I don't think it gets much worse than this. Feel totally beaten

worriedDan · 11 February 2017 at 12:12AM

After many years of denial, I/we have to face up to our debt situation. I am sitting here feeling like the end of out world is about to come. I feel like I have let everyone down. SOA below

We have always had some debt but an expensive few years have seen it really spike. Most of it is in my name although some is in my wife's name. She knows that we have loads of debt but I haven't shown her the bottom line and I am not going to. Not yet anyway. Things are difficult at the moment so I want to get on top of payments etc before sharing the true extent with her. I hope that this does not make me deceitful, but I think it's the best way for now.

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 3378
Partners monthly income after tax....... 1010
Benefits................................ 82.8
Other income............................ 0
Total monthly income.................... 4470.8

Monthly Expense Details
Mortgage................................ 497
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 103
Electricity............................. 40
Gas..................................... 82
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 10
Mobile phone............................ 60
TV Licence.............................. 14
Satellite/Cable TV...................... 10
Internet Services....................... 10
Groceries etc. ......................... 200
Clothing................................ 50
Petrol/diesel........................... 160
Road tax................................ 5
Car Insurance........................... 60
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..................... 23
Contents insurance...................... 0
Life assurance ......................... 40
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 20
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1519

Assets
Cash.................................... 0
House value (Gross)..................... 150000
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 0
Total Assets............................ 158000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 75000....(497)......1.5
Total secured & HP debts...... 75000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
cc1............................15900.....304.......0
cc2............................6600......200.......18.9
cc3............................4500......45........0
hsbc...........................2700......75........18.9
creation.......................4500......45........0
creation.......................4600......100.......18
cc2 wife.......................4500......45........45
cc1 wife.......................7000......165.......6.9
cc4............................5000......100.......0
Total unsecured debts..........55300.....1079......-

Monthly Budget Summary
Total monthly income.................... 4,470.8
Expenses (including HP & secured debts). 1,519
Available for debt repayments........... 2,951.8
Monthly UNsecured debt repayments....... 1,079
Amount left after debt repayments....... 1,872.8

Personal Balance Sheet Summary
Total assets (things you own)........... 158,000
Total HP & Secured debt................. -75,000
Total Unsecured debt.................... -55,300
Net Assets.............................. 27,700

sourcrates · 11 February 2017 at 12:22AM

Welcome to the forum.

You appear to have a good income, and a reasonable amount of money left at month end to pay the debts with.

So this is not insurmountable.

The question is, do you really have £800 left after all payments have been made ?

Mr.Generous · 11 February 2017 at 12:23AM

first stop spending on cards for stuff you don't need, plenty of income there to get the debt paid down. Set targets and goals and get started paying it off. Do not make minimum payments on interest payable cc's. Tell your wife and agree to a new lifestyle that will leave you happy, healthy and wealthy for years to come.

bsms1147 · 11 February 2017 at 12:24AM

Well done for admitting the problem. It's often the hardest step and it will get better. The good news is that you have a good income, so that will help.

The figures suggest you have £1,872.80 a month left over after debt repayments. Is this true? If not you need to work out where this is all going. Keep a spending diary.

If it is true then pushing all that excess towards debt repayments would see you clear the balance in just over 18 months.

Whatever the situation you will be able to sort this.

worriedDan · 11 February 2017 at 12:39AM

Thanks for the quick replies! In terms of the 'spare' £1872, my salary has recently increased quite a bit. I have also temporarily opted out of my pension scheme which is giving me £300 per month. I can see that this is fixable, I just feel absolutely wretched that I have allowed this to happen. I don't know why but I feel like I have let my son down - he is 6!

Worrierwalker · 11 February 2017 at 12:46AM

Pay as much of your debts off with your surplus as you can- it will reduce faster than you think. If it helps, clear cc1 first, then 2 etc.
Also, get back into your pension scheme as soon as you can.

enthusiasticsaver · 11 February 2017 at 2:03AM

Do you know where the spare money is going and how has the debt built up? £55k is a lot when you already have a large disposable income. Is it everyday spending or is there a reason for the debt? Redundancy, gambling?

If you really want to address this now though your large income will sort this relatively quickly with strict budgeting. Can you move any of the cards charging interest to 0% deals? The cc2 of your wife's needs sorting first if it really is charging 45%.

worriedDan · 11 February 2017 at 8:05AM

enthusiasticsaver wrote: »

Do you know where the spare money is going and how has the debt built up? £55k is a lot when you already have a large disposable income. Is it everyday spending or is there a reason for the debt? Redundancy, gambling?

If you really want to address this now though your large income will sort this relatively quickly with strict budgeting. Can you move any of the cards charging interest to 0% deals? The cc2 of your wife's needs sorting first if it really is charging 45%.

oops it's 0% not 45%! Will edit

The debt has built up just by general overspending over years. We also funded a wedding, maternity leave, new car etc, all sing 0% CC's.

DrWatson1 · 11 February 2017 at 8:27AM

worriedDan wrote: »

Electricity............................. 40
Gas..................................... 82 - Both of these seem very high. By way of comparison, I pay £40 per month for both in my 2 bed semi

Mobile phone............................ 60 - This can be reduced

Petrol/diesel........................... 160 - This seems low for 2 cars - Do you really only fill both cars up 3 times a month?

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 75000....(497)......1.5 - A 75000 mortgage over 25 years at 1.5% would be 300 a month - are you overpaying? If so, the extra 197 should be going to your high CC debt first.

My financial situation is very similar to yours - aside from I have 1/3 of your total income! I only say this as despite my position, I know it's fixable and it's not something I now lose a moments thought over. Facing up to your situation is always the hardest part, and you have now done that, and resolving the issue should be fairly straightforward with your disposable income.

itchyfeet123 · 11 February 2017 at 11:57AM

worriedDan wrote: »

She knows that we have loads of debt but I haven't shown her the bottom line and I am not going to. Not yet anyway. Things are difficult at the moment so I want to get on top of payments etc before sharing the true extent with her. I hope that this does not make me deceitful, but I think it's the best way for now.

It does make you deceitful. You don't have the right to unilaterally decide what's best. Your decisions affect her, and she has the right to know where things stand.

As a practical matter, how do you expect to clear the debt if your wife isn't part of the process? Is she going to be on board with a lot of belt tightening if she doesn't know the magnitude of the problem? On another thread you mentioned that you have been in charge of the money for some time; without meaning to sound harsh, that doesn't seem to have worked out so well, so maybe it's time your wife had some input.

You say that things are difficult, but I guarantee they will be more difficult if your wife finds out you've been hiding this from her.

Anyway, as others have said, you are in a pretty good place for clearing this quickly. You have comfortably 3k/month to pay towards debt (current minimums plus your monthly excess). You can do this easily, and without being particularly frugal, within two years.

I would reconsider your pension contribution, assuming you have an employer match. Usually saving while you're paying interest is foolish, but judging from your salary you're at the type of place that offers a pretty generous match, probably in the range of 100-200% (i.e you pay 8% and they pay 16% or similar). Even if you were only paying 2700/month instead of 3000/month towards your debt, you'll still comfortably clear it within 2 years. If your employer doesn't offer a match, then you should continue to forego the contributions until your debt is paid.

FBaby · 11 February 2017 at 12:10PM

Indeed, this is a lot of debts accumulated with overspending, so if your wife is contributing to the needless spending because she thinks you can afford it due to your income, then why would she stop unless she fully understand the extend of the debt?

It sounds like you are in a very good position to sort it out, so don't let it get to you, having options means having control and it is not that hard to go from overspending to spending only what is necessary, however, the change in mindset has to be in place.

I personally think that if you can stick to your SOA, you would be better off continuing to pay in your pension. Have you considered that not doing so is taking you over £50K (I think) which mean that you will need to repay some of your child benefit?

I don't think it gets much worse than this. Feel totally beaten

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