In a 40k hole that I don't know how to get out of!

elsien

I am also pretty sure you are not spending only 120 quid a year on birthday and Christmas presents for the children, each other and any other family who might be involved.

You also need to think about why/how the debt has been run up, because that is a way to understand how not to keep running it up further.
It’s not about judgement but some people consistently overspend over long period of time, some splash out on expensive items such as cars or holidays , others have some sort of personal crisis for example illness which can’t be helped but completely derails the finances for awhile.

Whereabouts in there do you think you sit?

Nojls

Very good point Elsien, definitely other costs to factor in and this is where looking at the greater picture is very useful. A lot of this was run up during covid when I was the sole provider when my wife was out of work and we recently got married and went on honeymoon (albeit kept costs down as much as possible). I am just struggling to see where to go. Obviously, with cutbacks it can make a difference but with interest this would take an eternity to pay off with the point it has got to with regards to the monthly payments. In comparison to other peoples debts in the forum I know there are people who have been even worse off but I just want it to clear. My wifes job situation is likely to get better in the coming months so she should be bringing in a little bit more. If I was paying out £500 instead of £1200 p/m we would be in a good position and would have less stress. I don't see another way out other than a DMP?

Vitor

I don't see another way out other than a DMP

I agree, realistically that's a debt that will take up to 5 years to pay down on a DMP.

Nojls

Hi Vitor (or anyone else),

As it stand, I have not missed a payment on any of these accounts. My current account is with Barclays (as is one of the debts). I have a Monzo account so would you suggest transferring pay from work, council tax, utilities to come out from this bank account? Once this is done, what would then be my first steps?

Nojls

Thank you for all your comments so far,

RAS

You need your income and essential DDs to be associated with a bank account belonging to a provider to whom you owe nothing. You need to check the information about banking groups as one bank can off-set money on an account against money in an account with another group member.

Do not use the switch mechanism which permits creditors to re-instate cancelled DDs.

Congratulations on being clear about the manner and extent of your financial issues. And unexpected spends are often an issue. They need factoring in for next year. You do however need to make sure your wife is fully on board.

I agree with elsien and Vitor's comments. You can't afford £300 ents when you haven't got enough in the other categories.

You need to sit down together when you can get some quiet time and go through the finances. Start general, about the fact that they are not sustainable and you need to talk, then go general figure and suggest a full joint audit. Then book a "date."

Depending on the age of your children, you need to explain the difference between needs and wants and start managing expectations.

You're probably going to be scheduling a weekly money talk in the short-term and monthly thereafter.

Nojls

Sorry, what do you mean by booking a 'date'

Nojls

Can you also recommend banks who do not clash with my debts. Starling, Monzo?

Grumpy_chap

on an ok salary of £63,500 a year 

Monthly income after tax................ 3431.06

Typically, that salary would be around £3,950 take home (assuming not Scotland).

Are you paying student loan deductions?

Are you making contributions to an employment pension above the minimum? I rarely suggest reducing pension contributions and I am certainly NOT suggesting to leave an employment pension scheme or to pay less than the minimum needed to secure the employer's contributions. BUT, reducing any voluntary contributions might be appropriate to consider.

Are you paying income tax against any BIK such as healthcare?

It is just, understanding that apparent £500 gap in monthly income is a big number…

Some other expense items I would check / consider possible areas for efficiency:

Gas..................................... 0 = So an all-electric property?

Satellite/Cable TV...................... 88 = can you ditch the cable TV and just have freeview?

Childcare/nursery....................... 0 = no after school club / babysitters ever?
Other child related expenses............ 0 = no clubs to pay for? no hobbies?

Medical (prescriptions, dentist etc).... 0 = not even annual dental check ups?

enthusiasticsaver

I think some of those categories are underquoted like Birthdays and groceries. I would also say with a £3500 car repair bills are likely to be higher than £1200 over the year and £30 for 2 children does not sound enough.

I think I would recommend a DMP and aim to get the £37k paid off in the 5-6 years it takes for the defaults to drop off your record.