ANY help would be gratefully received. Desperate times

jue3107

Hi Everyone

I'm new to the forum, so please forgive me from jumping straight in for advice but I feel like everything is collapsing in around me at the moment.

My situation is one of my own making really, so I don't have anyone else to blame. Four years ago my husband and I separated. During the very messy divorce I bought him out and thereby increasing my mortgage from £100k to £160k, with payments of £874 per month. I thought that I could manage at the time, with hindsight I probably shouldn't have done it. I also ended up taking out a loan for £15000 to pay off some debts that we had accrued between us (he paid his share too). As money was so tight I started using my credit cards for general stuff like food, petrol etc. I've never been one for really going out so it all went on essential stuff. Unfortunately, as the credit cards went up, so did the payments, and so did the need for me to use them more and more each month just to get by.

The result is that I'm now in debt to the tune of a £15000 loan (not sure APR % but think it's around 6% - will have to check) (goodness knows how much the final repayment amount will be as I can't find the paperwork at the mo. Though it's £287 per month and over 10 years with 18 months gone, so I can probably work it out from that. The Credit Cards are £11500 (Virgin 0%APR until next month then not sure what rate will be) and £5500 (Tesco 16.9%APR) each and I'm floundering. I've put my SOA at the bottom of this. If someone could please have a look at it for me and come up with any suggestions I would be very grateful as I'm going out of my mind at the mo.

OUTGOINGS
Mortgage 875.43
Council Tax 91.00 Paid for each of 10 months
Telephone Bill & Broadband 46.00
House Insurance 33.00
TV Licence 11.37
Life Assurance 10.00
Loan 287.39
Gas & Electric 96.00
Water Bill 19.75
Life Assurance 14.56
Interest Free Credit (Bed) 48.67
Mobile Phone 25.00
Tesco Master Card 171.00
Virgin Credit Card 142.00
Petrol 40.00
Food 120.00

INCOME
Child Maintenance 309.00
Salary 1374.83
Children's Tax Credit 37.38
Child Benefit 72.40

Total Incomings 1793.61
Total Outgoings 2031.17

I've listed all the essentials. We don't go out and I don't buy clothes until the others are falling off me.

I am desperately trying to keep my house and not have to sell as that would cause me so many problems, partly because of the current situation but also my ex husband HAD agreed to stay on the mortgage until our son is 18. The mortgage is tied up until 2012 on a fixed rate of 5.39%. If I move I won't be able to get a mortgage by myself and also the rate will be so much higher than it is now. I've looked at ringing the credit card and loan companies and asking if I can make reduced payments but I haven't done this yet. I'm terrified that it will affect my credit rating after reading a guide book from one of the debt counselling agencies. It would take me years to be able to pay them off at a reduced rate (bad enough now) and then they add 6 years before your credit score comes back thus scuppering any chance of me getting a mortgage in the future.

Sorry for rambling on and on and on, but I really am at my wits end and it's helped me to get this all out. I'm currently sat here in tears reading back what I've had to write down.

Thank you very much for taking the time to read this and for any help/advice that you are able to offer.

sparky0107

Hiya hun & welcome,
Would you happen to have your APR's for your loans & CC's, also is your council tax over 10 or 12 months. Gas & elec seem very high, also you've not added food, or clothing allowances. If you can amend these then you'll get some very nice helpful people coming along very soon to give you some very good advice & help. Good Luck

jue3107

Thanks I'll edit the post where I can now )

Merlot

jue3107 wrote: »

Hi Everyone

I'm new to the forum, so please forgive me from jumping straight in for advice but I feel like everything is collapsing in around me at the moment.

My situation is one of my own making really, so I don't have anyone else to blame. Four years ago my husband and I separated. During the very messy divorce I bought him out and thereby increasing my mortgage from £100k to £160k, with payments of £874 per month. I thought that I could manage at the time, with hindsight I probably shouldn't have done it. I also ended up taking out a loan for £15000 to pay off some debts that we had accrued between us (he paid his share too). As money was so tight I started using my credit cards for general stuff like food, petrol etc. I've never been one for really going out so it all went on essential stuff. Unfortunately, as the credit cards went up, so did the payments, and so did the need for me to use them more and more each month just to get by.

The result is that I'm now in debt to the tune of a £15000 loan (goodness knows how much the final repayment amount will be as I can't find the paperwork at the mo. Though it's £287 per month and over 10 years with 18 months gone, so I can probably work it out from that. The Credit Cards are £11500 and £5500 each and I'm floundering. I've put my SOA at the bottom of this. If someone could please have a look at it for me and come up with any suggestions I would be very grateful as I'm going out of my mind at the mo.

OUTGOINGS
Mortgage 875.43 - Can you change to interest only for a while instead of repayment
Council Tax 91.00 - Ask you council if you can over 12 months instead of 10, some council permit this and other don't.
Telephone Bill & Broadband 46.00 - This is far too high.
House Insurance 33.00 - Too high
TV Licence 11.37
Life Assurance 10.00
Loan 287.39
Gas & Electric 96.00 - This is high, have u switched lately? If not, do so.
Water Bill 19.75
Life Assurance 14.56
Interest Free Credit (Bed) 48.67
Mobile Phone 25.00 - You can't afford this, get rid of it
Tesco Master Card 171.00
Virgin Credit Card 142.00

INCOME
Child Maintenance 309.00
Salary 1374.83
Children's Tax Credit 37.38
Child Benefit 72.40

Total Incomings 1793.61
Total Outgoings 1871.17

Please notice that on the list of outgoings I haven't got anything other than direct debits and my outgongs are already £100 more than my income. I've cut down and down and down on food to the point that I'm only spending about £30 a week for the 2 of us (me and 14 year old son) and that has to cover cleaning stuff too.

I am desperately trying to keep my house and not have to sell as that would cause me so many problems, partly because of the current situation but also my ex husband HAD agreed to stay on the mortgage until our son is 18. The mortgage is tied up until 2012 on a fixed rate of 5.39%. If I move I won't be able to get a mortgage by myself and also the rate will be so much higher than it is now. I've looked at ringing the credit card and loan companies and asking if I can make reduced payments but I haven't done this yet. I'm terrified that it will affect my credit rating after reading a guide book from one of the debt counselling agencies. It would take me years to be able to pay them off at a reduced rate (bad enough now) and then they add 6 years before your credit score comes back thus scuppering any chance of me getting a mortgage in the future.

Sorry for rambling on and on and on, but I really am at my wits end and it's helped me to get this all out. I'm currently sat here in tears reading back what I've had to write down.

Thank you very much for taking the time to read this and for any help/advice that you are able to offer.

Hi and welcome to the DFW board, please don't cry we are here to help you, I have added some comments in above and I will be back, my DS has just woken up.

Merlot.x.

Witsend_2

So sorry that you are upset and crying and I'm sorry I am not able to help you regarding advice. However, I just wanted to say hang in there as someone will answer you soon sit tight. Hugs to you and welcome x

~Beanie~

Hi, I'm sorry I can't offer much practical advice but I just wanted to say well done for posting on here, that's the first step to sorting yourself out. These guys gave me loads of help when I posted my SOA and I have started making a dent in my debts (only a small one, mind!).

From what I can see your gas and electric seem very high, can you switch and get a cheaper deal? You also need to include food, clothes, transport costs etc on your list. How long is left on the finance for the bed? I hate to say it but it really does seem that your mortgage repayments are crippling you - could you rent a room out or get a lodger? Could you get extra work or another job? I do realise this could be difficult with a child.

Include everything you can think of that you spend money on and some expert will come and offer assistance I'm sure.

pania

Hello sweetie and welcome to these ere boards, your debt is at a very similar level to me so I have a good idea where you are coming from.

Take a deep breath, you are in the right place here and will be looked after.

OK, so lets take a look at this SOA, i think you are aware that you are going to HAVE to bite the bullet and contact CCCS, please don't worry about the credit rating right now, it will ne knackered anyhoo if you carry on as things are. I too have been on the "have i got enough bread for toast everyday between now and payday diet and it ain't fun.

Have you any chance of getting a friend or colleague in as a lodger? of course it would need to be someone you could trust with little one around too.

Your mortgage looks like it is interest only right now and this is a priority debt and one to definately keep on top of.

2 life insurances, guessing one was to top up the shortfall when you bought OH out. Contact yur company and ask them how much it would be to amalgamate the 2 policies. if necessary shop around but PLEASE if you switch ensure that the policies are like for like. House insurance is rather high, look at quidco for a switch and get some cash back too.
What are the credit limits on your CC's, interest rates and minimum payments for each would be handy to know...
Gas and leccy also v high, shop around and switch if necessary.
Good luck hon, always someone here if you need a chat.

salena

If you are working, shouldnt you be entitled to working tax credit to?

angelavdavis

Hiya Jue and well done for getting this far,

First crack at the bills - hope it helps:

jue3107 wrote: »

Hi Everyone

OUTGOINGS
Mortgage 875.43
Council Tax 91.00 Does this include single person discount? You can ask the Local Authority to switch this to priced over 12 months instead of 10 to lower the repayments.
Telephone Bill & Broadband 46.00 This is really high - shop around and find out what deals you can get. switch through Quidco for cashback.
House Insurance 33.00 What is this for? Shop around and switch through quidco for cashback.
TV Licence 11.37
Life Assurance 10.00 See below
Loan 287.39
Gas & Electric 96.00 Get your boy involved - get all the electronic devices off standby and switched off properly, keep a note of the meter readings on a weekly basis, share it with him and then gradually replace lightbulbs with energy saving ones. He is old enough to start learning how expensive stuff like electricity is now. If you don't have one - get a slow cooker and use it to produce meals - particularly in winter-time - it costs a fraction of the cost of an oven.
Water Bill 19.75
Life Assurance 14.56 Why do you have two life assurance policies? I pay £9.99 per month - I am 39 and have a £120k mortgage, I think you might be overinsured.
Interest Free Credit (Bed) 48.67 How long is left on this one?
Mobile Phone 25.00 Coupled with the telephone/BB bill above, this is £71 per month, you need to downsize your account.
Tesco Master Card 171.00
Virgin Credit Card 142.00

INCOME
Child Maintenance 309.00
Salary 1374.83
Children's Tax Credit 37.38
Child Benefit 72.40

Total Incomings 1793.61
Total Outgoings 1871.17

Please notice that on the list of outgoings I haven't got anything other than direct debits and my outgongs are already £100 more than my income. I've cut down and down and down on food to the point that I'm only spending about £30 a week for the 2 of us (me and 14 year old son) and that has to cover cleaning stuff too.
You need to include food on the above list too.

First things first - change the easy stuff and that is listed above. As has been mentioned by sparky, you need to factor in additional costs and also, need to detail total debts, aprs, length of loans, etc so everyone can see the full picture.

Check out www.entitledto.co.uk for information relating to benefits - ensure you are getting what you are entitled to.

GeorgeUK

Lots of good advice already.

Have a look at https://www.entitledto.co.uk to see you are claiming everything you should as salena suggested.

I'd also look at your credit history (free at experian but cancel within 30 days). From this you should hopefully see if you have any late payments or defaults that lenders may be wary of. Also check how many recent credit checks you have had. You can usually have 3 within 6 months before your credit score is affected. (Don't bother paying to see your credit score - different places use different methods to calculate it so is not worthwhile)

It may be possible for you to get a 0% on Balance Transfers promotion from a new CreditCard or get a Life of Balance Card (low interest).

I'd put off ringing the card companies until you have spoken to one of the free debt charities. You don't need to take their advice, but they should be able to offer advice and show you what your options are.

These are the free debt charities we usually refer people to:
(Taken from Fermi's signature)

Professional, free and impartial advice on debt problems can be obtained from several charitable and 'not for profit' organisations. They never make a penny from the advice they give, which means it will be given with only your best interests at heart. You can contact:

Your local CAB Office and ask to speak to a 'money advisor'
The Consumer Credit Counselling Service (CCCS) - Tel: 0800 138 1111
National Debtline - Tel: 0808 808 4000
Payplan - Tel: 0800 917 7823

jue3107

Thanks everyone. I really do appreciate your help. I've now edited the original post to show in the essential bits and pieces such as interest rates etc.

Re working tax credit - I earn too much to be eligible for it - £21,500. Unfortunately I can't get another job as the one I've got is full time and I have a lot of commitments re my dad and son. I can work freelance from home and am in the process of putting an advert in the local paper. I can try to get a lodger from work (large organisation) but the problem I've got is the rooms are very small and I couldn't even get a bed in the spare room.

The virgin credit card is up to it's limit and the tesco one has a total of £9900 credit limit £5,500 is used at the moment. I recently transferred over £4k from tesco to virgin as this was the cheaper rate.

Re the loan, until I find the paperwork I can't recall how much the interest rate was although I don't think it was above 6%. I think there is probably about £29274 outstanding. I must have got the loan amount wrong perhaps it was £20k. Oh I'm sorry I really don't know until I find the paperwork.

The Council Tax does include single person discount otherwise it would be well over £100 per month. I will ring the local authority tomorrow and ask to change it to 12 months.

The landline bill is £13 for broadband and the rest is for line rental etc - BT. This was last reviewed in June 07. I don't use it a tremendous amount but I need to have a phone as my Dad is very poorly and lives alone so he needs to be able to get hold of me 24/7. Hence why I've got a mobile too.

The house insurance is for buildings and contents.

One of the life assurance policies is left from when we had an endowment mortgage and had no surrender value. As we had been paying for quite a while we thought it would be more beneficial to keep it going than stop it. The other policy is also a life assurance policy and I think the death benefit was somewhere in the region of £55k. Either way they wouldn't cover the mortgage if something happened to me. They are both with different companies so I wouldn't be able to amalgamate them. At the moment ex husband is paying half of the £14.56 one as he is on it too.

The mortgage is repayment as having been bitten by endowments once before I desperately didn't want to be in the same position of receiving letters every week saying that "your policy is not performing".

The gas and electric were reviewed in June last year. I only use the gas for the central heating (don't use the fire) and the bill is about £50 per month (eon). The electric is about £46 per month. I've queried the gas bill several times as I thought it seemed too high with british gas, n-power and powergen and they have all said it's correct. I just don't understand it at all. We have cavity wall insulation, double glazed upvc windows and no draughts anywhere. We are both very energy conscious and make sure that the lights are turned off - although I have to admit I don't unplug appliances at the wall. I don't use the oven a tremendous amount and have already gone down the slow cooker route )

The bed only has a couple of months to go and will be paid off.

I've not defaulted on any payments as yet, and desperately don't want to.

This was what CCCS said on my debt remedy - From the information you have provided, your income is not sufficient to meet your priority expenditure. This means that even if your credit debts did not exist, you would still be unable to meet your normal day to day living costs.
You therefore need to take immediate steps to improve your financial situation in order to prevent your current position deteriorating further. Within this booklet there are suggested ways to improve your circumstances.
Once you have reviewed your budget and found ways to increase your income and/or reduce your expenditure, please revisit debt remedy with your web reference number, amending your figures accordingly. We will then be able to advise you further on how to deal with your credit debts.
Until you have improved your situation, we are unable to provide you with a solution to your debt problem, because you have no money available to repay your debts If any of your debts are with the same bank as your personal account (where your income is paid), we would recommend you move this to another bank. This prevents your bank continuing to take payments from your account and ensures that you are in full control of your money. A list of alternative bank accounts can be found at https://www.fsa.gov.uk.