In a state...please help..includes SOA

ukjs1976

Hi - your advice and experience would be very much appreciated.

Here goes...

I've run up unsecured debts due to using credit cards over the past few years. Total debt is currently 13200 (all unsecured debt)

I rent and have no mortgage. Me and OH have no joint financial commitments. We have been together for years, live down the road from each other but have chosen to have our own space (it works for us). Therefore all debt detailed below is my responsibility alone, no joint debt, no kids.

There is one major debt in all of this. Egg card debt of £10800 with currently about £170 in interest added on every month 19% apr.. This is frightening me to death ;-(


Many thanks in advance.




Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........0
Number of cars owned.................... 0

Monthly Income Details[/b]
Monthly income after tax................ 1300
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1300

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 425
Management charge (leasehold property).. 0
Council tax............................. 95
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 200
Clothing................................ 20
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 50
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)...... 15
Haircuts................................ 0
Entertainment........................... 15
Holiday................................. 15
Emergency fund.......................... 15
Total monthly expenses.................. 997


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
egg............................10800.....280.......19
amex...........................1700......41........19
overdraft......................700.......40........19
Total unsecured debts..........13200.....361.......-


Monthly Budget Summary
Total monthly income.................... 1,300
Expenses (including HP & secured debts). 997
Available for debt repayments........... 303
Monthly UNsecured debt repayments....... 361
Amount short for making debt repayments. -58

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -13,200
Net Assets.............................. -13,200

WASHER

Welcome to DFW board.

Food is high, you could reduce that, especially as their is only you.

Do you not have a telephone line?

Are your water rates in with your council tax?

Other than the groceries, not to much to cut back on. Have you thought about a lodger? It would help you repay the debt much sooner.

WASHER.x.

ukjs1976

Hi Washer,

Thanks for your reply.

No telephone line (got rid of the land line as i dont need it)

Water rates are included in the rent.

No room for a lodger.

Food costs is high as includes cigs

WASHER

You may want to contact the CCCS (A debt charity, they won't charge you for advice), you don't seem to have a lot to cut back on and you are in deficit each month by £58.

A DMP (debt management plan) may be the answer. Take a look at the CCCS website, it has a wealth of knowledge.

kaz0705

Consider changing your mobile phone tarriff. I went with O2's Simplicity Sim (so have to keep current phone) which is £20 a month for 1400 texts, 700 mins and free internet. you can get lower tarriffs if you don't think you need that many mins/ texts (I need the mins!).

Also, I have been extremely impressed with O2's boradband. It's £7.50 a month if you're an existing mobile customer. So that could save you 27.50 straight off (I don't work for o2, i promise!)

Secondly, as you currently are short each month the obvious things need to be said: stop smoking or at least cut down. Speak to NHS about their free service to help cut down/stop or maybe seek out trainee hypnotists to help? My friend has just completed a course to practice and advertised on gumtree for people to practice on... They're probably a crutch right now for you which will make giving them up seem impossible but groceries for one should be more like half (if not less!) each month so you could easily have another £100 to add to repayments.

Likewise, the holiday fund, entertainment and clothes fund all need to go... It's not FOREVER, just until you get your repayments under control.

I'm sorry, playing the KillJoy here! On the plus side, you are addressing the issue and that's brilliant!

I would also second seeking advice from CAB etc. There is a light at the end of the tunnel- just a bit of a hard slog to get there.

Best of luck!

x

Foundational

Hi - I agree with Washer, do look at CCCS. A few thoughts, though - Mobile costs seem high, can you change contracts - there's good info on the Main Site here, and in the Forum for this. Groceries could still perhaps be trimmed, look at the Old Style Money Saving Board in the Forum, and look at the tips about dropping a brand on some of the shopping. How do feel about cutting back/cutting out the ciggies? I expect this feels harder than ever at the moment but there is NHS help available. Part of a plan? Otherwise there doesn't seem much to cut back on. Is all the £50 travel and saving for hols essential? Likewise, emergency fund. Anything you can sell on e-bay or at a car boot.

I recognise that even if you make savings to break even, you need to do a little more than this to start reducing the debt by paying more than the minimum. But if you could get to this point, the smaller Amex debt would be the best target, to see something going down.

Please keep posting, you may get more thoughts and encouragement. Best wishes.

Foundational

ukjs1976

Thanks for the replies and suggestions.

To add, not sure if this is relevant but, deductions from monthly gross pay of £1888.58 are total of £570.86 (Income tax PAYE £245.20, NI D £131.90, Pension £122.76, student loan £57.00, union £14.00).

Am considering a DMP through the CCCS with a proposed monthly combined payment to the debts of £203 (which the CCCS indicates will mean it will take 5 + 1/2 years to clear the debts (assuming interest is stopped).

CCCS advised to make sure my salary goes to a bank account not connected to the debts before taking any further action. I do in fact already have an alternative current account that isn't connected to the debts that I used to use, i have checked with that bank and the account has 3 quid in it and is still active. They said would be fine to start paying salary into that current account and use it as normal (has no overdraft facility and I will tell them i don't want one).

DMP appears to be the most realistic way forward but has few guarantees, the interest on the debts may carry on, they could still reject the plan, they could still take me to court and of course it will destroy credit record. The cccs tells me that being in debt isn't a crime, but i feel very ashamed. I will never ignore my personal finances again. I don't even have much to show for all this debt.. helped my sister out a bit but she's in debt as well :-(

Right now a DMP seems the only way to try and stop the debts spiraling due to interest added every month and start to reduce the amount I owe.

Thank you for your suggestions and experience.

lesalanos

why not move in with the OH even if just for a few months to get your debts down?

Primrose

Groceries definitely look high. If cigarettes are included in this amount, quitting is obviously a major area to centrate on quickly as this could give you some extra money fairly quickly to start reducing your debts. Your GP can probably refer you to a Non smoking clinic if you think giving up is going to be difficult.
Could you move into your boyfriend's home for a few months? This would mean very little gas and electricity being used in your place - probably standing charge only - which again would give you some financial room to manoeuvre.

ukjs1976

Thanks for the suggestions.

Looking at the numbers involved I can't see how I can make inroads into the debt without getting the interest charges stopped, this is what is making the debt go up and up and up. Or am I missing something?

ukjs1976

Hi again ~

This where I'm now at with trying to sort out my debt situation:

~ the paper work has now been collected together,
forms completed and sent to the CCCS to go ahead
with setting up a DMP.

~template letters now sent to the three creditors
(by registered post, not signed but my name printed in
capitals after the 'yours failthfully').

~DDs cancelled on my old current account

~salary payment is now in place to my new
current account with no overdraft facility (has no
association with any of the three financial institutions
I owe debt to).

~now sorting out so priority payments
e.g. council tax etc are made from my new
current account

~I have made a £1 token payment to egg credit card
as the dd will return next week, I have informed them
of this in the letter i sent advising the setting up of a
DMP with the CCCS.

When I phoned my new current account to check the balance,
the person I spoke to said i could have a credit card with them
and would I like them to set that up for me!!!!!
I told the person at the bank that I never want to have a credit card with them.

Now I will just have to wait and see what the outcome is from the
creditors and the CCCS.

Thank you to everyone for the brilliant advice on this website.