Debt Help

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ManyWays said:

ad2 said:

The fix ends 30 April 2025 and it is Shared Ownership with Halifax. The 1 car is PCP and unfortunately yes we need 2 at present

so what will the mortgage go up to then at current interest rates? You need to make your plan now on the basis that the mortgage is going up, no point in making a lot of small economies to scrape through paying the debts then next April be unable to as the mortgage and rent will have both gone up. When does the PCP end, because you are unlikely to be able to refinance at a good rate even if you keep paying the debts.

I need to find out that. My other concern is we want to make changes now in terms of debt however we are worried about the mortgage and renewing in March/April and what effect it will have. The PCP has just over another 2 years

ad2

EssexHebridean said:

ad2 said:

Maybe there is work to be done on the food bill then but we never seem to be able to get lower than £120/£140 a week (dog food inc). No they are not teenagers and I have included school meals for 1 of them in that. I will see if anything can be done on your mobiles as well.

I have updated it again, hope that helps

[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................ 3412

Partners monthly income after tax....... 1558

Benefits................................ 170.2

Other income............................ 0[b]

Total monthly income.................... 5140.2[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 621.1

Secured/HP loan repayments.............. 380

Rent.................................... 929.3

Management charge (leasehold property).. 0

Council tax............................. 199

Electricity............................. 61.83

Gas..................................... 61.83

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

Water rates............................. 90.52

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

Mobile phone............................ 154.92

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

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

Internet Services....................... 37

Groceries etc. ......................... 600

Clothing................................ 50

Petrol/diesel........................... 250

Road tax................................ 33.25

Car Insurance........................... 84.49

Car maintenance (including MOT)......... 30

Car parking............................. 40

Other travel............................ 335

Childcare/nursery....................... 24

Other child related expenses............ 59.1

Medical (prescriptions, dentist etc).... 70

Pet insurance/vet bills................. 72.85

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

Contents insurance...................... 10.72

Life assurance ......................... 0

Other insurance......................... 39.23

Presents (birthday, christmas etc)...... 50

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

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

Holiday................................. 0

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

Household Services...................... 22[b]

Total monthly expenses.................. 4341.39[/b]

[b]

Assets[/b]

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

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

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

Car(s).................................. 1725

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

Total Assets............................ 1725[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 108821...(621.1)....2.49

Hire Purchase (HP) debt ...... 24898....(380)......7.3[b]

Total secured & HP debts...... 133719....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Credit Card....................8500......220.......20.01

Credit Card....................4700......140.......24.85

Credit Card....................5900......86........24.1

Store Card.....................164.63....30........34.9

Loan...........................6909.89...300.......0

Credit Card....................3732.84...121.......23.9

Credit Card....................2532.24...25........0

Store Card.....................589.75....37.12.....29.9

Store Card.....................110.36....30........24.9

Credit Card....................250.......0.........0

Overdraft......................250.......0.........0

Store Card.....................631.42....37........24.9[b]

Total unsecured debts..........34271.13..1026.12...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 5,140.2

Expenses (including HP & secured debts). 4,341.39

Available for debt repayments........... 798.81

Monthly UNsecured debt repayments....... 1,026.12[b]

Amount short for making debt repayments. -227.31[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 1,725

Total HP & Secured debt................. -133,719

Total Unsecured debt.................... -34,271.13[b]

Net Assets.............................. -166,265.13[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

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

Food bills have proved challenging for a lot of folk over the years - you’re not the first to struggle with reducing this, BUT it is doable, and at this point, anything you can shave off helps! For a start do you actually “budget” a set amount for food? So set aside your chosen amount so you can see it at the start of the month and can also see the effect on the balance that each shopping trip makes? 

Secondly - HOW do you shop? Do you make a list, then once or twice a week head to the shop to get the things on that list? And what is the list based on - a meal plan? Or just things you think you probably need…? Or is there one main shop a week then lots of trips into the shops when people say “Mum! We’re out of milk!” - that is the reality for lots of people, but it’s also often a more expensive way to shop as let’s be honest, who ever goes to the supermarket for a bottle of milk and comes out having just bought the milk and nothing else?! 😂
Third - WHERE do you shop? And also - branded or own brand? Own brand or basic? The “downshift challenge” on the main MSE site is an oldie but a goodie - it can make a big difference, and often people even find that they prefer some of the swaps they’ve made too. If you currently shop at Sainsbury’s, then try Tesco. If you are currently a Tesco shopper, take a look at Aldi or Lidl. 

First challenge for you on the groceries then - ring-fence that budget so you can see how much you have, and then before you do ANYTHING else, grab a child (one with legible writing, if they are old enough for that!) and head to your fridge, freezer and cupboards, and start listing the things you have. You want a decent sized notebook for this (one you already have, this is NOT a shopping opportunity!) - set aside a full page or more for each area, and head them up so everything is clear. If you see anything as you go along you are close to running out of, and that you actually need, then add that to a new page to start a shopping list. Once you have your inventory, then the next step is to involve the rest of the family and see how many meals you can make for the next few weeks using just the things you have in stock already. This is your chance to use the things that have been lurking in the freezer for ages, and to make the most of the stuff you have. Think about batch cooking, providing a meal for the following few days, plus one in the freezer for another week. The trick is to give yourself a boost by being able to keep your spend really low for a few weeks - and also get you into the habit of shopping with a list and meal planning. Also - if having the kids/OH with you leads to temptation and overspending in the supermarket then whichever of you is the more disciplined does the shop, the other stays at home! 

My other big concern from your SOA is the Presents category - you say you budget £50 a month for this, but show nothing in cash savings. How much do you actually have saved here? We’re now just a shade off 2 months from Christmas, so what planning have you done, how much have you got budgeted to spend and do you actually have that money? Allowing that you have children, to me, this might be your most important focus right now, as it is a critical point if you DON’T currently have your budgeted spend saved. Whatever you do, please don’t be tempted to see this Christmas as one last hurrah and put spending onto plastic, ultimately it is ONE day - it is not worth giving yourselves an increased financial headache for! 

What is the situation with that water rates bill - I presume that is rates rather than a meter? If yes, then double check whether your supplier allows an option to change back from a meter after a set period if you find it more expensive, and if they do, then apply to get a meter fitted. If they don’t m then ask around among local pals with a similar family/house setup to you - you won’t take long to find people on metered supplies - then ask them what they pay - although it won’t be an exact comparison because every household is different, it will give you an idea - and I suspect you will be surprised at the difference! (We are only a household of 2, but do have a veg garden which requires water in the warmer weather, and are currently paying £18 a month.) 

Thanks for the advice on this. Food bill is a bugbear of mine! We do a weekly shop on a budget at Tesco and this is always a challenge however we need to reduce it somewhat. I think Aldi and Lidl are options we need to look at.

We have some savings which I have clearly missed off about £300 for Xmas.

The water I have challenged already. I have a feeling they have messed out billing up but have raised a query with SES water about monthly payments.

Grumpelstiltskin

ad2 said:

ManyWays said:

ad2 said:

The fix ends 30 April 2025 and it is Shared Ownership with Halifax. The 1 car is PCP and unfortunately yes we need 2 at present

so what will the mortgage go up to then at current interest rates? You need to make your plan now on the basis that the mortgage is going up, no point in making a lot of small economies to scrape through paying the debts then next April be unable to as the mortgage and rent will have both gone up. When does the PCP end, because you are unlikely to be able to refinance at a good rate even if you keep paying the debts.

I need to find out that. My other concern is we want to make changes now in terms of debt however we are worried about the mortgage and renewing in March/April and what effect it will have. The PCP has just over another 2 years

You will be able to remortgage with your current lender without a credit check but it  will be more expensive and if rent goes up as well as you say you will be even more in a mess.

It is vital because of this that you reduce your spending as much as you can, so as I have said go through everything with a fine toothcomb, sell anything you can and maybe tell family you are having a quiet Christmas this year, don't get drawn into anything you can't afford.

ManyWays

A DMP won't prevent you getting a new fix from the Halifax. They won't do an affordability check unless you want to borrow more. 

ad2

OK I will find out what the likely rate/amount is going to be in terms of the mortgage. I am currently reviewing what we can reduce in terms of monthly costs.

What is the best way to start the DMP? I have read of doing it yourself on here and we have also reached out to StepChange and I know you can do it through them as well.

Grumpelstiltskin

Don't start a DMP until your debts have defaulted, Stepchange will want you to start ASAP that is the wrong way to go, you can do it yourself, problem is you have a lot of creditors which will make it a little more complicated but if you are going to go down the DMP route cancel all unsecured debt payment now and put every spare penny you have in an emergency fund. You need this as you won't have access to credit and you need to have money behind you to cover all emergencies.

Nothing moves fast in debt collection and it could take many months before you get defaults, but you should have some money saved by then.

Rob5342

ad2 said:

What is the best way to start the DMP? I have read of doing it yourself on here and we have also reached out to StepChange and I know you can do it through them as well.

Stepchange have a very rigid approach of starting payments immediately and paying as much possible towards them. Thats great if you are a bank or credit csrd company but pretty poor if you are the person that owes them money. If you manage it yourself you can take advantage of how the system works and get everything cleared for much less and with much less damage to your credit report. 

How do you decide what to buy when shopping? If you plan out all your meals you can make sure you only buy what you absolutely need and use up any leftovers etc. 

RAS

We aren't seeing it as often, possibly because more people are self managing but classically people would come on here in a panic because they were on a debt charity DMP, having started with no savings. The car had broken down, the freezer had conked out in hot weather, family member was dying, miles away. 

They'd no access to credit and little if anything put aside to cover the unexpected cost. The advice was always the same. Contact your DMP provider, tell them you have to cancel your DMP payment to cover the emergency. So folk were yo-yoing between payments and breaks because they didn't have emergency funds.

Then re-assess your costs before restarting the DMP. The DMP provider may only allow £25 per month towards an emergency fund, so save a month's payment before you re-commence etc. And make sure you save that £25. 

You have a lot of accounts, so there will be a fair bit of admin, but if between you, you can manage a spreadsheet, you'll be able to do it. Once the accounts are defaulted and you've got some emergency funds, you can always ask a debt charity to take over for a break, maybe for a year or two.

The good thing is that once the defaults are issued, interest and fees stop, and after a few years, you will start getting discounted offers to clear the debts.

One small thing, not normally suggested. You have two very small store card accounts. It may be worth clearing these just to reduce the hassle factor down the line. But do make sure you have a month's non- payment of credit saved first.

Rob5342

RAS said:

One small thing, not normally suggested. You have two very small store card accounts. It may be worth clearing these just to reduce the hassle factor down the line. But do make sure you have a month's non- payment of credit saved first.

The good thing about managing it yourself is that you can just tailor it to your own needs and do things like this.

sourcrates

There is an assumption that self managed debt management is difficult, when really it is not, once you get to the point where you are setting up payments, doing so via online banking is very easy and quick, once you have everyone's bank details that is.

With all the required information pre-installed, all that is then required of you is to click the payments button for each creditor every month, and that`s basically it, a ten minute job, its precisely like it was before, except the payment you are making is affordable, and not a contractual amount.

Debts do get assigned to different collectors, and are also occasionally sold, so some re-jigging of payment details may be necessary, but apart from that its should all be plain sailing, I should however just echoe how important an emergency fund will be in all of this, make sure you save one.