Wanting to be debt free and improve credit ratings.

elaina79

Hi everyone :hello:

I have been lurking on these boards for a little while now and have finally started to deal with my mounting debts.

I have noticed that over the posts I have been reading I have noticed that everyones SOA's are for people who are working.

I am currently a carer for my husband who became quite ill last year with a mental illness. To be honest I am very lucky that he is still here today.
I gave up work at the end of last year to look after him full time and to also look after the kids as he was unable to.
I am currently pregnant with our 3rd child after suffering several miscarriages over the past few years.
We took in a lodger at the beginning of last year and at the same time I became quite ill. I had an op in May of last year and am now better.
While the lodger was here he caused alot of problems for us and due to his past social services became involved. He then assaulted us in front of our kids so he was arrested and spent 8 weeks in prison. He is now out and is harrassing us but so far hasn't come near us.

At the end of last year I decided to start my life over again and me and hubby have worked on making our life much more stable and quite which has been good for the kids. I also decided to get my finances in order as due to the hastle of the year before most of the bills went unpaid and the only money I had was for the rent and to feed us.

Once I gave up work (I spent most of last year on SSP) I got all my benefits sorted and am getting all the benefits that as a family we are entiltled to which comes to about £2000 per month. I have seen posts on these forums where people in receipt of benefits are treated quite badly and am just wondering if I can get any help to get my life sorted once and for all.

I just want to say thank you in advance. :A

elaina79

Most of the payment arrangements that I have set up so far are for arrears for the utility and council tax bills for this property. The only other one at the moment that I am paying is for my credit card and the remaining balance is about £180, but its capital one so my APR is 30%. I know that we have other debts but to be honest I can't remember who they are with and how much for.

I also want to start to repair my credit rating but not sure how to do this.

Tixy

Hi Elaina

Sorry to hear things have been so tough for you over the last year or so. I think an SOA will still be useful for people to be able to advise. Put your benfits in the income section at the top.
http://www.makesenseofcards.com/soacalc.html

The only way to repair credit ratings (as far as I understand it) is with time and by paying off debts or reaching agreements with your creditors. Do not pay any firm that offers to fix your credit rating - they can't.

However it will be useful for you to know what you credit files show at the moment. Request your files from experian, equifax and callcredit (for you and hubby)

I can't guarantee that people won't post critical or unconstructive comments about you being on benefits but the majority of people are here are caring and won't judge you for it. We are all in different financial situations due to different circumstances. All I can say is to ignore any critical posts. Usually you will get many more helpful ones than not.

Congratulations of your pregnancy, this and your husbands health is more important than debt. Once people see your SOA I'm sure you will get lots of advice.

Tixy.

elaina79

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 2021.82
Other income............................ 0
Total monthly income.................... 2021.82
Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Hire Purchase (HP) repayments........... 0
Rent.................................... 730
Management charge (leasehold property).. 0
Council tax............................. 80
Electricity............................. 60
Gas..................................... 86
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 33
Mobile phone............................ 30
TV Licence.............................. 13
Satellite/Cable TV...................... 25.41
Internet Services....................... 0
Groceries etc. ......................... 380
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 20
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)...... 40
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1547.41

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
Capital One....................180.......20........30
Fine...........................210.......40........0
Fine...........................300.......20........0
Total unsecured debts..........690.......80........-

Monthly Budget Summary
Total monthly income.................... 2,021.82
Expenses (including HP & secured debts). 1,547.41
Available for debt repayments........... 474.41
Monthly UNsecured debt repayments....... 80
Amount left after debt repayments....... 394.41
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -690
Net Assets.............................. -690
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.[/font]

Finally I have done it. The council tax, gas, electric and water are the amounts that I am paying to clear the arrears as well as paying for what I am using now.

It says that I have a surplus of nearly £400 but we have been buying baby stuff recently so this figure is lower, but I don't know where to add that.

justruth

Hello and welcome to the board.

On the baby stuff front, I would strongly suggest looking on places like Gumtree and freecycle for your area, as these often come up. It's mostly good stuff that the baby has just out grown, usually brought from new and only used for a few months. (BTW Congratulations!)

It's a little hard to offer constructive advice while you are unsure about the full extent of your debt, as at the moment it really doesn't look too bad, even if you just applied half your surplus to the debt you would clear the lot in 3.5 months.

Are you in full receipt of your benefits? Or are housing benefit and council tax benefit included in the amount shown as income? If not I would strongly recommend going to the council and seeing about this!

Needless to say try to be more energy efficient, which should be slightly easier as the weather has improved and the days are drawing out. Will the council tax arrears be cleared by April as is usually the case? Any idea what the new payment will be?

Now on the stuff where I think you can cut down some more. Get rid of the satelite TV. Go onto freeview and you get things like cbeebies etc. The grocery shopping is huge, look over at the OS board, get into meal planning and shop with specific lists. Down grade etc. I appreciate that is to feed a family of 4 and a bump but it's still really high.

I would recommend a spending diary for a bit to see where the excess money is going. Try No spend days if you find it works for you and just look at where the money is going.

You say you do not know who else you owe money to? Does this mean that you have unopened letters sat somewhere that you are not ready to open yet or does this mean you have moved and not informed your creditors and you're a little apprehensive about doing so? Just guesses not judgements. If it is the letters then get a cuppa, open them up and arrange them so that all letters refering to each debt are on a seperate pile. Then look at the most recent one and come back on here where we will do our very best to help you out. If it is that you have moved and not informed your creditors yet I think I will let someone with a little more experience advise you on your next best step as I would be inclined to sort out a few of the bits you already have before adding to the stress. (I doubt I'll go to MSE heaven for saying that)

thevinternet

Great advice Justruth - I was going to post, but I think I'd just say all the same stuff!! When your council tax arrears are paid Elaina, it might be worth asking if you can pay them over 12 months instead of the usual 10? In some areas they let you do this I believe, it will make life easier in the long-run. xx

elaina79

Thank you for your advice.

We have managed to find some good bargains online for the baby stuff which has been good.

My income includes the council tax benefit and also the LHA. However this will go up after june as at the moment we only need 2 of our 3 bedrooms but once baby arrives we will then need 3. I still have my clothes from when my son and daughter were young so that will help with some of the cost.
My parents are getting us a hamper of reusable nappies as well which will help reduce the cost on the nappy front and I am going to breastfeed so that will reduce the cost of the formula milk.

I am trying to cut down on my energy usage and now that the weather is starting to improve I can hang out my washing. I have an issue with my boiler and it doesn't turn the heating on when the house gets cold, unless I run lots of hot water out the tank. This may be good at saving the gas but I know my water bill will go up.

My council tax arrears will not be paid of until into next year but I am going to pay off as much as I can to this to get it cleared. I am not sure how much my new bill will be but it will be much lower than my payments now.

I have cut down the sky bill from over £60 per month so this is much better now. I have reduced my shopping bill as well since getting it delivered which has help. Each month I try to shave a little bit more off it. What would be the amount that I should be aiming for for a family of 4 and a bump (my cravings have eased off which has also helped).

Over the past 8 years I have moved about 10 times and haven't always kept up to date with my creditors, usually due to having to move at very short notice. Some of them have found me at this address and I am going to arrange payments with them, but its the ones that haven't found me that I am unsure off. I imagine they would all be on my credit file wouldn't they.

My aim is to get these debts paid off then start on all of the old debts, would this be the right way to go about it, or should I do it in one big lump.

justruth

If you are going onto a Debt Management Plan then you would need to include all the debts as you cannot be seen to be treating any creditor more favorably than the others, ie paying one but not the others. That said if you can keep clear of having to do that for the short term then I would deal with the ones you already have in front of you then see where you stand.

Can you get the landlord to sort out the boiler? Especially as it is gas. The last thing you need when bump becomes baby is to have the hot water give up on you too.

From what you have said you are looking at all the ways to make things stretch a little further. There are families of 4 on here who get the grocery shopping down to about half of what you spend each month however I see from your signature that you are already on that.

Well done on the baby stuff, you look to really be going for it and doing so sustainably.

I was thinking about your question regarding improving credit and it really is very simple. Your credit improves when you stay in the same place on the ellectoral role for several years, you pay each one of your creditors on time for several years and you don't really need the credit that much any more anyway. Just how I see it works.

elaina79

Had some good news today. Hubby has had his DLA award renewed and it's for an indefinate period which puts my mind at ease.
I was worried that they were going to stop it, as I have heard of the troubles that many others have had.

I have set up a spreadsheet now which details all income for this year and I have noted down the agreed payments so far to my debts. My hubby managed to get a catalogue account as well today although it has yet to be finalised apparently. We have only ordered a bin for our recycling stuff on it, and will only use it for essentials (washer dryer has started to make a funny noise so not sure how long it will last for).

Things are getting easier for us now financially. It feels really good to be able to pay off my debts and next month is when the rest of the payments start so I am optimistic.

justruth

Thats excellent news about DLA! I'm really pleased that you are feeling more secure. I do not mean to be a killjoy about the catalogue but I would be very careful about how you use it. I understand that one of the problems with trying to become debt free is that there is often not enough left over if something breaks once you have thrown your entire available income at debt.

As for the washer dryer, do you really need to buy a new one just yet? They are incredibly energy inefficient (well dryers in particular) and you can often get free or really cheap second hand washing machines locally. I know as I have given a couple away in my time that were only a year or so old, but I had nowhere to store them so I gave them away. Just let it be known that you are looking for one and you will find that someone will offer it to you. I do get that you are using reusabe washable nappies for the baby and you have 2 kids already, but a clothes horse really is a lot cheaper and if you feel embarrassed you can always put it down to becoming more environmentally aware.

Perhaps see if you could live without until any energy arrears are cleared, and you have tackled your existing debt that you know about and you could save for a new one as a small reward?

I was just looking at your sig and notcied how well you did on the grocery challenge this month! It's the small steps like that which really make the difference!

justruth

PS have you had any luck contacting the land lord about the boiler?