Your advice and thoughts are needed please...

rubydoiwannabee

skintjenny wrote: »

hi just thought id give you a bump and let you know that whilst you will have terrible days, im sure this situation is not impossible.
there is some great support on here, have you tried reading some of the diaries? it might help to see how other people are dealing with thier debts, and the changes they are making to take control again.
good luck, i think its great that youve both realised what you need to do and are giving yourselves this time to try and sort things out
xx

Thanks SkintJenny,
This is such a rollarcoaster of emotions, do you find that?

One day I think of course we can crack this the next it is all gloom and doom!! I feel ashamed, embarrassed and stupid that we have ended in this place and then the next inspired, excited and proud that we are no longer in denial and are taking steps to improve..... blimey...what a palava!!

Quietgirl

Would it cut you some slack if you moved your morgage to interest only for a while?

rubydoiwannabee

Quietgirl wrote: »

Would it cut you some slack if you moved your morgage to interest only for a while?

Hi, it really would I have already checked and it is £300 a month less. The only trouble is I am so scared we would never be in the position to go back and that we then wouldn't have anything building up to pay off what was owed. We are thinking of taking advice about whether the amount we currently pay to term assurances to cover the repayment element of our mortgage would be better paid into an investment plan if we switched to interest only.

Thanks for taking the time to read and respond.:D

skintjenny

if you moved it to interest only whilst you payed off all your other debts, by the time you were debt free you'd have all the extra money each month that you could chuck at your morgage...
atleast then youd be getting rid of the worst debts first and not be having to worry about meeting your morgatge payments...
im rubbish at spelling mortgage, morgatge, morgage... argh! i know a t goes in there somewhere!
xx

Quietgirl

Could you list the amount owed on your debts, and the APR. I was just thinking thats all switching to interest only morgage which would save you that £300 per month you need, then stop contributing to the L & G Isa, and the term assurance, which would give you an additional £269.22 per month to throw at the debts. When do you finish the £25 fine? Also your phonebill looks high to me too. Broadband I believe you can cheaper too.

Am off to bed now, just thought I'd throw in a few ideas take care!

rubydoiwannabee

it is worth thinking about, but we would have absolutely no life insurance and that is just toooooo scary to contemplate. The transferring the mortgage to int only for the short term is a real possibility and one we may have to do if the extra jobs don't materialise.

have swapped phone providers today and now only pay £20 per month, plus calls for both phone and broadband. Also did weekly shop today and it was on £36 when the last two weeks it had been £80 and the two weeks before £110!!! So we are making really good progress on the day to day stuff, which means the deficit is now down to £260 a month. I feel sure we could make that up with extra work. Here's hoping whilst I feel positive.

Thanks again, night night.

Poosmate

Hi Ruby

Congratulations on having your LBM before it's too late.

I am in a similar situation to you in that I am doing my own DAP (Debts Action Plan). I had my LBM in March. I've really cut back on everything (I live alone so that's easy really). I visit this site every day to keep me on the straight and narrow.

I've created a spreadsheet listing each of my debts, balance, interest added, payments made and new balance. Up till March I was only paying minimum payments on 1 of the CC's and over on the other (Der! the one with lower interest!) and I wasn't even paying anything towards my mortgage current account O/D because the interest was so low on it! It reached critical point when I realised the interest that would be added in April would put it over it's limit so I knew I had to do something. For that month I put in £20 (enough to cover the interest and a little bit extra).

I also routed around and gathered together every penny I could lay my hand on that was in this acct or that acct and managed to scrape together about £200 (including a cheque I'd got for a christmas pressie). I paid £50 into the mortgage current acct to give me a couple of months breathing space, created my spreadsheet and devised a plan of action.

I now know who needs paying what and when and am constantly playing with the figures to see if I can pay less to one to over pay a higer interest other. I've also managed not to dip in to my savings so I am building a pot out of which I can pay car tax and insurance when it's due instead of putting it on the CC. Hopefully I have broken the cycle. A lot of my annual bills were put on my CC as I just didn't think I had the money to budget for them. I am budgeting very hard now as it is the only way to break the cycle.

I've only managed to pay about £163 off my debt within the last few months but there have been a few nasty payments added on to the debts over the last few months. Hopefully they are the last and I can concentrate on reducing the debt.

The snowball calc told me that I'll be debt free in Mar 2016! lol. That is based on paying £150 per month towards the debt (incl interest). It's not going to be that long though because:-

a) I (hopefully) will be earning more next year than this and the year after etc.
b) Will hopefully be able to cut some food costs down by growing my own.
c) Will reduce the payment on my low life of balance card rather than pay the current minimum and use that to pay extra off the higher interest card.
d) With a good credit record transfer some of the debt to 0% interest. (Must apply)
e) Have at least 50% equity so am toying with idea of remortgaging hence giving me more disposable income.

These are just a few of my plans. I would give yourselves 6 months before you review with a view to going into a DMP only because there is a possibility that until you get into a routine of debt busting it may get a little worse before it gets better. I review my monthly figures almost every day (yes obsessed I know - but it's still early days). I've also set up another spreadsheet with debt totals, payments to each (according to the snowball calc) and last payment month and how many months the snowball reckons it will take me (93 lol). I will review this in 3 months time and take a couple of quid off the low life of balance card payments and add it to the highest interest card and throw the figures through the snowball calc then. This is my 3 monthly review spreadsheet.

Hope this made sense and may be of some help to you.

Thanks

Poo

P.S. I could always get another job if push comes to shove or drink a cheaper coffee than Nescafe (I do still have some areas that i can cut back on).

rubydoiwannabee

A great help thanks Poo, I will come and read again tomorrow because I am really tired now!! Just thought I would write and say thanks and well done to you too, you seem to have everything under control. Like you I am addicted to this site and look forward to seeing the numbers decrease.

night night
x

Merlot

rubydoiwannabee wrote: »

I know it does and it is dependant on more work really, that is why I am only giving us 3-6 months to try!! Then we will know for sure that a dmp is our best option.

Here is our I&E

• Income

OHWages £1,473.00
My Wages £1,500.00
Child Benefit £125.40
Child Tax Credit £40.00

Total Income £3,138.40

• Outgoings
• Mortgage £1,082.32 - You need interest only for a while
• ISA (legal and general) £143.76 - cancel this whilst on Interest only
• Term Assurances £125.46 - wow - this is too high
• Council Tax £140.00
• Water £31.50
• Buildings & Contents £23.22
• Gas and Electricity (EON protected) £113.00 - too high
• TV Licence £11.61
• Court Fine £25.00
• Phone £30.82 - too high
• Broadband (virgin) £15.00
• Dads life assurance £13.04 - whats this
• 2x car insurance £45.26
• Mortgage payment protection (abbey) £37.94 - Sorry you cannot afford this
• Fridge servicing and maintenance plan £4.79 -cancel once your fridge is working
• Breakdown cover (RAC) £3.60
• Childcare (14pw x 39/12) £45.50
• 2 x mobile phones £50.00 - cancel both of these
• 2 x mot, service and tax £75.34
• 2 x petrol and 1 x parking (parking = £20 per week, petrol £40 each pw) £433.33
• Housekeeping £408.00 - too high
• Prescriptions £10.00
• Clothing £45.00 - too high
• School bus pass £46.00
• Christmas and birthdays £20.00
• School meals/save or pocket money approx £.5.50 a week £22.41 - take pack lunches

Total before debt pments £3,001.90

• Debt payments
• Loan £235.79
• CC £197.00
• store card £35.00
• HFC bank £19.99
• £487.78

• Total outgoings £3,489.68

Difference a month -£351.28 short

I know this is a lot to make up but if we can get extra work and try and make savings on the above we are hoping. I have applied for a 0% credit card today to do a balance transfer.

Here is hoping... with lots of effort and discipline.

Any comments welcome.

I have put comments in above, you are not going to like them, but you cannot afford all this insurance, life insurance, building and contents are a most, others are a luxury you can ill afford. I bet you any money you had an IFA advise you on these, he/she is making money from you and sometimes there own interest is at heart. You could easily make up the short fall each month without doing a DMP.

Merlot.x.

rubydoiwannabee

Merlot wrote: »

I have put comments in above, you are not going to like them, but you cannot afford all this insurance, life insurance, building and contents are a most, others are a luxury you can ill afford. I bet you any money you had an IFA advise you on these, he/she is making money from you and sometimes there own interest is at heart. You could easily make up the short fall each month without doing a DMP.

Merlot.x.

Hi Merlot, thanks for your comments. It is the mortgage and life covers, investment to cover int only part etc that is crippling us, due to a re=mortgage for house extension, that we now think was ill advised. The isa covers the int only part of our mortgage and life cover and the term !!! are decreasing with the rest of the loan. If I go to int only for a while for whole mortgage I am worried about not having an investment to pay off mortgage amount. Although as someone else suggested, we could through all the debt monthly payments at the mortgage once they are cleared. Thanks for your advice, it is much appreciated.

The EON gas and elec is price protected until Sept 09 and will cost us £35 to switch, so I figured it was a good thing, we are paying this each month and not clearing our usage, so we are actively turning everything off also.

Thanks again, I will give your advice much thought.:o