What is my best option?

topspotian

Hi there. Thankyou in advance for any replies to this. Me and my partner have combined unsecured debts of about £45,000, mainly credit cards,loans and store cards.(also a mobile phone bill,overdraft and gym membership). These debts are from between 1998-2006, and the last payment either of us made was in 2006.
I work full time as a self employed cabbie and my partner works part time and we are in reciept of family/working tax credits. We live in a rented council house and have 2 children with also another 1 on the way. After our weekly outgoings we are left with about £30 spare which usually is spent on the kids in one way or another.
There seems to be no way out of this mess we've got into and we can't seem to make any future plans because of this mountain of debt. People I speak to, all have different opinions of how to sort it out but they are so contradicting its left me no option to get some expert advice. The options I have been told are :
1. Go bankrupt.
2.Get an IVA.
3.Try and do a deal with the debt collection agencies.
4.Ignore the debt and after 7 years it will be wiped away.
We really want to get this sorted out and start planning for the future, living a normal life like normal people. In a nutshell, 1.sort debt ,2.save up,3.get married 4.save up,5.buy our own house,6.plan for retirement..
Is this possible or have we wrecked our credit for life?:huh::huh:
Thanks for reading....

cookie220985

the chances are that if no payments have been made since 2006 your credit score and report will have definitely been affected, it may even be worth trying to access your credit reports so you can assess the damage yourselves. As for getting rid of the debt, could you post a statement of affairs on here so you can see yourself,?
http://www.makesenseofcards.com/soacalc.html

it may be worth contacting all the debt collection agencies and creditors explaining your in financial difficulty, they may make a deal with you, for weekly or monthly arrangements or a plan.

I strongly suggest you get all your debts calculated 1st, then work it out from there

Little_Vics

Hi - firstly well done for facing up to things. I agree that an soa is the best way forward - people who know a lot more that me will be along to have a look and give some advice. You're in the right place!

savingmummy

Hi firstly you do need expert advise. I would seek this sooner rather then later.
How come neither of you have paid anything since 2006?
If you ignore them they won`t be wiped away! It actually makes the situation far worse by ignoring them SO you need to contact the people you owe too and organise a repayment plan.
You need to do a SOA to see whats coming in and whats going out!! Be 100% when filling this in including all apr`s on the debts then post it on here. We can then look over it and assist you better.
As it stands your credit is affected, but it will clear 6 yrs after your total debtfree day SO you have got to get debtfree if you have big plans.
Goodluck

robert71

You should pick up the phone. There are some really good and trusted debt advice charities out there. Have you spoken to any?

Based on repaying £120 per month it would take you 28 years to repay £45,000, even if the interest was frozen. Debt Management is out.

The maximum write-off on an IVA is usually about 80% in extreme circumstances although the average is closer to 50%. Over 5 years / 60 months you can afford to repay £7200. This means your creditors would have to write off over 80%.

Another factor is IVA's are often used instead of bankruptcy by individuals to protect their homes, but as you rent this is not an issue.

This is not professional advice and you MUST talk to someone you can trust, but Bankruptcy would see you debt free and discharged in about a year. It is usually possible to get bank accounts from places like the cooperative bank. Your credit rating can be repaired over time. MSE has some great tips on how to do this once you're discharged.

However, bankruptcy is not free:

"There are fees and costs to pay if you wish to petition for bankruptcy yourself, these are Official Receiver £360 and court costs of £150*

* If you are in receipt of some social security benefits or on a low income the £150 court costs may be fully or partially waived. To apply for exemption you will need to obtain and complete form ex160 which must be taken to court along with relevant proof of income (usually no older than 1 month)."

A site I help out at has a list of the UK's debt charities plus other good advice. So do call one of them if you haven't already.

topspotian

[tt]Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 425
Benefits................................ 840
Other income............................ 0
Total monthly income.................... 2265

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 264
Management charge (leasehold property).. 0
Council tax............................. 88
Electricity............................. 50
Gas..................................... 120
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 65
TV Licence.............................. 10
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 680
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 120
Childcare/nursery....................... 160
Other child related expenses............ 120
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 25
Entertainment........................... 80
Holiday................................. 50
Emergency fund.......................... 30
Total monthly expenses.................. 1992


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
credit card....................4469......0.........0
credit card....................3354......0.........0
card...........................4206......0.........0
partners card..................334.......0.........0
partners card..................433.......0.........0
partners card..................1124......0.........0
partners phone bill............337.......0.........0
partners card..................391.......0.........0
partners card..................886.......0.........0
partners loan..................2570......0.........0
partners overdraft.............1042......0.........0
partners card..................2188......0.........0
gym............................67........0.........0
loan...........................4953......0.........0
loan...........................18210.....0.........0
card...........................503.......0.........0
Total unsecured debts..........45067.....0.........-


Monthly Budget Summary
Total monthly income.................... 2,265
Expenses (including HP & secured debts). 1,992
Available for debt repayments........... 273
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 273

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -45,067
Net Assets.............................. -45,067

[/tt]

savingmummy

topspotian wrote: »

[tt]Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 425
Benefits................................ 840
Other income............................ 0
Total monthly income.................... 2265

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 264
Management charge (leasehold property).. 0
Council tax............................. 88
Electricity............................. 50
Gas..................................... 120 this is very high
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 0
Mobile phone............................ 65:eek:
TV Licence.............................. 10
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 680 really needs halving
Clothing................................ 30 stop or cut down!! use what you have for now
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 120?????
Childcare/nursery....................... 160
Other child related expenses............ 120 what is this exactly?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50 budget this
Haircuts................................ 25 find cheaper or lesson visits
Entertainment........................... 80 pub? takeouts??? cut down
Holiday................................. 50 is this booked?? i would not have a holiday in this situation
Emergency fund.......................... 30 USE this it is an emergency!!!
Total monthly expenses.................. 1992


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
credit card....................4469......0.........0
credit card....................3354......0.........0
card...........................4206......0.........0
partners card..................334.......0.........0
partners card..................433.......0.........0
partners card..................1124......0.........0
partners phone bill............337.......0.........0
partners card..................391.......0.........0
partners card..................886.......0.........0
partners loan..................2570......0.........0
partners overdraft.............1042......0.........0
partners card..................2188......0.........0
gym............................67........0.........0
loan...........................4953......0.........0
loan...........................18210.....0.........0
card...........................503.......0.........0
Total unsecured debts..........45067.....0.........-

you need to find out the apr`s to give each debt a priority

Monthly Budget Summary
Total monthly income.................... 2,265
Expenses (including HP & secured debts). 1,992
Available for debt repayments........... 273
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 273 - where is this going!!!

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -45,067
Net Assets.............................. -45,067

[/tt]

I have highlighted parts i would change in an instant. You really need to cut down and stop most things to get you straight!
Clothing and grocery can be cut back leaving you with over £200 to pay off a debt each mth. Also you have a suplus of 273 so you need to work out where this goes.
Hopefully other will advise too, goodluck

Sundowner1

I think the grocery and entertainment spend is amazing as it is more than my whole income - you could cut this by at least £300 and pay off some of the smaller debts eg Gym, phone bill etc to encourage you along and simplify the situation! Could you work more hours to up your income as you are self employed?
The holiday and entertainment costs are not a priority and are not a suitable way to budget at the moment.
Good luck, I'm sure others will be along with plenty of advice.

MrsTinks

£680 on groceries??? Seriously????
That needs addressing big time!

topspotian

£100 per week on groceries. £70 per week on cigarettes.

savingmummy

topspotian wrote: »

£100 per week on groceries. £70 per week on cigarettes.

Your in serious debt! You have a family to support a new baby coming and debts. You need to get some help, stop the ciggies and pay off the debts.
I am a smoker BUT go without to get debtfree.