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  • FIRST POST
    • bilko89
    • By bilko89 4th Oct 16, 10:32 AM
    • 111Posts
    • 251Thanks
    bilko89
    Determined to get rid of my debt ASAP!
    • #1
    • 4th Oct 16, 10:32 AM
    Determined to get rid of my debt ASAP! 4th Oct 16 at 10:32 AM
    Hi all.

    After having a look on Martin's blog pages on the subject I would love to have the forums input and advice for the situation I find myself in!

    My current debt stands at £4,701.91, which is made up of mostly payday loans, a couple of mobile phone contracts (defaulted) and credit cards. All of which I have agreements in place, interest frozen and paying £100 per month overall to creditors.

    I certainly do NOT want to be paying £100 per month for 47 months! What I was pondering was of course continuing to pay my £100 per month but also putting away say £50 per month (will be up to £120 as a hire purchase I have ends soon) and saving up a good amount of money before offering settlements to each of my creditors. My other half is also currently applying for jobs after being unemployed since having our second child (2 years ago) so the majority, if not all of this would also go towards the "savings". Just really wanted to rack the communities brains about my idea and if it makes sense?

    Also, in terms of discussing settlement figures with creditors, I know Martin provides great templates and instructions on how to do this but is there a better way to do this or will me doing it using this guide get me the best results anyway?

    Sorry for badgering on, your replies and input are much appreciated
Page 2
    • EssexHebridean
    • By EssexHebridean 7th Oct 16, 5:11 PM
    • 6,328 Posts
    • 35,067 Thanks
    EssexHebridean
    I get where you're coming from Bob, and to an extent you're right, but the OP isn't exactly spending a fortune on entertainment generally, are they. It wouldn't be £57 in any case - there were still need to be a landline phone in place (there are kids in the household remember, so for emergencies it's advisable to have a landline if possible) and also I'm assuming that some form of broadband isn't seriously considered a luxury by many people, these days?

    I personally think, particularly for a family with children, that a small spend on entertainment per month is not only reasonable, but to be encouraged if it can be afforded. Cutting things absolutely to the bone is fine, but it can make it more likely that a plan to debt-clear will fail if all enjoyment is stripped from life.
    MORTGAGE FREE 30/09/2016
    • Bedsit Bob
    • By Bedsit Bob 7th Oct 16, 6:30 PM
    • 9,311 Posts
    • 48,764 Thanks
    Bedsit Bob
    It wouldn't be £57 in any case - there were still need to be a landline phone in place (there are kids in the household remember, so for emergencies it's advisable to have a landline if possible) and also I'm assuming that some form of broadband isn't seriously considered a luxury by many people, these days?
    Originally posted by EssexHebridean
    You can get BB and the phone line for ~ £18.

    You could always take a basic Netflix, for £5.99, giving you a total of ~ £24 pm.

    That's a lot less than £57 pm.
    My job is Top Secret. Even I don't know what I'm doing.

    Amount I have so far denied the BBC - £1015-50
    • EssexHebridean
    • By EssexHebridean 7th Oct 16, 6:42 PM
    • 6,328 Posts
    • 35,067 Thanks
    EssexHebridean
    You can get BB and the phone line for ~ £18.

    You could always take a basic Netflix, for £5.99, giving you a total of ~ £24 pm.

    That's a lot less than £57 pm.
    Originally posted by Bedsit Bob
    This is of course true, however I stand by my comments.

    Sometimes, when someone is truly making an effort to change, it's better to pat them on the back for what they HAVE done, than to p*ss on their chips for what they haven't...
    MORTGAGE FREE 30/09/2016
    • bilko89
    • By bilko89 10th Oct 16, 3:20 PM
    • 111 Posts
    • 251 Thanks
    bilko89
    Hi folks, interesting comments!

    Bob, I COULD get rid of the virgin altogether but then again I have two kids (2 & 6) who share an iPad (yes my 2 year old can work it!) that uses the internet and who regularly watch TV. I have bit the bullet and got rid of the Sports channels I watched and the Movie channels my OH watched and saving over 50% on the bill overall, I don't want to punish the kids but I 100% see where you are coming from and you are not wrong!

    My OH called today at lunch to let me know she has a job interview on Thursday! It's part time in the winter time and full time in the summer (admin job at the local racecourse) so that would be a massive help in the long run and certainly shave a few months off that December 2017 target!

    Thanks again everyone
    • Cailbhinn
    • By Cailbhinn 22nd Oct 16, 4:09 PM
    • 88 Posts
    • 260 Thanks
    Cailbhinn
    Hi bilko89! It's a great wee forum and hopefully will help you get rid of those debts quicker. Looking at your SOA I have a few comments but one in particular which I don't think was picked up on.

    You say in your SOA you're spending £330 on debt repayments but in your original post you say you are splitting £100 between your creditors. Taking away your car finance you should have £115 left (i.e. 41 months against 47) but it's all quite confusing as you have added things to categories which should go elsewhere.

    I hope it's not too cheeky but I've re-done your SOA. Ive accumulated your unsecured debt and used £115 as repayment rather than £100. I've highlighted in blue the things you *should* be saving for each month out of your excess. I've removed the 0 things which you don't need to pay.

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 1365.54
    Partners monthly income after tax....... 0
    Benefits................................ 531.28
    Total monthly income.................... 1896.82

    Monthly Expense Details

    Secured/HP loan repayments.............. 336
    Rent.................................... 300
    Council tax............................. 150
    Electricity............................. 40
    Gas..................................... 40
    Mobile phone............................ 32
    TV Licence.............................. 12.12
    Satellite/Cable TV...................... 57 [new price]
    Groceries etc. ......................... 200 [new reduction]
    Clothing................................ 0
    Petrol/diesel........................... 90
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0

    Other child related expenses............ 56
    Contents insurance...................... 15 [new price]
    Presents (birthday, christmas etc)...... 40
    Haircuts................................ 15
    Entertainment........................... 0
    Emergency fund.......................... 0

    Wedding................................. 150
    Total monthly expenses.................. 1533.12



    Assets

    Cash.................................... 0
    Car(s).................................. 10000
    Total Assets............................ 10000[/b]


    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Secured Debt.................. 125......(50).......0
    Hire Purchase (HP) debt ...... 511......(71).......0<
    Car............................10995....(215)..... .0
    Total secured & HP debts...... 11631.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Debt...........................4788......115...... .0
    Aunt...........................1000......125...... .0
    Total unsecured debts..........5788......240.......-



    Monthly Budget Summary

    Total monthly income.................... 1,896.82
    Expenses (including HP & secured debts). 1,573.12
    Available for debt repayments........... 323.7
    Monthly UNsecured debt repayments....... 240
    Amount left after debt repayments....... 123.7




    Essentially:
    • You have £120 odd per month as an excess but this is to pay for entertainment, clothing, odds and sods etc
    • At the moment at least £40 per month should be being saved towards presents
    • You aren't saving anything towards other annual costs - car tax, maintenance, insurance, emergency fund
    • Once hire purchase (£71) ends - rather than increasing debt payments I'd put this away every month for these annual things
    • Once wedding paid off I'd put it towards annual things too
    • Only once aunt paid off would I put this towards debt repayment.

    Few questions:
    • If wife gets job will this increase childcare/decrease benefits?
    • When are arrears paid in rent and council tax?
    • Are benefit overpayments not taken out of current benefits?
    • When is the £50 HP a month paid off?
    • Are you really only paying £100 per month to debt rather than £115 as per your SOA
    • How much is your annual car insurance? Road tax? Maintenance?


    Like I say i hope i'm not being cheeky but looks like you are overspending or at the very least not budgeting for things that crop up like Christmas, car insurance etc and then getting yourself into debt. Believe me I know - that's why I have £12k of debt! No judgements just trying to help
    Last edited by Cailbhinn; 22-10-2016 at 4:29 PM.
    Starting Debt (31 Oct 2016) - £12,956 | Current Debt (31 Oct 2016) - £12,956 (0% paid)
    • bilko89
    • By bilko89 24th Oct 16, 3:19 PM
    • 111 Posts
    • 251 Thanks
    bilko89
    Thanks very much Cailbhinn for that! A lot of effort must have went into it, much appreciated.

    Yes, I've not used the SOA Calc correctly I don't think. I'm currently paying £115 to debt (not including car finance of course)

    Onto your questions:-

    It will be a part time job so although child tax credits will be affected, I believe the new working tax credits she would receive would re-compensate that loss but that's something I'll need to look into with the benefits calc.

    Rent arrears will be paid off in May, rent will be £304.12 to finish off the arrears and then back to the normal payment of £257.52 in June.

    In terms of the CT, I spoke to the council offering the £150 per month to clear arrears but they have passed it onto a sheriffs office (Walker Love) who have sent a letter. I offered them the £150/month via email and currently waiting on their reply. This would clear the outstanding balance in June next year but I'm unsure if there is a time restraint on paying this back in time for next years bill?

    It was Housing Benefit over-payments. My wage rose last year a bit so they came to the conclusion we had received to much for a few months last year. We came to an agreement to pay it back in installments with the council.

    Still another 10 months to go on the £50 HP, should be paid in August next year.

    As above, paying £115.

    My insurance was £865.48 - renewal due Sept 2017
    Tax was paid 2 years upfront by dealership - £30 due Jan 2017
    Maintenance - Free Service and MOT from dealership for first year, not budgeted at all for next year!

    No offence what so ever taken, thanks very much again for the time and effort! Looking forward to more ideas/suggestions!
    • Cailbhinn
    • By Cailbhinn 24th Oct 16, 9:30 PM
    • 88 Posts
    • 260 Thanks
    Cailbhinn
    Thanks for than bilko. It's going to be a tight few months. Have you anything sorted for the weans' Christmas? Obviously getting into more debt is not going to help - even if you could get more debt. Your weans are still young enough to not need several hundred quids worth each at Christmas.

    My advice would be for the next few months is to get two envelopes:
    • £200 for messages
    • £160 for everything else*

    *Christmas, entertainment, clothes etc

    From January you'll need to start putting away probably the wedding fund each month for car insurance/maintenance for next year so you don't get into the same palava. Similarly the £71 for clothes, birthdays, entertainment, emergency fund etc. Only when Aunt, £50 HP and rent arrears finish could you start whittling down debt. Similarly when your wife gets a job - start clearing those pay day loans as I assume they are not 0% and are stupidly high APRs.
    Starting Debt (31 Oct 2016) - £12,956 | Current Debt (31 Oct 2016) - £12,956 (0% paid)
    • bilko89
    • By bilko89 25th Oct 16, 8:51 AM
    • 111 Posts
    • 251 Thanks
    bilko89
    Thanks for than bilko. It's going to be a tight few months. Have you anything sorted for the weans' Christmas? Obviously getting into more debt is not going to help - even if you could get more debt. Your weans are still young enough to not need several hundred quids worth each at Christmas.

    My advice would be for the next few months is to get two envelopes:
    • £200 for messages
    • £160 for everything else*

    *Christmas, entertainment, clothes etc

    From January you'll need to start putting away probably the wedding fund each month for car insurance/maintenance for next year so you don't get into the same palava. Similarly the £71 for clothes, birthdays, entertainment, emergency fund etc. Only when Aunt, £50 HP and rent arrears finish could you start whittling down debt. Similarly when your wife gets a job - start clearing those pay day loans as I assume they are not 0% and are stupidly high APRs.
    Originally posted by Cailbhinn
    Christmas shopping starts with my November wage , the £71 HP, saving on Virgin and £150 wedding fund from last month will all go towards that, same in December so January (as cliched as that sounds) is the start of an actual budget for us! Thankfully, the payday loans have had all their interest frozen by the companies after I spoke to them all, so debt is not rising every day which was extremely important!
    • determined new ms
    • By determined new ms 25th Oct 16, 9:18 AM
    • 5,558 Posts
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    determined new ms
    Hi looks like you're making a good start! Are you receiving in work benefits? If yes then the poster is correct that anything your wife earns will likely we deducted, so you'll have to think if it's worth it. However probably if she is working 50% of a job it would be worth it.

    I would just like to weigh in on the insurance debate. I'm probably not going to be popular for saying this as it goes against the general consensus but I have never had contents ins in the 24 years I have had my own place. So I'm looking at around £3k I've never spent that others have! I would build up an emergency fund which would protect you against any big necessities. Even £10 pm soon adds up and if you need a washing machine, fridge etc you can usually pick them up on ebay for less than £50. I've almost always bought white goods 2nd hand and never had any problems with them. Really weigh up if you need this.

    I totally agree reconsider sky. It's all carp and freeview, watch on demand, internet, youtube will mostly give you what you are after. I have a lo who is 3 1/2 and I can find all of her viewing needs on youtube. Also if any family members or friends have $ky/netf1ix/Amaz0n they can give you their log on details and are allowed to have a certain amount of users. That is what my oh does so he can watch the football matches. And to be honest to deny the Murd0ck corp £ seems like a force for good in the world!

    Good luck, seems like you'll be fine
    Debt to Bank of oh Mum: £4200/£5700
    Wombling 2016 £263.42 Roadkill £27.21
    • EssexHebridean
    • By EssexHebridean 25th Oct 16, 11:50 AM
    • 6,328 Posts
    • 35,067 Thanks
    EssexHebridean
    Hi looks like you're making a good start! Are you receiving in work benefits? If yes then the poster is correct that anything your wife earns will likely we deducted, so you'll have to think if it's worth it. However probably if she is working 50% of a job it would be worth it.

    I would just like to weigh in on the insurance debate. I'm probably not going to be popular for saying this as it goes against the general consensus but I have never had contents ins in the 24 years I have had my own place. So I'm looking at around £3k I've never spent that others have! I would build up an emergency fund which would protect you against any big necessities. Even £10 pm soon adds up and if you need a washing machine, fridge etc you can usually pick them up on ebay for less than £50. I've almost always bought white goods 2nd hand and never had any problems with them. Really weigh up if you need this.

    I totally agree reconsider sky. It's all carp and freeview, watch on demand, internet, youtube will mostly give you what you are after. I have a lo who is 3 1/2 and I can find all of her viewing needs on youtube. Also if any family members or friends have $ky/netf1ix/Amaz0n they can give you their log on details and are allowed to have a certain amount of users. That is what my oh does so he can watch the football matches. And to be honest to deny the Murd0ck corp £ seems like a force for good in the world!

    Good luck, seems like you'll be fine
    Originally posted by determined new ms
    You're certainly not popular with me! Sorry but this is simply irresponsible advice - I have NO idea what your personal situation is but in the case of the OP we're talking about a family with children. Imagine worse case scenario you go out for the day and return home to find fire has swept though your building and destroyed everything bar what you stand up in. You seriously think £3k would pay for that? To "Self insure" against total loss of contents you'd need a pot rather a lot bigger than that, and bigger I suspect than any emergency fund you may have also, I can assure you. (And remember that the O/P is not in the luxurious position of having a large emergency fund to dip into!)

    PLEASE O/P - for the sake of £6 - £8 a month don't be thinking that this is in any way good advice - it truly isn't.

    Political views apart, I agree with the comments about paid-for TV though.
    MORTGAGE FREE 30/09/2016
    • enthusiasticsaver
    • By enthusiasticsaver 25th Oct 16, 2:11 PM
    • 2,553 Posts
    • 4,365 Thanks
    enthusiasticsaver
    I would also say in the OPs situation not having contents insurance is madness. I am not a fan of insurance myself and never take out extended warranties, additional insurances and our excesses are £500 usually to keep premium low but we have significant savings. OP does not and for the sake of less than £10 per month will protect himself from the cost of replacing everything should there be a fire.
    Debt and mortgage free and saving for early retirement
    • EssexHebridean
    • By EssexHebridean 25th Oct 16, 2:46 PM
    • 6,328 Posts
    • 35,067 Thanks
    EssexHebridean
    I would also say in the OPs situation not having contents insurance is madness. I am not a fan of insurance myself and never take out extended warranties, additional insurances and our excesses are £500 usually to keep premium low but we have significant savings. OP does not and for the sake of less than £10 per month will protect himself from the cost of replacing everything should there be a fire.
    Originally posted by enthusiasticsaver
    I'm with you on the extended warranty issue - except with one notable exception which I felt the benefit of recently. At the beginning of 2014 I spent a 4-figure sum on a camera lens - it was bought from a Hong Kong based company so came with no UK warranty. I'd bought items from the supplier before, and have done since, however on this occasion I chanced looking at the cost for the three year extended warranty. It was £17 - and with the amount I'd already saved buying the HK lens anyway I decided to pay for it. Last month, when the lens went wrong, I was very glad I had, it paid out to the tune of £350 for the repair! it is the one and only extended warranty I had EVER taken out on anything!

    Apologies for taking your thread off topic OP - just thought enthusiasticsaver might appreciate that one!
    MORTGAGE FREE 30/09/2016
    • bilko89
    • By bilko89 25th Oct 16, 3:22 PM
    • 111 Posts
    • 251 Thanks
    bilko89
    No worries at all Essex!

    On the insurance debate, I never even thought about insurance before this thread! But I must admit, it seems a no brainer to pay £6.99/month (how much I was quoted) to cover EVERYTHING. I would even say Cailbhinn, you should get it !!

    Just had some bad news, apparently, we have been overpaid child tax credits now! so for the next 5 weeks my OH will be given £47.30 per week instead of £98.42 Just a nightmare after planning all this!
    • EssexHebridean
    • By EssexHebridean 25th Oct 16, 4:35 PM
    • 6,328 Posts
    • 35,067 Thanks
    EssexHebridean
    'Tis the law of s0d that the best laid plans will be disrupted by the *bleeping* Child tax credit people.
    MORTGAGE FREE 30/09/2016
    • bilko89
    • By bilko89 25th Oct 16, 5:14 PM
    • 111 Posts
    • 251 Thanks
    bilko89
    'Tis the law of s0d that the best laid plans will be disrupted by the *bleeping* Child tax credit people.
    Originally posted by EssexHebridean
    Even better one for you, received reply from Walker Love who say CT balance needs to be cleared by April in time for the new tax year. I'll be back tonight to plan Thanks for the support!
    • Cailbhinn
    • By Cailbhinn 25th Oct 16, 7:46 PM
    • 88 Posts
    • 260 Thanks
    Cailbhinn
    It never rains but pours!

    Re: CT - you planned for June so two months early shouldn't be a big issue with HP and wedding fund coming free - keep the £150 p/m until Jan then increase to £220-ish I presume?

    It will be tight for a couple months because of benefit reduction - if you could absorb that with being frugal with the groceries then you might just manage but appreciate its difficult feeing wee ones at a reasonable amount. Also the kids clubs - could they forgo it for a couple months?
    Starting Debt (31 Oct 2016) - £12,956 | Current Debt (31 Oct 2016) - £12,956 (0% paid)
    • Cailbhinn
    • By Cailbhinn 25th Oct 16, 7:47 PM
    • 88 Posts
    • 260 Thanks
    Cailbhinn
    I would even say Cailbhinn, you should get it !!!
    Originally posted by bilko89
    I'm lodging with my pal - so no need!
    Starting Debt (31 Oct 2016) - £12,956 | Current Debt (31 Oct 2016) - £12,956 (0% paid)
    • bilko89
    • By bilko89 26th Oct 16, 8:38 AM
    • 111 Posts
    • 251 Thanks
    bilko89
    That's a decent excuse I suppose Cailbhinn

    Right going to sit down today and sift through and see what I can do!

    Will post on here for everyone's trained eye
    • bilko89
    • By bilko89 26th Oct 16, 10:29 AM
    • 111 Posts
    • 251 Thanks
    bilko89
    Monthly Income Details
    Monthly income after tax................ £1,365.54
    Partners monthly income after tax....... £0.00
    Benefits................................ £326.80
    Total monthly income.................... £1,692.34

    Monthly Expense Details
    Secured/HP loan repayments.............. £336.60
    Rent.................................... £350.00
    Council tax............................. £100.00
    Electricity............................. £40.00
    Gas..................................... £40.00
    Mobile phone............................ £33.00
    TV Licence.............................. £18.18
    Satellite/Cable TV...................... [new price] £57.00
    Groceries etc. ......................... [new reduction] £200.00
    Clothing................................ £0.00
    Petrol/diesel........................... £90.00
    Road tax................................ £0.00
    Car Insurance........................... £0.00
    Car maintenance (including MOT)......... £0.00
    Other child related expenses............ £56.00
    Contents insurance...................... [new price] £7.00
    Presents (birthday, christmas etc)...... £0.00
    Haircuts................................ £0.00
    Entertainment........................... £0.00
    Emergency fund.......................... £0.00

    Wedding................................. £0.00
    Total monthly expenses.................. £1,327.78



    Unsecured Debts
    Description....................Debt......Monthly..
    Debt...........................4788......129......
    Aunt...........................1000......125......
    Total unsecured debts..........5788......254......


    Monthly Budget Summary
    Total monthly income.................... £1,692.34
    Expenses (including HP & secured debts). £1,327.78
    Available for debt repayments........... £364.56
    Monthly UNsecured debt repayments....... £254.00
    Amount left after debt repayments....... £110.56

    Right, this is my new story now for November I have changed/included:-

    1. Benefits down from £531.28 to £326.80
    2. Council Tax Payment to £100 (for Nov & Dec, rising to £230 January through to April)
    3. TV License is £18.18
    4. New Virgin price of £57
    5. £40 saving from groceries, now £200
    6. £7 contents insurance added
    7. £6 a month taken off debt repayments as PDL company have written off outstanding balance of £232
    8. BUT
    9. £20 to pay back balance from THREE mobile per month, new Debt monthly repayments at £129

    Items in red, I will allocate from the amount left after debt repayment.
    • EssexHebridean
    • By EssexHebridean 26th Oct 16, 11:30 AM
    • 6,328 Posts
    • 35,067 Thanks
    EssexHebridean
    You're still not budgeting anything for car tax/insurance? You need to set aside a minimum of £75 per month to cover this - PLUS extra for the months you haven't yet done so, plus an additional sum for maintenance, servicing and depreciation. Otherwise what happens when these things come up is you just end up falling back on the CC again. You need to start building the good habits from now.
    MORTGAGE FREE 30/09/2016
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