Our Soa, Shocking lbm, What on earth do we pay first?

liltinks78

Hi all,
We have reached desperation point at our wages being swallowed up in debt by our lack of budgetting, laziness and ignorance. Having now faced up to what we owe, we are desperate to clear these debts, I am stunned that we have let it get to this stage. We got married two years ago and in order to pay for the wedding let all our payments slip, I spent way more than I earned as I was on maternity leave and continued to spend the way I did when I had a full income. It is a typical debt spiral and we are now at the stage where we have so many debts, no one will lend us a penny. Which is a good thing as we can't obtain any more debts, but in the long run horrendous as we would like to clear these and look towards getting a mortgage but with most of the debts out to debt collectors and in default the chances of that ever happening appears to be nil, especially with all the defaults. I am self employed and currently earning a relatively okay wage but know that in twelve months it could go down so we need to address this now. I have tried the snowball calculator but as some (most) of the debts are interest frozen with dca's there was no minimum payment to put in or apr. I have yet to make payment offers to these dca's. I was hoping some of you with more experience could and would offer your opinions in terms of which debts to pay first. My husband suggests the provident as we pay £72.00 a week on those! We do have money to pay the debts that we have up to now just been frittering away and the scary thing is, that we have nothing to show for it!
All opinions welcome, I know I have caused this mess, I know I have the means to sort it out, I just dont know how to go about it. I am more daunted by the sheer amount of debts than anything as feel there are so many to manage! Thankyou for reading.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 1500
Benefits................................ 680 (Shortly due to go down to 120.00)
Other income............................ 0
Total monthly income.................... 3780
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 175 (includes arrears as missed 3 months when moved in)
Electricity............................. 60 (High as I work from home, an on prepayment, have just switched to EDF, change will take effect soon)
Gas..................................... 90(As electricity)
Oil..................................... 0
Water rates............................. 27.5
Telephone (land line)................... 50 (Changing to o2 in March as ridiculously high)
Mobile phone............................ 30 (Both £15 pm o2 payasyou go - free calls and texts to each other)
TV Licence.............................. 11.41
Satellite/Cable TV...................... 37 (Multiroom package, only signed up two months ago so am stuck in it for another 10 months)
Internet Services....................... 7.99
Groceries etc. ......................... 200
Clothing................................ 30
Petrol/diesel........................... 50
Road tax................................ 16
Car Insurance........................... 35
Car maintenance (including MOT)......... 7
Car parking............................. 5
Other travel............................ 2
Childcare/nursery....................... 201
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 11
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 40
Entertainment........................... 40
Holiday................................. 125 (we go on one family holiday abroad a year so have budgeted for this)
Emergency fund.......................... 10
(Unnamed monthly expense)............... 0
POCKET MONEY............................ 20
CHILD TRUST FUND........................ 10
MARIE CLAIRE SUBSCRIPTION............... 1
CREDIT EXPERT........................... 6.99
LOVE FILM............................... 3.99 (Just cancelled)
NCMA MEMBERSHIP......................... 5 (includes public liability insurance so is essential)
GYM MEMBERSHIP.......................... 28
Total monthly expenses.................. 1865.88

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
NEXT DIRECTORY.................200.......10........16
VANQUIS VISA...................279.99....0.........29.9
PROVIDENT......................127.5.....32.5......0
GRANDAD........................600.......0.........0
PROVIDENT......................490.5.....84.5......0
PROVIDENT......................330.......104.......0
BCA............................138.16....0.........0
BARCLAY CARD...................1332.83...0.........0
NATIONAL INSURANCE.............217.9.....0.........0
HALIFAX........................241.68....0.........0
OLD GYM ACC....................50........0.........0
IQOR (PAYPAL)..................52.54.....0.........0
MACKENZIE HALL.................300.......100.......0
UNITED UTILITIES...............727.85....0.........0
LITTLEWOODS....................436.35....0.........0
WELCOME FINANCE................3533......160.......0
AVON...........................187.06....0.........0
LLOYDS TSB.....................1800......0.........0
CANDID COLLECTIONS.............2248......0.........0
DEBT MANAGERS..................867.......0.........0
BRITISH GAS ELEC...............247.......100.......0
CREDIT ACCOUNT MANAGE..........871.......0.........0
PROVIDENT......................682.5.....91........0
Total unsecured debts..........15960.86..682.......-

Monthly Budget Summary
Total monthly income.................... 3,780
Expenses (including HP & secured debts). 1,865.88
Available for debt repayments........... 1,914.12
Monthly UNsecured debt repayments....... 682
Amount left after debt repayments....... 1,232.12
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -15,960.86
Net Assets.............................. -14,960.86

Horace

Hi and welcome

Firstly I would seek advice from one of the debt charities such as CCCS.

Stop buying clothes - reduce your grocery bill, you can cut by half and still eat well (meal plan, and cook from scratch - look at the Oldstyle board for tips).

Rather than having a holiday abroad - use this money to pay your debts...holidays abroad are a luxury that you cannot afford when you have debt.

Get rid of your prepayment electricity meter and switch to a normal meter and submit meter readings, you tend to pay over the odds when you are on a pre-payment meter. Remember if you work from home to claim part of your utility bills from the business..put it down in your accounts for the tax man.

You don't need £20 pocket money, clothes can be ditched, haircuts - use a local college as you can still get a good cut but cheaper than £40 a month. Cancel your Credit Expert subscription, you don't need it, ditch the magazine subscription too

You need to pay your National Insurance and your tax - these are priority debts,

What is the old gym account? Get rid..

Keep a spending diary so that you note down where you are spending money - magazines, newspapers, coffee here and there, sweets, lunches etc..note it all down.

Verbatim

There are still quite a few luxuries on your SOA but well done on cancelling Lovefilm!
I don't think you can afford a holiday, gym membership, children's pocket money or Trust Fund payments, £40 a month on both haircuts and entertaining, credit expert monthly and £20 on presents as a start. Or £20 month on clothes. That's £296 a month less 2p and including lovefilm I think. That's cash that would clear a couple of your smaller debts. You can usually get broadband, sat/ cable TV and landline cheaper in a package. We pay virgin around £36 a month for all three including landline calls. You could also shave quite a bit off your groceries by meal planning, shopping to a list based on the plan not wasting any food and cooking from scratch.

As all your debts are quite small (although there are a few of them lol) you could clear 3 or 4 in the first month. It's good that you have decided to tackle the problem now before it gets any worse. You'll soon be on the way to saving for a deposit.

I'm guessing that you don't actually have £1232.12 left each month?

If you do then you dcan repay your debts in around a year, less if you make changes to your budget. If not you do know where it goes you could start a spending diary to keep track and try Martin's demotivator if it's starbucks or similar.

pepe2008

If you have £1200+ a month to play with,

Get rid of Next and Vanquis as they are both charging you interest ( If you have Vanquis as an 'essential' card, then only use it for things that you KNOW you will pay back in that Statement Period)

You could then start picking off the debts by offering settlements below the actual amount owed......or picking off the smaller ones and cleaning things up a bit.

National Insurance needs to be settled as that can have an effect on Pension in the future.

liltinks78

Thank you both for taking the time to read it. There are lots we can cut out on. We do not get virigin in this area and I have just enquired with bt but because we didnt pay our bill on time and they cut the line two months ago. when they put us back on we have entered into yet another 12 month contract - really annoying but the charges for cancelling are horrendous. We have made the same mistake with sky, only this time with the multiroom thing. Would you pay the small ones first to reduce the overall number?

savingmummy

liltinks78 wrote: »

Hi all,
We have reached desperation point at our wages being swallowed up in debt by our lack of budgetting, laziness and ignorance. Having now faced up to what we owe, we are desperate to clear these debts, I am stunned that we have let it get to this stage. We got married two years ago and in order to pay for the wedding let all our payments slip, I spent way more than I earned as I was on maternity leave and continued to spend the way I did when I had a full income.
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 1500
Benefits................................ 680 (Shortly due to go down to 120.00)
Other income............................ 0
Total monthly income.................... 3780
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 175 (includes arrears as missed 3 months when moved in)
Electricity............................. 60 (High as I work from home, an on prepayment, have just switched to EDF, change will take effect soon)
Gas..................................... 90(As electricity)
Oil..................................... 0
Water rates............................. 27.5
Telephone (land line)................... 50 (Changing to o2 in March as ridiculously high) i would get incoming calls only and just pay line rent
Mobile phone............................ 30 (Both £15 pm o2 payasyou go - free calls and texts to each other)reduce this, if you get free texts/talk time surely this lasts you quite a while? my dh tops up £10 every other month
TV Licence.............................. 11.41
Satellite/Cable TV...................... 37 (Multiroom package, only signed up two months ago so am stuck in it for another 10 months) i would call and explain, sky removed it for us mid contract
Internet Services....................... 7.99
Groceries etc. ......................... 200 reduce this
Clothing................................ 30 use what you have
Petrol/diesel........................... 50
Road tax................................ 16
Car Insurance........................... 35
Car maintenance (including MOT)......... 7
Car parking............................. 5
Other travel............................ 2
Childcare/nursery....................... 201 can you get cheaper??
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 11
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 reduce this, only buy for selected people.
Haircuts................................ 40:eek: find cheaper, cut your own dh/childs
Entertainment........................... 40
Holiday................................. 125 (we go on one family holiday abroad a year so have budgeted for this) pay debts instead
Emergency fund.......................... 10 how much is in this? can you use it on a debt?
(Unnamed monthly expense)............... 0
POCKET MONEY............................ 20 reduce
CHILD TRUST FUND........................ 10
MARIE CLAIRE SUBSCRIPTION............... 1
CREDIT EXPERT........................... 6.99
LOVE FILM............................... 3.99 :T(Just cancelled)
NCMA MEMBERSHIP......................... 5 (includes public liability insurance so is essential)
GYM MEMBERSHIP.......................... 28 cancel for now
Total monthly expenses.................. 1865.88

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
NEXT DIRECTORY.................200.......10........16 pay off in full using surplus
VANQUIS VISA...................279.99....0.........29.9 pay off in full using surplus
PROVIDENT......................127.5.....32.5......0
GRANDAD........................600.......0.........0
PROVIDENT......................490.5.....84.5......0
PROVIDENT......................330.......104.......0
BCA............................138.16....0.........0
BARCLAY CARD...................1332.83...0.........0
NATIONAL INSURANCE.............217.9.....0.........0
HALIFAX........................241.68....0.........0
OLD GYM ACC....................50........0.........0
IQOR (PAYPAL)..................52.54.....0.........0
MACKENZIE HALL.................300.......100.......0
UNITED UTILITIES...............727.85....0.........0
LITTLEWOODS....................436.35....0.........0
WELCOME FINANCE................3533......160.......0
AVON...........................187.06....0.........0
LLOYDS TSB.....................1800......0.........0
CANDID COLLECTIONS.............2248......0.........0
DEBT MANAGERS..................867.......0.........0
BRITISH GAS ELEC...............247.......100.......0
CREDIT ACCOUNT MANAGE..........871.......0.........0
PROVIDENT......................682.5.....91........0
Total unsecured debts..........15960.86..682.......- what are the Aprs?

Monthly Budget Summary
Total monthly income.................... 3,780
Expenses (including HP & secured debts). 1,865.88
Available for debt repayments........... 1,914.12
Monthly UNsecured debt repayments....... 682
Amount left after debt repayments....... 1,232.12:eek: where does this go?????
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -15,960.86
Net Assets.............................. -14,960.86

You have a HUGE amount left each month where does this go????? Even reducing the benefits from 680 to 120 your left with a bit!!

I have highlighted in blue where i would make changes BUT if you have 1k each month to play with then somewhere you are overspending and this needs to be stopped. Throw the surplus at hiugh apr debts

Stop the cards and catologues close accounts x

Numpty_Monkey

liltinks78 wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 1500
Benefits................................ 680 (Shortly due to go down to 120.00)Put the £120 in the calc
Other income............................ 0
Total monthly income.................... 3780
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 175 (includes arrears as missed 3 months when moved in)How many more at this rate?
Electricity............................. 60 (High as I work from home, an on prepayment, have just switched to EDF, change will take effect soon), are you switching to DD payments or still on prepay, you can ask to get prepay meters removed, if in credit (they may charge?)
Gas..................................... 90(As electricity) as above
Oil..................................... 0
Water rates............................. 27.5
Telephone (land line)................... 50 (Changing to o2 in March as ridiculously high) are you getting a package deal with o2 with mobile
Mobile phone............................ 30 (Both £15 pm o2 payasyou go - free calls and texts to each other)
TV Licence.............................. 11.41
Satellite/Cable TV...................... 37 (Multiroom package, only signed up two months ago so am stuck in it for another 10 months)
Internet Services....................... 7.99
Groceries etc. ......................... 200 can be reduced, meal planning,drop a brand,batch cooking(helps with gas and elec)
Clothing................................ 30 charity shops,ebay,wear what you have, sell out grown kids clothes
Petrol/diesel........................... 50 is it worth haveing a car?
Road tax................................ 16
Car Insurance........................... 35 any insurance use comparrison sites and cashback sites
Car maintenance (including MOT)......... 7
Car parking............................. 5
Other travel............................ 2
Childcare/nursery....................... 201
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 11
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20 reduce
Haircuts................................ 40 Halve this
Entertainment........................... 40
Holiday................................. 125 (we go on one family holiday abroad a year so have budgeted for this)If not booked cancel,
Emergency fund.......................... 10,
(Unnamed monthly expense)............... 0
POCKET MONEY............................ 20 who's?
CHILD TRUST FUND........................ 10 cancel for now, you can always it up in future years
MARIE CLAIRE SUBSCRIPTION............... 1 cancel
CREDIT EXPERT........................... 6.99 cancel, you can get your credit report for £2,
LOVE FILM............................... 3.99 (Just cancelled):T
NCMA MEMBERSHIP......................... 5 (includes public liability insurance so is essential)
GYM MEMBERSHIP.......................... 28 cancel
Total monthly expenses.................. 1865.88

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
NEXT DIRECTORY.................200.......10........16
VANQUIS VISA...................279.99....0.........29.9
PROVIDENT......................127.5.....32.5......0
GRANDAD........................600.......0.........0
PROVIDENT......................490.5.....84.5......0
PROVIDENT......................330.......104.......0
BCA............................138.16....0.........0
BARCLAY CARD...................1332.83...0.........0
NATIONAL INSURANCE.............217.9.....0.........0
HALIFAX........................241.68....0.........0
OLD GYM ACC....................50........0.........0
IQOR (PAYPAL)..................52.54.....0.........0
MACKENZIE HALL.................300.......100.......0
UNITED UTILITIES...............727.85....0.........0
LITTLEWOODS....................436.35....0.........0
WELCOME FINANCE................3533......160.......0
AVON...........................187.06....0.........0
LLOYDS TSB.....................1800......0.........0
CANDID COLLECTIONS.............2248......0.........0
DEBT MANAGERS..................867.......0.........0
BRITISH GAS ELEC...............247.......100.......0
CREDIT ACCOUNT MANAGE..........871.......0.........0
PROVIDENT......................682.5.....91........0
Total unsecured debts..........15960.86..682.......-

Monthly Budget Summary
Total monthly income.................... 3,780
Expenses (including HP & secured debts). 1,865.88
Available for debt repayments........... 1,914.12
Monthly UNsecured debt repayments....... 682
Amount left after debt repayments....... 1,232.12
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -15,960.86
Net Assets.............................. -14,960.86

I've left a few comments,
Well done on having a LBM:idea::T:T
The main problem with your SOA (don't worry) is the lack of info about the debt repayments, and possible changes in income in the next month or so.
that will change your available amount