In Debt getting no where

newjam · 3 July 2014 at 10:47AM

Hi Guys,

I am in around £9000 worth of Debt and wanted some advice.

It all started when i became a gambling addict which i am now battling and i am hoping to get out of Debt. I have done SOA and wanted some information on which is the best way to battle the debts. I have done a Debt Remedy with Step change and have been told a DMP is my best option which will clear my debts in 13 years!!! i was hoping for a quicker solution. They have also offered a Token payment plan too which i would pay £1 per month to each creditor. I was thinking if this is possible i could save any extra funds i have save up and offer a full & final settlement offer. Is this allowed?? also would my creditors go for this??

Any advice would be gratefully received.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 800
Partners monthly income after tax....... 0
Benefits................................ 936
Other income............................ 0
Total monthly income.................... 1736

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 420
Management charge (leasehold property).. 0
Council tax............................. 65
Electricity............................. 45
Gas..................................... 45
Oil..................................... 0
Water rates............................. 26
Telephone (land line)................... 20
Mobile phone............................ 23
TV Licence.............................. 13
Satellite/Cable TV...................... 20
Internet Services....................... 15
Groceries etc. ......................... 150
Clothing................................ 50
Petrol/diesel........................... 40
Road tax................................ 13
Car Insurance........................... 40
Car maintenance (including MOT)......... 9
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 600
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 25
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1649

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
JD Williams....................139.......0.........0
24/7 Moneybox..................246.......0.........0
Clear Accoount.................294.......0.........0
Provedent......................2319......0.........0
Mini Credit....................1842......0.........0
N Power........................1153......0.........0
Wonga..........................699.......0.........0
Bonga Loans....................530.......0.........0
Speed-e-Loans..................534.......0.........0
Vanquis Bank...................478.......0.........0
Royal Bank Scotland............334.......0.........0
EDF Energy Electric............454.......0.........0
EDF Enerygy Gas................389.......0.........0
Peachy Loans...................199.......0.........0
Total unsecured debts..........9610......0.........-

Monthly Budget Summary
Total monthly income.................... 1,736
Expenses (including HP & secured debts). 1,649
Available for debt repayments........... 87
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 87

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -9,610
Net Assets.............................. -7,610

BillJones · 3 July 2014 at 12:22PM

They've based the plan on your currrent income (as they should) but there's no reason that you can't work towards a job or career that pays more.

Your wage is only 30 hours on national minimum, so that has to be something that you look into, either in terms of a second job, or in working towards getting more per hour (or preferably both).

newjam · 3 July 2014 at 12:33PM

BillJones wrote: »

Your wage is only 30 hours on national minimum, so that has to be something that you look into, either in terms of a second job, or in working towards getting more per hour (or preferably both).

Hi, I am currently working as much as i can. I am a single mother and as you can see my childcare costs are astronomical as it is.

I feel unfair offering my creditors just £1 a month. Im not sure the best way to approach them.

lozzy81 · 3 July 2014 at 12:39PM

Pay the token £1 per month and use the rest of the money to make a bigger payment to one of the smaller debts and pay that off, then move onto the next doing the same until you reduce the number of creditors?

newjam · 3 July 2014 at 12:40PM

Is this allowed? im worried that they will refuse my offer of £1 per month. Some can be really nasty people.

lozzy81 · 3 July 2014 at 12:46PM

I don't think step change would have suggested it if it was not legal! you have alot of small debts which you could pay off, maybe the ones who are not very nice first!! the less of them you have the easier it will be and you will feel so much better watching them disappear

newjam · 3 July 2014 at 1:55PM

I will send an offer of £1 a month to each creditor (hopefully they will accept) Then hopefully i can pay off the smaller debts and work from there.

I feel cheeky asking for this but i guess im not the only person doing it and at least they are getting something from me

RAS · 3 July 2014 at 2:47PM

I would strongly advise that you start by putting any spare into an emergency fund so that you have some backup if the car breaks down, you are off sick etc.

Once you have built up that contigency (say half a month's salary), put aside a bit more and ask about clearing the utility debts first?

longtermplanner · 3 July 2014 at 3:23PM

Are EDF your current utility supplier? If they are, they will not accept a token payment, you will have to agree a more relistic amount with them.

Do you need the car? You use very little petrol.

When will your childcare costs reduce?

National_Debtline · 3 July 2014 at 4:06PM

Hello there,

Generally a creditor will accept a token payment of £1 per month if that is what your financial statement shows that you can afford. You may find that such an offer is rejected if you have a 'surplus' income of £87. That said, I think you have been conservative with your figures. As RAS has mentioned, you should consider setting aside an amount for emergencies. Do also consider increasing the amount you have for housekeeping - £150 is on the low side for an adult and child (although not totally unrealistic).

Very best wishes,

David @ National Debtline.

dancingfairy · 4 July 2014 at 9:23PM

You might find a DRO a suitable alternative to a dmp. Basically it is a mini-bankruptcy. It probably wasn't suggested as I believe your surplus has to be under £50 a month but as has been said you could have an emergency fund and no doubt there are other things that may need to be tweaked a bit.
Also a dmp will almost certainly not last you 13 years, as you have identified you may have the option to do full and final settlements but also it seems unlikely you will need to be paying out £600 a month childcare for that many years. I would assume that it would only be very high for a few years at most? This would then free a lot of money up to reduce the term of your dmp or do full and final settlements.
df

In Debt getting no where

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