling nursery fees and mortgage rate increases. I have now reached a point where I am unable to obtain any further interest free credit cards deals or loans at a decent rate. I will soon be unable to pay my credit card minimum payments as the interest free period has expired or will be expiring soon.

I have had a problem with credit cards my whole life since getting my first one at 18 and really want to change. 

I have completed a SOA- this is based on my half of household bills and mortgage although these are joint with my husband. He is not aware at the level of my debt and will be horrified to find out. The earnings are just mine as I will be the one paying this debt alone. 

After reading these forums I am considering a self managed DMP but wanted to request information from this forum to understand this is the best option. I have contacted Step Change previously who recommended a DMP.

Please could someone offer some guidance.

Thanks.

[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.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 2407.68
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 2407.68[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 540
Secured/HP loan repayments.............. 153
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 68
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 0
Mobile phone............................ 63
TV Licence.............................. 6.12
Satellite/Cable TV...................... 0
Internet Services....................... 13.5
Groceries etc. ......................... 350
Clothing................................ 120
Petrol/diesel........................... 100
Road tax................................ 16.62
Car Insurance........................... 34.41
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 50
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 65
Buildings insurance..................... 8.05
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 50
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 50[b]
Total monthly expenses.................. 2015.7[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 260
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 260[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 164924...(540)......5<
PCP............................10514.5..(153)......9.9[b]
Total secured & HP debts...... 175438.5..-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Virgin Credit Card.............12814.....328.......20.01
Halifax Credit Card............10360.....236.......28.94
Paypal Credit..................1783.29...45........21.9
Next...........................1279......70........24.9
Very...........................1527......20........0[b]
Total unsecured debts..........27763.29..699.......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 2,407.68
Expenses (including HP & secured debts). 2,015.7
Available for debt repayments........... 391.98
Monthly UNsecured debt repayments....... 699[b]
Amount short for making debt repayments. -307.02[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 260
Total HP & Secured debt................. -175,438.5
Total Unsecured debt.................... -27,763.29[b]
Net Assets.............................. -202,941.79[/b]

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

Comments

  • rainbow_days
    rainbow_days Posts: 4 Newbie
    First Post
    I just realised I left a few zeros off my house value. Updated SOA attached:

    [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.................... 2[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 2407.68
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 2407.68[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 540
    Secured/HP loan repayments.............. 153
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 68
    Electricity............................. 50
    Gas..................................... 50
    Oil..................................... 0
    Water rates............................. 28
    Telephone (land line)................... 0
    Mobile phone............................ 63
    TV Licence.............................. 6.12
    Satellite/Cable TV...................... 0
    Internet Services....................... 13.5
    Groceries etc. ......................... 350
    Clothing................................ 120
    Petrol/diesel........................... 100
    Road tax................................ 16.62
    Car Insurance........................... 34.41
    Car maintenance (including MOT)......... 50
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 50
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 65
    Buildings insurance..................... 8.05
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 50
    Entertainment........................... 100
    Holiday................................. 0
    Emergency fund.......................... 50[b]
    Total monthly expenses.................. 2015.7[/b]
    [b]

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

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 164924...(540)......5<
    PCP............................10514.5..(153)......9.9[b]
    Total secured & HP debts...... 175438.5..-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Virgin Credit Card.............12814.....328.......20.01
    Halifax Credit Card............10360.....236.......28.94
    Paypal Credit..................1783.29...45........21.9
    Next...........................1279......70........24.9
    Very...........................1527......20........0[b]
    Total unsecured debts..........27763.29..699.......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 2,407.68
    Expenses (including HP & secured debts). 2,015.7
    Available for debt repayments........... 391.98
    Monthly UNsecured debt repayments....... 699[b]
    Amount short for making debt repayments. -307.02[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 260,000
    Total HP & Secured debt................. -175,438.5
    Total Unsecured debt.................... -27,763.29[b]
    Net Assets.............................. 56,798.21[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,490 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    OK great for posting your SOA but the number one thing you should do is tell your husband.

    What is he going to think if he finds out himself?

    You should be a partnership and share everything,  if you have joint bank and or mortgage accounts then there is a chance he will find out.

    Once he knows then you can sort something out together.

    Did you spend every penny of the money on yourself?

    I guess not so it is a family problem.
    If you go down to the woods today you better not go alone.
  • rainbow_days
    rainbow_days Posts: 4 Newbie
    First Post
    Thank you for your reply. I realise I will have to speak with him about it but was hoping to have a bit of a plan in place beforehand. This will impact us both as we have a shared mortgage and joint account. My concern is he will not be on board with the idea of letting accounts default before setting up payment arrangements as he would see this as very bad. However I understand if I contact my credit cards and set up payment plans this impacts my credit file for longer? 

    You are right the money has not all been spent on myself although a portion of it is from trips I have taken with friends, night out, private dental treatment and clothes etc for myself and the children. 

    I cant spend the rest of my life in this constant debt, I am so fed up of it and need to change my mindset and outlook on life. 
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,490 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    If you pay a reduced amount to the debts it's called an Arrangement to Pay and it doesn't disappear from your credit file until 6 years after the final payment is made. If it  defaults it disappears 6 years after the default date even if it hasn't been fully paid off.
    If you go down to the woods today you better not go alone.
  • Time2Go_25
    Time2Go_25 Posts: 993 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    It's really difficult to provide advice on only half of the picture, it would be better to do a full SOA covering all of the income and expenditure for both of you.

    Do you not get any child benefit?

    There does look like there's room for savings, £700 a month on groceries, £240 a month on clothing, £126 a month on mobile phones. 
  • rainbow_days
    rainbow_days Posts: 4 Newbie
    First Post
    Thank you for responding. I understand comments about the big picture but my husband will not be paying any money towards this debt so his earnings should not be included.

    I don’t think I will be able to make my virgin credit card payment this month without leaving myself with virtually no money - I guess this will be the beginning of the journey to a default. It seems so counterintuitive that if you contact them to arrange a payment plan you are worse off than if you just let the account default. 

    I agree I need to look at my spending and create a realistic budget. Is there anywhere I can go for realistic figures for spending on clothing, groceries etc for a family of four? 
  • Sncjw
    Sncjw Posts: 3,562 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    But his income may help you get out the debt.  

    Was the things purchased by the debt for the household and did he benefit from it? 


    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment paused to pay off cc 

    Starting balance £66,565.45

    Current balance £58,108

    Cc around 8k. 

  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,490 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    It's no use looking for realistic figures  you need to check back through your bank statements and see what you are actually spending on groceries etc.

    Then do an accurate SOA and we will tell you if any figures are too high and if you need to cut back.

    You do need to have your husband on board with this and as as been said if your husband and children benefited from your spending he should be contributing.
    If you go down to the woods today you better not go alone.
  • RAS
    RAS Posts: 35,660 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Basically, when you want to transfer your mortgage to a new deal, your husband will learn that you (plural) can't because you (singular) have debts you haven't shared with him.

    And because you have a joint account with him, there is a more present risk that he is refused credit because of your debts.

    Do you want him to learn that your debts affect his ability to access credit and better mortgage deals because he is refused deals, or do you understand that it may be better to tell him first?
    If you've have not made a mistake, you've made nothing
  • Andyjflet
    Andyjflet Posts: 700 Forumite
    Part of the Furniture 500 Posts Photogenic Name Dropper
    Morning, its easy to get lost in spending and not be able to control the credit card interest, what chance do you have of getting any of this switched to 0%?
    I have to agree with everyone on here, I don't see how you can work a plan and pay down a lot of debt without sitting down and having the conversation with your partner now. I would be even more hurt to find my partner had hidden this from me even longer and then defaulted on payments I could have helped with. 
    Baby Step 6/7 . £16000 saved and invested. £47,000 deposit paid on new home DEBT FREE !!!
    Currently Negotiating with HMRC !
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