£50k debt please help me - I need to get my life back in order.

Murph2010

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£50k debt please help me - I need to get my life back in order.
Hi and many thanks for reading. To cut a long story short I was in a relationship where my ex partner and I got into a high amount of debt, initially this was due to living beyond our means but then the credit was used to live on and in fairness to myself I tried to make a change and put a stop to it but problems in the relationship didnt help. We split up 3 years ago but its myself who has the debt as it was in my name.
Luckily I have now met someone new and I need to get this debt sorted before it gets serious. I want something in place so I can see how long the journey will last to paying this off.

The details. Essentially I have 5 credit cards (none of which I have used or had possession of for 4 years) with an outstanding balance of £22,000. I am in agreements with all of these and pay between £20 and £55, paying a total of £160. The problem with this is that every 3-6 months this gets increased and I am not making any significant dent in the debt, it will take forever at these levels to pay off.
There is also a joint loan of £30,000 of which I am the first name on the loan. Like the credit cards I pay a nominal fee of £25 per month as a goodwill gesture, my ex also pays £25 per month (allegedly). This debt is actually attached to the property my ex lives at with her 3 children (I am not the father). The mortgage is in joint names although I do not pay anything on it, I live in rented accommodation. The mortgage is approx £142k, value of house would be around £165k. I believe the mortgage to not be in arrears of any kind.

I am currently managing my finances well, I only buy what I can afford to buy, I am employed but as I say I want to solve and clear this debt now. I am willing to make sacrifices as I want a fresh start with my new partner and to have this dealt with and a date in the future where things will be paid off.

The world of IVA and bankruptcy is mind boggling and I ask for your help today in enabling me to have a future.

Kind regards

DarkConvict

IVA is used to protect assets, such as a house. Since you do not live in it , nor has it got much equity this will probably not be suitable for you.

A DMP which is informal agreements to pay, basically what you do now is the way forward for most people, but it depends on the level of debt they are in. Contact the debt charties for more information on it. - https://forums.moneysavingexpert.com/discussion/2077631

To see how long it would take a DMP use this snowballing tool. http://www.whatsthecost.com/snowball.aspx

For use to advice you, post up an SOA in MSE format - http://www.makesenseofcards.com/soacalc.html

The main issue one would face with bankcrupty if it is the best option for you is what job do you do, finance and legal industry's are just 2 that often require a good credit history, and whilst it only shows for 6 years on a credit record it will mean you have to answer yes if asked have you been made bankrupt.

Murph2010

Thanks for the reply. Its my intention whilst seeking advice on here is to ring the CCCS tomorrow evening.

You suggested an IVA may not be suitable for me and indeed when I contacted a company they said I wouldnt get one because of the agreements I am in and also the loan debt would not be able to be put into the IVA because its secured.

The DMP whilst working for me currently is not something I want to be doing moving forward, I want a clean slate and to know when that will be. If I can do something that means I'm debt free in 5 years then thats fine, but I need action and now. I want something to be in place thats means the above will happen. I am at my wits end with this now, its on my mind everyday.

Thank you

Fang_3

Murph2010 wrote: »

Thanks for the reply. Its my intention whilst seeking advice on here is to ring the CCCS tomorrow evening.

You suggested an IVA may not be suitable for me and indeed when I contacted a company they said I wouldnt get one because of the agreements I am in and also the loan debt would not be able to be put into the IVA because its secured.

The DMP whilst working for me currently is not something I want to be doing moving forward, I want a clean slate and to know when that will be. If I can do something that means I'm debt free in 5 years then thats fine, but I need action and now. I want something to be in place thats means the above will happen. I am at my wits end with this now, its on my mind everyday.

Thank you

I don't quite understand this. You have £50,000 worth a debt but you don't want to do anything that will take a bit of time. There's no such thing as getting a quick clean slate.

Murph2010

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1630
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1630

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 25
Rent.................................... 575
Management charge (leasehold property).. 0
Council tax............................. 90
Electricity............................. 31
Gas..................................... 30
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 12
Mobile phone............................ 40
TV Licence.............................. 12
Satellite/Cable TV...................... 65
Internet Services....................... 0
Groceries etc. ......................... 240
Clothing................................ 20
Petrol/diesel........................... 100
Road tax................................ 13
Car Insurance........................... 30
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 8
Buildings insurance..................... 0
Contents insurance...................... 9
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 80
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1420


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


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 30000....(25).......0
Total secured & HP debts...... 30000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Lloyds.........................3500......10........0
MINT...........................8550......30........0
EGG............................1550......55........0
CABOT..........................5600......20........0
VIRGIN.........................2500......30........0
Total unsecured debts..........21700.....145.......-


Monthly Budget Summary
Total monthly income.................... 1,630
Expenses (including HP & secured debts). 1,420
Available for debt repayments........... 210
Monthly UNsecured debt repayments....... 145
Amount left after debt repayments....... 65

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -30,000
Total Unsecured debt.................... -21,700
Net Assets.............................. -51,700

Murph2010

From everything I read, things could be sorted within 5 years. Something could be in place. This is what I want. A friend of mine recently went bankrupt with debts of over £80k and within 6 months it was all done and dusted and she was debt free. Ok, the bankruptcy will be on her file but the debt is cleared and she can get on with her life. This is what I want, I just need to know the best way to go about it.
I'm sorry if I come across looking for an easy way out, thats not the case. I just need help.

NorthernLas

I think it would be useful if you got advice from the bankruptcy board regarding your joint debts. I think if you go bankrupt your XOH may become liable for the full amount. Also, as you are still on the mortgage, some of the value of the house may be taken into account.
Have you put your figures into the CCCS debt remedy? (Not sure if you need to do this with more realistic minimum payments and see what it advises)

Murph2010

Thanks NorthernLas. I am going to ring the CCCS tomorrow evening after work so thanks for pointing me in that direction. This may sound harsh but I am having to look after Number 1 now after being saddled with all this joint debt. I hope the the CCCS can help me.

NorthernLas

No, it is important to look after Number 1, but it is always good to know what might happen so that you can have a plan.

You can get advice from other charities like National Debtline if you need a second opinion.

DarkConvict

Hi,

With debts of £50,000 and an surplus of £200 after living expenses, you simply cannot clear this debt doing a DMP.

Assuming no interest or charges which is never the case, you need £830+ a month just to make it meet the 5 year objective.

Bankruptcy is not the end of it either, they force you to keep up payments on a IPA/IPO (IPO is court enforced if you fail the IPA payments), for a total of atleast 3 years.

Your Groceries is high, i've seen it as low as £60, but usually its about £120 for 1 person, never more than £60 per person for a bigger family i.e. 4 people.

Your rent is also quite high, are you in london or london outstirts, I know people who pay only £400 for a share in a 2 bedroom flat in outer london.

With £50,000 of debt entertainment is a luxury so £80 is too much, reduce to perhaps £10.

Whilst your SOA is missing bits like house value, I would say BR is the most viable option and does cost ~£550. So long as your career does not require a good credit record you should be okay.

Ames

I think your utiliites are high, I live in an all electric flat and pay £33 for energy and on a meter my water is £127 a year.

Your groceries are also way too high, I spend £100 a month and I can't do too much cooking from scratch because of health issues.

I also think that sky and £40 on a mobile is high, and at least the sky part is a luxury you wont be allowed if you go for any kind of plan, whether it's DMP or bankruptcy.

Again, entertainment is too high given your situation.

I'm sorry if that sounds harsh, it's meant to be constructive.

I agree though that on your income with such high debts a DMP wont work within anything remotely like a reasonable time. BR could be awkward though because of the house.