How Do I Decide?

DreamerHelen

Hi Everyone,

I currently have 6 Debts that I am paying £305 to per month and 2 Provident Loans that I am paying £115 to per month.

Now I know I can't do anything about the Provident Loans, and that's okay, but the other 6 Debts I simply can't afford to be paying £305 per month.

The most I can afford is £150 per month to the 6 Debts.

I've looked at my SOA and I cannot get it down anymore, believe me I've tried...but I'll try to do another one if I can find the Link and then I can show you (I'll have to do that later as I'm working very shortly).

My Question is this: I know from reading this Forum that I have to send a Letter to each of my Creditors, this month I can only offer them £1 payments as I have just gotten out of Hospital - Does anyone have a Template Letter that I can send to them which includes the following:

1) That I can only afford a £1 token payment for February
2) What I'm offering to Pay from March onwards
3) Please stop harrassing me by phone
4) I will no longer be dealing with them by phone
5) Can they tell me exactly what I owe as of now

I have stupidly been conducting all my Debts via Phone Calls which I know I shouldn't have done now because they just harrassed me to make higher and higher payments which then led me to be in this position of not being able to afford it.

I can't go via PayPlan or CCCS as I am self-employed and they don't seem to have any provisions for that because my monthly income is set at a minimum but sometimes goes up and so some months I may have extra money.

Secondly, how do I decide how much goes to each Creditor? In my letter to them I want to say that I am offering them £1 token payment for February and then I want to tell them what I am offering per month from March. But how to decide who gets what? And what do I do if they don't accept the offer?

Sorry for all of the Questions but I cannot get myself into another mess and I'm desperately trying to get out of this mess that I've put myself into.

If someone could help I would really appreciate it and I will do my SOA later on (if someone has the link that would be really helpful as well).

Thank you in advance.

found_a_bargin

Have you tied booking a appointment with the local CAB??

If i were you i would state and keep your repayments at the minimum amount but save any excess you find your self having and pay off debts as and when you have enough,

Im sue the CAB have helped thousands of people in your situation being self employed..

Someone more knowledgeable will be around soon

Or look for immoral_angel she is a CAB advisor and petty fab at sorting things out.

miss_missy

hi and welcome
cant really advise you but if you can post an soa there maybe other ways to help you if you feel you have just a shortfall of 150 per month its amazing how much can be saved
also list your debts with balances, credit limits aprs etc so we can see if theres space to shuffle to help also
the link for the soa calculator is in a thread at the top of the 1st page on this forum started by southernscouser

savingmummy

SOA link here http://www.makesenseofcards.com/soacalc.html once you have done it press MSE.
You may not beable to reduce outgoings but others may spot things you could alter

swampduck

Just a thought - is it not possible to reduce your payments to Provident? Usually these are interest loaded at the beginning of your payment plan which means that as long as you pay it off eventually and dont miss any weeks when you should paying then they should be fine. They dont continue to add interest like other debts - just speaking from past experience here - it helped me when I was in this position a few years back.
Might be worth a chat with your Provident agent - they may not like it as they are paid according to what they collect - but needs must in your case.

Swampy

Tixy

Hi Helen

Here are some template letters, you could read them all and then adapt the most suitable for what you want to say -
http://forums.moneysavingexpert.com/showpost.html?p=21937969&postcount=52
http://forums.moneysavingexpert.com/showpost.html?p=21654579&postcount=50
http://www.nationaldebtline.co.uk/england_wales/temp/4743_37111.pdf

DreamerHelen

MY SOA

Monthly Income Details
Monthly income after tax................ 2000 - Can sometimes be more
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2000

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 440 - I live in a Studio Flat, no room for a Lodger
Management charge (leasehold property).. 0
Council tax............................. 100 - I'm catching up on past payments
Electricity............................. 65 - I give Meter Readings every 6 months
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 75 - This includes TV, Phone and Broadband. I work from home and need a decent tv, phone and broadband package.
Mobile phone............................ 100 - As i work from home and for myself, I need 2 mobiles and a Dongle, so that raises the cost.
TV Licence.............................. 15
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100 - Not sure if I can get this down or not, there is just me.
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 75 - This is for my Oyster Card into London for my Course
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15 - This is for a pre-payment prescription card as i have lots of prescriptions every month
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25 - I could cut this down possibly
Haircuts................................ 15 - I could cut this down as well
Entertainment........................... 30 - I might be able to cut this down too
Holiday................................. 0
Emergency fund.......................... 0
Laundry................................. 30 - I don't have a washing machine so i have to use the Launderette
Psychotherapy........................... 195 - This is a Course Requirement
Psychotherapy Course.................... 155 - This Course will further my Career, which is a good thing and will ultimately make me more money
Total monthly expenses.................. 1435

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
Mum............................2000......200.......0 - Owed for Dental Work, must be paid
Ex-Partner.....................9000......100.......0 - Owed and must be paid
Smith Lawson...................1990......0.........0
Capital One....................130.......0.........0
Provident......................800.......115.......0
Bryan Carter...................7861.87...0.........0
Moorcroft......................6410......0.........0
NCO Financial..................5900.81...0.........0
Capquest.......................4847.67...0.........0
Lewis Group....................2460......0.........0 - Apart from Capital One and Provident the rest of the Debts have the Interest frozen
Total unsecured debts..........41400.35..415.......-

Monthly Budget Summary
Total monthly income.................... 2,000
Expenses (including HP & secured debts). 1,435
Available for debt repayments........... 565
Monthly UNsecured debt repayments....... 415
Amount left after debt repayments....... 150

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -41,400.35
Net Assets.............................. -41,400.35

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

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So there you have it, I've tried to make things as clear as possible...

I'm going to type out the Letters tomorrow....but still don't know what to offer each Creditor as a permanent payment.

miss_missy

i cant really help much on what to offer to creditors however i do think you should get some advice if your going to send in that soa to creditors as i dont know how happy they will be that your paying your mum and ex 300 per month i know you say it must be paid but i doubt creditors will be happy espiecially someone like cap one who you owe only 130 too and your only paying £1 to this month yet i take it youve paid your mum £200

please do get upset by what i have said i do understand that its hard with it being family and your ex is not the best person to owe money too but i dont want you sending something to creditors that will possible make them start charging interest again

last point could your mum take a reduced payment for 1 month so you can at least pay cap one off? (as you say they are still charging interest)

miss_missy

ment to say do NOT get upset above sorry

miss_missy

i would tell everyone you can afford presents and reduce to 0 unless you have children you buy for nieces/nephews i have never stopped buying for the children

you say you need 2 mobiles are both for work? if one is personal use is it contract if so move to pay as you go

how often do you get your hair cut? try and reduce when my debt was at its highest i got a cut and blow dry twice a year

this mean seem hard to do but the quicker your out of debt the happier you will be and you can have all these things back again

Tixy

Helen

Have you had advice from CCCS or anyone? If you did a DMP with them you would be able to include the provident loans in the DMP.
Or are you planning on doing your finances yourself because of the situation with debts to your Mum & Ex?
Even if you are doing a self-managed DMP you could still include provident which would mean you would have more to spread amongst all the creditors.

Have you actually looked round for a cheaper media package. £75 is still quite a lot. Also in relation to the mobiles what is the breakdown of costs? busineess/ personal/dongle? I ask because I know there are some business packages on the market now with almost unlimited calls etc for around £40.

Do you have anything you could sell to raise money to pay off the debts? How were the debts incurred? was it just generally living above your means?

Sorry I've just seen your point about not using CCCS etc as you are self-employed. Might be worth a call/email to national debtline or business debtline as they may be able to help self-employed people.