In need of serious help/advice

anniee1981

Hi,

Not really sure where to start, firstly I feel utterly ashamed about our situation so here goes. We have a newborn baby (that's the only good thing). we also have a 3 year old girl. This is our list of outgoings and incomings, this does NOT include day to day spending like petrol, food etc etc and as you can see we are in minus already

Incoming





Wife’s Salary (SMP)

£400.00

Husbands Salary

£1,230.00

Tax Credit

£90.68

Child Benefit

£135.85

Total Income

£1,856.53

Outgoings



Loan 1

£207.00

Loan 2

£264.00

Loan 3

£210.16

Loan 4

£319.46

Virgin Credit Card

£79.00

Mortgage (Interest Only)

£536.79

Gas & Electric

£78.00

TV/Broadband/Home Phone

£35.00

TV Licence

£11.95

Council Tax

£115.00

Water

£39.64

Car Insurance

£35.00

Camera Insurance

£5.00

Pet Insurance (3 Pets)

£21.36

Life & Critical Illness Insurance

£28.37

Motor Breakdown

£9.44

Husbands Life Insurance

£11.53

Buildings Insurance

£16.49

Home & Contents Insurance

£11.48

TGWU Union

£10.67

Emergency Home Call-Out

£5.25

Bank Account Charge

£10.00

Lloyds TSB OD Interest

£6.00

T-Mobile (Contract)

£40.00

Total Outgoings

£2109.21

Left With

-£252.68

I have had the you don't need all those policies but we do and have tried to find cheaper but can't. Our mortgage is interest only and almost used all the equity. Loan 2 is from my parents we can't stop paying that. I can't go back to work due to having a newborn baby husband could do extra hours in another job but there is no overtime available where he is. I would gladly work somewhere at the weekend but would lose my maternity pay.

We feel sick and WE KNOW it is our own fault but there must be something we can try, we DO NOT want to sell or go bankrupt, were thinking of an IVA or something similar but do we need to go to this step ?

Any advice would be so very greatfully received, as we can't sleep eat it's constantly on our minds. I am 27 and Husband is 29.

Thank You in advanced.

itsnever2lateisit?

Please explain why you NEED some of those insurance policies. IMHO they are in the 'nice to have' bracket given your current situation. Can you reduce the TMobile contract to a lower tariff? Most companies allow you to change.

I'm not sure about this but if you went down the IVA route Loan 2 would be a problem unless there is a written legally binding agreement in place, and even then the payment would be much reduced and Bank of Mum and Dad would never see all their money back

SuzySu

First of all congratulations on the birth of your baby. Now... I haven't got much experience but from what I can see, the first thing to do is to ring one of the FREE, charitable organisations like CCCS and get an appointment to speak with one of their advisors. I think they are busy busy busy so you will need to make an appointment (that will last about an hour) for them to call you. They might not have a space for a couple of weeks, but you certainly need to pick up that phone.

They will do a very thorough analysis of your income and your outgoings and will leave no stone unturned.

The advice they give is first rate.

Secondly, is there any way you could 'up your income' whilst staying at home with your children. Would you consider something like childminding? I did it for 7 years while mine were small and it can bring in a very good wage (plus you get to stay at home with your own children if that's what you want to do).

Please go give CCCS or similar a call asap and good luck.

anniee1981

Not sure which policies I could stop, maybe pet insurance is one of them, the T-Mobile contracts are for both of us both at £20 which is the lowest we can go according to them. We need our life insurance and also our home and buildings insurance, motor breakdown we need as husband works about 40min away from home. Will cancel the camera insurance as it need to be repaired a few months ago but £5 is £5. Any other suggestions ? Will defo ring CCCS thank you.

jmhgibson123

i would advise agains bankrupcy or iva as you will be able to return to work at some point. i would phone each company or write with a list of income and outgoing and explain your situation and ask if for a period of 6 months you can make very small token payments to be reviewed after 6 months when you can arrange proper payments c.a.b are good with this and will give you a copy of a letter to send to each company to ask them to stop intrest while you are struggling always make sure what ever you do that the advice you get is free some companys will offer there debt services at a price
good luck and congratulations on the baby

bigheadxx

Your Tax Credits seem quite low given your income so perhaps you could check if this is the right amount.

anniee1981

My full-time income would be £20,850 but I worked part-time which is 22.5 hours so took home about £840. My husbands income is £19,000 and takes home £1230ish each month. So we only qualify for min tax credit which was £34 per month but we an extra £50 for the baby element.

SuzySu

I know you think all your policies are necessary or you would not have taken them out in the first place, but a roof over your heads is even more necessary and you don't want to be in the position of losing it. So, if you cancel the camera insurance, pet insurance, breakdown insurance, contents insurance and emergency call out you will be saving yourselves over £50 straight away.

I know it's not ideal, but neither is being in debt (and I speak from experience).

Each policy on it's own is 'only' £5 or 'only' £10, but put enough of them together and you get a hefty sum leaving your account each month.

Please consider it carefully.

Burlesque_Babe

Your gas and electricity seems high, check out Uswitch to see if there is a cheaper provider and then go through Quidco to switch and get the cashback on top.

check out moneysupermarket for your car and home insurance and again, if you can find cheaper quotes, swap. First check if the insurer is on Quidco - if they are, go through quidco to swap.

Cancel the camera insurance and have a look for a cheaper broadband provider - are you with Sky or Virgin?? Look to see if you can get a Freeview box instead of a dish or cable.

the £10 account charge on your bank account - cancel this - all you are getting it stuff like reduced breakdown cover and cheaper travel insurance.

Would getting a water meter save a few pounds each month?

Are you stuck in your mobile contract? If not, switch to a t-mobile PAYG sim. There are places online you can get a couple free.

What is the emergency home call out insurance for? Have you ever needed it??

How much do you spend on groceries each month? Also costs for car tax and petrol need to be factored in.

Look to ebay anything that isn't nailed down or car boot all you can.

CLAPTON

you need to work out a 'proper' SOA show all your actual spending like petrol and food etc. so we can see

income
essential spending (i.e. excluding unsecured debts but including mortgage)
only whats left is available for debt payments

its pretty clear that there will be very little to pay towards the debts so in the end you will have to stop paying them. But we need to see the real SOA first.

How much is the house worth?
how much the mortgage?
how much is each debt , whats its APR?
is there PPI on any of the debts?

pania

Sorry guys. I honestly cannot believe that some people have recommended cancelling pet and contents insurance.
Having been the subject of a massive housefire, contents insurance is a must must must no matter how tight the scenario, there are other things that CAN be cut back on that should go first.
"you need a roof over your head"... Yes they do. What happens if life and CI insurance is cancelled and the main wage earner is killed in a car accident. There is no money to pay the mortgage and the roof is lost.
Vital insurances aren't Nice to have, they are MUST have.
What would happen to the pet if it was hit by a car or had an illness? vets bills can quickly run to hundreds if not thousands. what is the alternative to paying the bill? the OP earns too much for rspca treatment.
Sometimes advising the cancellation of policies is right, but please think carefully of the consequences before recommending they are cancelled.
I would hate anyone to be in the situation that we were in with only the clothes we stood up in and nothing else, with no contents insurance to place what was lost.
Or like my horse who would have been put to sleep yr and half ago for the want of a £10 pm insurance policy. I could ill afford it at the time, but the £3k vets bill would have been the end of me.