9 mths pregnant 80k debt - please help.

millssy

Hello,

I am in major debt, am about to have a second baby and am about to sort out my debts but wantedto sanity check it with any experts out there. I was made redundant when pregnant with my first child which meant a loss of my annual salary of 80K Per year plus all my exsiting wedding debts topay (35k). I have managed to survive for the last three years by freelancing, setting up a ltd company which is bringing in a salary for me of 40k per year and by my husband and I making serious cutbacks to our lifestyle. We have sold our cars, sold one of our houses and moved into the cheaper one, sold stuff on ebay and generally cutback on everything but have not managed to reign in our debts and are now 85k in debt and are about to default for the first time. Our credit history is poor as we have so many debts showing and so many credit searches. We are associated together on credit searches but wanted to see if there was anyway of seperating our credit reports by dissassociation (my maiden mae is where all the debts are held not in my husbands or my married name) and the mortgage on our current property is in my maiden name also. I have pasted the ccss remedy according to our debts and they are suggesting we do a debt mgt plan over 10 years but I wondered if there was a better way considering my husband has a good income of 43k per year and net pay of 2.5k per month and although I have maternity leave coming up I have manage dto save 4.5 k in my business bank to cover me for 4 to 5 months leave.

We have a mortageg of 148k with a secured loan of 20k and the property was valued as 240k a few weeks ago but we don't want to sell as we need a family home with a 2 yr old and another baby about to arrive. We have tried to re-mortage with HSBC (our current providers) but they have refused as we have an overdraft of 27k with them which is 9k over the limit of 18k and costing us 85 pounds per month in interest. I have credit cards with More with a balance of 11k and interest of 21% and egg with a balance of 14.5k and interest of 18% and I have stopped paying both the monthly fees whioch amount to £800 repayments and have offered a repayment plan but they said I would be defaulted if I do this.

I'm not sure what to do. Should I try and resolve and keep making the monthly payments (which are not reducing the debt) and hope our creit rating gets better? Or should I go for the plan suggested below which means a poor credit rating for 10 years. Please help. I am so stressed I can't sleep.

S

Your Budget

The figures in this budget are based on those supplied by you during the preparation of your Debt Remedy.

Your Income Amount

Your take home pay £2,100
Your partner's take home pay £1,500

Total income £3,648

Housing Amount Comment

Rent
Mortgage £1,250
Secured loans/2nd mortgage £220
Mortgage endowment premium
Service charge/ground rent
Water £25
Council tax £175
Gas £40
Electricity £40
Other household fuel

Household services

Building and contents insurance £36
Telephone, mobile & internet £60
TV licence £11
Satellite
Repairs and maintenance £84
Household appliance rental
Child maintenance
Childcare £234
Fines, CCJs, Decrees
Life insurance/pensions
Medical/accident insurance £35
Hire purchase

Transport

Vehicle spares and servicing £20
Road tax £16
Motor insurance £75
Vehicle breakdown cover £10
Fuel & parking £180
Public Transport

Food & housekeeping

Food, toiletries, cleaning £346
School meals/meals at work
Pets, pet food/insurance
Tobacco

Misc. goods & services

School trips/activities £5
Medicines/prescriptions £10
Dentist/opticians £14
Hairdressing £13
Union/professional fees
Laundry/dry cleaning
Education fees

Personal & leisure

Clothing & footwear £43
Newspapers/magazines
Sports, hobbies, entertainment £15
Children's pocket money £10
Church/charity donations

Sundries/emergencies/other costs

Sundries/emergencies £15
Loan from family/friend
Other

Total expenses £2,982

Additional information Comment

No of adults 2
Dependants 1

Totals Amount

Total income £3,648
Total expenses £2,982
Surplus (Deficit) £666

Your Creditor List

The figures in this creditor list are based on those supplied by you during the preparation of your Debt Remedy.

Creditor name Debt type
Outstanding
balance
Contractual
payment
Ownership
of debt

1 Egg
Personal
Loan
£9,012 £148 Me
2 Egg Credit Card £14,500 £220
My
Partner
3 HSBC Credit Card £4,245 £189
My
Partner
4 HSBC
Personal
Loan
£8,500 £367
My
Partner
5 HSBC Overdraft £26,000 £1,300
My
Partner
6 Lloyds TSB
Personal
Loan
£1,077 £50 Me
7 Marks & Spencers Credit Card £11,500 £358
My
Partner
8 MBNA Credit Card £5,177 £139 Me

TOTAL £80,011 TOTAL £2,771

ikkle87

Hi and welcome to the boards,

Although you have looked on the website I would try calling up the CCCS or National Debtline or speaking to your local CAB as they can make things a little clearer and offer a more personalised advice.

Also are you aware you may be entitled to Maternity Allowance?
http://direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Expectingorbringingupchildren/DG_10018869

Shineyhappy

Hi,

Have you asked to switch to an interest only mortgage for the time being?

From your budget I think that there are cut backs to be made:

-10 pounds pocket money for a 2 year old? Whats that for?
-Do you need to spend 43 pounds on clothing or footwear every month?
-Can you ger cheaper car insurance as you are spending 900pounds on insurance and 120 on break down cover a year?
-Can you cut your food bill as 350 seems very high to me, have a look on the Old Style board for ideas.
-Do you really need to spend 84 pounds a month on house hold maintenance? What does this cover?

If you clear the highest interest debts first you should be able to really hammer down the debts.

Are you throwing your left over money at the debts each month or does that disapear? Maybe keep a spending diary so you know exactly where that goes.

Good luck!

millssy

Hi

Thanks for that.

The money for our two year old is for her trust fund so I guess we could cut it back.

Re interest only we asked HSBC that and they refused to cooperate. We are ona flexible rate with no tie ins.

Sarah

Shineyhappy

Have you spoken to a mortgage broker at all for advice?

Apart from having kids, I do know how scary it is to be in debt and be worried about remortgaging! I had to pay off loads before I could get a remortgage. I got a lodger (360 a month) cut back on everything, at worst spending less than 10 pounds a week on food and eating all the wierd stuff that accumulates in the cuboards like making pancake mix last for 3 dinners! That was actually quite nice though.

Even now I only get new clothes as presents for my birthday and Christmas. I have Ebayed and Amazoned until there isnt much to sell left, then advertised free stuff on Preloved through Quidco (a cash back site) and got 10p back per advert.

Try not to stress too much and it is doable, it just means cutting back on the luxuries for a while.

Do you have much you could sell? I was amazed that I could sell old text books and Lego and the extra cash just helps so much!

misspoppy

Hi

Can you cut your childcare costs while you are on mat leave? £236 is a lot when its not necessary.

Also have a look at your telephone/mobile/internet costs are they the best deals you can get? have a look around online and sign up to www.quidco.co.uk where you can get cash back for buying online, you can make a lot for insurances and changing broadband providers.