JSA + £6k debt to 4 crediters!

Pantho

Sorry if this is jumbled, I've not slept due to illness (Damn flu sucks)

Liviing situation:

Your Financial Summary

    * Monthly income = £217
    * Monthly priority outgoings = £292
    * Monthly contractual payments = £259
    * You have 5 creditors
    * Your total credit debt = £6000
    * You are spending £75 more than you have coming in each month, and therefore currently have no money available to offer as payment to your creditors. ]

Got this from the CCCS.co.uk website.

Fact is, there are no areas I can cut down in my details I gave them. I live in a 1 bedroom flat.

JSA gives you £50 a week, and I will admit this is JUST barly enough to live on if you don't drink/smoke (which I don't)

Anyways, main problem:

I owe £6000 to 6 creditors, each of them from when either before university when I was working, or from during university.

RBS = £1250
Natwest = £1250
HSBC = £1500 (£700 is intrest free)
HSBC Credit Card: £1500
Barclays Credit Card: £600

Current agreements/standings.

For the past 9 months I've been putting these out of my mind, simply saying to myself I'll start regular repayments once I find fulltime work. But this simply has not happened, I cannot believe I've been out of work for nearly a year .

So, after finally answering a phone call from Triton(RBS Balance) today I figured I would start the ball rolling on sorting out my screwed up life.

Triton insist on a min of £8 per month, my problem is that if all 5 creditors ask this, I have no chance of buying the things I like ... Pasta, electricity etc. Triton insist that all of a sudden if i don't agree to a payment plan today legal action will be taken, ofcourse when I asked why after 2 years today was the magical day that legal action would start she accused me of not taking this seriously...

Basically, I need help

I can't even afford to pay £5 a month if i pay all 5 creditors.

To top it all off, I just moved into my first property which is a 1 bedroom council flat. I have no other choice where to live - before this I was classed as No Fixed Abode.

moongarden

Hi Pantho,
You have come to the right place as the peeps round here know a thing or two about managing our way out of these situations

You have provided some of the right sort of information there with your list of debts but a few more details will be needed such as the rates of interest etc and also the amounts you pay in regular bills.

To provide the full picture you should put together a State of Affairs (abreviated to SOA on here).

There is a great website which helps you do this here:
http://www.makesenseofcards.co.uk/soacalc.html
just feed in the information and when you have done it paste the info up onto here so we can point out anything which can be done to help.

Pantho

Been on the phone with the kind CCCS guys for abit.

wow are they helpful, such a relief talking to people who are trying to help and not exploit you for money

They are advising my to take a DRO currently, which I'm looking into. I'm off to town today to get full statements from all my bank accounts and intrest rates.

RBS + Natwest are intrest and charge free as there still student accounts. I would be happy to leave them until I find employment, but they want to take legal action.

HSBC is in 3 parts

Student account £700 ish
Current account £900 overdrawn, be whatever standard intrest rates they charge (only £200 is agreed overdraft)
Credit Card £1600 with 29.9%apr ( It was when i last looked a year ago )

Barclays was £600 also at 29.9% APR

Pantho

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 4
Number of children in household......... 
Number of cars owned.................... 

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 220
Other income............................ 0
Total monthly income.................... 220

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 40
Gas..................................... 20
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 20
Mobile phone............................ 0
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 85
Clothing................................ 12
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............ 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)...... 0
Haircuts................................ 0
Entertainment........................... 10
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 217


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
HSBC...........................1600......0.........29.99
HSBC...........................700.......0.........0
HSBC...........................900.......0.........0
Barclays.......................600.......0.........29.99
RBC............................1250......0.........0
Natwest........................1250......0.........0
Total unsecured debts..........6300......0.........-  


Monthly Budget Summary
Total monthly income.................... 220
Expenses (including HP & secured debts). 217
Available for debt repayments........... 3
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 3

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -6,300
Net Assets.............................. -6,300

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using Firefox browser.

moongarden

Pantho wrote: »

Total monthly income.................... 220 - have you checked www.entitledto.co.uk to see if you are entitled to anything else?
Have you got anything you are not using which you could sell/ebay?

Monthly Expense Details
Mortgage................................ 0 - how are you paying for your home if not a share of rent or mortgage?
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 40
Gas..................................... 20
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 20
Mobile phone............................ 0
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 85 - you are doing well here - £19.61 a week for food for 4 people is quite low.
Clothing................................ 12
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............ 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)...... 0
Haircuts................................ 0
Entertainment........................... 10
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 217


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
HSBC...........................1600......0.........29.99
HSBC...........................700.......0.........0
HSBC...........................900.......0.........0
Barclays.......................600.......0.........29.99
RBC............................1250......0.........0
Natwest........................1250......0.........0
Total unsecured debts..........6300......0.........-


Monthly Budget Summary
Total monthly income.................... 220
Expenses (including HP & secured debts). 217
Available for debt repayments........... 3
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 3

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -6,300
Net Assets.............................. -6,300

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using Firefox browser.[/code]

I may be wrong and someone else may correct me but I think you also used to be able to earn a small amount of money without it affecting your benefits - a long way back it used to be £5.00 a week.

It doesn't look like there is much that can be altered there but also it doesn't look like this is the full picture. You have put a household of 4 people so i take it this is the other half and two children? Have you included their incomes into the budget, i.e. child benefit can be put towards the groceries and therefore not all the grocery money goes from your individual income?

If you can sell anything I would try to clear the Barclays £600 first - any extra bits of income you can generate put them straight off that one. Could you do online paid surveys or anything like that?

elfen

If this is for four people, and you're paying everything yourself, why not ask for contributions from everyone to make it fair. If this is your OH and kids, then some of the child benefit/OH's money needs to go towards this too (although I can't see how it's four people if you're living in a one bed flat unless you all sleep in the same room together)

If it's just you, then the groceries need to come down, you may need to go from top brand to value

EDIT: And if this is for four people, you'd get more money a week from JSA than 50 quid, since there's also the partner element AND elements for the two children, and CTC. Also moongarden is right, think if it's a family you can earn £20 a week disregard which would help too

Pantho

It is just me, typo on the 4 ... some how

I did this fairly quick, the CCCS one said i need to budget £96 for groceries/cleaning items etc etc.

I only spend £10-20 a week on actual food shopping, normally £10.

elfen

Put what you REALLY spend in, not what the CCCS say you have to. You know how much you spend on food and stuff, not them.

moongarden

ok, so am i right in presuming that you have housing benefit but this goes direct to the landlord and that's why there is nothing showing for rent?

next steps could be:
1 - check you are receiving all the benefits you are entitled to
2- see if you can get a small income of say £10 a week (check that this is ok with Benefits Agency rules first) - this could pay for entertainment and free up the £10 you have allocated there for debt repayment.
3- sell anything you are not needing right now and pay the money off to bring you back into credit - overdrafts are VERY expensive :eek:!! I know RBS/Triton are shouting the loudest but they are not the ones digging you into a worse hole and undoing your efforts by charging high interest and charges.
How much more disposable income will you have if you are not paying £25 a month in unauthorised overdraft charges?!
4 - Speak to HSBC and see if they will Restructure the debts - putting the overdraft and credit card into a loan at a lower rate of interest - with lower fixed monthly repayments.
5 - your electricity is high at £40 a month - is this paying back arrears? if not then take a reading and ask to be sent an up to date bill - if you are in credit then ask them to reduce the Direct Debit.
6 - shop around for different suppliers for gas and elec to try to reduce these.

You said you spoke to CCCS which is the best place to go for non profit making help. If you go for a DRO (Debt Relief Order) this will stay on your credit file for i think 6 years and make it pretty difficult to get credit or mobile phone contracts or anything like that - but you do seem to fulfil the main criteria for getting a DRO if you wanted.

My first step would be to speak to HSBC and see if this can be restructured. Get the overdraft facility removed from your account and get it paid off or moved. You should then have a disposable income of around £35 - 40 a month.

It all about squeezing the outgoings and more significantly in your case the cost of borrowing down.

Once you have spoken to HSBC you could write to each of the creditors the same letter enclosing the same state of affairs (which you need to update so its super accurate - you need to put HSBC overdraft % and you need to add a category in Monthly Expense Details to show how much you pay in bank charges each month - you may be shocked when you see how much the £900 overdraft is really costing you compared to say a £1600 loan) and say that you are able to offer them whatever, lets say £30 between them and this will be divided proportionaly between them. State in the letter that you intend to review the payments in 6 months and will send them an updated SOA at that time. Also state that if they do not ALL accept you will speak again to CCCS and will apply for a DRO.

Pantho

Let me add some more information to that ...

Electricity is only £7 a week, ish... I've only been living here 3 weeks so im still figuring out the exact costs.

I have nothing to sell to pay overdrafts off, no offense but don't reply "Everyone has something to sell" because I really don't ...

HSBC are the only ones charging any interest for an overdraft. I know taking a DRO is a serious step. But I cannot think of any other ways out of this unless I find a decent job.

I've got work experience,. I've got qualifications... It's just finding the damn thing.

Am I right in thinking a DRO doesn't stay for 6 years if you improve your circumstances within the 12months and start repaying your debts ?

moongarden

Please don't go for a DRO before you have spent one day checking you are receiving all the benefits you are entitled to and speaking to HSBC.

A DRO lasts for 12 months after which your debts are written off but this will sit on your credit file for 6 years making it very difficult to get any credit - or even a mobile phone contract.

If you are considering a DRO to get the stress of being hassled by these companies off your back then juust write to them and say that you no longer wish to speak to them of the phone and all communication must be in writing. Then try to get some agreements with them. Once you have an agreement as long as you stick to it you will then have more peace to focus on getting a job.

If you can juggle things until you get a job (easy to say i know) then pay these things off then you could be free and back in the black within 24 months.

It can be done - you can do it!