Advice needed please!

Shelley84

Hi,

I have debts of around £17k. This is broken down to -

HMRC over payments - £1700
Lloyds CC - 1650
Lloyds OD - 3000
Lloyds Loan - 1600
NW Loan - 7500
HP - 1700

I have written to all my creditors (Not HMRC) to offer token payments of £1 a month temporarily. I have not heard from NW yet, Lloyds wrote back saying they don't accept my token payments, and sent me an Income and Expenditure sheet to fill in and return. HP company told me I have to pay or they will take the car back.

I have been made redundant 2 weeks ago, and am looking for work. While unemployed I am unable to meet my priority monthly outgoings let alone my debts! I have always payed my debts off each month, this is the first time I have been in the situation of being unable to pay, which is worrying as I have a nearly 4 year old and really don't want people knocking on my door with him around. I need to provide for him and thinking about all this gets me quite upset.

My question is what do I do now? I am going to write back to Lloyds including the Income Expenditure sheet filled in and ask again to freeze interest and pay token payments. What do I do if they refuse again? I simply cannot pay them anything more than £1 until I find a job, same with NW. Not heard anything from them so what should I do now?

I have paid in full for the month of Sept using my redundancy money, but October is when I cannot fulfil my commitments to them.

Please help guys!

Thanks

Katie-Kat-Kins

Ok, the HP on your car is a secured debt, and the debt is secured on your car. Secured debts aren't the same and offering token payments isn't the same with secured debt.

First post your income and expenditure here, use the Statement of Affairs from make sense of cards (there is a link in the advice to new users post at the top of the page). We can help you out with how to make savings and how to make sure that the income and expenditure account is acceptible to your creditors.

Go to entitled to and check whether you can get any benefits or help while you are out of work too.

Consider approaching CCCS or Payplan, they are free debt management charities and often the creditors take your offer of token payments more seriously if you are using one of them for help.

It may be worth asking the HP company what your options are, depending upon your contract you may be better off giving up the car than struggling with the repayments, but sometimes the penalities are really harsh.

Good Luck

Shelley84

I have attached my SOA. A few things about it - I live with my Mum, so the money I pay her towards the mortgage includes all bills except food, so Rent, CT, Gas, Elec, Water, LL, Internet, Sky, Insurance I think thats it.
I have a car on HP, I haven't put in maintenance etc as I pay this as and when (I have been able to as I was working until 2 weeks ago)

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 587 (CHB, TCR, IS)
Other income............................ 0
Total monthly income.................... 587

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 122
Rent.................................... 365
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35 (iPhone taken out on 2 yr contract in June - before I knew about redunancy! Can't cancel)
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 50
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 440
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........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1162

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0 (not including car it's on HP)
Other assets............................ 0
Total Assets............................ 0

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 1700.....(122)......9
Total secured & HP debts...... 1700......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Lloyds loan....................1700......103.......11
Lloyds CC......................1650......35........11
Lloyds OD......................3000......40........0
HMRC...........................271.......271.......0
HMRC...........................1450......50........0
Nationwide Loan................7500......237.......6.4
Total unsecured debts..........15571.....736.......-


Monthly Budget Summary[/b]
Total monthly income.................... 587
Expenses (including HP & secured debts). 1,162
Available for debt repayments........... -575
Monthly UNsecured debt repayments....... 736
Amount short for making debt repayments. -1,311

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -1,700
Total Unsecured debt.................... -15,571
Net Assets.............................. -15,571

Shelley84

Just to point out the HMRC debt for £271 is being paid in full from redundancy money!

Jesthar

Hi Shelley,

Have you checked to see how your benefits will change now you are unemployed? You should do this ASAP if not.

Is your grocery bill for all three of you, or just for you and your child? If the latter, you could probably knock £50 off that with care and planning, if for all three then that's pretty good really.

Childcare, now that is is really hurting you - will you need this whilst you are not working?

~Jes

Shelley84

Hi Jesthar,

The benefits are estimated, I called HMRC about tax credits last week to change it, and have applied for Income Support. The figure here is if I get the maximum of each!

Food is for me and my son, the things that cost most are nappies and milk. I spent £120 in Asda last weekend and have £30 left to top up fruit and veg. Freezer is stocked with chicken, mince, got loads of tins too! I will try and get this down to £100 a month from the next shop.

Childcare is the one that hurts! I am applying to get him into pre-school but they won't take him til January - if he gets in as we are not in catchment area. So if he gets in I only have 3 more months of paying the nursery. I thought of taking him out as I am at home all day now, but if I find another job, it's not fair on mum to have him 5 whole days a week - he's a handful! Plus he has made so many friends there and I'd like to keep him there til January if poss.

Katie-Kat-Kins

Presumably you can ditch the childcare now you aren't working.

Can you speak to your mum about reducing your rent contribution while you are out of work? Will your petrol consumption go down now you aren't working?

Have you confirmed the position with your benefits?

£150 on groceries seems high for just you and your child.

For the purposes of an SoA to send to creditors you need to allow a bit for your car maintenance as it will at least need servicing.

How much redundancy money will you get? Can you use some of this to repay some debts? You could then live just off your benefits.

Can you get any sort of work now? Maybe bar work or waitressing until the right job comes along.

Shelley84

Hi Kat P,

I can't reduce my rent payment, it's not a standard 'i live with parents' situation. Mum bought the house Feb 08 on the understanding that I have to pay £365 a month towards it - she can't afford to make up what I don't pay.

Benefit people are aware of everything, waiting for exact figures now.

Going to try and get food down to £100 from now on!

I received £1k redundancy - £271 is going to HMRC, £275 was paid for my cars MOT and repairs, the rest is for October to put towards the benefits and pay my basic outgoings.

I am looking for work, anything, really not fussed what I do!

Petrol will be around the same as doing a free evening course in Science which is twice a week and 10 miles away.

Katie-Kat-Kins

Sorry crossed posts.

Nappies and milk, he's nearly four he should be potty trained by now, that will save you money. In the meantime get on freecycle and look for some cloth nappies, not only will this save you money it will encourage him to potty train as it is more noticeable when they are wet. Milk you should get healthy start vouchers to help with this by now, but he should be on standard milk by now which in morrisons is only £3 for 8pts, at his age he should just be having it as a drink and as part of food rather than having "feeds" so you shouldn't be getting through masses of milk. Get on the O/S board to help reduce your shopping bill.

If you don't want to give up nursery then can't you reduce the number of hours down to save money? Don't forget that if you do get a new job it will only be a few months before he starts pre-school so your mum wouldn't have him for that long. Once he is dry he'll be less work too.

Just a few suggestions.

Shelley84

Hi again!

He's 4 in December - he's potty trained in the daytimes. It's the nights that are an issue, he's not ready for night training but once the nappies I have run out I am going to try anyway! With milk he has some before he goes to bed, but if he is having a tired day, or a grumpy day he has more than normal, plus with cereal. I get 6 litres for £3.79 from Tesco

I am thinking about reducing his hours for a few months, he does 4 afternoons and 1 whole day at the moment.

Katie-Kat-Kins

Get your milk in Morisons or asda where is is £3 for 6 litres. Try using mysupermarket.com to compare where it is cheapest to buy your supermarket shopping. The O/S board is great for this type of thing. They can recommend ways to stretch your ingredients to last longer too. The marriages relationships and families board might be able to help with getting him dry at night, I'm no expert but at nearly 4 he is old to still be in nappies at all.

Definitely reduce the time down, if you and mum are both at home it is daft paying for someone to look after him, though I appreciate you don't want to loose the place. Don't worry about him loosing the social interaction, while you are at home there are lots of things to do with him that will get him meeting other kids, and while you are out of work you can do somethings for free.

Since your income has decreased so sharply I think it would be worth consulting a free debt management company like CCCS or Payplan to help you negotiate reduced payments.

Best of Luck.