I'm new. I need advice please! We just don't know the best way out!

bargainhuntermummy

Hi Everyone!

Right this is a long one but I need to start at the very beginning.

My partner is self employed (so not got a 'regular income' varies hugely) and has a son from a previous relationship who he currently pays £200 per month maintenance (direct to his ex not through CSA).
Our problems started in January 2005. I hadn't really been with my partner that long. He owned a small studio flat and I rented a small studio flat over the road. Neither of us had much money but my partner had a £9k loan from halifax and about 3 credit credit cards. He fell behind on a few payments and I offered to help him out but as we hadn't been together all that long he wouldn't accept the help and decided to consolidate all his cards and loan and get a 'secured' loan for £20k from Welcome finance (he didn't look into it - ignored the high interest rate and I feel this is where we well and truly ended up in the S***!). How he got the loan is beyond me as he had only had his flat one year and only paid £49000 for it and had paid £3000 deposit so there was nowhere near enough equity in the flat to cover it and the total amount repayable at the end of the term is £62000 which is £20000 more than the flat was worth at the time!!! So as the payments were £350 it was a struggle but we decided to both move into his flat as mine was rented. This was all ok and just about manageable until the end of 2005 as I was pregnant and we decided to sell the flat. We anted to get rid of the loan and rent however we could not sell the flat for enough to pay of the loan so had to buy something else! We ended up managing to get £62950 for the flat (amazing really!!!) and bought the cheapes decent sized house we could find in an area we weren't so keen on - a 2 bed terrace for £95950 (mortgage for £86000) our first baby was born in September 2006 and I fully intended to return back to work. However Jake has a quite rare medical condition which takes quite a bit of looking after (have to keep his temp constant and watch many colours/preservatives/additives, chemicals on clothes over excitement as he gets rashes/stomach pain/headaches/breathing problems and there is a possibility of anaphlaxis) it took until February this year to diagnose him and no childminder would take him until they new what it was. Therefore I did not return to work and only realised a couple of months ago we were entitled to DLA/carers allowance this has now gone through and been approved but the payments haven't all started properly yet. Due to this we have got ourselves behind with a lot of our bills and currently have missed 3 mortgage payments (we had missed 3 loan payments, but paid those back this month). Our situation is now that we have tried to remortgage (our fixed rate ends in May) and no one will have us unless we end up paying a rate of 9%! We have tried to remortgage an incorporate the loan but there is STILL not enough equity in our house to do this as currently lenders will only do up to 90% lend to value. Therefore we have put our house up for sale - but with all the fees etc if we sell we still will only just be able to pay everything off and probably will not have enough left for a deposit to rent! Our out goings are about £1800 per month (not including fuel/food) and we get in approx £2400 but obviously with him being self employed he doesn't always get paid each month. On paper it looks more manageable but this doesn't include the bills we have missed, late payments etc! I know we got ourselves into this mess and its all our fault. But can any one offer any advice on the best way to go from here?? Im pregnant at the moment and the baby is due in August so Im dreading moving with a newborn but we are desperate to get clear of our debt. I have applied to go to Uni in Sept 2009 to do nursing subject to be getting in and my mil retiring to take car of my children. I hope this will be the start of my getting back into work and earning enough to live! Thanks for listening sorry this is such a long post - needed to get it off my chest!

MrsBartolozzi

Just a bump cos you have no replies!

Sorry I can't be of help, but there are lots of knowledgable peeps here who will be!

MrsB

CHEAP_AS_CHIPS_4

Hiya:hello:

this is part welcome part bump to get you up the boards

You have certainly come to the right place and will get some fab advice and brilliant support

what i would sugest you do first is an soa, there is a sticky on the first page which shows you what to do, that will show exactly you situation, income , expneditute ect

once you have posted that we can give you some better advice.

just a thought, are they going to backdate the DLA allowence?

cheaps x

CHEAP_AS_CHIPS_4

ahh, mrsbart you beat me to it!:D great minds think alike

bargainhuntermummy

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1600
Benefits................................ 844.48
Other income............................ 0
Total monthly income.................... 2444.48

Monthly Expense Details
Mortgage................................ 502
Secured loan repayments................. 350
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 95
Electricity............................. 75
Gas..................................... 75
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 10
Mobile phone............................ 55
TV Licence.............................. 20
Satellite/Cable TV...................... 20
Internet Services....................... 20
Groceries etc. ......................... 300
Clothing................................ 50
Petrol/diesel........................... 250
Road tax................................ 10
Car Insurance........................... 25
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 32
Contents insurance...................... 0
Life assurance ......................... 50
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
CSA..................................... 190
Car..................................... 240
Total monthly expenses.................. 2509

Assets
Cash.................................... 0
House value (Gross)..................... 115000
Shares and bonds........................ 100
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 115100

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 86000....(502)......5.59
Secured Debt.................. 20000....(350)......17.7
Total secured debts........... 106000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Egg............................1438......0.........24.9
GE.............................132.81....0.........24.9
HSBC...........................526.3.....0.........24.9
Barclaycard....................531.21....0.........24.9
Halifax........................1255......0.........24.9
Total unsecured debts..........3883.32...0.........-

Monthly Budget Summary
Total monthly income.................... 2,444.48
Expenses (including secure debts)....... 2,509
Available for debt repayments........... -64.52
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ -64.52

Personal Balance Sheet Summary
Total assets (things you own)........... 115,100
Total Secured debt...................... -106,000
Total Unsecured debt.................... -3,883.32
Personal net worth...................... 5,216.68

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========Thanks- i've filled in the SOA it reads even worse than I thought although we have cut right down on the food thanks to the OS board so that may be a bit less. Doesn't include last years council tax deby (about £400 I think) There's no hope for us is there!

ViHan

bargainhuntermummy wrote: »

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1600
Benefits................................ 844.48
Other income............................ 0
Total monthly income.................... 2444.48

Monthly Expense Details
Mortgage................................ 502
Secured loan repayments................. 350
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 95
Electricity............................. 75 This is high, look for a better deal and go through Quidco
Gas..................................... 75 Same here
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 10
Mobile phone............................ 55 Is this contract? If so can you switch to PAYG?
TV Licence.............................. 20
Satellite/Cable TV...................... 20 Have a look for an internet/phone/tv package, or consider freeview
Internet Services....................... 20
Groceries etc. ......................... 300 Have a look at the old style board for ways of reducing this
Clothing................................ 50
Petrol/diesel........................... 250 :eek:
Road tax................................ 10

Car Insurance........................... 25 When this comes up for renewal go again through Quidco.
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 50 What are these and can they be reduced?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 32 Is this buildings and contents? Go for a combination deal again it can be cheaper and go vis Quidco.
Contents insurance...................... 0
Life assurance ......................... 50
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
CSA..................................... 190
Car..................................... 240 What is this? you have fuel is it paying for the actual car?
Total monthly expenses.................. 2509

Assets
Cash.................................... 0
House value (Gross)..................... 115000
Shares and bonds........................ 100
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 115100

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 86000....(502)......5.59
Secured Debt.................. 20000....(350)......17.7
Total secured debts........... 106000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Egg............................1438......0.........24.9
GE.............................132.81....0.........24.9
HSBC...........................526.3.....0.........24.9
Barclaycard....................531.21....0.........24.9
Halifax........................1255......0.........24.9
Total unsecured debts..........3883.32...0.........-

Monthly Budget Summary
Total monthly income.................... 2,444.48
Expenses (including secure debts)....... 2,509
Available for debt repayments........... -64.52
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ -64.52

Personal Balance Sheet Summary
Total assets (things you own)........... 115,100
Total Secured debt...................... -106,000
Total Unsecured debt.................... -3,883.32
Personal net worth...................... 5,216.68

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========Thanks- i've filled in the SOA it reads even worse than I thought although we have cut right down on the food thanks to the OS board so that may be a bit less. Doesn't include last years council tax deby (about £400 I think) There's no hope for us is there!

Welcome to the boards!

Have added some thoughts about your expenditure.

andan

Just wanted to say hi and welcome to the board. I'm not great with advice, but have you looked into things such as checking you have the cheapest gas and electricity, as these seem a bit high. Also, your food bills seems very high, i realise that you have a son with particular needs, but i'd suggest looking on the old style board for some ideas on cutting down your food bill.

You could also try ebaying and amazoning anything that you no longer need, if youve got any baby stuff that your unlikely to need this time round then its likely to do well on ebay.

I wish you the best of luck with your situation and congratulations on the baby.

chez000

Has you mortgage company been in touch with you, if so what has been suggested/agreed?
After 3 months missed payment it is usual for mortgage companies to start possesion proceedings if they do you have options such as
- spreading the arrears over the remaining term of the mortgage - possibly not affordale at present
- capitalising the arrears i.e adding them on to the mortgage.
- paying them off at a fixed monthly amount - again possibly not affordable at the moment.

Could you switch to an interest only mortgage as a short term measure? obvioulsy this wont help in the long term as the capital would still need paying.

Not great with CSA stuff but could your OH explain things to his ex and reduce the amount he pays?

This is a long shot but welcome finance used to be shocking at drawing up credit agreements, if you havent had anyone look at the agreement I suggest you do as there is a chance (albeit a very slim one) that there agreement is badly done missing key terms etc and not enfocable.

bubbles0169

can i just say you are not stupid you have a very good reason to be in debt this country has gone to pot lending easily but making you pay later
i got into debt by being stoopid just spending on cards when i didnt need to
so i reiterate you are not stupid
if you ever need to get it off your chest just post in the forum 'money savers arms' its where we go to let off steam if you didnt know:)
hope you get the advice you need
big hugs xx

fumken

This is a great site. I have never really been good with my money and maybe I would have been debt free by now had I learnt how to save and not waste pennies.
I will have to take the much needed time for a financial makeover and will come over for advice. This website and forum:T is the best thing that's happened to me in a long time!

Sue-UU

Hi bargainhuntermummy,

It's so (far too) easy to get into debt nowadays and you're much the same as so many of us here, so don't think for one minute that you're on your own, you're NOT!

Looking at your SOA I have to agree with all the things ViHan has gone for. You can get far cheaper ISPs than the one you have, you can also get deals where you get the ISP/phone and TV all together, so there are certainly ways to get that down. Unless you really need Satellite then get rid of it!... (unless you can get a package deal with them with phone and telly as well) Same with the mobile at the rate you're paying, do try PAYG, you really can't afford not to! Your fuel costs per month are astonishing to say the least, can't they be slashed? Do you have 2 cars, if so can one go? Again with the electricity, switch to another company. I've no doubt that the child costs are quite easily amassed, but have a check through to see if there are ways to reduce them.

I do sympathise with little Jake's health problems, I hate to hear of sick kiddies, any chance it'll lessen as he gets older? I really do hope so, though I'm pleased that, for now at least, you can get DLA etc.

All the best.

Sue