Debt help

Garyh79

I have been working for the last 2 years to get debt free and improve my credit rating but I am now at a point after having to take a pay cut at work that I can't afford my debts and have any sort of life. By life I mean even having the spare money to buy road tax.

At the moment I have:

Welcome Finance
£4789 - 68.4% - £315.84pm

HSBC (defaulted 2 years ago and dealing with collection agent)
£1473 - 0% - £130pm

Student Loan
£2617 - 1.5% - £82pm (taken from salary)

Total - £8879 - £527.84

The help I need is that I would prefer to consolidate and cut my outgoings but can't get credit in order to do this. The other option is DMP but then my credit rating will be even more shot than it currently is and being 29 I would like to get a mortgage within the next 6 years. Also would Welcome agree to a DMP?

I have been paying off as much as I can but now I am at the point where I just can't pay each month.

Any advise would be greatly appreciated!

Thanks

RAS

When did you take out the Welcome Finance account?

Nargleblast

Hello Gary, and thanks for being brave enough to take this first step. Suggest you find the link (top of forum?) for SOA calculator - SOA means statement of affairs, i.e. detailed list of income and expenditure. Having done that, post it on here and you should get a few helpful suggestions on how to cut costs and maximise income. A debt management plan is something to consider a bit later if you find your economising isn't working out, and I would suggest you contact CCCS, Payplan or some other debt counselling charity for advice on that.

Gemmzie

Hi Gary, well done for posting.

Try and fill in this SOA > http://makesenseofcards.com/soacalc.html

That should show what's coming in (with your new lower salary) and out to see if we can save you any more and make the debts a bit more affordable

Garyh79

OK 2 things - Ras - I took out this loan in Aug 2007. I have had 2 previous loans with them and with one of them I did use the PPI as I was made redundant, now I know I was definitely mis-sold as they said I couldnt have the loan unless I took the PPI.

Secondly, I have been using this site for about 6 months and have exhausted all avenues in cost cutting, I'm single, 29 and renting so tax cuts, benefits etc aren't available to me. I have only just taken out car insurance so I can't change that and on phone, broadband and utilities I am on the best deals I can find.

I have done a statement of earnings (its at work) and spoken to CCCS but they will only reccomend a DMP, I am concerned that this will damage my credit score for another 6 years when I am only 2 years from being debt free at the moment.

RAS

real pity about the new loan. The old ones were subkect to the old legal rules and you may have been able to challenge them.

One option would be to see if your local credit union would lend you an amount which you could pay off the Welcome loan - but can you overpay without penalty?

Garyh79

Yeah I know, was rather disapointed to find out I couldn't claim.

There is no penalty for overpayment or early repayment, this is why I thought a new loan at a cheaper rate could be the way to go (if i could get credit)

As far as I can find there isn't a credit union I can join, I have been in contact with one why are planning to set up but they wont be up and running for another 1 months so they told me today.

The more I look at it, a DMP is the way to go but I dont want to ruin my credit score.

RAS

Gary

if you do a full SOA, it may be possible to find ways of fixing things for the short-term.

And if you were to root around in the back of wardraobes, what could you find to put on amazon or take to a car boot sale?

Gemmzie

If you miss a payment, as you say you can't afford them, then that will adversely affect your credit score anyway.

If you definitely have your outgoings cut and you've checked you can't get any more money in then that's probably the best way to go.

Garyh79

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1491
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1491
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 455
Management charge (leasehold property).. 0
Council tax............................. 88
Electricity............................. 18.5
Gas..................................... 0
Oil..................................... 0
Water rates............................. 9.5
Telephone (land line)................... 10.5
Mobile phone............................ 35
TV Licence.............................. 6
Satellite/Cable TV...................... 0
Internet Services....................... 7.5
Groceries etc. ......................... 100
Clothing................................ 25
Petrol/diesel........................... 40
Road tax................................ 18.33
Car Insurance........................... 43
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 15
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 35
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 17
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 998.33

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 350
Other assets............................ 0
Total Assets............................ 350

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Welcome Finance................4789......315.8.....68.4
Student Loan...................2617......82........1.5
HSBC...........................1473......130.......0
Total unsecured debts..........8879......527.8.....-

Monthly Budget Summary
Total monthly income.................... 1,491
Expenses (including HP & secured debts). 998.33
Available for debt repayments........... 492.67
Monthly UNsecured debt repayments....... 527.8
Amount short for making debt repayments. -35.13
Personal Balance Sheet Summary
Total assets (things you own)........... 350
Total HP & Secured debt................. -0
Total Unsecured debt.................... -8,879
Net Assets.............................. -8,529

RAS

Am I assuming that this covers your half of the household expenditure plus your personal spends?