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  • FIRST POST
    • Ebonydeluxe
    • By Ebonydeluxe 6th Nov 17, 7:50 PM
    • 91Posts
    • 76Thanks
    Ebonydeluxe
    DMP or Bankruptcy new daily overdraft fee
    • #1
    • 6th Nov 17, 7:50 PM
    DMP or Bankruptcy new daily overdraft fee 6th Nov 17 at 7:50 PM
    Evening all,

    The new daily bank overdraft charges have just pushed me over the edge that I was precarious hanging on to. What once cost around £60 a month is going to now cost £144+. And due to the daily charges is causing me an even bigger cash flow problem.

    I called StepChange today and the debt remedy tool recommended a DMP, with the alternative of bankruptcy. My situation is so dire I cannot afford to pay my childrenís school meals on time and Iím not entitled to free school meals. I use my credit cards once I have made the minimum payment. This means I am never clearing the debt and just creating more debt.

    I think I am at risk of redundancy and have recently been diagnosed with a heart condition. The relevance of the heart condition is that it means it will be highly unlikely I will be able to get a mortgage as it will be hard and costly to obtain life insurance. Getting a mortgage would be my main reason for wanting to preserve a good credit rating, but since that is unlikely, I am questioning whether bankruptcy is the better option.

    SOA - Now included showing I have even less available because some of the minimum payment assumptions were wrong. I know people will look at the two cars, but without going into too much detail, it involves my ex and my misjudgement. All debts are in my name and there is nothing I can do about it. Debt on HP cars is more than their worth.

    Statement of Affairs and Personal Balance Sheet[/b]
    Household Information

    Number of adults in household........... 1
    Number of children in household......... 5
    Number of cars owned.................... 2
    Monthly Income Details

    Monthly income after tax................ 1268
    Partners monthly income after tax....... 0
    Benefits................................ 1364
    Other income............................ 0
    Total monthly income.................... 2632

    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 456
    Rent.................................... 22
    Management charge (leasehold property).. 0
    Council tax............................. 18
    Electricity............................. 44
    Gas..................................... 40
    Oil..................................... 0
    Water rates............................. 40
    Telephone (land line)................... 0
    Mobile phone............................ 46
    TV Licence.............................. 13
    Satellite/Cable TV...................... 0
    Internet Services....................... 27
    Groceries etc. ......................... 370
    Clothing................................ 50
    Petrol/diesel........................... 120
    Road tax................................ 56
    Car Insurance........................... 188
    Car maintenance (including MOT)......... 45
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 429
    Other child related expenses............ 116
    Medical (prescriptions, dentist etc).... 8.6
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 188
    Presents (birthday, christmas etc)...... 10
    Haircuts................................ 0
    Entertainment........................... 70
    Holiday................................. 0
    Emergency fund.......................... 40
    Total monthly expenses.................. 2396.6


    Assets

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


    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 0........(0)........0
    Hire Purchase (HP) debt ...... 8633.....(176)......19.9<
    HP.............................11242....(280)..... .20
    Total secured & HP debts...... 19875.....-.........-

    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Aqua...........................450.......15.63.... .29
    Argos..........................1900......95....... .29
    Argos..........................743.......38....... .29
    Very...........................1430......72....... .39.99
    Very...........................3301......150...... .39.99
    Vanquis........................250.......16....... .29
    Tesco..........................223.......25....... .29
    Next ..........................2872......144.......0
    M&S loan.......................3547......322.......0
    M&S............................2150......65....... .26
    Lloyds overdraft...............3200......144.......0
    Lloyds cc......................4250......140.......24
    DWP............................2000......30....... .0
    Debenhams......................651.......27....... .29
    Barclays oveirdraft............1600......60........0
    Barclaycard....................6798......170...... .27
    Total unsecured debts..........35365.....1513.63...-


    Monthly Budget Summary

    Total monthly income.................... 2,632
    Expenses (including HP & secured debts). 2,396.6
    Available for debt repayments........... 235.4
    Monthly UNsecured debt repayments....... 1,513.63
    Amount short for making debt repayments. -1,278.23

    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -19,875
    Total Unsecured debt.................... -35,365
    Net Assets.............................. -55,240


    There is nothing in the SOA which can be re-budgeted. I have compared my energy supply, broadband, etc. The mobile phone cost is for three phone contracts, my two daughters and mine. I will be able to reduce my mobile bill in Feb next year by about £10 or so.


    DMP would allow me to keep car, required for work and getting around with five children. Plan says it will last around 6 years, providing creditors freeze interest. My concern is if they donít.
    Bankruptcy would allow fresh start, restrict me from being stupid with credit, but I understand I could be asked to pay any surplus for 36 months.
    Either way I need to act sooner rather than later.
    I havenít missed any payments yet but that is because I am servicing the debt with debt.
    Thanks in advance.
    Last edited by Ebonydeluxe; 09-11-2017 at 12:16 PM. Reason: Providing SOA
    Hoping to be debt free for life!
Page 1
    • Ebonydeluxe
    • By Ebonydeluxe 8th Nov 17, 7:38 PM
    • 91 Posts
    • 76 Thanks
    Ebonydeluxe
    • #2
    • 8th Nov 17, 7:38 PM
    • #2
    • 8th Nov 17, 7:38 PM
    Any advice pls
    Hoping to be debt free for life!
    • -taff
    • By -taff 8th Nov 17, 7:53 PM
    • 7,098 Posts
    • 5,090 Thanks
    -taff
    • #3
    • 8th Nov 17, 7:53 PM
    • #3
    • 8th Nov 17, 7:53 PM
    Stop paying the debt [except for priority debts which don't include credit cards], write to your lenders or enter a DMP with Stepchange to start with. If you need to go bankrupt further down the line, it's always an option.

    Open new basic bank account and get your salary/benefits etc paid into that.

    Once you have some breathing space, you can plan better...
    • Richey_
    • By Richey_ 8th Nov 17, 8:52 PM
    • 262 Posts
    • 299 Thanks
    Richey_
    • #4
    • 8th Nov 17, 8:52 PM
    • #4
    • 8th Nov 17, 8:52 PM
    Tad excessive when you have £400 plus a month.
    Unless your credit history is in tatters with defaults etc then ignore the above.
    You need to post a full SOA as in all likelihood you can cut your expenses down and have maybe £600 spare a month.
    You would be debt free in a few years, as when you pay off debts that’s more per month on other debts. If you have a good credit history it’s worth keeping hold of as defaults and then ccjs can ruin it for up to 12 years in total plus they may add in collection fees.
    Complete the SOA and then people can assist
    • -taff
    • By -taff 8th Nov 17, 10:45 PM
    • 7,098 Posts
    • 5,090 Thanks
    -taff
    • #5
    • 8th Nov 17, 10:45 PM
    • #5
    • 8th Nov 17, 10:45 PM
    Their total debt is 30k plus, and each month amounts to 1600. They have 400 spare.

    I'm all for them cutting down and servicing them without defaulting on anything but if they have already spoken to Stepchange and been advised a DMP or bankruptcy, I'm not sure how much they can cut down and not default.
    • Jon81
    • By Jon81 9th Nov 17, 5:58 AM
    • 89 Posts
    • 169 Thanks
    Jon81
    • #6
    • 9th Nov 17, 5:58 AM
    • #6
    • 9th Nov 17, 5:58 AM
    Their total debt is 30k plus, and each month amounts to 1600. They have 400 spare.

    I'm all for them cutting down and servicing them without defaulting on anything but if they have already spoken to Stepchange and been advised a DMP or bankruptcy, I'm not sure how much they can cut down and not default.
    Originally posted by -taff
    Hi Taff,

    Typically, anything less than the contractural payment, even under the umbrella of a dmp via stepchange will likely result in a default. This isnít a wholly bad thing.
    • Jon81
    • By Jon81 9th Nov 17, 6:01 AM
    • 89 Posts
    • 169 Thanks
    Jon81
    • #7
    • 9th Nov 17, 6:01 AM
    • #7
    • 9th Nov 17, 6:01 AM
    Tad excessive when you have £400 plus a month.
    Unless your credit history is in tatters with defaults etc then ignore the above.
    You need to post a full SOA as in all likelihood you can cut your expenses down and have maybe £600 spare a month.
    You would be debt free in a few years, as when you pay off debts thatís more per month on other debts. If you have a good credit history itís worth keeping hold of as defaults and then ccjs can ruin it for up to 12 years in total plus they may add in collection fees.
    Complete the SOA and then people can assist
    Originally posted by Richey_
    Defaults and ccjs are present for 6 years on a credit file - where did 12 come from?? And besides, if a creditor can display a commitment to a debt management plan either self managed or via a (non fee) debt counciling service there is little point in a creditor going after a ccj
    • Richey_
    • By Richey_ 9th Nov 17, 7:02 AM
    • 262 Posts
    • 299 Thanks
    Richey_
    • #8
    • 9th Nov 17, 7:02 AM
    • #8
    • 9th Nov 17, 7:02 AM
    12 years came from 6 years default and at its absolute worse they then apply for a ccj just before the 6 year mark and then it’s another 6 years. Less in Scotland.
    • Jon81
    • By Jon81 9th Nov 17, 7:45 AM
    • 89 Posts
    • 169 Thanks
    Jon81
    • #9
    • 9th Nov 17, 7:45 AM
    • #9
    • 9th Nov 17, 7:45 AM
    12 years came from 6 years default and at its absolute worse they then apply for a ccj just before the 6 year mark and then itís another 6 years. Less in Scotland.
    Originally posted by Richey_
    I think itís pretty emotive to sudgest people consider the what if senario on a pretty exteem basis as youíve outlined, I think on first read of it could compound some peopleís fears not allay them

    The fact is, creditors, regardless of size or debt being considered are duty bound to act fairly to customers and especially those who approach them with financial concerns

    As a minimum this means a period of breathing space while that person addresses their affairs. Ccjís, debt collectors and collection charges are way off the agdenda for as long as the individual works with a debt service such as stepchange or pay plan or otherwise responds faithfully and in good time if dealing with creditors on their own

    Yes, peoples credit record will be tarnished, however myself and others on this board can attest to the fact that this neednít cause issues and in fact defaults should be encouraged so as to get the clock ticking and them off your file

    I donít think fearmongering, when people on these pages are possibly at their lowest point is helpful or supportive
    • Ebonydeluxe
    • By Ebonydeluxe 9th Nov 17, 8:11 AM
    • 91 Posts
    • 76 Thanks
    Ebonydeluxe
    Thank you for your replies. I just need to clear up one thing. I don’t have £400 spare a month. I have £400 left to pay towards debts of £1600. No amount of budgeting is going to get anywhere close to being able to meet my monthly payments.
    I think I will do as taff says and start the DMP and consider bankruptcy later down the line if the DMP is unsuccessful.
    Last edited by Ebonydeluxe; 09-11-2017 at 8:21 AM.
    Hoping to be debt free for life!
    • StopIt
    • By StopIt 9th Nov 17, 8:42 AM
    • 1,371 Posts
    • 1,167 Thanks
    StopIt
    Thank you for your replies. I just need to clear up one thing. I donít have £400 spare a month. I have £400 left to pay towards debts of £1600. No amount of budgeting is going to get anywhere close to being able to meet my monthly payments.
    I think I will do as taff says and start the DMP and consider bankruptcy later down the line if the DMP is unsuccessful.
    Originally posted by Ebonydeluxe

    The reason why we ask for a full SOA for things like this is because there are experts here who can tell the difference between £400 surplus before debt on paper, and £400 surplus in reality.


    The latter would result you getting an IPA in BR. The former, that forgets non recurring but common spending, exceptional items that must be factored into an annual budget and plain old underreporting of spending can make a massive difference.


    Please post your MSE SOA so it can be looked at properly. Entering a DMP or BR have their own impacts and going on a DMP only to go BR later just wastes time and effort if BR was the best option to begin with.
    • Ebonydeluxe
    • By Ebonydeluxe 9th Nov 17, 12:18 PM
    • 91 Posts
    • 76 Thanks
    Ebonydeluxe
    Right- I see your point. I have now included it.
    Hoping to be debt free for life!
    • StopIt
    • By StopIt 9th Nov 17, 12:38 PM
    • 1,371 Posts
    • 1,167 Thanks
    StopIt
    Evening all,

    The new daily bank overdraft charges have just pushed me over the edge that I was precarious hanging on to. What once cost around £60 a month is going to now cost £144+. And due to the daily charges is causing me an even bigger cash flow problem.

    I called StepChange today and the debt remedy tool recommended a DMP, with the alternative of bankruptcy. My situation is so dire I cannot afford to pay my childrenís school meals on time and Iím not entitled to free school meals. I use my credit cards once I have made the minimum payment. This means I am never clearing the debt and just creating more debt.

    I think I am at risk of redundancy and have recently been diagnosed with a heart condition. The relevance of the heart condition is that it means it will be highly unlikely I will be able to get a mortgage as it will be hard and costly to obtain life insurance. Getting a mortgage would be my main reason for wanting to preserve a good credit rating, but since that is unlikely, I am questioning whether bankruptcy is the better option.

    SOA - Now included showing I have even less available because some of the minimum payment assumptions were wrong. I know people will look at the two cars, but without going into too much detail, it involves my ex and my misjudgement. All debts are in my name and there is nothing I can do about it. Debt on HP cars is more than their worth.

    Statement of Affairs and Personal Balance Sheet[/b]
    Household Information

    Number of adults in household........... 1
    Number of children in household......... 5
    Number of cars owned.................... 2
    Monthly Income Details

    Monthly income after tax................ 1268
    Partners monthly income after tax....... 0
    Benefits................................ 1364
    Other income............................ 0
    Total monthly income.................... 2632

    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 456
    Rent.................................... 22 Living rent free? Or Partner covers this?
    Management charge (leasehold property).. 0
    Council tax............................. 18 Surely an error. if not could you tell me where you live so I can save £140 a month! Or as above.
    Electricity............................. 44
    Gas..................................... 40
    Oil..................................... 0
    Water rates............................. 40
    Telephone (land line)................... 0
    Mobile phone............................ 46
    TV Licence.............................. 13
    Satellite/Cable TV...................... 0
    Internet Services....................... 27
    Groceries etc. ......................... 370 From a budgeting POV, far too low. You can budget £3 a person a day, that's £540 a month.
    Clothing................................ 50 Normally I advise of high spending here, but for 5 kids? Probably low.
    Petrol/diesel........................... 120
    Road tax................................ 56
    Car Insurance........................... 188
    Car maintenance (including MOT)......... 45
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 429
    Other child related expenses............ 116
    Medical (prescriptions, dentist etc).... 8.6
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0 You really need this.
    Life assurance ......................... 0
    Other insurance......................... 188
    Presents (birthday, christmas etc)...... 10
    Haircuts................................ 0
    Entertainment........................... 70
    Holiday................................. 0
    Emergency fund.......................... 40 Where does this go? You have no cash stated.
    Total monthly expenses.................. 2396.6


    Assets

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


    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 0........(0)........0
    Hire Purchase (HP) debt ...... 8633.....(176)......19.9<
    HP.............................11242....(280)..... .20
    Total secured & HP debts...... 19875.....-.........-

    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Aqua...........................450.......15.63.... .29
    Argos..........................1900......95....... .29
    Argos..........................743.......38....... .29
    Very...........................1430......72....... .39.99
    Very...........................3301......150...... .39.99
    Vanquis........................250.......16....... .29
    Tesco..........................223.......25....... .29
    Next ..........................2872......144.......0
    M&S loan.......................3547......322.......0
    M&S............................2150......65....... .26
    Lloyds overdraft...............3200......144.......0
    Lloyds cc......................4250......140.......24
    DWP............................2000......30....... .0
    Debenhams......................651.......27....... .29
    Barclays oveirdraft............1600......60........0
    Barclaycard....................6798......170...... .27
    Total unsecured debts..........35365.....1513.63...-


    Monthly Budget Summary

    Total monthly income.................... 2,632
    Expenses (including HP & secured debts). 2,396.6
    Available for debt repayments........... 235.4
    Monthly UNsecured debt repayments....... 1,513.63
    Amount short for making debt repayments. -1,278.23

    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -19,875
    Total Unsecured debt.................... -35,365
    Net Assets.............................. -55,240


    There is nothing in the SOA which can be re-budgeted. I have compared my energy supply, broadband, etc. The mobile phone cost is for three phone contracts, my two daughters and mine. I will be able to reduce my mobile bill in Feb next year by about £10 or so.


    DMP would allow me to keep car, required for work and getting around with five children. Plan says it will last around 6 years, providing creditors freeze interest. My concern is if they donít.
    Bankruptcy would allow fresh start, restrict me from being stupid with credit, but I understand I could be asked to pay any surplus for 36 months.
    Either way I need to act sooner rather than later.
    I havenít missed any payments yet but that is because I am servicing the debt with debt.
    Thanks in advance.
    Originally posted by Ebonydeluxe

    Replies in red.


    Assuming you pay everything you have into a DMP thus keeping the Secured assets, it'll take 12 years to pay these debts off. That's if the interest is frozen today.


    Your SOA isn't realistic for a few reasons also, so I would say that you don't even have this £200 for a DMP most of the time.


    The only thing with BR is that you will lose anything secured, so would need alternatives for your cars. However, I don't think a DMP is really suitable here without dumping the cars, so either way, those are pretty much gone.
    I'm a Board Guide on the Debt Free Wannabe, Credit Cards and Loans 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. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com

    In debt and looking for help? Look here for the MSE Debt Help Guide.
    Also, If you need any free and impartial debt advice, the National Debtline, Stepchange, and the CAB can help.
    • Ebonydeluxe
    • By Ebonydeluxe 9th Nov 17, 1:32 PM
    • 91 Posts
    • 76 Thanks
    Ebonydeluxe
    Thanks for your reply.
    Rent is low as housing benefit covers most of the cost.
    Same goes for council tax. My income is very low.
    Food budget is low because I generally donít buy junk, ready made meals or other prepared food. I donít buy lots of fizzy drinks, snacks, biscuits or juice because I noticed my childrenís teeth rooted. On most days we have a home cooked meal. Frozen meat and veg also helps with cutting down costs quite substantially. When cash flow is really bad I can do a lot with a can of kidney beans, rice and mixed veg. I am open to upping the budget though, but at present I tend to use a few credit cards to pay for food shopping, so in reality it is costing me more in the long run.

    The £40 emergency fund does not exist as such, but reflects unexpected emergency costs which may arise in a month and stupid spending decisions/going over budget. Which in reality is probably more.

    I see your point. My worry with bankruptcy is what you mentioned of the payments I would still have to make if it was deemed I had lots of residual income. I guess what you are saying though, is that my budget is too low and an insolvency practitioner may deem that there is nothing to pay for 36 months? Where as the StepChange debt remedy reckons I will have to pay £800+ a month as I will not have the secured debt.
    Hoping to be debt free for life!
    • StopIt
    • By StopIt 9th Nov 17, 2:18 PM
    • 1,371 Posts
    • 1,167 Thanks
    StopIt
    Just FYI, on a normal SOA, you put the full rent and CT figure, then add the HB and CTB in the benefits column, so they match up.


    The reason why I mentioned the grocery budget in red as that is what I think is the accepted figure by an OR in BR.


    Certainly speak to Stepchange however about both options. Yes, if you went BR, you would free up some money for an IPA by getting rid of the secured agreements, however, I think that can be managed and remember some benefits do not count towards an IPA surplus.
    I'm a Board Guide on the Debt Free Wannabe, Credit Cards and Loans 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. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com

    In debt and looking for help? Look here for the MSE Debt Help Guide.
    Also, If you need any free and impartial debt advice, the National Debtline, Stepchange, and the CAB can help.
    • obay
    • By obay 9th Nov 17, 4:17 PM
    • 415 Posts
    • 290 Thanks
    obay
    A lot of people will suggest paying the highest interest rates possible, I do this the other way, I pay the smallest amount possible to free up the money to start paying off the bigger amounts. (I have done this with my DFS sofa agreement, even though it was 0% interest, I made £25 ready to churn to pay more to my boiler agreement (which I am doing now..) I also paid off a £55 debt that was causing me a lot of agro which I didn't need, both 0% I saved £80 and are now ready to blow on my own debts and they have made a dent.

    On this, I'd consider pay either of these;

    Vanquis........................250.......16....... .29
    Tesco..........................223.......25....... .29

    They have the lowest balance, however quite a high-interest rate.

    Paying off the tesco loan will give you an additional 'smaller' £25 pot to repay the debt quicker. The same with the Vanquis loan which will take you to £41 to debt.

    Now; it's not going to be easy, but you need to communicate to these creditors and see if they can freeze the interest for a month or so while you are working out your plan of attack.

    This will clear you of £500 worth of debt + Give you an extra £41 per month to make to your creditors.

    I understand you have 5 children, that it might be hard to overcome and will initially be a shock to the system - Let's get your budget under control and in a safe manner.

    Once you have these two paid off, then target this one
    Aqua...........................450.......15.63.... .29

    Slowly but surely, you're getting more money into your pocket, I am wondering, without falling into a bigger trap of borrowing if you can ask your partner (if you have one) or mum and dad for £500 initally to be paid back within 12 months just to give you a good start on getting this bit under control..

    I am almost certain that a lot of people will tell you otherwise purely because they're more experienced then what I am - Take with a pinch of salt my advise, but it would save a lot of hassle and you'll start noticing a different shortly.

    Also another thing that I have learnt recently -- How long have you had your HP car for? I believe you can give it back once you reach 50%.
    Last edited by obay; 09-11-2017 at 4:30 PM.
    1/12/16 - £152,599.00
    11/11/17 - £145,990.00
    Two Credit agreements to pay off - £13653! (inc interest).
    Sofa (DFS) (0%)£923/£923 - Paid off 7th November!
    Barclays Boiler (18.9%!)£400/£3021.36
    Barclays Car (5.99%)£0/£8,832.37
    • -taff
    • By -taff 11th Nov 17, 10:30 AM
    • 7,098 Posts
    • 5,090 Thanks
    -taff
    Sorry to add another post, but you need to explore your options with Stepchange, and also you could head over to the bankruptcy board for thir input.

    Ultimately, you will have to make your own choice but make them armed with knowledge about potential sticking points of both.

    A DMP will see you defaulting on your debts and trash your credit file for six months, with a potential pay back time of years. Banruptcy will be over quicker, and leave you in a position where you don't have any new debts, but again, credit or a mortgage will be difficult to get for a few years afterwards.

    I read some of your post history and noticed that you went for a consolidation loan a few years ago, did that contribute to your current status? If it did, you really need to look at what your budget is, and how you are managing it, because everyone here will help with that, there's also the old style board for help with meal planning and cheap food purchase.
    Look at things like Quidco and topcashback for things you have to buy in case there's a discount or cashback available for that.

    I know it's easy for people on the other side of the computer to judge away, but don't let that frighten you off asking for help.

    Most will help, ignore the ones who want to shout at you.
    And good luck.
    • Ebonydeluxe
    • By Ebonydeluxe 11th Nov 17, 11:34 AM
    • 91 Posts
    • 76 Thanks
    Ebonydeluxe
    Yes, I got the consolidation loan, closed some of my credit cards, but kept the main players for emergencies. Because I had cleared the balances the credit card companies increased the credit limits. I spent about 6 months not getting back into debt. Then I started spending on one of the cards, maxed it out then did a 0% balance transfer and just continued on a journey of more debt. If I had closed all the credit card accounts I would not be in so much debt.

    The suggestion above your post regarding paying off the two smaller credit card amounts was something I considered. This could probably work if I was to arrange my own tailored DMP where I offer lower amounts to the larger debts to free up cash to pay off the smaller debts, with the aim of having more cash to put towards a smaller amount of creditors. However, I think this has the potential to be very messy and not give me the breathing space I need to just be able to pay for my basics and not feel as stressed out as I am.

    I managed to open a new bank account with NatWest. Please let me know if you see any potential problems with having a Natwest account and any of the creditors I have listed. From what I have read, there is no group link, but you just never know.

    Not sure how much of a difference it makes, but I am expecting another baby next year, so will definitely have less income as I will be on maternity leave. Yeah-I know itís a mess. Does it change the advice you would give about my options?
    Hoping to be debt free for life!
    • enthusiasticsaver
    • By enthusiasticsaver 11th Nov 17, 12:59 PM
    • 4,681 Posts
    • 8,788 Thanks
    enthusiasticsaver
    I think when almost £2k of a £2396 income is going on debt repayments budget tinkering is pretty much a waste of time. You should put the full amount of rent and council tax there and put the benefits you get at present in the benefits column. As stopit says your soa is too low in places and for both a DMP and bankruptcy you should not be trying to keep the figures low or you will be asked for the surplus to repay debts.

    Why are there no cars showing in the assets column given you are paying for 2. I am not sure why you are paying for your exes but I would have let that default long ago unless you were trying to protect your credit record? I think in your situation I would be looking to keep the car and get an affordable DMP set up as I think once you have got the debts sorted with no interest accumulated you could have around £500 free each month to pay off the £55,240. I think £800 is optimistic from payplan even without the secured loan repayments as that plus the £253 surplus before unsecured debt only comes to £700 approx and there are gaps in your soa. I would be pushing for closer to £500 or £600 but it will still take a lot longer to be clear than with bankruptcy.

    If your income is due to reduce then bankruptcy may be a better option as reduced income means less surplus. I am not sure if they will let you keep the car though.

    I think Nat West should be ok for a new basic bank account as I cannot see that any of the creditors are part of that banking group.
    5 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, 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
    • -taff
    • By -taff 11th Nov 17, 3:48 PM
    • 7,098 Posts
    • 5,090 Thanks
    -taff
    Does it change the advice you would give about my options?
    Originally posted by Ebonydeluxe
    Honestly? No. You'll be on even less money when you're on maternirty leave so not much to say about that.

    Ring up Stepvhange, ring up the National Debtline and have a good chat with them, you can ask them al the questions about car/income/DMP/bankruptcy and they should have clear answers for you.

    Ultimately, it's your decision....

    P.S When I said trash your file for six months, it should have read 6 years....
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