CCS have suggested I have a DMP but I am on benefits

yellowduck_2

Good morning all you lovely helpful people, I am hoping to pick your brains as I don't know what to do for the best.

I am not working due to ill health and get £89.90 a week ESA which equates to £390 a month

I owe Nat West £6,700 for an unsecured loan and Tesco Credit Card £805.

My outgoings on essentials (pared to the bone with zero spend on clothing, leisure, repairs to my home etc) comes to £330. CCS have suggested that I use the remaining £60 to enter a DMP and offer each of my creditors £30 a month. I am a bit anxious about this, as what do I do if\when fuel costs go up, my very cheap mobile deal ends, something essential breaks etc. Any advice, suggestions or just a bit of a cheer up will be much appreciated

My outgoings come to

ghostmadlittlemiss

I'd go for the DMP personally and save the other £30 a month for emergencies. I know you've said you've cut back on everything but would you mind popping up a SOA for us anyway, just to see if there's anything you've missed? The link is here.
Kayleigh

Nargleblast

Yellowduck - if you have provided CCCS with full details of your income and outgoings then they will have set you some realistic budget amounts for food, clothing, bills etc. If anything untoward happens - car or domestic appliance fails, kids need new school uniform, that sort of thing, then you let them know and between you revise your DMP payment for a month or two to allow for the emergency. Your DMP payment can be reviewed at any time to take into account any change in circumstances. Of course, your credit rating gets shot to bits for a few years but it's a price worth paying for peace of mind knowing that you are starting to sort out your debts.

alwaysonthego_2

If you're on benefits you should only be offering non-priority creditors £1 per month. I would try and visit the CAB who can help you make the token payment offer.

fermi

alwaysonthego wrote: »

If you're on benefits you should only be offering non-priority creditors £1 per month. I would try and visit the CAB who can help you make the token payment offer.

I would agree with that.

Firstly, benefits are there for you to live. They give you the absolute basic amount that the government says you should have to live.

As such, they shouldn't be used to repay debts, and creditors should not expect you to do so.

Secondly, £30-60 per month is hardly going to dent debts of that size. And unless interest and charges are frozen the debts are likley to just increase regardless.

So personally I think you need to:

a) Get the help of a professional debt advisor to offer token payments, try to get interest/charges frozen, and explain your situation.
b) Again with a professional advisor, try to work out if there are any better long terms solutions given the future prospects of you being able to clear these debts. Something like a DRO may be an option?

yellowduck_2

thanks eveyone, will do a SOA in a bit, have just studied the one that CCSso did with the info I gave them and there are a few errors on it. I own my home outright so that's one good thing but as it is a two up two down in a not very good area downsizing is not really an option. Also I would not qualify for a DRO as I have property. My son is grown up and I don't drive, don't really think I have anything I can sell. The interest has already been frozen on my credit card and Tesco was happy to accept £2 a month when I was on basic ESA. It's because it's been increased from £63.40 a week to £89.90 that the CCCS have suggested a DMP. I had been meeting the Nat West loan re-payments from my redundancy money but that is nearly all used up now. Before I spoke to CCS i was thinking of offering Nat West £30 a month and sticking with £2 for Tesco but CCS ses that they have to have equal shares of any surplus money. I want to get back to work but this will be a slow process given my health and the current economic climate.

Fire_Fox

The problem might be that if you offer token payments indefinitely, some of your creditors would seek a charging order on your home. I doubt that a court would expect the house to be sold, but when you move on the debts would have to be repaid.

Is there any possibility you could take in a lodger to bring in some extra cash? I am not certain how this would affect any benefits so you'd need to take advice. If you could live in the smaller bedroom this would make the larger one a more attractive bedsit.

yellowduck_2

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 399
Other income............................ 0
Total monthly income.................... 399
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 9
Electricity............................. 37
Gas..................................... 48
Oil..................................... 0
Water rates............................. 22
Telephone (land line)................... 0
Mobile phone............................ 21
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 148
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 13
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 16
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.................. 341

Assets
Cash.................................... 0
House value (Gross)..................... 79000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 79000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Nat west loan..................6700......291.......7.8
tesco credit card..............805.......34........0
Total unsecured debts..........7505......325.......-

Monthly Budget Summary
Total monthly income.................... 390
Expenses (including HP & secured debts). 341
Available for debt repayments........... 49.00
Monthly UNsecured debt repayments....... 325
Amount left after debt repayments....... 3,333
Personal Balance Sheet Summary
Total assets (things you own)........... 79,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -7,505
Net Assets.............................. 71,495
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

this is my SOA not done it quite right as have missed off £10 prescription charges, have season ticket thing, I get contributions ESA so am not exempt from charges. The £16 insurance is for buildings and contents. I have had my landline disconnected to save money. I pay £9 a month Council Tax which was calculated based on my total income for this financial year and took into account SSP i got from my ex-employer. I do not have a mortgage as have paid it off (phew!). The £148 includes cleaning stuff, I cook from scratch, use a slow cooker, freeze stuff etc. I do have to have a reasonable diet as have a lot of stomach probs. My mobile varies from month to month as when I have to phone the DWP it's all 0845 which costs loads and you are on hold for ages. I use the 0800 buster. Don't really know what else I can do to cut down, dreading Christmas. I have price fix til 2010 with British gas, pay as you go internet so I am not tied into a contract. Mobile contract up in Nov so will go on pay as you go. I made a typo when i did this, so it is a bit odd, I put that I had £3,900 monthly income ( I wish) have edited it but not sure the sums add up

RAS

Hi

I can well see natwest trying for a charging order.

Can I aks if you have checked the default letters on these accounts (assuming they have been issued)?

When did you open the accounts?

Do you have PPI insurance on the loan?

Have you joined www.freecycle.org or the new organisation?

HAve you read EagerLearner's thread on survey sites?

Chekc out the comps and freebies forums on here, particularly for presents

yellowduck_2

No i don't have PPI, took loan out in Aug 07, over 48 months, so almost half way through it, was going to get PPI from independent company but then my employer dropped the bombshell that my job was only a temp one. Apparenrently this is not illegal , but obviously I couldn't take out PPI, I then got another temp contract with same organisation and was made redundant when I was off sick. Tesco debt is about 4 years old, used to be £5,800 so feel I have done quite well shifting a lot of that.Not had any default letters, will this make any difference? Am registered with Freecycle and will look at your other suggestions. Many thanks

Prudent

That is a very tight SOA and as has already been said benefits provide the minimum on which you should be expected to live. If you do not expect to return to work, it may not be feasible to pay off these debts if they are still accumulating interest.