Hi I owe about 21K and need advice help.

jbal_2

...........

claireabelle_2

:hello: Hi Joe
welcome to MSE!
You'll get lots of good advice, I'm sure, just bumping this for you so it doesn't drop off the first screen.
Can you find your unsecured debts' APRs?
Thanks
Claire

Clariman

Hi jbal and welcome.

You have already commented on the Sky and phone bills. Assuming that your SOA is complete (nothing for entertainment and holidays) then cutting out Sky TV alone will balance the books but you really want to have a bit spare so that you can start paying off the debts. The two areas that stand out to me are Car Insurance and Petrol/Diesel. Is that for one car or two? If two cars, maybe you could consider surviving with one. If only one car, then your insurance seems pretty high to me. Have you shopped around recently for car insurance? Why are your petrol costs so high?

I wouldn't recommend taking your mortgage to 115% because that secures even more debt against your home. Also, with concerns over the direction of property prices at the moment, the last thing I would want to do is to have a mortgage that was bigger than my house value. Besides, I think that the credit crunch will mean that no lender will offer you a 115% mortgage. If I am not mistaken, your current lender Northern Rock has withdrawn their >100% mortgages.

The other danger of consolidating your debt is that it means that you don't face up to the issue of the imbalance between your income and expenditure. If you carry on with a budget that is out of kilter then you will get further in to debt. I'd strongly recommend getting an SOA/budget that addresses that NOW.

In addition to cutting down on expenses, would it be possible for you to take on some additional part time work e.g. do some bar work for an evening a week which will give you some entertainment while being paid for it?

HTH
Clariman

Clariman

So you are considering moving 0% unsecured debts onto your mortgage? Not only will they then start attracting interest, but they will be secured against your home. To be frank (but said in a friendly and kind way ) I think that's madness.

Besides, I doubt whether you'll get a 115% mortgage from anyone at the moment AND you may fall into the typical debt consolidation situation of continuing to overspend and get further into debt.

I REALLY think you need to get your SOA to balance: whether that be by increasing your income or decreasing your expenditure. Borrowing more to pay off a debt is not paying off a debt ... it is merely moving your debt around.

Clariman

TotallyBroke

Have you thought about combining your broadband and calls onto Sky package. Sky are doing free calls at the moment. I have this service and I only pay BT £21 per quarter for the line rental so £7 per month. I have a middle range sky package, top broadband and the talk package so in total I pay £40approx although that includes all calls e.g. 0870 and 0845 numbers that I have used a lot lately. That could save you approx £30 per month. Also you will be entitled to Tax credits when baby is born. I think it is approx. £135 per month just for baby being under 1. That doesn't include anything else you may be entitled to because of income. check out www.entitledto.co.uk it will give you a basic idea. People may shoot me down for using baby money on bills but without that baby wouldn't have a roof over it's head. Good luck it's hard but doable (if that's a word!!) check out freecycle for clothes for baby and NCT sales for nearly new baby products. Another good site is netmums you can get some good second hand stuff cheaply plus I found it a great source of mum & baby advice.

aligerdie

You haven't included any Child benefit or tax credits which you will be entitled to when junior makes and appearance though have you?

Maybe that might go to help make up the deficit if this is the budget you think you will have when the little one comes along. (or have I read that wrong )

I also think your house and contents insurance is a bit high too, is it worth shopping around on quidco?

Good luck with the little one by the way!

TurnaroundSue

Hi and welcome. You say that your wife is earning good money, is there anyway you could throw as much of her wage at the debt now whilst she is still in full time employment and maybe clear off one of your cards (or save it and then ask for a full and final settlement figure) - not sure how a dmp works, so dont know if you are able to do this!

Also I agree with Clariman that I WOULDNT

TurnaroundSue

Hi and welcome. You say that your wife is earning good money, is there anyway you could throw as much of her wage at the debt now whilst she is still in full time employment and maybe clear off one of your cards (or save it and then ask for a full and final settlement figure) - not sure how a dmp works, so dont know if you are able to do this!

Also I agree with Clariman that I WOULDNT secure anymore against your home (especially in the current market) and I also doubt whether you would get anyone to give you a mortgage at this amount. If however you did decide to go along this route, remember that will cost you money in charges etc which you could use to pay off some of the debt. I seriously would consider NOT going down this route however.

I am not very good at SOA's so will leave that to the more knowlegeable people of this board.

Good luck on your debt free mission.:beer:

Clariman

Clariman, I know its madness but I'm worried with a little one on the way that I won't be able to provide for my family and with the debt moved to my mortgage it frees up an extra £230 a month.

I can't argue with your aims - wanting to provide for your family, but I'm worried about the longer term effect on you and them. I am not debt whizz, so maybe others who work in debt advice may come along and offer some other potential solutions.

The most important thing for your family (hope this doesn't sound patronising) is to give your kids unconditional love and their basic needs i.e. roof over their heads, food on the table and some clothes to wear. By moving unsecured debts to debts that are secured on your family home ... and putting yourself immediately in a negative equity situation when there are concerns that house prices may be heading south ..... then I fear you are putting at risk the roof over your family's heads.

Also, a poll on a debt management board on another website that I frequent asked people who had consolidated their debts whether that sorted out their problems or whether they continued to get further into debt. Over 90% said that they got further in to debt. And why is that? It is because, consolidating is an easy quick fix and doesn't address the fundamental underlying problem that expenditure is higher than income. Your family is about to face a large drop in income. What you need to do is to find a manageable but equivalent drop in expenditure. Anything else (IMHO) is not a long term fix.

If your family are your primary concern, then maybe it is time to put your car hobby to one side, reduce you very high petrol costs and associated car insurance. Besides, with a new baby you won't have time for track days

Clariman

Shelley84

First off if your wife is able to - Breastfeed when baby is born. You will save so much on formula.

I was unable to and had to pay a fortune on formula milk. Use washable nappies.

Get rid of everything that is not a necessity to live - ie Track Days!

Have you looked into Sky? You can get internet, tv and phone for £26.
Your grocery bill can come down. Check out the Old Style board.

TotallyBroke

I think you are running away with your baby purchases. You won't need a cot for atleast 4months. If your wife chooses to breast feed I would recommend co sleeping until baby has dropped the night feed then you can get a cot. Or buy a pushchair that has a carry cot attachment baby can sleep in that until turning 4months old when it can then move into a cot.
Baby essentials are 6 vests, 6 sleepsuits, 2 blankets, cardigans, muslin cloth (or any cloth off cut). Suit for going outside. Bottles (if not breast feeding) sterliser (again if not breast feeding) nappies, cotton wool (cheaper to buy a big roll and roll your own balls). Pushchair or travel system (not needed until atleast 10days after when midwife releases you from her care).
For the first 6 weeks you are constantly washing, drying and wearing so don't buy loads of clothes. Save the mini me clothes until 3months old when they will last in them longer than a couple of wears.
You may be entitled to the £500 Sure start maternity grant check that out it could help.