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  • FIRST POST
    • JayCollins
    • By JayCollins 7th Jul 17, 6:20 PM
    • 2Posts
    • 0Thanks
    JayCollins
    Is insolvency the only way?
    • #1
    • 7th Jul 17, 6:20 PM
    Is insolvency the only way? 7th Jul 17 at 6:20 PM
    I owe approximately £20,000 with all original creditors selling it on to debt recovery agencies, not including the few thousand that I owe family. Having been through hell over the past 3 months - homelessness, emotional abuse etc - I've completely lost track of everything financially. I have now been granted a tenancy under the local council and moved in June 26th.

    Looking at things on a spreadsheet, I'm seriously concerned that I'm not going to be able to make proper dents in the above balance. My monthly responsibilities for the flat are £770 and my income is £540. My income is standard Universal Credit (with £50 deduction due to advance repayment / court compensation order for 6 months) and the Housing element to cover rent only. Even getting rid of the TV licence, Wifi and Mobile Phone (£84 total), the only 'luxuries' I have, I'm still coming up very short.

    Now I have been made aware that I may qualify for ESA, however this only increases my income by approximately £220 per month - I'm still £10 short of even having nothing to live on for the month once the bills are paid. I may qualify for PIP, and this would increase my income further by approximately £230 per month. Assuming I get PIP, I'm looking at £220 after priority bills. I've cut the groceries/toiletries/cleaning budget to a minimum of £150 per month, leaving £70. I will sometimes have to spend some money on public transport to get me to and from JobCentre/Council appointments, using my push bike as far as possible. There just doesn't seem to be anything to even get me some decent clothing, towels, let alone have any resemblance of a social life.

    That's my situation and I don't think it will realistically allow me to pay this debt off, as much as I want to repay every penny. I've already exhausted a TPP, and being on that sort of plan for another 12+ months would make a negligible difference in the balances. I can't see this £70 making any difference on a DMP either. My credit file is shot to bits, but ideally I don't want to go insolvent if I don't have to, but I can accept what ever will be will be.

    I will be in touch with StepChange on Monday morning to see how they may help point me in the right direction, but I'd like some more input over the weekend as well - This forum came highly recommended for advice.

    Thank you for reading.

    Edit: SOA added...

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 1
    Number of children in household......... 0
    Number of cars owned.................... 0

    Monthly Income Details

    Monthly income after tax................ 0
    Partners monthly income after tax....... 0
    Benefits................................ 540
    Other income............................ 0
    Total monthly income.................... 540


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 341
    Management charge (leasehold property).. 0
    Council tax............................. 15
    Electricity............................. 45
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 26
    Telephone (land line)................... 0
    Mobile phone............................ 21
    TV Licence.............................. 30
    Satellite/Cable TV...................... 0
    Internet Services....................... 33
    Groceries etc. ......................... 150
    Clothing................................ 10
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 30
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 5
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 10
    Haircuts................................ 12
    Entertainment........................... 4
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 732



    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
    M&S Credit Card................2988......1.........18.9
    Santander (Wescott)............1393......1.........18.9
    Barclaycard (Link).............1214......1.........29.9
    Family.........................3500......1........ .0
    EE.............................398.......1........ .0
    Halifax Overdraft..............595.......1.........0
    Hitachi (Cabot)................1799......1.........0
    Wonga.com (?)..................434.......1.........12
    Santander (Wescott)............7402......1.........15.9
    Total unsecured debts..........19723.....9.........-



    Monthly Budget Summary

    Total monthly income.................... 540
    Expenses (including HP & secured debts). 732
    Available for debt repayments........... -192
    Monthly UNsecured debt repayments....... 9
    Amount short for making debt repayments. -201


    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -19,723
    Net Assets.............................. -19,723


    Created using the SOA calculator. Reproduced on Moneysavingexpert with permission, using other browser.
    Last edited by JayCollins; 07-07-2017 at 10:28 PM. Reason: Title change
Page 1
    • FatVonD
    • By FatVonD 7th Jul 17, 7:43 PM
    • 4,651 Posts
    • 17,728 Thanks
    FatVonD
    • #2
    • 7th Jul 17, 7:43 PM
    • #2
    • 7th Jul 17, 7:43 PM
    I can't help you but just wanted to wish you luck.

    There will be plenty along later to help you later this evening but in the meantime you could consider also posting on the benefits board to check you are getting everything you are entitled to.
    Lunches brought to work in August 14/22 Money saved to date £27.08 (compared to spending three pounds on a meal deal)

    Make £10 a day in August £97.07/£310 (July £71.45, June £251.22, May£119.33, April £236.24, March £106.74, Feb £40.99, Jan £98.54)
    • JayCollins
    • By JayCollins 7th Jul 17, 9:02 PM
    • 2 Posts
    • 0 Thanks
    JayCollins
    • #3
    • 7th Jul 17, 9:02 PM
    • #3
    • 7th Jul 17, 9:02 PM
    Thanks for your kind words. I will check out to see if I may qualify for anything else.
    • fatbelly
    • By fatbelly 7th Jul 17, 10:36 PM
    • 11,057 Posts
    • 8,248 Thanks
    fatbelly
    • #4
    • 7th Jul 17, 10:36 PM
    • #4
    • 7th Jul 17, 10:36 PM
    It's tough trying to live on UC.

    Your situation does seem suited to a Debt Relief Order.

    Basic Criteria for a debt relief order :

    •Must not be a homeowner,

    • Debts less than £20,000,

    • Can have a car worth up to £1000,

    • No other assets of more than £1000,

    • Must have £50 or less left at month end, after all essential payments have been made (not inc debt repayments),

    • Cannot have had a DRO in last 6 years.

    However, until you have more income (maybe ESA or PIP) you may get further into debt. Normally I would say leave the dro until your situation is stable. But you are very close to the 20k limit. Above that level you're looking at full bankruptcy with £680 fees.
    • sourcrates
    • By sourcrates 7th Jul 17, 11:09 PM
    • 11,520 Posts
    • 11,115 Thanks
    sourcrates
    • #5
    • 7th Jul 17, 11:09 PM
    • #5
    • 7th Jul 17, 11:09 PM
    To be perfectly honest, you can't afford any debt repayments on that budget.

    I would write to each creditor detailing your situation, ask them to write off the debts, in your situation, there's nothing they can do to you, it's pointless paying when you are so strapped for cash.

    You have no property or assets, no job to deduct money from wages, your creditors can't touch you at all.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, 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.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
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