Trying to work out a plan....

nolongerindenial

Ok,

As part of my lightbulb day, Rather than sit in my own mess stewing ideas over, I am burning the midnight oil and trying to work out what the plan is to move forward....

So Firstly I need to list the creditors...

Toyota Finance - Secured Loan on a car I am trying to sell: £1500, 2 payments in arrears and the car is on the market for twice this to hopefully get me a cash pot

Natwest Loan: £13500 owed, Due to the Natwest not being able to provide me an agreement or the APR, I can not put this figure on. However it has been passed to Eversheds for recovery
Natwest Overdrafts: £5500 - again they will not tell me the interest rate and have passed these over to eversheds.

Natwest CC: £339 owed on a £350 limit: 19.99% APR, 1 month in arears
Egg CC: 1119 owed, 29.9% uptodate
Alliance and Leicester (MBNA Card): £2500 owed 29.99% APR
Santander CC (Found this afternoon ) £350 owed at 19.99% APR

We were just about coping before my baby boy was born in december, and my wife is off on maternity meaning she is down £600 per month on her salary until september, not helping the household liquidity

Looking realistically at the situation, and reading a lot of the diaries today, what I could do with happening is having 3-6 months of making minimal payments, to allow us time to get back on our feet financially, and put my energies into marketing my business to provide my family longer term financial stability.

However, to achieve the longer term goals, I have realised I must put some energy into the short term goals and spend some time dealing with the debts rather than hiding away from them as much as I can.

Does anyone have any tips on negotiating with your creditors?? Can you also pick and choose which ones to negotiate with? IE I do not want to negotiate with the mortgage company, however do wish to negotiate with every other company.

I have attached a SOA, based on our worst month trading to date (Feb 10), My take home is usually about 600 higher than last month, with my wife's take home normally covering the other 600 difference (Leaving an overall surplus, which has been eaten up in the past couple of months to the point I am struggling to get the money together week on week to feed the 3 of us.

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.................... 4

Monthly Income Details
Monthly income after tax................ 900
Partners monthly income after tax....... 492
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1392

Monthly Expense Details
Mortgage................................ 665.9
Secured/HP loan repayments.............. 440.0000000000001
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 96
Electricity............................. 28
Gas..................................... 38
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 11.75
Mobile phone............................ 100
TV Licence.............................. 35
Satellite/Cable TV...................... 23
Internet Services....................... 20
Groceries etc. ......................... 400
Clothing................................ 0
Petrol/diesel........................... 150
Road tax................................ 16
Car Insurance........................... 60
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 100
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)...... 140
Haircuts................................ 1.25
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2374.9


Assets
Cash.................................... 147
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 4500
Other assets............................ 0
Total Assets............................ 104647


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 112000...(665.9)....6.7
Secured Debt.................. 13500....(297)......8.9
Hire Purchase (HP) debt ...... 1500.....(143)......16.9
Total secured & HP debts...... 127000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Egg............................1119......30........29.9
Alliance Leicester.............2500......89........29.9
Total unsecured debts..........3619......119.......-


Monthly Budget Summary
Total monthly income.................... 1,392
Expenses (including HP & secured debts). 2,374.9
Available for debt repayments........... -982.9
Monthly UNsecured debt repayments....... 119
Amount short for making debt repayments. -1,101.9

Personal Balance Sheet Summary
Total assets (things you own)........... 104,647
Total HP & Secured debt................. -127,000
Total Unsecured debt.................... -3,619
Net Assets.............................. -25,972

Tixy

Hi

With regards to your creditors and which ones to try to negotiate with - your mortgage is a priority debt (and secured) so should be paid in preference to any other. Any other secured debts you also need to consider the implications (eg will the car be repossessed). Other than that you should be trying to treat all other creditors equally so that they don't think you are giving preferential treatment to any.

If you do just want a very short term plan then you could try negotiating with the individually to see what they will each offer - however the fact that some debts have already been passed on means that things may be a bit far for this.
Have the natwest debts been defaulted? Have you stopped paying them altogether?

Looking at your SoA - how many of the 4cars are you running? you are trying to sell 1? can you not sell 2, I assume neither of you needs more than 1 car.

Looking at your expenses - mobiles are very high - if this is business use then really you should show your income after business expenditure and tax etc. If not business then try to reduce the cost by at least half.

TV licence - should be either £13 monthly or £26 if you are within the first 6months of paying by DD - is the £35 not a quarterly amount?

Groceries - can definitely be reduced. Even on £300 you should be able to eat really well for the 3 of you (including buying nappies etc)- have you tried the drop a brand challenge? have you tried meal planning for the whole week before you go shopping so that you don't buy unnecessary items and waste them?

Presents looks really high at £140 - I don't think you can afford anything like this amount with these debts.

Is your mortage fixed rate? how long for?

Right so back to the main issue - what defaults do you have? your credit cards may allow you to negotiate short payments for a while but are likely to default you for doing so.

You only seem to have 2 of your 4 card listed?

Have you set up alternative bank accounts now you cannot use the natwest accounts? do these new accounts have overdrafts?

Have you spoken to any of the professional free debt advisors?

laurasavon

I'm no expert but £400 seems high for food and is 4 cars a typo or do you have 2 cars each?

Morgan_Ree

nolongerindenial wrote: »

Ok,

As part of my lightbulb day, Rather than sit in my own mess stewing ideas over, I am burning the midnight oil and trying to work out what the plan is to move forward....

So Firstly I need to list the creditors...

Toyota Finance - Secured Loan on a car I am trying to sell: £1500, 2 payments in arrears and the car is on the market for twice this to hopefully get me a cash pot

Natwest Loan: £13500 owed, Due to the Natwest not being able to provide me an agreement or the APR, I can not put this figure on. However it has been passed to Eversheds for recovery
Natwest Overdrafts: £5500 - again they will not tell me the interest rate and have passed these over to eversheds.

Natwest CC: £339 owed on a £350 limit: 19.99% APR, 1 month in arears
Egg CC: 1119 owed, 29.9% uptodate
Alliance and Leicester (MBNA Card): £2500 owed 29.99% APR
Santander CC (Found this afternoon ) £350 owed at 19.99% APR

We were just about coping before my baby boy was born in december, and my wife is off on maternity meaning she is down £600 per month on her salary until september, not helping the household liquidity

Looking realistically at the situation, and reading a lot of the diaries today, what I could do with happening is having 3-6 months of making minimal payments, to allow us time to get back on our feet financially, and put my energies into marketing my business to provide my family longer term financial stability.

However, to achieve the longer term goals, I have realised I must put some energy into the short term goals and spend some time dealing with the debts rather than hiding away from them as much as I can.

Does anyone have any tips on negotiating with your creditors?? Can you also pick and choose which ones to negotiate with? IE I do not want to negotiate with the mortgage company, however do wish to negotiate with every other company.

I have attached a SOA, based on our worst month trading to date (Feb 10), My take home is usually about 600 higher than last month, with my wife's take home normally covering the other 600 difference (Leaving an overall surplus, which has been eaten up in the past couple of months to the point I am struggling to get the money together week on week to feed the 3 of us.

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.................... 4 Is this a typo??

Monthly Income Details
Monthly income after tax................ 900
Partners monthly income after tax....... 492
Benefits................................ 0 child benefit? Tax credits?
Other income............................ 0
Total monthly income.................... 1392

Monthly Expense Details
Mortgage................................ 665.9
Secured/HP loan repayments.............. 440.0000000000001
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 96
Electricity............................. 28
Gas..................................... 38
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 11.75
Mobile phone............................ 100 When do the contracts end?
TV Licence.............................. 35
Satellite/Cable TV...................... 23
Internet Services....................... 20
Groceries etc. ......................... 400 Far too high for the 3 of you! Try getting it down to £50 a week
Clothing................................ 0
Petrol/diesel........................... 150
Road tax................................ 16
Car Insurance........................... 60
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 100 Whats ths for?
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)...... 140 This money really does need to be spent elsewhere
Haircuts................................ 1.25
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2374.9


Assets
Cash.................................... 147
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 4500
Other assets............................ 0
Total Assets............................ 104647


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 112000...(665.9)....6.7
Secured Debt.................. 13500....(297)......8.9
Hire Purchase (HP) debt ...... 1500.....(143)......16.9
Total secured & HP debts...... 127000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Egg............................1119......30........29.9
Alliance Leicester.............2500......89........29.9
Total unsecured debts..........3619......119.......-


Monthly Budget Summary
Total monthly income.................... 1,392
Expenses (including HP & secured debts). 2,374.9
Available for debt repayments........... -982.9
Monthly UNsecured debt repayments....... 119
Amount short for making debt repayments. -1,101.9

Personal Balance Sheet Summary
Total assets (things you own)........... 104,647
Total HP & Secured debt................. -127,000
Total Unsecured debt.................... -3,619
Net Assets.............................. -25,972

I have added a few bits for you to look at

Also you say you're going to be selling the car which has arrears on it
Can this be done if theres an outstanding balance on it??
I mean are you actually allowed to sell it seeing as you don't technically own it yet?

It's quite simple for a new owner to do a HPI check, just to see if there is any outstanding finance on it

nolongerindenial

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.................... 4

Monthly Income Details
Monthly income after tax................ 900
Partners monthly income after tax....... 492
Benefits................................ 100
Other income............................ 0
Total monthly income.................... 1492

Monthly Expense Details
Mortgage................................ 665.9
Secured/HP loan repayments.............. 143
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 89
Electricity............................. 28
Gas..................................... 38
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 11.75
Mobile phone............................ 100
TV Licence.............................. 35.62
Satellite/Cable TV...................... 23
Internet Services....................... 20
Groceries etc. ......................... 400
Clothing................................ 0
Petrol/diesel........................... 150
Road tax................................ 16
Car Insurance........................... 60
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
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)...... 11.66
Haircuts................................ 1.25
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1843.18


Assets
Cash.................................... 0
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 4500
Other assets............................ 0
Total Assets............................ 104500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 112000...(665.9)....6.79
Hire Purchase (HP) debt ...... 1500.....(143)......16.9
Total secured & HP debts...... 113500....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest Loan...................13500.....297.......NaN
Egg ...........................1119.9....31.81.....26.9
Alliance & Leicester...........2600......80........0
Santander......................400.......14........0
Natwest CC.....................340.......7.........29.9
Total unsecured debts..........17959.9...429.81....-


Monthly Budget Summary
Total monthly income.................... 1,492
Expenses (including HP & secured debts). 1,843.18
Available for debt repayments........... -351.18
Monthly UNsecured debt repayments....... 429.81
Amount short for making debt repayments. -780.99

Personal Balance Sheet Summary
Total assets (things you own)........... 104,500
Total HP & Secured debt................. -113,500
Total Unsecured debt.................... -17,959.9
Net Assets.............................. -26,959.9


Updated with more figures, there were some errors on the original one as pointed out (Gifts arent 140 a month, that was the annual price but that doesnt include my son's birthday and christmas presents - as I simply dont know what they will cost

The TV License payment is correct and monthly due to the fact I have had to catch up on late payments due to a banking error when we moved away from the bank which I did not spot

The mobile contract has dropped down as we cancelled a web and walk, however we are tied in to our contracts until october and december this year, and one of the phones is used solely for business purposes (about £50 pcm of this), however we have just changed accountants and as such I am awaitng him going through the books and telling me what I can / can not claim for.

Yes we own 4 cars. One car has the Finance outstanding and is for sale. Yes you are correct it is illegal for me to sell the car whilst there is an outstanding charge on the vehicle, however the last time I did this I insisted I paid off the outstanding finance prior to them leaving with the car - for both there peace of mind and my own piece of mind the car was clear from outstanding finance. One of the other cars is what we now drive daily. One of the other two cars is my project hobby car, which I am restoring and have all the materials to keep me going this year on its restoration. The fourth car is a vehicle I am in the process of getting back on the road as it is in better condition than the daily driver estate, which in my opinion should not have passed its last MOT (Prior to me buying it), this car will be broken when it comes to have its MOT time as I am under no illusion that it will fail - and I will make a nice little amount on its parts on ebay, effectively leaving 2 cars in october, a road going car and my project car.

We are working on getting our shopping bill down, however I have put this SOA as a statement of where we are now, and one of the reasons we are in this situation.

The Child related expenses are for his nappies/cotton balls and food.

Our mortgage is fixed rate until may 2012

I will goto experian now and get a list of all my defaults.

I think that answers everyones questions, thank you for your time

elfen

Some of the money from the car, can you use it to pay off one of the cards? Preferably the one with the highest interest rate, as this may give you a bit more breathing room.

miss_missy

hi
i think you really need to look into your benefits as you should be getting more than 100 per month
CB = 20 per week
Tax credits should be around 90ish a month at least as you get more when babys under one and we got around 90 per month and we get the lowest amount you can get due to what we earn
you need to look into this asap i would call them up immediately

nolongerindenial

That was always the plan - to either use the money to pay off the highest APR debt (A&L/Egg From memory), or use the money to try and reduce the overall number of creditors (Santander/NatwestCC rest to egg/a&l)

Now I am not sure if its best to have a pot ready instead or not - hence im on here asking for help

nolongerindenial

miss_missy wrote: »

hi
i think you really need to look into your benefits as you should be getting more than 100 per month
CB = 20 per week
Tax credits should be around 90ish a month at least as you get more when babys under one and we got around 90 per month and we get the lowest amount you can get due to what we earn
you need to look into this asap i would call them up immediately

CB we hassle every 3-4 days for an update as to where this is upto, but they state every time they can take upto 12 weeks from the date of application, which due to all the holidays from when he was born and trying to get an appointment to register him didnt occur until the 20th January, meaning we may not see the money we are entitled to until late april

As for tax credits, it is a pain in the backside as due to my income on the self assessment they wanted we were entitled to a total of £500 based on past income over 12 months ago now, and are not entitle to any working credits until the new tax year (6th april i believe)

We went to see a cab advisor about all the benefits, and we are chasing it up as frequently as is possible for the CB

miss_missy

nolongerindenial 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.................... 4

Monthly Income Details
Monthly income after tax................ 900
Partners monthly income after tax....... 492
Benefits................................ 100 check this
Other income............................ 0
Total monthly income.................... 1492

Monthly Expense Details
Mortgage................................ 665.9
Secured/HP loan repayments.............. 143
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 89
Electricity............................. 28
Gas..................................... 38
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 11.75
Mobile phone............................ 100 reduce this
TV Licence.............................. 35.62
Satellite/Cable TV...................... 23
Internet Services....................... 20
Groceries etc. ......................... 400 cut this by at least £100 i budget 300 but never spend that much and i have 2 adults 2 children 1 in nappies
Clothing................................ 0 you will need something here for a baby
Petrol/diesel........................... 150
Road tax................................ 16
Car Insurance........................... 60
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 you need something here
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 you should have something here
Contents insurance...................... 0 same as above
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 11.66
Haircuts................................ 1.25
Entertainment........................... 0 are you sure this is 0
Holiday................................. 0
Emergency fund.......................... 0 you should have somehting here
Total monthly expenses.................. 1843.18


Assets
Cash.................................... 0
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 4500
Other assets............................ 0
Total Assets............................ 104500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 112000...(665.9)....6.79
Hire Purchase (HP) debt ...... 1500.....(143)......16.9
Total secured & HP debts...... 113500....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Natwest Loan...................13500.....297.......NaN
Egg ...........................1119.9....31.81.....26.9
Alliance & Leicester...........2600......80........0
Santander......................400.......14........0
Natwest CC.....................340.......7.........29.9
Total unsecured debts..........17959.9...429.81....-


Monthly Budget Summary
Total monthly income.................... 1,492
Expenses (including HP & secured debts). 1,843.18
Available for debt repayments........... -351.18
Monthly UNsecured debt repayments....... 429.81
Amount short for making debt repayments. -780.99

Personal Balance Sheet Summary
Total assets (things you own)........... 104,500
Total HP & Secured debt................. -113,500
Total Unsecured debt.................... -17,959.9
Net Assets.............................. -26,959.9


Updated with more figures, there were some errors on the original one as pointed out (Gifts arent 140 a month, that was the annual price but that doesnt include my son's birthday and christmas presents - as I simply dont know what they will cost

The TV License payment is correct and monthly due to the fact I have had to catch up on late payments due to a banking error when we moved away from the bank which I did not spot

The mobile contract has dropped down as we cancelled a web and walk, however we are tied in to our contracts until october and december this year, and one of the phones is used solely for business purposes (about £50 pcm of this), however we have just changed accountants and as such I am awaitng him going through the books and telling me what I can / can not claim for.

Yes we own 4 cars. One car has the Finance outstanding and is for sale. Yes you are correct it is illegal for me to sell the car whilst there is an outstanding charge on the vehicle, however the last time I did this I insisted I paid off the outstanding finance prior to them leaving with the car - for both there peace of mind and my own piece of mind the car was clear from outstanding finance. One of the other cars is what we now drive daily. One of the other two cars is my project hobby car, which I am restoring and have all the materials to keep me going this year on its restoration. The fourth car is a vehicle I am in the process of getting back on the road as it is in better condition than the daily driver estate, which in my opinion should not have passed its last MOT (Prior to me buying it), this car will be broken when it comes to have its MOT time as I am under no illusion that it will fail - and I will make a nice little amount on its parts on ebay, effectively leaving 2 cars in october, a road going car and my project car.

We are working on getting our shopping bill down, however I have put this SOA as a statement of where we are now, and one of the reasons we are in this situation.

The Child related expenses are for his nappies/cotton balls and food.

Our mortgage is fixed rate until may 2012

I will goto experian now and get a list of all my defaults.

I think that answers everyones questions, thank you for your time

i have listed a few things above you really need to look at your soa as there seems to be things missing that should be budgeted for
also im no expert but surely anything business related should not be on you soa and instead part of your business and being paid for by the business, as i say i dont know this but i would have thought that the mobile you say is solely business should be in your business accounts that would save 50 off your soa straight away

Poosmate

I know this is going to sound harsh but does your wife HAVE to stay off work till September?

Your son's first birthday and Christmas is a long way off at the moment so don't even think about it yet. He will have loads of stuff from friends/family anyway, I would be inclined at the time (if you are still in financial difficulties) to do something special for him rather than costly. He's not going to know what you "buy" for him but you could do something real special like buy small trinket type things like the "Baby's First Christmas" bauble for the tree, a few newspapers and write him a letter saying how he's changed your life and what he means to you, take a nice photograph of him and keep them in a box in the loft. Give it to him on his 18th birthday and it will mean more to him than you would ever imagine.

Good luck

Poo