newbie - soa advice / payplan

moothom

Hello
I have been visiting the forum for a long time now, and I have now reached the point where I think I need to remove my head from my own behind.
My debts are about 18k, mostly credit cards and a few overdrafts.
My credit history is good, I have met almost all my payments (I missed 2 on my halifax card because their system could not process payments with gaps in it.....this was about 2 years ago though.)
I recently checked and it was all green.

However, I am forever in my overdrafts and can not make any progress due to the high interest rates on some of the cards (MBNA and HSBC)
I actually got £2400 last month as a tax rebate from where I was. (It didn't help I was between jobs for 3 months)
I have had loans in the past and have fully paid these of, but I have had no luck getting a loan now, probably because I was working abroad for the last 6 months. In an ideal world I would borrow 13k, pay of my barclaycard, bt from mbna and clear all other debts and pay of as much of the barclaycard each month on top of the other debts. But this is probably not viable looking at my SOA.

My SOA is roughly like this - I know I should be exact, but I plan to sit down tomorrow afternoon and get everything written down and exact. I am in a slight rush as I have an interview with payplan on Monday so thought would post here to get things rolling.

I think they will suggest and IVA due to the low amount available each month?
I am very scared of the IVA - but then maybe its what I need to get out of this hole?
Also - I am paid hourly, I believe 989 will be my lowest monthly payment, with the most being 1100.
Thank you for any advice, these forums are great, but I am somewhat overwhelmed by the shear amount of information here.
d.f.w.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 989
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 989

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 175
Clothing................................ 0
Petrol/diesel........................... 200
Road tax................................ 10
Car Insurance........................... 100
Car maintenance (including MOT)......... 20
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 850


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
HSBC cc........................5900......140.......19
MBNA...........................4000......100.......31
egg............................2000......50........17
natwest od.....................1000......0.........19
hsbc od........................700.......0.........19
barclay card...................4000......80........7
halifax........................1000......28........19
Total unsecured debts..........18600.....398.......-


Monthly Budget Summary
Total monthly income.................... 989
Expenses (including HP & secured debts). 850
Available for debt repayments........... 139
Monthly UNsecured debt repayments....... 398
Amount short for making debt repayments. -259

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -18,600
Net Assets.............................. -18,600

Tixy

Hi

moothom wrote: »

Hello
I have been visiting the forum for a long time now, and I have now reached the point where I think I need to remove my head from my own behind.
My debts are about 18k, mostly credit cards and a few overdrafts.
My credit history is good, I have met almost all my payments (I missed 2 on my halifax card because their system could not process payments with gaps in it.....this was about 2 years ago though.)
I recently checked and it was all green.

However, I am forever in my overdrafts and can not make any progress due to the high interest rates on some of the cards (MBNA and HSBC)
I actually got £2400 last month as a tax rebate from where I was. (It didn't help I was between jobs for 3 months)
I have had loans in the past and have fully paid these of, but I have had no luck getting a loan now, probably because I was working abroad for the last 6 months. In an ideal world I would borrow 13k, pay of my barclaycard, bt from mbna and clear all other debts and pay of as much of the barclaycard each month on top of the other debts. But this is probably not viable looking at my SOA. Its more likely you cannot get a loan because you owe so much compared to your income. You already owe more than you earn and people are struggling to get any more credit if they owe 50% of what they earn.

My SOA is roughly like this - I know I should be exact, but I plan to sit down tomorrow afternoon and get everything written down and exact. I am in a slight rush as I have an interview with payplan on Monday so thought would post here to get things rolling.

I think they will suggest and IVA due to the low amount available each month? I think they will be more likely to suggest a debt management plan due to your low income, low amount available. Have a read of this guide if you haven't already http://www.moneysavingexpert.com/loans/pdf-iva-guide.pdf

I am very scared of the IVA - but then maybe its what I need to get out of this hole?
Also - I am paid hourly, I believe 989 will be my lowest monthly payment, with the most being 1100.
Thank you for any advice, these forums are great, but I am somewhat overwhelmed by the shear amount of information here.
d.f.w.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 989 how long have you had this job? can you fit a second job round it? presumably the higher months are when you expect to get overtime? can you increase the amount of overtime you can do?
Partners monthly income after tax....... 0
Benefits................................ 0 are you entitled to any tax credits to top up your income? check at www.entitledto.co.uk
Other income............................ 0
Total monthly income.................... 989

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300 does this include all bills, utilities, council tax, tv licence etc? are you renting from or boarding with family?
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 175 this is very high for one person. Plenty manage on around £80 but perhaps set a target of £100 to start. Try meal planning for the week before you go shopping and try the drop a brand challenge. For people who cook for 1 person then batch cooking larger meals and freezing into individual portions can work out cheaper.
Clothing................................ 0 is this realistic long term? maybe budget a small amount over the year.
Petrol/diesel........................... 200 are all jounreys essential? do your drive efficently and fill up at the cheapest garage?
Road tax................................ 10
Car Insurance........................... 100 have you shopped around? read the article on here to see if you can use any of the tips to reduce the cost (such as adding an older named driver if you are young)
Car maintenance (including MOT)......... 20
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 if you buy any then do include a small amount in your budget
Haircuts................................ 10
Entertainment........................... 0 to be realistic include a small figure here
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 850


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0 do you own your car? how much is it worth?
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC cc........................5900......140.......19
MBNA...........................4000......100.......31
egg............................2000......50........17
natwest od.....................1000......0.........19
hsbc od........................700.......0.........19
barclay card...................4000......80........7
halifax........................1000......28........19
Total unsecured debts..........18600.....398.......-
is your current account still with any of the overdrafts above? if so then move your salary to a new basic account (no overdraft) with a bank you don't owe any money to to protect you from having your salary swallowed up by the bank.

Monthly Budget Summary
Total monthly income.................... 989
Expenses (including HP & secured debts). 850
Available for debt repayments........... 139
Monthly UNsecured debt repayments....... 398
Amount short for making debt repayments. -259

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -18,600
Net Assets.............................. -18,600

Do you anticipate you are likely to be able to increase your salary over the next few years or are you realistically likely to be stuck at the sort of level you are now earning?

What did you spend the money from the debts on? is there anything you could now sell off to start reducing your debts?

Your outgoings (aside from food) are fairly low but obviously because your debts are relatively high you are a long way from being able to meet your repayments. How have you managed so far? have you been getting £260 or so further into debt each month?

Hopefully Payplan will be able to talk through things with you, don;t rush into any decision (particularly if you are thinking of an IVA - if you are I would recommend you get a advice from several different places due to the seriousness of entering into an IVA.

Good luck with your interview with them.

moothom

Do you anticipate you are likely to be able to increase your salary over the next few years or are you realistically likely to be stuck at the sort of level you are now earning?
Yes and no, I am on a 6 month contract, and sadly no over time - any hours I do extra are given back.

What did you spend the money from the debts on? is there anything you could now sell off to start reducing your debts?
Sadly no.

Your outgoings (aside from food) are fairly low but obviously because your debts are relatively high you are a long way from being able to meet your repayments. How have you managed so far? have you been getting £260 or so further into debt each month?
Pretty much, I recently got a large tax return of £2400 and it was basically eaten by my overdraft.

Hopefully Payplan will be able to talk through things with you, don;t rush into any decision (particularly if you are thinking of an IVA - if you are I would recommend you get a advice from several different places due to the seriousness of entering into an IVA.
Thank you for your advise.
I will update my budget later, but certain things like insurance are the cheapest available, food wise I do eat alot, but need to but can probably cut back!
Thanks - will update later

Happytogetdebtfree

Hi moothom all the best with sorting your debts out and getting on top of things... i hope it works out.. there is a bit of a deficiet i think a debt managemnet plan will be the way to go so that you can offer an amount you can afford... it might be wise to speak to the sitizens advice bureau, fingers crossed and all the best xx

moothom

Thanks for the replies.
Having spoke with Payplan the other day and went through my budget etc, the result was I was recommended a DMP.
I was told that I would have to pay £132 a month, and assuming the creditors accepted the offer it will take 11.9 years to repay my debts.
This sounds perfect, and I ould try to pay in extra each month to try pay it of asap.
One thing that scares me is that some of the creditors say no?
I was told to cancel all my direct debits and offer a token payment to each for roughly what they would receive.
I know there is a wealth of knowledge on the forums, but i feel very overwhelmed by the thousands of posts.
thanks

MyLastFiver

Assuming your salary will rise over time, it will take you less than 11.9 years to repay. You will be paying roughly one third of contracted minimum payments. My ratio was similar when I started on a DMP. All my creditors accepted this and eventually they all stopped interest. Some will refer your account to a Debt Collection Agency. This is not as scary as it sounds because it usually means that you will not be charged any more interest. HSBC are particularly bad to deal with. Ignore the phone calls, pay them according to the plan and eventually they will refer you to DCAs and the calls will stop.

What you do with any monthly surplus is up to you. Personally I would save it for a rainy day, or as a buffer in case your living costs rise. Once you start overpaying your DMP, your creditors will expect this every month then get arsey if you go back down to your "normal" payment.

moothom

Thanks for the reply, put my mind at ease.
Once they pass my debts of to a DCA - I assume payplan deal with them?
Sods law I owe HSBC the most, but there we go.
I am expecting to get some money back from the last Tax year, but due to some unknown reason their has been a big delay (probably because I returned from working in Australia) - anyway - once I get this money I had intended to pay it to my debts, but obviously I don't want to screw up the plan - so should I just hold onto it and have it as a backup source? (its probably about £600.)

Also - I have sorted out my basic account, salary will be paid in there. I have cancelled Direct debits, but was told to start making the token payments, but to send a letter to the creditors - is there a template for such a letter? And should I send the payment on the usual date?