Newbie would greatly appreciate your help...!

baggsy909

Hi All,
I’m a new poster here and want to get everything off my chest! I’ve been reading up quite a bit about how everyone is getting on and am inspired by the feeling of community on these boards. I think I’ll need a dose of that too!

I’d like advice on what you all would do in my situation please.

I’m in debt to the following creditors;

HBOS unsecured loan - £18,000
AA Personal Finance loan - £12,000
Egg credit card - £5,000
Student Loan - £10,000
Bank Overdraft - £3,000
Total = £48,000

I earn £28,000 which works out at around £1,600 per month after tax etc. I currently repay £796 on my debts every month (all of which are unsecured). Only the two personal loans (and student loan) are being repaid – the credit card and overdraft I’m paying interest only. I have no assets at all, and all debts were taken out when I used to be making a lot more money than I am now (in a primarily commission-based role, I was earning £42k+). My monthly outgoings (living expenses) are £1,100. As you can see I’m ‘losing’ money every month as I cannot afford what I have to pay out every month.

Luckily, I’ve had a bit of money put away, so I have never missed a payment on any of loans, and only missed a credit card payment once, years ago by accident. But now I’m quickly running out of cash and need to do something!

The way I think about it at the moment is that once I start being unable to repay my debts, my credit rating will be screwed. This will happen in two months or so. If I was to go for a DMP, IVA or Bankruptcy, then - either way - the banks will not like me for a very long time and I can wave goodbye to a mortgage etc for the foreseeable future!

If I go for a DMP or IVA, then I will be told how much I have to pay back each month (which may only be a couple of hundred pounds less than I’m paying at the moment, as I don’t have that much of a shortfall), meaning that I won’t be any less stressed than I am now, with no money in the bank come the end of the month.

If I go for BR, then I’ll no doubt have to pay an IPO. BR would leave me with an extra £800 in my account per month and there’s no way they’d go for that! But at least I’d still have SOMETHING over and above my repayments every month, as from what I read you pay back up to 70% of your excess cashflow…

I don’t know where to go from here!

A couple of extra things;
My OH and I are getting married next year. As neither of us have the cash lying around, and I doubt that I’ll be able to get any more credit (nor do I want it), I was wondering that if she gets an unsecured loan (as she has a great credit rating), will I be able to pay her my half of the loan repayments as if she is a creditor? If she were to take out this loan before I choose DMP, IVA or BR, would I be able to list it alongside my debts?

Also, there’s a chance we’ll have to move house within the next 6 months, to another rental property. Should I do this before I go down one of the routes, to make it easier getting a new place?

My OH and I have a joint bank account that we never use, and I’m going to close it to prove that we’re financially independent from each other. Even though we live at the same residence, this should spare her from my poor credit rating, right?

As it might take me a month or two to make a decision and get a new bank account etc (my current one is with my loan provider), I’m thinking of stopping my payments next month while I decide and/or, save up for court fees etc. I’ll read up the various posts for advice on this topic, but if anyone has any advise that might be specific to me that would be great!

Thanks in advance for all your help – and sorry for the mammoth post! I’m just not sure what to do now and it’s really getting me down… I realize that I might not be in as much debt as lots of people here, but it’s only my super-frugal lifestyle that’s prevented me from slipping into the ‘unpaid repayments’ territory yet, and it’s driving me crazy!

Cheers,

Baggsy

P.S. Sorry if this is posted in the wrong place!

debt_doctor

You ve obviously learnt a lot already from this board, and indeed in your situation BR may well be the best and by far the cheapest option for you but you really do need to also seek advice from a debt charity on your situation.

Personally I wouldnt even think of being an unofficial party to your partners future loan, thats what you are trying to get away from.

Renting is always easier if you have a good credit rating but couldnt your partner just get the tenancy in her sole name anyway ?

ps - I assume you know that the student loan would not go in to your BR .

DD

baggsy909

Thanks DD!

I was hoping you'd pop along and comment! Your comments on the situation's of others always seem to be well thought through and intelligent.

I wasn't aware of the student loan aspect. I prefer to be a passive member of any forum before I get involved, but you learn something new every day!

I'll give one of the chairy lines a call, hopefuly tomorrow. Would you recommend that I have any further info available other than what i've included above? Just tried to pour my heart out into a long post...!

Also, if anyone else has any advice on the aspect of my marriage next year and helping the missus out with the loan repayments for that, i'd greatly appreciate it. Would like to have as much info as possible going into the call with the charity line.

DD, one final question if I may; do you think I'd be advised to stay clear of BR because i'm not that much short of my repayments as they stand? Sometime I think i'd be better showing them proof that i'm struggling bu not making a few payments. Crazy logic, i know - but maybe i won't be taken seriously as i've not missed payments yet...

Thanks again

peachyprice

baggsy909 wrote: »

Also, if anyone else has any advice on the aspect of my marriage next year and helping the missus out with the loan repayments for that, i'd greatly appreciate it. Would like to have as much info as possible going into the call with the charity line.

She can take out a loan and you can use your remaining surplus in any way you wish, so you can pay towards her loan. However, I would steer clear of putting her on your BR forms.

Many people go BR without missing a single paymnet, that won't have any effect at all.

debtinfo

Hi Baggsy, there is a real difference between DMP on one side and IVA/BR on the other. As you have pointed out you are able to pay something but are short of the full payment. The one thing that will not work is taking on new credit or continuing to make payments you cannot afford, this will only make the situation worse. Since BR is a last resort i will look at the other option first. You mention that you used to earn alot more due to commision. A DMP should be used where you have a temporary reduction in income and not a way to pay the whole thing off. Sometimes these can freeze interest but you have to be carefull at looking at the terms to make sure this will happen. If there is a chance that you will be back to earnng alot more in say 6 months then a DMP could be the way to go.

On the other hand if your income is not likely to rise then you will not pay yur debts off for many, many, many, many years witha DMP. This leaves BR or IVA. IVA if you need to protect equity in a property or if in a BR sensitive job. BR if not

debt_doctor

baggsy909 wrote: »

DD, one final question if I may; do you think I'd be advised to stay clear of BR because i'm not that much short of my repayments as they stand? Sometime I think i'd be better showing them proof that i'm struggling bu not making a few payments. Crazy logic, i know - but maybe i won't be taken seriously as i've not missed payments yet...

Thanks again

Well you say that you are short on making your repayments each month so must be either making ends meet by further monthly borrowing or cutting back your essentials to an unrealistic level. Either way you are insolvent as you cannot pay your debts when they fall due ( without resorting to as I just mentioned)

I'm not a great fan of letting things get 'really bad' before choosing a debt remedy - why put yourslf through that ? If you can see that drastic action is needed then, after receiving further advice, delaying is pointless.

DD

tigerfeet2006

If you put up your SoA then someone will look at it as if you are presenting it for BR for you.

You will need to put the full household bills down ie rent, utilities, CT, groceries etc. Then you put your own personal expenses down ie mobile, hair, travel, clothes etc.

For the income you put your full income and your OH contribution to the joint household bills, not her full wage.

Hope that makes sense. This is the template we use. Format to MSE and C&P it in the thread.

http://www.makesenseofcards.co.uk/soacalc.html

baggsy909

@Debtinfo

My wages are not going to go back up to that level unfortunately. I was on a very low basic salary having to rely on a huge amount of luck and a good market to make a lot of commission. Now i'm in a much more stable job and I wouldn't swap it back for the world!

Secondly, having no assets, I though BR could be a good option as the negatives don't seem that much worse than IVA/DMP (my credit rating will be tarnished completely anyway) and I'll get to keep more of my monthly cash.

@DebtDoctor

You're right again. It is pointless churning through another month, just moving closer to the inevitable. Looks like i'll just need to keep my eye on the phone calls and letters coming through after cancelling my DDs if I do decide to go down that route...

@tigerfeet2006

Thanks a bunch for the link. Will definitely complete it, but think i'll save it for tomorrow! Getting square eyes in front of the monitor! Would you recommend waiting to complete this before calling CCCS/CAB/NatDebt?

Thanks again guys...

tigerfeet2006

The debt charities will ask you what you spend on your essential outgoings, so they know what your outgoings are at the moment so it might be a good excersize for you to complete one before speaking to them.

baggsy909

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1600
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 60
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 13
Mobile phone............................ 16
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 230
Clothing................................ 15
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
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......................... 16
Presents (birthday, christmas etc)...... 30
Haircuts................................ 10
Entertainment........................... 180
Holiday................................. 30
Emergency fund.......................... 30
Total monthly expenses.................. 1377

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
Egg CC.........................5000......150.......0
Halifax Loan...................18000.....300.......0
AA loan........................12000.....211.......0
HBOS Overdraft.................3000......0.........0
Total unsecured debts..........38000.....661.......-

Monthly Budget Summary
Total monthly income.................... 1,600
Expenses (including HP & secured debts). 1,377
Available for debt repayments........... 223
Monthly UNsecured debt repayments....... 661
Amount short for making debt repayments. -438
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -38,000
Net Assets.............................. -38,000


Hi all,

I've completed my SOA above. I know i'll have to cut down on a few things such as entertainment etc, but for most of it this is how i've been living my life over the last 12 months. I'd say the entertainment/haircuts/grocery totals will have been lower over the past few months than i've shown here, but i've given a true reflection of what i've been spending over the past 12 months.

Oh, and i've only us been given a pay rise to that amount and I still can't get my head above water. I used to making a lot less than that and I was haemmoraging money a lot quicker than I am now!

What do you think the peeps at CCCS etc will say about the above?

Also, I just remembered I have an old bank account at Lloyds TSB. As I have debts with my current bank, HBOS, I know i'll be advised to move. But seeing as Lloyds TSB and HBOS have been merged, but retain seperate identities on the high street, will i be OK just moving my wages etc to Lloyds? Or should I plump for a completely seperate one such as Co-op or Barclays?

Thanks again in advance

tigerfeet2006

baggsy909 wrote: »

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1600
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 60
Electricity............................. 30 Are they really this low? Will it cover you for winter?
Gas..................................... 30 ditto
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 13
Mobile phone............................ 16 max £50 for both LL and mobile
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 15 Is this essential for work? If not hide in LL
Groceries etc. ......................... 230 OR may cut to £200 but put this and see. Nothing ventured.
Clothing................................ 15 OR will allow at least £40
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40 Is it really this low?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0£20
Pet insurance/vet bills................. 0 no pets?
Buildings insurance..................... 0
Contents insurance...................... 0You should have this, especially with accidental damage £20 ish
Life assurance ......................... 0
Other insurance......................... 16 what is this?
Presents (birthday, christmas etc)...... 30 most OR's won't allow but try £20 and see.
Haircuts................................ 10
Entertainment........................... 180 not allowed.
Holiday................................. 30
Emergency fund.......................... 30 most OR's won't allow but put £20 and see.
Total monthly expenses.................. 1377

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
Egg CC.........................5000......150.......0
Halifax Loan...................18000.....300.......0
AA loan........................12000.....211.......0
HBOS Overdraft.................3000......0.........0
Total unsecured debts..........38000.....661.......-

Monthly Budget Summary
Total monthly income.................... 1,600
Expenses (including HP & secured debts). 1,377
Available for debt repayments........... 223
Monthly UNsecured debt repayments....... 661
Amount short for making debt repayments. -438
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -38,000
Net Assets.............................. -38,000


Hi all,

I've completed my SOA above. I know i'll have to cut down on a few things such as entertainment etc, but for most of it this is how i've been living my life over the last 12 months. I'd say the entertainment/haircuts/grocery totals will have been lower over the past few months than i've shown here, but i've given a true reflection of what i've been spending over the past 12 months. When you present the SoA to the debt charity then do it as you have put it here. When you do for the OR then do it with the amendments in red.

Oh, and i've only us been given a pay rise to that amount and I still can't get my head above water. I used to making a lot less than that and I was haemmoraging money a lot quicker than I am now!

What do you think the peeps at CCCS etc will say about the above? well your outgoings are greater than your incomings so they may suggest a DMP or BR. As you are renting an IVA probably wouldn't be appropriate.

Also, I just remembered I have an old bank account at Lloyds TSB. As I have debts with my current bank, HBOS, I know i'll be advised to move. But seeing as Lloyds TSB and HBOS have been merged, but retain seperate identities on the high street, will i be OK just moving my wages etc to Lloyds? Or should I plump for a completely seperate one such as Co-op or Barclays? Go for a Co-op Cashminder or Barclays Cash account. Lloydds/TSB will most likely close your account when they know you are BR.

Thanks again in advance

If you pay union/professional fees you can include these. If you wear suits to work then put £10 dry cleaning.

You will most likely get an IPA if you do go BR. Will get the table for you.

Sorry that took so long, I had to go and sort out world war 3 in the middle of it :rolleyes: