New and in need of help...

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Good day everyone on the MSE website... I hope you can take the time to read my little thread as I am in need of your help and support.

Over the years I've managed to get more and more in debt and now I have moved in with my girlfriend, with baby expecting, I need to face the harsh reality that I'm in over my head, about £15,000 worth.

It all started when I was 19 and has snow-balled since. I thought I was in the position, with a good income of £28k pa, to pay everything back. However, I've been stung by charges all over the place which keep knocking me back, I end up over my overdraft and are hit by yet more charges. I've asked for the charges to be suspended on my account for a few months while I get back on my feet, but Lloyds don't seem interested in helping me.

I've taken the first steps by speaking to both PayPlan and CCCS who have advised that I should set up IVA's with my creditors and move my bank account. I've already in the process of moving my bank account over to someone else and writing to my creditors. However I'm a little worried about 2 things:

1) will they accept the IVA, token offers?

2) what damage will this do to my credit rating?

The token offers will be a reasonable amount, not too much less than I am paying now. Can anyone advise on what has happened to them?

Also anyone that is now 'debt-free' or at least getting there can tell me how the whole process has affected them getting credit? I do have aspirations to move from rented to owning my own home, but will these IVA's put that in jeapody?

Having read other posts, everyones circumstances are different, but I'm really happy with the way people help other people. It's a great community and one I can contribute in going forwards

Any help anyone can give me will be greatly appreciated...

Virgin MSE member :A
"You'll remember you don't believe in any of this fate crap... you're in control of your own life... remember?"
«1

Comments

  • RAS
    RAS Posts: 32,767 Forumite
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    Hi

    Am a bit surprised CCCS and Payplan have recommended an IVA rather then a DMP. Yes both will mess up your credit rating. An IVA is an Insolvency arrangment, so you have to declare it for all time if you are asked on a credit application form, even though it falls off your credit check much earlier.

    If you are going to do an IVA, you would be advised to do it via one of the debt charities such as CCCS rather than dealing direct with an IVA provider.

    Ditto for a DMP.

    Without seeing your income and expenditure and knowing more of your circumstances, it is hard to advise more.
    The person who has not made a mistake, has made nothing
  • bank_of_slate
    bank_of_slate Posts: 12,922 Forumite
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    Hi trenery,
    Can you post a full statement of accounts so we can see if we can help!
    http://www.makesenseofcards.com/soacalc.html
    ...Linda xx
    It's easy to give in to that negative voice that chants "cant do it" BUT we lift each other up.
    We dont count all the runners ahead of us & feel intimidated.
    Instead we look back proudly at our journey, our personal struggle & determination & remember that there are those that never even attempt to reach the starting line.
  • trenery
    trenery Posts: 14 Forumite
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    Well I have an income of £1,750 per month, with outgoings including credit cards, loans and household outgoings such as rent, bills, food etc comes to £1650, but because of bank charges earlier in the year I've found that my outgoings come to more like £2,000 which has led me missing 2 payments for the council tax and 1 for my car...

    Lloyds just won't help me, hence why I'm looking in to IVA's.

    Thanks for the reply :)
    "You'll remember you don't believe in any of this fate crap... you're in control of your own life... remember?"
  • bank_of_slate
    bank_of_slate Posts: 12,922 Forumite
    First Post Combo Breaker
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    Can you default on a different payment rather than your Council tax?
    Please avoid getting behind with the council tax!!!!!

    Please post up a full SOA so we can help, support and advise?
    ...Linda xx
    It's easy to give in to that negative voice that chants "cant do it" BUT we lift each other up.
    We dont count all the runners ahead of us & feel intimidated.
    Instead we look back proudly at our journey, our personal struggle & determination & remember that there are those that never even attempt to reach the starting line.
  • trenery
    trenery Posts: 14 Forumite
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    Statement of Affairs and Personal Balance Sheet
    Monthly Income Details

    Monthly income after tax................ 1750
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 1750

    Monthly Expense Details

    Mortgage................................ 0
    Secured loan repayments................. 0
    Rent.................................... 550
    Management charge (leasehold property).. 0
    Council tax............................. 115
    Electricity............................. 22.5
    Gas..................................... 22.5
    Oil..................................... 0
    Water rates............................. 25
    Telephone (land line)................... 12.5
    Mobile phone............................ 60
    TV Licence.............................. 25
    Satellite/Cable TV...................... 0
    Internet Services....................... 12.5
    Groceries etc. ......................... 200
    Clothing................................ 7
    Petrol/diesel........................... 220
    Road tax................................ 15
    Car Insurance........................... 50
    Car maintenance (including MOT)......... 10
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    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................................ 0
    Entertainment........................... 20
    Holiday................................. 0
    Emergency fund.......................... 10
    Total monthly expenses.................. 1387


    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 7000
    Other assets............................ 0
    Total Assets............................ 7000


    No Secured Debt

    Unsecured Debts
    Description....................Debt......Monthly...APR
    Lloyds CC......................1500......40........20
    Lloyds Loan....................3500......120.......18
    Car Loan.......................7200......217.......18
    Welcome Loan...................1200......80........30
    Lloyds O/D.....................1600......50........8
    RBS O/D........................700.......20........8
    Total unsecured debts..........15700.....527.......-


    Monthly Budget Summary

    Total monthly income.................... 1,750
    Expenses (including secured debts)...... 1,387
    Available for debt repayments........... 363
    Monthly UNsecured debt repayments....... 527
    Surplus(deficit if negative)............ -164

    Personal Balance Sheet Summary
    Total assets (things you own)........... 7,000
    Total Secured debt...................... -0
    Total Unsecured debt.................... -15,700
    Net Assets.............................. -8,700

    Created using the SOA calculator at www.makesenseofcards.com.
    Reproduced on Moneysavingexpert with permission.
    "You'll remember you don't believe in any of this fate crap... you're in control of your own life... remember?"
  • RAS
    RAS Posts: 32,767 Forumite
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    OK, there is a bit of difference between how we look at an SOA for debt management purposes and how we look at a SOA for the purposes of paying off your debt.

    An SOA allowance for an IVA is generally pretty tight, a DMp is less so.

    I appreciate that yout GF is expecting a child but it is not clear whether you are dealing here with expenditure for one person or two. If it is one, your expenditure is high, if is is two, then she should have aternity payment and shortly child benefits and you need to be exploring wwww.entitledto to find out abotu working tax credits, child tax credits and posible HB or CTB.

    Can you clarify?
    The person who has not made a mistake, has made nothing
  • trenery
    trenery Posts: 14 Forumite
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    The expenditure in terms of household stuff is for 2, all the debts are in my name. She is due to take her maternity allowance in February as she is due in March, and I think she is entitled to child tax credits too, but this isn't for another few months and I need to take action now.

    Any suggestions?

    Thanks for your help so far. It's very much appreciated :)
    "You'll remember you don't believe in any of this fate crap... you're in control of your own life... remember?"
  • RAS
    RAS Posts: 32,767 Forumite
    Name Dropper First Anniversary First Post
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    OK

    I appreciate that the debts are all yours, but if the expenditure is joint, you need to add her current income as well or halve the household expenditure. If you do a DMP, IVA or go bankrupt, you are only allowed to pay your part of the household expenditure when assessing surplus income.
    trenery wrote: »
    Statement of Affairs and Personal Balance Sheet
    Monthly Income Details
    Monthly income after tax................ 1750
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 1750
    Monthly Expense Details
    Mortgage................................ 0
    Secured loan repayments................. 0
    Rent.................................... 550 - half or all?
    Management charge (leasehold property).. 0
    Council tax............................. 115 - is this 10 months or 12?
    Electricity............................. 22.5
    Gas..................................... 22.5 - OK if this is for two but halve to calculate your share
    Oil..................................... 0
    Water rates............................. 25
    Telephone (land line)................... 12.5
    Mobile phone............................ 60 - even if this is for two, you need to cut this right back. reduce your tariff and go PAYG.
    TV Licence.............................. 25 - should be £11 permonth so this is a set deal. When does that finish?
    Satellite/Cable TV...................... 0
    Internet Services....................... 12.5
    Groceries etc. ......................... 200 - even for 2, you can cut £50 here
    Clothing................................ 7
    Petrol/diesel........................... 220 - whow - what are you driving, or how far? Can you recalim any from your bosS?
    Road tax................................ 15
    Car Insurance........................... 50 - check the comparison sites and use www.quidco.com to get cashback
    Car maintenance (including MOT)......... 10
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0 - you need this
    Life assurance ......................... 0 - and this if you have a child
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 10
    Haircuts................................ 0
    Entertainment........................... 20
    Holiday................................. 0
    Emergency fund.......................... 10 - this is an emergency
    Total monthly expenses.................. 1387

    Assets
    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 7000
    Other assets............................ 0
    Total Assets............................ 7000

    No Secured Debt
    Unsecured Debts
    Description....................Debt......Monthly...APR
    Lloyds CC......................1500......40........20
    Lloyds Loan....................3500......120.......18
    Car Loan.......................7200......217.......18
    Welcome Loan...................1200......80........30 - this is the one to target.
    Lloyds O/D.....................1600......50........8
    RBS O/D........................700.......20........8
    Total unsecured debts..........15700.....527.......-

    What are the limits on these accounts?

    Monthly Budget Summary
    Total monthly income.................... 1,750
    Expenses (including secured debts)...... 1,387
    Available for debt repayments........... 363
    Monthly UNsecured debt repayments....... 527
    Surplus(deficit if negative)............ -164
    Personal Balance Sheet Summary
    Total assets (things you own)........... 7,000
    Total Secured debt...................... -0
    Total Unsecured debt.................... -15,700
    Net Assets.............................. -8,700
    Created using the SOA calculator at www.makesenseofcards.com.
    Reproduced on Moneysavingexpert with permission.

    OK

    Once you get the full picture you are jsut about breaking even.

    To turn stuff round

    1. have you any charges on the cards, laons or accounts that you can reclaim. Remember that only the accounts are frozen whilst the court case is decided.

    2. Those loans - any of them got PPI. Most is mis-sold. Even if you need PPI, you can get stand alone much cheaper elsewhere. Reclaim.

    3. Is the car HP or a loan, duration of the loan and time left?

    4. What is still kicking around in the house you have just left, in box at your parens etc, that could be sold via e-bay, amazon or at a car boot sale?
    The person who has not made a mistake, has made nothing
  • trenery
    trenery Posts: 14 Forumite
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    There is only my income in to the household, so what you see above is everything coming out of my account as the girlfriend lost her job about a month ago.

    It is a lot of petrol, but I travel about 65 miles per day to get to and from work :(

    I've made efforts to cut my phone bill, I've reduced my tarrif down to £30 per month.

    My Gas and Electric are paid together, fixed price of £55 a month for both. Is this good or bad? I'll check on one of the comparison sites at the weekend.

    Thanks for the advice, I'm looking in to reclaiming my credit card charges this weekend. The bank charges have been addressed but the court case is ongoing still. As for the loan this has no PPI attached so can't reclaim.

    We did a car boot a few weekends ago so have nothing really to sell.

    After taking all this in to consideration is an IVA or DMP the only way out of this mess I've got myself in to? I think so, but an impartial view point would be great :)
    "You'll remember you don't believe in any of this fate crap... you're in control of your own life... remember?"
  • RAS
    RAS Posts: 32,767 Forumite
    Name Dropper First Anniversary First Post
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    Hi

    Thanks for the explanations.

    I think a little humility is in order here; you are not solely responsible for "this mess I've got myself into." If your GF was working, the situation would be quite manageable. This is a joint effort.

    Is she signing on - even if she gets nothing but the NI credits?

    I think you need three things

    1. Call one of the debt charities here http://www.moneysavingexpert.com/loans/debt-help-plan#help. many of them are very busy but you can do a CCCS remedy on-line which speeds up processing your case.

    2. You need some sound benefits advice on your situation now, when your GF goes on mat leave and when the bady is born. Most importantly, once the baby is born, you personally will need to get a lot of the claims processed quickly.

    3. if you pm fermi or MrsTine, they can transfer this thread over to the main DFW board where you will much more comprehansive advice.

    And then you your GF on here herself, for all the advice on freecycle, mum and baby freebies etc which can be found across the forums. Oh and check that she does not have any old charges that can be reclaimed, even from closed accounts.

    I am not likely to be on-line over the weekend, but others will help you. Have a good weekend.
    The person who has not made a mistake, has made nothing
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