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  • FIRST POST
    • sm817
    • By sm817 14th May 18, 8:00 PM
    • 4Posts
    • 1Thanks
    sm817
    10,000 in debt @ 27
    • #1
    • 14th May 18, 8:00 PM
    10,000 in debt @ 27 14th May 18 at 8:00 PM
    Hi All,

    I have been using these forums for the past few months as a source of support (its amazing to feel that you're not alone) and have decided to post for some advice! I think I am doing everything I can to dig myself out of debt but I just wanted to ask you guys in case I am missing anything.

    Basically, I am in 10,000 worth of debt due to a gambling problem that spiralled out control within weeks. This is being dealt with - I am receiving counselling, I have no access to gambling websites and I confided in my partner who offers me support. The debt has been shifted to 2x 0% credit cards and I have an existing overdraft with first direct which is 0%. Below is my SOA - I suppose I am basically looking for reassurance. My partner and I are looking to move from a flat to a semi detatched house in about a years time and my biggest worry is that this debt will stop us from getting a joint mortgage (he doesn't know the extent of my debt and I haven't told him as I don't think he should be burdened with this problem).

    Our arrangement is that I pay all bills and he pays his mortgage, in the understanding that I would save money to go towards a home together next year. This is non negotiable as I want to be able to contribute to our house, and dont want to sponge off of him. This money goes into my lifetime ISA and I just view it as another bill. At the moment, the mortgage is in his name.

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

    Monthly Income Details[
    Monthly income after tax................ 1600
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 0

    Monthly Expense Details
    Mortgage.................................... 0
    Council tax............................. 110
    Electricity............................. 64
    Gas..................................... 0
    Water rates............................. 0 (included in council tax)
    Telephone (land line)................... 0
    Mobile phone............................ 34
    TV Licence.............................. 10
    Satellite/Cable TV...................... 0
    Internet Services....................... 35
    Groceries etc. ......................... 150
    Clothing................................50
    Petrol/diesel........................... 80
    Road tax................................ 0
    Car..........................................151
    Car Insurance........................... 34
    Car maintenance (including MOT)......... 0 (included in the service plan I have with my car)
    Car parking............................. 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Contents insurance...................... 14
    Life Insurance.0
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 10
    Entertainment........................... 150
    Holiday................................. 0
    Overdraft repayment..0
    Emergency fund.......................... 0
    Gym..................................... 0
    Factor Fees..........................40
    Gadget Insurance................7
    Breakdown Cover.................10
    Lifetime ISA............................200


    Total monthly expenses. 1179...........

    Assets
    Cash.................................... 5875 (this is in a Lifetime ISA to be used when we go for a joint mortgage)
    Car(s).................................. 0 (car is on PCP so dont consider it an asset)
    Total Assets............................ 5875

    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Tesco...5366150 0
    MBNA.........3557150...0
    First Direct OD......500....0...0


    Total unsecured debts.....9423.........

    Monthly Budget Summary
    Total monthly income..1600
    Expenses (including HP & secured debts)......1179
    Available for debt repayments..421
    Monthly Unsecured debt repayments.......300
    Amount left after debt repayments....... 121

    Personal Balance Sheet Summary
    Total assets (things you own)........... 5875
    Total HP & Secured debt................. 0
    Total Unsecured debt.................... 9423
    Net Assets.............................. -3548
Page 1
    • DCFC79
    • By DCFC79 14th May 18, 8:14 PM
    • 32,102 Posts
    • 20,198 Thanks
    DCFC79
    • #2
    • 14th May 18, 8:14 PM
    • #2
    • 14th May 18, 8:14 PM
    If you stop the ISA payments for 3 months you could clear the banks OD.

    Any chance of overtime ?

    Mobile phone is high at 34, change to sim free phone and a monthly sim only plan, depends when your contract is due to end.

    What does the entertainment cover ?
    Can it be cut back ?

    Whats factor fees all about ?

    Could you reduce entertainment and put that money towards the debts ?

    I know Gadget Insurance is only 7 but is it needed ?
    Last edited by DCFC79; 14-05-2018 at 8:52 PM.
    • sm817
    • By sm817 14th May 18, 8:27 PM
    • 4 Posts
    • 1 Thanks
    sm817
    • #3
    • 14th May 18, 8:27 PM
    • #3
    • 14th May 18, 8:27 PM
    Hey, thanks for your reply!

    No chance of overtime but have been looking for a temporary part time job to help over summer.

    Mobile phone contract due to end in February 2019 so got a while left on that one unfortunately.

    Entertainment covers things like cinema, eating out etc. Also fitness classes and hobbies such as climbing that we do together. I agree this can be cut back. Because my partner doesn't know how much debt I am in (he knows there are credit cards) he's of the opinion that we shouldn't let it impact on our enjoyment of life...

    Factor fees are a quarterly bill of about 240 that covers things like window cleaning, bin emptying, maintenance and repairs. Due to the housing development I live in unfortunately these are not optional. Part of the reason why we are looking to move.

    Thanks for the ideas though, will give them some thought!
    • enthusiasticsaver
    • By enthusiasticsaver 14th May 18, 8:50 PM
    • 6,677 Posts
    • 14,145 Thanks
    enthusiasticsaver
    • #4
    • 14th May 18, 8:50 PM
    • #4
    • 14th May 18, 8:50 PM
    If the debt is not cleared by the time you appply for the mortgage this may affect the amount you can borrow but the critical thing is no gambling transactions can show on your bank statements as these are red flags to lenders. Good that you have removed websites etc but you need to make sure you continue with counselling so you don't lapse.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • DCFC79
    • By DCFC79 14th May 18, 8:52 PM
    • 32,102 Posts
    • 20,198 Thanks
    DCFC79
    • #5
    • 14th May 18, 8:52 PM
    • #5
    • 14th May 18, 8:52 PM
    The way I see it if you want the debt then you need to make various cut backs. If you dont want the debt to impact on your enjoyment of life then carry on as you are but a mortgage might be a long way off or you might not get as much your hope for.

    At the minute your spending more than what you earn so how do you manage to pay 300 to the cards.
    • sm817
    • By sm817 14th May 18, 9:02 PM
    • 4 Posts
    • 1 Thanks
    sm817
    • #6
    • 14th May 18, 9:02 PM
    • #6
    • 14th May 18, 9:02 PM
    Hi, not sure where you're getting that from? I earn 1600 per month, and all outgoings including my 300 debt repayments, are currently 1479. Definitely living within my means as I have not placed any purchases on credit cards or loans in about 2 years (except for the gambling obviously...)

    For further info on the gambling, I have switched bank accounts to ensure there is no trace on my account. Have not gambled for about 7 months and feel like I am coping well with it. I understand there is no cure and will be in recovery for the remainder of my days.
    • Kitten868
    • By Kitten868 15th May 18, 12:02 PM
    • 928 Posts
    • 1,986 Thanks
    Kitten868
    • #7
    • 15th May 18, 12:02 PM
    • #7
    • 15th May 18, 12:02 PM
    Gadget insurance and breakdown cover you're paying 17 a month for. I bet your partner is paying the same? If you got a joint flexplus from nationwide it would cover both things for both of you for 13 a month instead. Lower excess as well for the phones.

    I notice you haven't included the car in your debts. How much is that because it goes against you too. Is your council tax over 10 months or 12?

    And how much are you planning to have saved? What's your goal? Xx
    Loan 1 5800/8000
    Loan 2 3800/5800
    Total 9600/13800 30% PAID
    • a_silver_lining
    • By a_silver_lining 15th May 18, 12:34 PM
    • 252 Posts
    • 690 Thanks
    a_silver_lining
    • #8
    • 15th May 18, 12:34 PM
    • #8
    • 15th May 18, 12:34 PM
    If you pay the 300pm and the left over 121 towards the debt then you will be debt free in 23 months, so two years. If you want to be debt free ina year then you would need to pay 9423 decided by 12 = 785, leaving you 364.25pm to find to pay towards debts.

    I would be tempted to speak to your partner and ask if you can buy in two years. Yes you will be paying the 421pm, but you will keep saving the 200pm, meaning you will be debt free in two years with over 10k in the ISA. A much better position to buy.
    19/12/14: Spent 10 years of savings!!
    ..... to buy my first home.

    2018: 1800 savings --- Family Loan (3400 direct + 2250 saver + 129.55 saver 2) 5779.55/10K paid 57.7%
    #38 1% Challenge: 514.70/ 2018, now at 25%!
    • DCFC79
    • By DCFC79 15th May 18, 3:28 PM
    • 32,102 Posts
    • 20,198 Thanks
    DCFC79
    • #9
    • 15th May 18, 3:28 PM
    • #9
    • 15th May 18, 3:28 PM
    Hi, not sure where you're getting that from? I earn 1600 per month, and all outgoings including my 300 debt repayments, are currently 1479. Definitely living within my means as I have not placed any purchases on credit cards or loans in about 2 years (except for the gambling obviously...)
    Originally posted by sm817
    May bad, ignore my last post, I was sure id read it right.
    My apologies sm817
    • hopenglory
    • By hopenglory 15th May 18, 4:03 PM
    • 1 Posts
    • 0 Thanks
    hopenglory
    Download Gamban blocking software and close that avenue for good!!
    • foxgloves
    • By foxgloves 15th May 18, 5:10 PM
    • 4,143 Posts
    • 21,505 Thanks
    foxgloves
    When we took out our joint mortgage, we were asked by the building society advisor if we had any debt. We did, the largest of which was a 16k loan my husband took out to cover the loss he made selling his previous property. Even though we were intending to pay this off in full using some of the profit from selling my house (which we did do), we were told the amount we could borrow would be reduced by what we owed..This didn't affect us, as we didn't want to borrow as much as that anyway, but I just wanted to add my voice to those who think getting your debts paid of first & going into your mortgage application with a nice clean slate is probably a good idea.
    Money can't jump out of your purse on its own so ask 'Can I borrow one, make one, grow one, bake one, re-purpose or recycle, acquire it for free?' Yes? Then put that purse away & keep your money because little savings grow!
    Loan pay-down fund instalment 2 = 470-01
    Payment received from surveys: 2015 = 320 2016 = 210 2017 = 304 2018 = 264
    • thegirlinthegreenscarf
    • By thegirlinthegreenscarf 16th May 18, 2:28 PM
    • 90 Posts
    • 221 Thanks
    thegirlinthegreenscarf
    The phone bill does look high. Obviously I am no expert, and don't know which network provider you are with, but when I had a phone bill that high it was because it included the cost of the phone. I later found out that after I had paid a certain amount (to cover the cost of the phone) I was able to reduce my bill by one tariff at a time. Ie you can't go from the highest tariff to the lowest, rather downgrade gradually, but it still might make a difference. Hope this helps!
    MBNA (Was 2000), Now 1,441.22 (Expected date Dec/2019)
    CAR (Was 300) Now
    2,280 (Interest free loan from family member)



    **Want to be on my way to being debt free for 40**
    • sm817
    • By sm817 31st May 18, 10:05 PM
    • 4 Posts
    • 1 Thanks
    sm817
    Hi All,

    thanks for your replies and sorry for taking so long to get back.

    Thankfully, I haven't gambled since and don't intend on in the future. I am keeping on top of my recovery so no gambling transactions will be appearing on my bank. Motivated by the fact that I know this looks bad to potential mortgage lenders!

    Car is 150 per month, around 10,000 in total. I understand this goes against me but don't feel as bad about that one as I see this as 'normal' debt. Next thing to tackle is the phone bill, I'm with EE so I'm going to get on to them soon.

    Some good news is that I confided in my parents. While they are in no position to pay my debt off and I absolutely wouldnt expect them to, they have paid off my MBNA credit Card (3557) and the 150 per month I pay to the credit card will now be going to their bank. While I won't be saving any money monthly, it is a HUGE relief that this is now clear from my credit file. So it feels like a win!
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