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Large amount of debt and don’t know what to do

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  • enthusiasticsaver
    enthusiasticsaver Posts: 16,053 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Move your main bank account to one without an overdraft facility and switch income and all essential bills to there.  You should cancel all debt repayments except for the mortgage. Do you need the car still? 
    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.

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  • Har4569ni
    Har4569ni Posts: 8 Forumite
    First Post
    Hi everyone sorry have not posted in a while. I will attach the full income expenditure form below 
  • Har4569ni
    Har4569ni Posts: 8 Forumite
    First Post

    Household Information
    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 1

    Monthly Income Details
    Monthly income after tax................ 1700
    Partners monthly income after tax....... 0
    Total monthly income.................... 2120

    Monthly Expense Details[/b]
    Mortgage................................ 620
    Secured/HP loan repayments.............. 350
    Rent..................................
    Management charge (leasehold property)..
    Council tax....................150
    Mobile phone............................ 45
    TV Licence.............................. 10
    Satellite/Cable TV...................... 0
    Internet Services....................... 30
    Groceries etc. ......................... 150
    Clothing................................ 0
    Petrol/diesel........................... 150
    Road tax................................ 0
    Car Insurance........................... 0
    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................. 0
    Buildings insurance..................... 55
    Life assurance ......................... 80
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 1820[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 200000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0[b]
    Total Assets............................ 200000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 52000....(620)......5
    Hire Purchase (HP) debt ...... 30000....(350)......6[b]
    Total secured & HP debts...... 82000.....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Overdraft NatWest .............19000.....150.......17
    Overdraft 2 NatWest ...........5000......135.......16
    BANK loan .....................8000......180.......9.95
    Credit card tesco..............6700......170.......9[b]
    Total unsecured debts..........38700.....635.......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 2,120
    Expenses (including HP & secured debts). 1,820
    Available for debt repayments........... 300
    Monthly UNsecured debt repayments....... 635[b]
    Amount short for making debt repayments. -335[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 200,000
    Total HP & Secured debt................. -82,000
    Total Unsecured debt.................... -38,700[b]
    Net Assets.............................. 79,300[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • kimwp
    kimwp Posts: 2,909 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    How did you calculate these numbers, which month's accounts did you use?
    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • tigergambit
    tigergambit Posts: 207 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    I think you might just have underestimated a few of these categories.

    You have a car on which you spend £150 per month on fuel but you don't tax, insure or maintain it and you never pay for parking?

    Your family of 4 only spend £150 per month on groceries?

    Your only entertainment is the TV but you have a discount on the licence fee?

    The kids never go on a school trip or need money for school meals or pocket money?

    Your clothes and shoes never wear out or need replacing?

    I think you need to take another look at this. The aim is to be as accurate as possible at this stage. If not sure you should over estimate expenditure. Once you have done that you will get a more realistic picture of your circumstances. 

    Do you really not qualify for any benefits or income support? Not even child benefit?


  • Har4569ni
    Har4569ni Posts: 8 Forumite
    First Post
    He everyone, 
    just a quick update on my situation. I am currently putting my house up for sale to gather money to pay the debt thanks to everyone for any advice I really appreciate it. 
  • RAS
    RAS Posts: 35,520 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Har4569ni said:
    He everyone, 
    just a quick update on my situation. I am currently putting my house up for sale to gather money to pay the debt thanks to everyone for any advice I really appreciate it. 
    This really is not a good idea. Where do you think you are going to live longer term? 

    Even if you pay off your debts, you will soon get back into financial difficulties if you don't have a clear sustainable budget within which you and the family can live within your income. And you need to maximise income by claiming benefits etc.
    If you've have not made a mistake, you've made nothing
  • tigergambit
    tigergambit Posts: 207 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Har4569ni said:
    He everyone, 
    just a quick update on my situation. I am currently putting my house up for sale to gather money to pay the debt thanks to everyone for any advice I really appreciate it. 
    Basically this is turning unsecured debt into secured debt as you will need a bigger mortgage to buy your next home. Really not a good idea. Have you worked on your SOA / budget to see how you will be able to pay a bigger mortgage? Have you sorted out child benefit and other benefit entitlement?

    Selling your home should be your last resort, you are not near this point.
  • kimwp
    kimwp Posts: 2,909 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    Har4569ni said:
    He everyone, 
    just a quick update on my situation. I am currently putting my house up for sale to gather money to pay the debt thanks to everyone for any advice I really appreciate it. 
    This is not a good route to address unaffordable unsecured debt.
    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • fatbelly
    fatbelly Posts: 22,919 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    edited 4 July at 6:51PM
    If you were going to sell your house anyway then this releases the equity to allow you to do full &final settlement deals

    But you didn't mention this in your first post. At that point you were trying to stay in the property
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