Don't know what to do next??

SegWy

Hi,
I have now updated a SOA and posted it below. I am thinking that the best approach is a DMP as at the moment we are just not able to pay off any capital. I know a lot of people are worse off than us, but my plan is to get debt free (Apart from the mortgage debt!) in 3 years, and then save like crazy to get out of negative equity so I can buy bigger house for me and my family. What are the chances of ever getting a mortgage again if I do a DMP, and do you all think its the best route to go down?
I really apreciate any help you can offer.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned....................
Monthly Income Details
Monthly income after tax................ 2800
Partners monthly income after tax....... 1200
Benefits................................ 80
Other income............................ 0
Total monthly income.................... 4080
Monthly Expense Details
Mortgage................................ 1300
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 74
Gas..................................... 44
Oil..................................... 0
Water rates............................. 15.5
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 9.19
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 550
Clothing................................ 100
Petrol/diesel........................... 150
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 300
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 25
Contents insurance...................... 25
Life assurance ......................... 0
Other insurance......................... 81
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2873.69

Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 140000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 183000...(1300).....6.4
Total secured & HP debts...... 183000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Natwest loan...................14000.....353.......0
Natwest Card...................9100......204.......0
M and S card...................8700......200.......0
house of fraser card...........650.......25........0
Sainsbury's bank card..........3400......73........0
Cap1 card......................1500......50........0
Total unsecured debts..........37350.....905.......-

Monthly Budget Summary
Total monthly income.................... 4,080
Expenses (including HP & secured debts). 2,873.69
Available for debt repayments........... 1,206.31
Monthly UNsecured debt repayments....... 905
Amount left after debt repayments....... 301.31
Personal Balance Sheet Summary
Total assets (things you own)........... 140,000
Total HP & Secured debt................. -183,000
Total Unsecured debt.................... -37,350
Net Assets.............................. -80,350

GeorgeUK

If you are meeting all your minimum payments, why do you need to go on a DMP? I doubt you'd even be allowed to if you are meeting your payments.

Is it because you are paying so much interest that you wondering how to tackle the debt?

~Beanie~

According to your SOA, you have £300 per month left over. Is this the case? If so, use it to pay more than the minimum on your debts. If not, you could try keeping a spending diary to try and find out exactly where it goes.

A couple of things could be cut down on your soa:

Groceries £550 - :eek: That is horrendous for 2 adults and 1 child and could easily be halved.

Clothing £100 - Wear what you already have for a while only only buy essentials such as shoes and underwear.

Can you lower the package on your satellite TV, or even get rid completely and get Freeview?

You have petrol listed but no other car related expenses such as tax, mot and maintenance.

You also have budgeted nothing for presents or haircuts.

Gemmzie

I can't see a DMP being accepted, sorry, you have £300 a month spare and some of your outgoings are too high - groceries definitely are.

I think snowballing is your best bet. Do you have any other empty cards? What are the APRs on your debts?

Dr.Shoe_2

I would use the surplus to reduce the debt that attracts the highest interest and then, once that's cleared, add the payments to the surplus and attack the next highest one etc.

Though I see that you are paying 0% interest on your unsecured debts (?)... If these are temporary deals then concentrate on the one that expires first or if they are semi-permanent deals then pay off the biggest repayment first (Your NitWits loan) then you will have 650 a month to pay off your next highest payment etc...

When they're all gone you can add £1,200 to your mortgage and have it paid off about 12 years sooner!

Numpty_Monkey

SegWy wrote: »

Hi,
I have now updated a SOA and posted it below. I am thinking that the best approach is a DMP as at the moment we are just not able to pay off any capital. I know a lot of people are worse off than us, but my plan is to get debt free (Apart from the mortgage debt!) in 3 years, and then save like crazy to get out of negative equity so I can buy bigger house for me and my family. What are the chances of ever getting a mortgage again if I do a DMP, and do you all think its the best route to go down?
I really apreciate any help you can offer.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned....................
Monthly Income Details
Monthly income after tax................ 2800
Partners monthly income after tax....... 1200
Benefits................................ 80
Other income............................ 0
Total monthly income.................... 4080
Monthly Expense Details
Mortgage................................ 1300
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 110
Electricity............................. 74High turn things off at the wall, look at comparrison sites and use cashback sites
Gas..................................... 44 look at comparrison sites and use cashback sites
Oil..................................... 0
Water rates............................. 15.5
Telephone (land line)................... 0
Mobile phone............................ 50 is this the best tarrif?
TV Licence.............................. 9.19 should be 12
Satellite/Cable TV...................... 40
Internet Services....................... 0
Groceries etc. ......................... 550 This can be halved easily, drop a brand, look at what you eat and through away, meal planning
Clothing................................ 100 is this for the year?
Petrol/diesel........................... 150
Road tax................................ 0 ????? budget for this
Car Insurance........................... 0?????budget for this
Car maintenance (including MOT)......... 0?????budget for this
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 300
Other child related expenses............ 0 ????
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 25 any insurance use comparrison sites and cash back
Contents insurance...................... 25 as above
Life assurance ......................... 0
Other insurance......................... 81Whats this, and as above
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0 need to budget for this
Entertainment........................... 0need to budget for this
Holiday................................. 0need to budget for this
Emergency fund.......................... 0need to budget for this
Total monthly expenses.................. 2873.69

Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 140000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 183000...(1300).....6.4
Total secured & HP debts...... 183000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Natwest loan...................14000.....353.......0 ??
Natwest Card...................9100......204.......0 ??
M and S card...................8700......200.......0 ??
house of fraser card...........650.......25........0 ??
Sainsbury's bank card..........3400......73........0 ??
Cap1 card......................1500......50........0 ??
Total unsecured debts..........37350.....905.......-

Monthly Budget Summary
Total monthly income.................... 4,080
Expenses (including HP & secured debts). 2,873.69
Available for debt repayments........... 1,206.31
Monthly UNsecured debt repayments....... 905
Amount left after debt repayments....... 301.31
Personal Balance Sheet Summary
Total assets (things you own)........... 140,000
Total HP & Secured debt................. -183,000
Total Unsecured debt.................... -37,350
Net Assets.............................. -80,350

Hi, Ive left a few comments
I'm guessing a lot of the groceries budget goes on the missing bits
The Apr' on the debts will be very usefull, but as you already have a surplus
have a look at snowballing
http://www.whatsthecost.com/snowball.aspx?country=uk
or
http://www.makesenseofcards.com/snowcalc.html


My guess is that you do not havethe surplus each month so, keep a spending diary

:A

SegWy

I have a company car and therefore all insurance and maintenance costs are covered. All the debts are in my name and each month all my money goes on normal bills and minimum repayments. Any left over money is from my boyfriend who is a self employed hairdresser. All credit cards are at their limit, and the mortgage is a 125% which was takenn out about 2 months before the market started to crash.
I am not sure what snowballing means, but if I continue just to pay the minimum each month then the capital of the debt will never reduce and it feels like we are not moving forward at all.
I see what you mean about the groceries, but we have a toddler so includes her food and tolietries but will seriously work on reducing it.
I felt that doing a repayment of £1000 per month on a debt management if all the interest is frozen means that I can be debt free in 37 months, and even over pay the mortgage with spare income from my partners income. Perhaps I should just keep as we are, and sweep all left over cash onto one card at a time to move on to the next one. I have also got a tax bill heading my way of £5700 and that is worrying me so I can't sleep at night. I am constantly worried about money and about how stupid we have been over the years and snap at everyone. (Sorry it sounds like I am feeling sorry for myself - I am not, I just want to get out of the mess!)

angelicmary85

Hi SegWy,

I've got a 16month old and another due in 5weeks so I understand how expensive kids can be but I've found alot of own brand toiletries are just as good as branded and should your toddler not be eating what you're eating (or has she got a special dietry need?) I'm not judging as my bambino, as gorgeous and adorable as she is, won't eat anything except branded super noodles!!

GeorgeUK

Try not to worry SegWy, you're in good company here.

I take it as Numpty Monkey says, you don't have that £300 left at the end of the month. A spending diary would really help you to see any areas where you are overspending and allow you to find an alternative that didn't cost as much.

DMP's have an adverse effect on your credit rating so you really don't want to do this if possible. These are for people that cannot meet their obligations to the creditors, which you are currently managing to do.

As suggested, snowballing may be the answer. This involves paying the minimum to your debts and throwing anything left at the debt with the highest APR. If you combine this with tarting (moving balances from one credit card to another), you may be able to save even more.

If you were to apply for some 0% credit cards (not to spend on), you may be able to transfer enough to clear a credit card (which you might be able to use later for another transfer) and as you are not paying interest, your debt should fall making it easier to meet the payments and reduce the debt quicker.

One of the good cards to try for is the Virgin credit card. This is 0% for 15 months and rom the 2nd month, the minimum monthly payment is £25.

Do you and your BF combine all finaces?
Does he have any debts that are not listed?

SegWy

I think that the cost comes from my boyfriend who eats like a horse and likes meat - but I am now in charge and this week managed to get the cost down to £80 this week. I think my big objective is to get that food bill reduced, and managed it by taing cash out to spend. I have also insured my salary against redundancy - and that is the £81 but really need to take out life insurance.

Numpty_Monkey

As the others have said, its very doubtful you will get a DMP, and if you did your credit rating will be shot for 6 years
At present you have no need for one, and there is no guarentee intrest will be frozen,

A quick explanation of snowballing
pay what you can of the highest APR debt, paying minimum payment on the rest
When the first highest APR debt is paid off, use the money you were paying to that to pay to the next highest still paying the minimum on the rest,
and so on.

If your credit rating is good when you start clearing some of your cards they might offer low rate balance transfers or 0% very good aslong as you don't use them cards again