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    • DebtFreeWannabeHezza
    • By DebtFreeWannabeHezza 8th Apr 18, 10:46 PM
    • 5Posts
    • 1Thanks
    DebtFreeWannabeHezza
    Frustration of unaffordable rates
    • #1
    • 8th Apr 18, 10:46 PM
    Frustration of unaffordable rates 8th Apr 18 at 10:46 PM
    My husband and I have been through a rough couple of years between mental health issues and an absolute nightmare with a huge case of dry rot in the house we live in (the agreement we have is that we don't pay rent but we're responsible for maintenance, which normally works out well, but not this year). In that time I've made some bad financial choices and we now have about 39k of unsecured debt. I've managed to get about 8k of it onto low interest (0% to 4.9%) credit cards, but the rest is on at least 17.9%.

    I've switched our fuel to the lowest provider and have spent all weekend working out our income against our essential and flexible outgoings. The rest would be manageable if we could convert our highest 15k into a loan with a monthly repayment around 330. The banks' headline rates of 3.9 or 4.6% are easily inside that figure (they work out at something like 270 per month), if I spread the loan over 5 years, but of course I'm not offered the headline rate. Instead, I'm offered rates of over 15% (my bank offered me 19.5% - really, what is the point?!), which would make my monthly payment more like 500 or more, and just compound the problem. I'm a member of the MSE Credit Club and my credit score is 726 so I'm basically not eligible for any Balance Transfer cards.

    Has anyone found a viable way out of this situation?
Page 2
    • jonesMUFCforever
    • By jonesMUFCforever 12th Apr 18, 2:41 AM
    • 25,092 Posts
    • 12,346 Thanks
    jonesMUFCforever
    I think the OP may have had us on.

    No Mortgage/rent payments, no water bills, no tv licence, no internet costs, etc etc but a stupid amount for vet fees.

    Could it be an elephant in the room?
    What goes around - comes around
    give lots and you will always receive lots
    • Dobbibill
    • By Dobbibill 12th Apr 18, 7:53 AM
    • 3,260 Posts
    • 4,180 Thanks
    Dobbibill

    I did the SOA thing:
    [font=courier new]Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 0

    Monthly Income Details

    Monthly income after tax................ 2200
    Partners monthly income after tax....... 800 maybe your OH can look at increasing this with a P/T job while he builds the new business.
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 3000


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 0 nothing at all or mortgage payments at all?
    Management charge (leasehold property).. 0
    Council tax............................. 149.22 is this over 10 months, if so change to 12 instead.
    Electricity............................. 112.68
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 0 Are you in Scotland?
    Telephone (land line)................... 0
    Mobile phone............................ 25.54
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 0
    Groceries etc. ......................... 101.58 this is quite low - is it accurate? don't forget about the trips to pick up bread/milk which don't get done in the big shop
    Clothing................................ 10
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0 how do you travel anywhere?
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 34
    Pet insurance/vet bills................. 903.48 is this an error?
    Buildings insurance..................... 0
    Contents insurance...................... 0 you need something in here - false economy not to
    Life assurance ......................... 0
    Other insurance......................... 29.25 what's this?
    Presents (birthday, christmas etc)...... 20
    Haircuts................................ 0 do you do this yourself?
    Entertainment........................... 128.98
    Holiday................................. 0
    Emergency fund.......................... 0 nothing in here - you talk of a nightmare year with the house - this would budget for occasional nightmares.
    Bank Accounts........................... 22 what's this?
    Magazines............................... 21.77this is a luxury, ditch until you're debt free.
    Total monthly expenses.................. 1558.5


    Assets

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


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Bank Loan......................5933.83...182.9.....17.5
    Credit Card 1..................7623.34...120.8.....4.5
    Credit Card 2..................7523.21...78........19
    Credit Card 7..................3027.92...0.........0 not even a minimum payment.
    Credit Card 6..................900.......8.77......0
    Credit Card 5..................4666.99...46........0
    Credit Card 4..................2290.73...22.91.....0
    Credit Card 3..................7337.89...292.7.....29.9[b]
    Originally posted by DebtFreeWannabeHezza
    Comments added in red - This budget shows you have funds left each month, what happens to this money?
    If you don't have this money left, you need to keep a spending diary.

    If you do have this money left then you need to amend the SOA, put funds in an EF and overpay the highest interest bearing debt first which appears to be CC3.
    Use the snowball method and once you've paid one debt use the overpayments and minimum payments to pay the next debt and so on.

    OP - many people take a few attempts to get the SOA spot on.
    Last edited by Dobbibill; 12-04-2018 at 1:41 PM.
    I'm a Board Guide on the Energy, Student Money Saving, UK Armed Forces and
    Local Money Saving - Wales boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.


    It's not about being the best -
    It's about being better than you were yesterday.
    • PeacefulWaters
    • By PeacefulWaters 12th Apr 18, 9:04 AM
    • 8,318 Posts
    • 10,667 Thanks
    PeacefulWaters
    I think the OP may have had us on.

    No Mortgage/rent payments, no water bills, no tv licence, no internet costs, etc etc but a stupid amount for vet fees.

    Could it be an elephant in the room?
    Originally posted by jonesMUFCforever
    It might be a lax approach to budgeting that explains the stated problem.

    Why do I think we'll never know?
    • thriftylass
    • By thriftylass 12th Apr 18, 9:46 AM
    • 3,359 Posts
    • 27,575 Thanks
    thriftylass
    I think the OP may have had us on.

    No Mortgage/rent payments, no water bills, no tv licence, no internet costs, etc etc but a stupid amount for vet fees.

    Could it be an elephant in the room?
    Originally posted by jonesMUFCforever
    They stated that they live rent free but are responsible for the upkeep (living in relatives house maybe) but you're right it doesn't explain the lack of the other costs.
    • DebtFreeWannabeHezza
    • By DebtFreeWannabeHezza 12th Apr 18, 4:32 PM
    • 5 Posts
    • 1 Thanks
    DebtFreeWannabeHezza
    Sorry, had a rough few days feeding a ridiculously early litter of baby hedgehogs (they're meant to be born in the early summer), whose mum seems to have been killed, so haven't had any free time.

    Thank you for your comments so far.

    So, to answer queries against the SOA:
    We live in a property provided by my work, and landline telephone, my mobile, home insurance and broadband are provided.
    Yes, we are in Scotland but I think our water is paid for by the business; we don't pay it, anyway.
    We don't own a TV since the old one broke - it's well down the list of priorities to get a new one.
    We grow our own veg (from last year's seed) as far as possible, and we get our eggs from our vet in the summer, so it's only meat, milk and winter eggs, plus veg top-up that we buy.
    Both our vehicles are owned by businesses - my car is provided by my work and my husband's is owned by his business. His is only used for the business and my personal mileage comes off my salary (the salary figure given is after deductions).
    We run an animal sanctuary (in our spare time), so our monthly food bill is about 350, vet bills are about 370 and insurance is about 180.
    Other insurance is insurance on the appliances in the house - washing machine, fridge-freezer etc. and since basically the only part of our washing machine that's original is the case, and the whole fridge-freezer has been replaced, they've been well worthwhile.
    I get my hair cut maybe once every three years and I cut my husband's hair with a set of clippers we bought years ago.
    Bank accounts is chargeable accounts - my main account is a Santander 1-2-3 account, which costs 2 for the account and 5 for the credit card (or the other way around), but we get more than that in cashback (against gas/electricity, council tax and my work fuel and travel spends), and my husband's account is a rewards account with Halifax that costs 15 per month but includes his vehicle breakdown cover, mobile phone insurance and various other things that he used to pay for separately - it works out cheaper to get it with the account.
    Magazines are a couple of publications my husband needs for his work and one that I get to do with the animal sanctuary - it's a 12-month contract, though, and rolled-over in November, so I can't stop it until the end of the year anyway.

    It's an error that there's no minimum showing for Credit Card 7 - that should be 30.

    We are in the process of building a kennels/cattery, so my husband had reduced his hours to allow us to build that. We would have been fine, financially if we hadn't had all the costs with the house last year (20k!), because that money would have paid off the Balance Transfers that expire this month. However, the stress of having months of living with no heating, power in only some parts of the house, no floors for weeks at a time, etc. triggered my mental health issues. As a result, I wasn't staying on top of our finances so I didn't register that we were going to run out of time with these BTs until a couple of weeks ago, otherwise I'd have postponed the kennels build last year, so that my husband could take on more work until our finances had recovered from the expenses on the house. The stage of build we're at now we can't really stop so we'll just have to keep going (need to get the building weather-tight) and hope I can find a way to manage us through this period.

    The build is costing us an average of about 330 per month, so that leaves 330 spare for paying off debts. I have never missed a loan, HP or credit card payment (I have Direct Debits set up to pay off our regular use cards in full and to pay off the minimums on the Balance Transfers) and have no CCJs or anything like that. The only negatives on my credit file are the fact that we don't own our home and that we've got a high debt utilisation rate.

    That's why it's so frustrating - if I could have got a loan at the published rate, I could have used that to pay off the two Balances that are now incurring interest (Credit Card 2 and Credit Card 3 - Credit Card 1 is only at 4.5% so that doesn't bother me) and by the time the other BTs come up for their end dates, we'll have finished building (so have an extra 300+ available because we won't be spending it on the build) and my husband will be back to full time so will be earning another 1000 per month, plus whatever we make with the kennels.
    Last edited by DebtFreeWannabeHezza; 12-04-2018 at 4:55 PM. Reason: Items missing
    • Dobbibill
    • By Dobbibill 12th Apr 18, 6:15 PM
    • 3,260 Posts
    • 4,180 Thanks
    Dobbibill
    Thanks for the update and clarity.

    Having a surplus is a good start - this will need to be tweaked when your minimum payments change as they start to incur interest.

    If the surplus is actually available overpay the most expensive debt and keep chipping away until your income alters then review again.

    Not being able to get a consolidation loan has been the best bit of bad news you could have had - you probably won't agree at the moment but when you look back you will be glad as it rarely works.
    I'm a Board Guide on the Energy, Student Money Saving, UK Armed Forces and
    Local Money Saving - Wales boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.


    It's not about being the best -
    It's about being better than you were yesterday.
    • RedFraggle
    • By RedFraggle 15th Apr 18, 7:57 AM
    • 708 Posts
    • 1,904 Thanks
    RedFraggle
    Running an animal sanctuary is admirable but requires a bottomless pit of money unless you are funded by a larger rescue organisation. My best friend did it for five years. I think you should scale that down not up.
    If you want to keep going with it get funding from as wide a pool as possible. I'd suggest the following (which you may already be doing):

    Support from a larger organisation: They sometimes sponsor individual independent rescues on an annual basis.
    Easy fundraising
    Pledge a pound
    Waitrose green token for local fundraising
    Asda, same as Waitrose.
    Sponsorships of a kennel, hutch or long term resident
    Promotion via social media
    Officially in a clique of idiots
    • Sncjw
    • By Sncjw 15th Apr 18, 8:41 AM
    • 1,894 Posts
    • 1,119 Thanks
    Sncjw
    I would give up on the animal
    Sanctuary idea atm while your in debt.

    Your partners wage is eaten up by the vet bills and you said he has reduced his hours to build something for the sanctuary.
    I!!!8217;m sorry but your not in the right time to do that given his wage just covers the bills for the sanctuary. I think he needs to increase his hours in the business or a get a job that pays a set amount each month.

    I know you will want to help these animals but you won!!!8217;t be able to help fully with the stress of debt hanging over your shoulder. What if you have to move at some point which means you will have to pay rent or mortgage which is another expense on top of your debts. You can!!!8217;t afford to do that now how will you afford to do it if you have to move
    • DebtFreeWannabeHezza
    • By DebtFreeWannabeHezza 16th Apr 18, 9:50 AM
    • 5 Posts
    • 1 Thanks
    DebtFreeWannabeHezza
    Clarification
    Thanks for the feedback. I think there's a bit of confusion, though - the Kennels/Cattery are nothing to do with the sanctuary. They are going to be a paying business. The sanctuary is run from in our house and we're in the process of trying to scale it down but we can't just chuck the animals we've got out so we're gradually finding them homes as appropriate places become available - we rehomed ten adult cats last year and we've still got another six to go.

    The Kennels/Cattery that my husband is building will be a stand-alone business (we have set up a Limited company) and the existing kennels and catteries in this area are oversubscribed by up to 80% so there's plenty of demand. We should be able to hit the ground running early next year.
    • kazwookie
    • By kazwookie 16th Apr 18, 10:10 AM
    • 9,872 Posts
    • 123,788 Thanks
    kazwookie
    Thanks for the feedback. I think there's a bit of confusion, though - the Kennels/Cattery are nothing to do with the sanctuary. They are going to be a paying business. The sanctuary is run from in our house and we're in the process of trying to scale it down but we can't just chuck the animals we've got out so we're gradually finding them homes as appropriate places become available - we rehomed ten adult cats last year and we've still got another six to go.

    The Kennels/Cattery that my husband is building will be a stand-alone business (we have set up a Limited company) and the existing kennels and catteries in this area are oversubscribed by up to 80% so there's plenty of demand. We should be able to hit the ground running early next year.
    Originally posted by DebtFreeWannabeHezza
    You say the house and I guess the land is provided for by your work.

    If you were to leave your work, what would happen to the building your husband is building?
    What does you agreement / contract /lease from your employer say about you building and running (your husband) a business from their land?
    Have you got the relevant license / insurnces etc in place or a figure available for this kennel business? has it been factored in to your costs?
    Sun, Sea
    Slinky start date 29.01.18 28 to go / -14 so far and counting!!
    • DebtFreeWannabeHezza
    • By DebtFreeWannabeHezza 18th Apr 18, 7:03 PM
    • 5 Posts
    • 1 Thanks
    DebtFreeWannabeHezza
    The kennels/cattery is being done with their input - they could hardly miss it happening, given that it's right outside their building.

    We have the relevant planning agreements in place. The licence can't be given until the building is up, but we've already spoken to the relevant people and yes, those costs are factored in. The company is providing the initial running costs, so we don't have to worry about those - we just have to cover the cost of getting the building up.

    As regards what would happen to the building if I left my work, it wouldn't make any difference. Even if we were living somewhere else, we still have a 10-year lease for the land, so we could still run the kennels, though it would be a bit of a pain if we were elsewhere. Why do you ask?
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