Urgent Advice Required Please!!!!!!!

kroeger

Firstly here is my SOA:

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1840
Partners monthly income after tax....... 0
Benefits................................ 345
Other income............................ 0
Total monthly income.................... 2185

Monthly Expense Details
Mortgage................................ 815
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 102
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 19
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 19
Internet Services....................... 20
Groceries etc. ......................... 300
Clothing................................ 0
Petrol/diesel........................... 80
Road tax................................ 20
Car Insurance........................... 28
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 8
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1578

Assets
Cash.................................... 0
House value (Gross)..................... 155000
Shares and bonds........................ 0
Car(s).................................. 10000
Other assets............................ 0
Total Assets............................ 165000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 131000...(815)......0
Total secured debts........... 131000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
egg credit card................8770......173.......16.9
Halifax Credit Card............12400.....275.......15.8
Halifax Personal Loan..........10000.....264.......9
Total unsecured debts..........31170.....712.......-

Monthly Budget Summary
Total monthly income.................... 2,185
Expenses (including secured debts)....... 1,578
Available for debt repayments........... 607
Monthly UNsecured debt repayments....... 712
Surplus(deficit if negative)............ -105

Personal Balance Sheet Summary
Total assets (things you own)........... 165,000
Total Secured debt...................... -131,000
Total Unsecured debt.................... -31,170
Personal net worth...................... 2,830

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

I am worried sick about my debt and do not know what to do. I am hopeless with money. A bit of background. I was bankrupt in 1997 but got it annulled and paid up what I owed in full in 2002. I am married with 3 dependant children. My current mortgage has a redemption penalty of approx £4,200 and this lasts until 2011. To pay my mortgage up in full including this will cost approx £131,000.

As you can see above I am in a negative income situation. Bankruptcy is not an option as I work for the Civil Service and would make it very awkward in my job.

I have looked at DMP, IVA and or selling the house and renting. I am 42 years of age and earn £30,000 gross per annum.

What would be my best option? I am not worried about ruining my credit rating as this would be a blessing in disguise. Looking at the CCCS website it suggests I would be paying off my debt for over 6 years!!!!!!

Looking forward to your replies.

moo2moo

The way I read it at the mo. you spend £105 a month more than you earn just to survive. Say goodbye to Sky (£15), change your internet package, there are lots out there at £12 a month (saving £8) several of these (eg. Tiscali) include free evening, weekend and selected international calls which would in turn reduce you telephone expenditure (basic BT line rental £12 so an £8 saving if you don't use the phone during the day). Reducing your grocery bill would also make a fair difference, there are lots of suggestions on the Old Style board as to how to achieve this.

Is your partner in a position to work? even 1 evening per week say 4 hours at minimum wage would make a £80 difference (assuming it doesn't negatively effect your benefits).

Your SOA doesn't allow for clothes, with 3 children thats not realistic long term.

Hopefully someone else will come along with some more practical advise. In the short term E-baying anything thats covered in dust sometimes helps.

SunderlandBlackCat

Hi there & welcome to the board.

Just noticed that all of your APR's are 0% & you are paying much more than the minimum on your cards.

Once you know what the APR's on your unsecured debts are & have decided how much you can pay towards them each month then you can put that information into the snowball calculator at http://www.whatsthecost.com/snowball.aspx

That will show you the quickest way to get rid of your debts while paying as little interest as possible.

I'm not the best at suggesting ways to make your money go further unfortunately as I tend to go to extremes but some things I picked up on were...

Electricity............................. 50
Gas..................................... 50

These seem very high to me, I'm paying less than half that on 2 houses. Have you looked at switching to cheaper suppliers & easy energy saving measures?

Satellite/Cable TV...................... 19

Do you really need this while you're struggling with debts? Have you looked at what channels are available on freeview/freesat? If you decide you really can't do without it could you get a better deal by switching to a combined TV/Phone/Broadband package.

Groceries etc. ......................... 300

This seems extremely high to me, how many is this feeding? Take a look at the Old Style board for practical ways to bring down your grocery spend http://forums.moneysavingexpert.com/forumdisplay.html?f=33

Buildings insurance..................... 20
Contents insurance...................... 8

This also seems a little high to me take a look on any of the the price comparison sites to see if you can get a better quote.

Clothing................................ 0
Car maintenance (including MOT)......... 0
Medical (prescriptions, dentist etc).... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0

Do you really not spend anything on these? I'd suggest potting some money aside for them once as part of sorting your budget out so you don't need to spend on the credit card when you have to pay for any of them.

Some other suggestions

Take a look at switching to a current account that pays a good rate of interest if you haven't already. I switched to Alliance & Leicester (currently paying 8.5%) & it was painless. they sort out all the transfers of direct debits etc for you.

Sign up for quidco at www.quidco.com. If you use their site to sign up for the A&L account you get £50 cashback & there are good cashback rates for switching insurance, utilities etc.

Good luck

kroeger

Thanks for the replies so far, I can trim here and there but I don't think I have any choice but to go down the DMP or IVA route. I am not paying 0% on the cards, I am paying the standard rates on these (can't remember what they are at the moment). Sky will be going (I have given 30 days notice). Forgot to put in £35 a month for my wifes Mobile (locked in for another 11 months on this with T-Mobile).

I will look at switching utility suppliers (presently with Southern Electric for my gas and electric). Latest quarterly bills are £150 each.

Regards groceries I have to feed five people including myself. What would you suggest to set aside for clothing?

Building and contents insurance cost me £280 for the year from Halifax (paid in one lump and not due for renewal for another 6 months or so).

lilian1977

Scottish Power are guaranteeing to reduce your energy bills at the moment - I live in a studio flat so only pay £35 per month for both but they've even beaten that.

rayday2

I am on a self managed DMP and it will take me over 12 years to pay it back - the length of time is irrelevant to me. Being on a DMP has meant I can feed my family without worrying, my home is safe, I have my life balance back.

Those utility bills btw do not seem high at all! Not sure where you all live but in a 3 bed semi I pay £110 combined and that is with a brand new boiler and the cheapest deal not long changed supplier so no previous bills in mine!

Bismarck

An expert may say otherwise but an IVA could have an impact on your future too. A DMP may take 6 years but once you start making inroads into the CCs the minimum payments on the will go down slowly but surely.

It won't be pleasant but neither is the worrying yourself sick about this.

Take care.

poppyg_2

I think 6 years is not too bad for the level of debt you have, once you start paying it things may happen like pay rise or other extra income which may mean you pay off more than expected and get the debt free date down

I think your electric seems high so I'd definitely look at switching gas/electric supplier, preferably via a cashback site such as quidco where you could get around £50 for changing supplier

Sky I'd do without and get freeview instead to save some cash

Anything you can sell to make extra cash? I'm ebaying a fair few things with some success at the moment

You've not included anything for birthdays, clothes, entertainment - is this really a true picture? It's important you think about every bit of spending you do

kroeger

Who would you recommend out of CCCS and Payplan? Also what would they allow for a family of five to live on? Does anyone have a breakdown by category?

I am seriously considering a DMP even though it will likely take 6 1/2 years to pay off, how likely are the companies to freeze interest and charges? especially over such a length of time!!!!!!

Bismarck

I think they'd rather do that than have you not pay them at all, or only getting a fraction of the debt back.

GeorgeUK

Have you looked at getting 0% creditcards to reduce the interest? Also, getting the virgin money card would reduce the monthly payments (min payment £25 for 2nd-15th months).

Council tax - if you are paying over 10 months can you ask to pay it over 12?

Make sure you are claiming everything you should be. http://www.entitledto.co.uk/