Buried head for too long....

Scared4future

Ok this is scary but I have now got to the stage where Im not sleeping at night, all I see is a huge black hole of debt hanging over my family, and I need some help! I apologise now about the essay Im about to write

I have an amazing husband who earns a decent amount (£35k per annum) and 3 kids under the ago of 8. Up to 2 years ago we were credit card debt free after consolidating my husbands (pre marriage/single guy) debts into an amount that was easy to fit into a monthly budget... But then everything fell apart.

My brother-in-law had to move closer to his job and he said that we could move into his house and both he and my husband would get a joint mortgage which would help him out and would get us onto the housing market which in the South of England is nigh on impossible for first time buyers with 3 children!! It was an offer we couldnt refuse as the amount we would pay each month would be alot less than the rent we were paying!

On moving in though we found lots of work needed to be done on the house as we had a 3 month old baby... such as new boiler and heating (£6k) etc. This was all thought to be ok as when the mortgage went through it would leave enough surplus cash to pay for it all... but in the meantime we put it on the credit cards! It should have been a short term solution (a month or so at most), while the mortgage went through.. we paid with credit card cheques as we had a promotion with 0% interest for 6 months. Seemed like such a good idea then. If I were to be honest we went a little overboard on the necessesities.. we had our back garden made child friendly and ripped up the carpets for wooden flooring etc! The thought being it was going to be our house and we wanted it lovely. Then the worst thing possible happened.... the mortage application failed.

All I was told was that there were issues with my brother-in-law's credit score, and ever since then things have just got worse! We are now left with over £20k credit card debt and no-way of finding a quick fix solution to paying them off..

As I have never had credit cards and never dealt with my husbands pre-marriage ones I had no idea how they worked, I had always dealt with real money that was my own. Now I look and find out that we are paying 30% apr (if my maths are correct) on a £12k balance :eek: mainly due to the fact that we used cheques to pay (bang goes that good idea of 0% interest for 6 months!!). I went out and found a job working a night shift on Saturdays... yes I know it isnt much but Im an old fashioned housewife who looks after her own kids! This went a small way to helping pay the debts.

In January we found out we were expecting another baby.. and before I get the tut tut's about bringing another child into this financial mess I will say that it should never have happened, it was a 0.005% chance!! I am soon to give up my night shift as I am suffering complications with my pregnancy, not helped by the job I do. I am now 5 months pregnant and so scared about my families future that I dont sleep/eat or even smile anymore!

Im just drawing up my SOA... which I will post on the next message. After doing the budget planner on this amazing site... Im even more scared!!

If anyone has any useful suggestions on how to approach my nightmare I would be so grateful.

Bestthingsinlifearefree

Hi Scared4thefuture,

Welcome to MSE !! Congrats on the pregnancy :T There is always a way forward let see if MSE ers can help you try to find it. Posting an SOA is a big step forward.

First you mentioned you and your husband moved into your brother in laws house with the aim of buying it jointly (and then spent cash doing it up). You then say the mortgage application failed.

So who owns this house now and who lives in it?


Best,

Sea78

Oh sweetie - massive hugs to you. Where are you living now? Are you still in the b-i-l's house? What's going to happen with that?

I can imagine you are feeling very stressed, but post up your SOA and we'll see if we can help.

Sea xxxxx

notlongnow_2

Congrats for taking the first step in seeking help.

Is there no way at all you can keep working your shift until you qualify for mat pay?

GeorgeUK

Just need a little clarification - who currently owns the house? Is it your Brother-in-law?
And are you paying the full mortgage on this right now?

The SOA calculator is a handy tool to make sure you've included everything
http://www.makesenseofcards.com/soacalc.html

I'd also check https://www.entitledto.com to see if you should be claiming any benefits you aren't currently getting.

Scared4future

SOA as promised....

INCOME

Partners Salary - £2098
My Income - £645

Total income - £2743


OUTGOINGS

Rent - £600
Council tax - £127
Gas - £23
Electric - £24
Water - £25
TV License - £11
Sky £43 (incl Broadband)
Phone - £32
Mobile x2 - £35
Food - £259
Car Insurance - £25 (paid yearly)
Petrol - £100 (husband works 25 miles away, but we are in the process of
selling the family car so will only have one small economical car for husbands commute... and very fit children!!!)
Car Tax - £16

Loan - £335
Credit Card (min repayment although we pay as much as poss) - £541
Hp Payment (Sofa 0%) - £89

Total Outgoings - £2285

I have not included any luxury items in this list as we really dont have them.. even the kids pocket money has had to stop

DEBTS

MBNA - Balance £12,800 - Monthly interest appears to be 2.5292%, is that 30%APR??? :eek:

HSBC - Balance £9000 - APR 15.9%

The loan is the consolidation we took out when we first married for my husbands debts and unfortunatly I am still waiting for hubby to call for current detail as its in his name only!!

If there is anything Ive forgotten then give me a nudge and I will find them out.
x

Scared4future

Clarification as requested.....

We still live in the house and we pay a minimum amount of rent to my BIL. I know my BIL feels so bad and responsible for the position we are now in and I know that if he had anyway of paying us the money back or helping towards the costs he would, but since this has happened we have found out that he is in a worse financial situation than we are (and TBH if we had known before hand about his mess we would never have gone along with the idea in the first place!).

Unfortunatly I work as a Bank member of staff in a hospital and as such do not qualify for Maternity Pay.

Thank you so far for your replies... I burst into tears when I saw them (yes its the hormones.. honest!!)

newmum1

Hello, you seem to be doing pretty well on items such as food, gas and electric. I have a few ideas for you as your not able to work at the moment could your husband get another job on weekends or evenings i understand that it will be hard but think of the extra money, are you claiming all the benefits that you are entitled to, is there any sort of work you could find to do from home as you would still then be able to look after your kids?

GeorgeUK

Actually, i think it's 34.95%

Council tax - if you are paying this over 10 months, ask if you can pay it over 12
Water - do you use water hippos or similar to reduce the amount of water used?
Food - have a look at the old style board. Could save quite a bit from this.

Edit: Take a look at your (and hubbys) credit file (free at experian if you cancel within 30 days)
This should show any late payments and defaults if you have any. Also look at how many credit checks you've had in the last 6 months. You can usually have about 3 before your credit score is affected.

If possible, we need to get your interest reduced. Some CreditCards do 0% BT promotional offers which i hope you can take up and pay off that MBNA Card with. You may be able to do a SuperBalanceTransfer with the Virgin Money card - paying the money into your current account rather than another MBNA Card.

Daz1

Congratulations and commiserations are in order then. Seriously, the situation sounds dire. At least your BIL is supportive and doing what he can......if this situation had soured family relations, imagine how much worse it could be. I do not have any advice really. Perhaps you have learnt a valuable lesson.......before entering ANY financial committment, especially with family but applies equally to anyone else, always get together and have an open, honest and frank discussion and try to plan for the worst. "What if" situations need to be covered so that you know what your options are. Since you are all living together, how about eating meals/shopping and doing budgets together? When I lived in a shared house (also with family and 1 other) we all contributed equally to any bills. Combined resources are often more "powerful" than an individuals efforts. How about sharing childcare arrangements with anyone at home so that you could take on a few extra shifts while you are able?

itsnever2lateisit?

Scared4future wrote: »

SOA as promised....

INCOME

Partners Salary - £2098
My Income - £645

Total income - £2743


OUTGOINGS

Rent - £600
Council tax - £127 Is this over 10 months or 12?
Gas - £23
Electric - £24
Water - £25
TV License - £11
Sky £43 (incl Broadband)This is a luxury you cannot afford, drop down to the £26 package which will retain broadband
Phone - £32 As you have sky BB and phone this should only be the rental to BT of £11.75
Mobile x2 - £35 If you are still in contract then reduce to min available, if not go to PAYG
Food - £259
Car Insurance - £25 (paid yearly)
Petrol - £100 (husband works 25 miles away, but we are in the process of
selling the family car so will only have one small economical car for husbands commute... and very fit children!!!)
Car Tax - £16

Loan - £335
Credit Card (min repayment although we pay as much as poss) - £541
Hp Payment (Sofa 0%) - £89

Total Outgoings - £2285

I have not included any luxury items in this list as we really dont have them.. even the kids pocket money has had to stop

DEBTS

MBNA - Balance £12,800 - Monthly interest appears to be 2.5292%, is that 30%APR??? :eek:

HSBC - Balance £9000 - APR 15.9%

The loan is the consolidation we took out when we first married for my husbands debts and unfortunatly I am still waiting for hubby to call for current detail as its in his name only!!

If there is anything Ive forgotten then give me a nudge and I will find them out.
x

Put your loans and CC into the snowball calculator at www.whatsthecost.com and have a play around you would be surprised at how much quicker you can pay off debts if you tackle them in the correct order.

The good news is that you have a surplus of funds each month to put to the debts, there are worse cases on this board which are being or have been fixed, so all is not lost.

Your in good company here, loads of support help and advise. IMO they are the best people you will never meet.

So chin up, your familly are the most important thing in life, ad be assured you can get out of this.