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My situation: What shall I do?
Gray-Fox
Posts: 312 Forumite
I am currently unemployed but have been offered a fixed term job from September. The job is potentially two years, but because of the cuts could be cut back to just 7 months. Given this, 7 months is the basis I will work from when planning my financial future.
This means that rather than working for the next 7 months and paying off loads based on my salary, I'd rather work, put money aside (in case I am made redundant after 7mths) and pay the absolute minimum I can get away with.
My debt is about 23k with two creditors. This is broken down as follows:
1) Professional Training Loan + charges + interest
2) Overdraft
3) Credit card I had while a student
I had considered a quick bankruptcy now, while still technically unemployed but I don't think it's the best idea because of IPAs and the initial fees to go bankrupt. I think the best options are either a DMP or handling my creditors myself.
What do people think?
This means that rather than working for the next 7 months and paying off loads based on my salary, I'd rather work, put money aside (in case I am made redundant after 7mths) and pay the absolute minimum I can get away with.
My debt is about 23k with two creditors. This is broken down as follows:
1) Professional Training Loan + charges + interest
2) Overdraft
3) Credit card I had while a student
I had considered a quick bankruptcy now, while still technically unemployed but I don't think it's the best idea because of IPAs and the initial fees to go bankrupt. I think the best options are either a DMP or handling my creditors myself.
What do people think?
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Comments
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wow, thanks for the responses0
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You're welcome. TBH though you did answer all your own questions in your OP. I'll just highlight a bit...wow, thanks for the responsesI am currently unemployed but have been offered a fixed term job from September. The job is potentially two years, but because of the cuts could be cut back to just 7 months. Given this, 7 months is the basis I will work from when planning my financial future.
This means that rather than working for the next 7 months and paying off loads based on my salary, I'd rather work, put money aside (in case I am made redundant after 7mths) and pay the absolute minimum I can get away with.
My debt is about 23k with two creditors. This is broken down as follows:
1) Professional Training Loan + charges + interest
2) Overdraft
3) Credit card I had while a student
I had considered a quick bankruptcy now, while still technically unemployed but I don't think it's the best idea because of IPAs and the initial fees to go bankrupt. I think the best options are either a DMP or handling my creditors myself.
What do people think?
As you are unemployed you won't have any disposable income to put towards debts so it's token payments only or borrowing from elsewhere to make the minimum repayments to keep your credit clean but as you are considering BR or paying as little as possible then it's irrelevant.:footie:
Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
I said that I am due to be employed in September.
:S0 -
On a short term contract. It's not quite the same as a permanent job. Save up some cash so that you can live off it when the contract finishes. How clean do you want your credit to be? A DMP will cause defaults and late payment markers to appear on your credit file for years.I said that I am due to be employed in September.
:S:footie: Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
If you do a DMP, either yourself or with CCCA, you will have to enclose a SOA. Do you intend to use your unemployed income and say nothing when you get a job, or put your employment income in? I don't think you are "allowed" savings on a DMP, you will be expected to use all surplus monies to pay off your debts.0
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On a short term contract. It's not quite the same as a permanent job. Save up some cash so that you can live off it when the contract finishes. How clean do you want your credit to be? A DMP will cause defaults and late payment markers to appear on your credit file for years.
1. Don't give two hoots about credit as I'm generally one for straight up cash rather than finance.
2. Your point about saving is precisely what I want to do and that's what I intend on doing.
3. Thanks for the clarity on the perm job thing. If it was a secure and permanent job, and would I have no problem repaying my debts in good time.If you do a DMP, either yourself or with CCCA, you will have to enclose a SOA. Do you intend to use your unemployed income and say nothing when you get a job, or put your employment income in? I don't think you are "allowed" savings on a DMP, you will be expected to use all surplus monies to pay off your debts.
1. DMPs are not legally binding though, are they? So unless they impose a CCJ on me, they never have to be shown proof of what I earn, right?
2. If it was up to me, I'd say nothing at all until I was in a financial position to start comfortably paying the debt off which I fully intend to do.
Can I just add, I am not a frivolous or spend thrift person. These debts are the result of student-hood and nothing else.
Cheers for the help so far.0 -
Savings can be disguised as an expense. As an example put £200 a month down for groceries and then spend as little as possible on groceries putting the rest aside for other months of the year. Someone on a DMP also has to "save" for the annual expenses such as insurance and these can be overestimated so that there will be enough when renewal time comes around just in case 1 or 2 months of "savings" aren't actually made.If you do a DMP, either yourself or with CCCA, you will have to enclose a SOA. Do you intend to use your unemployed income and say nothing when you get a job, or put your employment income in? I don't think you are "allowed" savings on a DMP, you will be expected to use all surplus monies to pay off your debts.:footie: Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
I actually suggested this to someone on another thread, i.e "pad out" things, but was told that if it ever went to a CCJ, which it could if any of the creditors won't accept the payments, then the court might require proof, as they did with that poster. My oh had CCJ's and I sent an SOA with "padded bits" and they accepted it. So I suppose it's "luck of the draw".0
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The padding must be reasonable. Rent and council tax can't be padded as it's fixed. But an extra 10-20% on the gas/electric is fine. Nobody knows how cold it's going to be or what the next price rise is. They have guidelines to go by and if you put £500 down for groceries for 1 person then that is far too much. The BR board here has a lot of information about the maximum figures that can be used.:footie: Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0
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Even though I'm not consdering bankruptcy?0
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