okey dokey, where to begin?

tenpence_shy

hi, long time lurker, first time poster

apologies for length

after thinking i was a clever sod with an excel spreadsheet to manage the finances, cc payments etc, i was a bit dismayed when i realised on monday that i'd missed off a full two rows and hadn't accounted for £12k, i am an arrse i freely admit, the wife tells me so

it also explained why my wonderful budgeting was going down the toilet and i was getting closer and closer to bouncing dd's each month.

we both work; having a joint take home of £2700 a month, me full time and mrs tenpence part time, but with mortgage and bills at £1440 and cc's of £704 for an outlay of £2140, it currently leaves us only £558 for food, petrol and busfare each month

suffice to say i rang the bank and haggled a loan of £14k over 5yrs out of them; brill i hear you cry, but not if the total debt is currently £34k

i've now looked into a dmp through cccs that looks like it could bring down our payments to around £419 from £704 and was wondering if the board would advise taking the loan to neaten up our cards before taking on the dmp?

the loan is through our current bank; pratvest, which has two overdrafts and two cc's attached, and our mortgage is with another bank; scallywax, with two cc's and a fixed term mortgage up in july 2011

mrs m says she needs a minimum of £800 a month to feed us and the two little tenpences (a fivepence and a little tuppence) and even if we do take the loan and manipulate the cc's; not paying off the highest interest but just the highest payments, we're still going to be £180 a month shy of that.

i don't know whether it's better to take the loan and pay off the cc's with scallywax then 'burn' pratvest with the dmp (but are they more likely to not agree to anything if we've just taken the loan?) in the hope of keeping scallywax sweet when it comes to july and re-mortgage time?

or just take on the dmp as it stands and hope that scallywax will be understanding in july, even though we will have shafted them with the dmp on two of their cc's

i'm in the process of opening a new bank account for when we flick the dmp switch but i guess i'm looking for your input on whether i'm going about it in the right way

i will pay back what i owe; i'm not trying to shirk out of my debt, but my immediate concern is to my family ; the tenpences, my fivepence and my little tuppence, and making sure we don't lose our home and we can feed and clothe ourselves and we don't start bouncing dd's and missing payments willy nilly

i open myself to your advice and scorn(but not too much of that eh?) as i don't like feeling this shade of crap

tenpence shy

rugbychick81

£800 a month on food seems steep...

Tixy

Hi and welcome

If you are considering a DMP then I would not take out the new loan first. I would just go into your DMP with the debts you have. I understand about the mortgage query but its not a route I would choose - they are much more likely to be 'annoyed' with a loan you have just taken out. And regarding the re-mortgage - on a DMP a lot of people do find they have to stick with a SVR rate as they cannot get a new fixed rate anyway. It should be looked at as a seperate issue by the mortgage bank regardless of you have cc's in a DMP.

Mrs T needs to be aware that if you are going on to a DMP then you won't have anything like £800 for groceries for a family of 4. Many people on here would say they manage a similar sized family on around £250. But on a DMP I think CCCS will probably allow you something like £350 for a family of 4.

From the sounds of it if you can cut back your grocery spending to the amount you'd need to in a DMP then it may be you wouldn't need qualify for a DMP anyway? Something to look into anyway.

Good plan to open a new account if you are considering a DMP - is it with a bank not connected to one you owe any money to?

Finally - as is always suggested in these circumstances - you could complete a statement of affairs and post on here to see if there are other areas people can suggest ways you can save money to save the need for a DMP - if you are brave the template is here - http://www.makesenseofcards.com/soacalc.html

KiKi

tenpence_shy wrote: »

hi, long time lurker, first time poster

Hello, and welcome.

Do post an SOA - that will be really useful for everyone in helping to identify if you can do this without a DMP....

it currently leaves us only £558 for food, petrol and busfare each month

...because that should be plenty...

mrs m says she needs a minimum of £800 a month to feed us and the two little tenpences (a fivepence and a little tuppence)

...and THAT makes my eyes water! £800 is way over the odds for a supermarket shop for two adults and kids - double what many people spend, triple for others! I don't mean to sound harsh, I'm just offering a reality check to Mrs M!


Please post a full SOA (as a lurker you'll know what it is, link at the top of the board) and the lovely people here can help you out better.


KiKi

dreamdreamer

I agree that I'm not sure you need a DMP and that I would have no idea how to spend £800 a month on food! I think maybe with some realistic cutbacks (I'm not saying spend £80 a month like some on here manage, but maybe halve it to 400) you'd find you were managing your repayments and not getting into more debt, without adversely affecting your credit rating like a DMP would.

jackieglasgow

Send your wife over to the OS board for some help with her food budget, she should only be spending £800 a month on food if you are eating Foie Gras and finest Fillet steak every night of the week. She could easily half that, and you could still eat very well. You might not need a DMP then.

dancingfairy

taking a loan out that you intend to default on does not sound like a good plan and could potentially lead to allegations of fraud I would have thought - a bank is not going to be too pleased that you decided to pay joe bloggs off and leave them with a debt that you intend to default on
df

tenpence_shy

sorry, i should have proofed my OP

i meant £800 per month for food(looroll/washing powder etc), clothing, school dinners for fivepence, childcare for tuppence, fuel for the car so mrs t can get to work, busfare for me so i can too, entertainment(ha!) etc, which ties in with the figures i have from CCCS

we mainly shop in lidl or home bargains, the occasional run to tesco/asda when offers appear, not as i appeared to imply, fillet and chateau neuf every night

i've consolidated my hours to work over 4days so my wife work an extra day to bring more in and not have to put tuppence into childcare more than once a week. this way the kids have a parent at home every day bar one but its still not enough

we can't even afford for fivepence to go to ballet or gymnastics like the other little girls at school, luckily tuppence is happy to beat me up and play with his (second hand) thomas trains

my intention for the loan was not to defraud but to consolidate as i'd rather have 3 angry creditors than the 11 we have now
i also asked for the loan prior to considering a dmp and as my priority is to my family and keeping a roof over their heads and food in their bellies, sod the ethics/morals of pleasing pratvest and the banking system

i'm opening a new account with the red bank espanol, so will transfer the small amount o/s from our scabbey card to another before i do and i'll pull together a SOA and post it up tomorrow then you can all open up with both barrels

again apologies for my mitsake with the £800 spent on beluga, i'll go beat the servants so it doesnt happen again

tenpence shy

DVardysShadow

tenpence_shy wrote: »

my intention for the loan was not to defraud but to consolidate as i'd rather have 3 angry creditors than the 11 we have now
i also asked for the loan prior to considering a dmp and as my priority is to my family and keeping a roof over their heads and food in their bellies, sod the ethics/morals of pleasing pratvest and the banking system

Leaving aside ethics, the general view here is that 'consolidation' does not usually deliver all of the claimed benefits. Sure enough, it could reduce the number of creditors you have to deal with - and you don't appear to be under an illusion that you can eliminate debt with debt.

The problem with having all of your credit as a loan is that you have a very rigid repayment schedule, with no margin for events such as the car breaking down or a heating repair. So out come the credit cards again, and I am sure some will come here and testify that before they knew it, they were back in as much credit card debt as they were before the loan - and had the loan to pay off on top.

Reading between the lines, it looks like you have gone beyond the 'event horizon' and you are in the black hole where your credit is increasing each month just to fund normal living and repayments. I suggest that you put up the Statement of Affairs as already suggested, and get the collective wisdom before you make any decisions. As it is at the moment, your course of action looks as though it will deliver very little benefit at the expense of putting the roof over your head at much greater risk later on.

tenpence_shy

righto, heres a cribbed version of my budget from CCCS debt remedy in lieu of a standard SOA

Mortgage £854
Secured loans/2nd mortgage £150
Water £42
Council tax £114
Gas £46
Electricity £48

Building/contents insurance £46
Telephone/mobile/internet £55
TV licence £13
Satellite £21
Repairs/maintenance
Household appliance rental
Child maintenance
Childcare £165
Life insurance/pensions £24

Spares/servicing £20
Road tax £11
Insurance £25
Breakdown cover £9
Fuel/parking £130
Public transport £74

Food, toiletries, cleaning £398
School meals/meals at work £64

School trips/activities £12
Medicine/prescriptions
Dentist/opticians £10
Hairdressing £30
Union/professional fees £28

Clothing/footwear £60
Sports/hobbies/entertainment £35
Children's pocket money £20

Sundries/emergencies £30

Date budget created 10 Feb 2011
No of adults 2
No of dependants 2

Take home pay £1,325
Partner's take home pay £1,375
Child Benefit £134
Child Tax Credit £33

Total Income £2,867
Total Expenditure £2,534

Surplus (Deficit) £333

it now offers the wonderfulness of an iva as a way through this :eek: as well as a dmp!

over the past few months we've cut down to what we consider the bare essentials, whats left is above

i'll just head off a few things that i'm sure will be pointed out

phone/mobile/web - we're on a sky calls package & i need the web for work(out of hours remote it support) and study(OU degree i'm plowing through), mrs t is on payg and i'm on the lowest orange package till dec(24mths tie so can't get out early, i've already asked!)
satellite - lowest package a month and tied in till dec as above
school meals/meals at work - thats fivepence, she has to eat and its £1.75 a day - mrs t usually takes food in as do i
public transport - that can be brought down as i will cycle into work a few days a week, hell the 12 miles there will fly by and just think how much weight i'll lose! that way it'll be £34 a month instead of £74
dentist/opticians - we're both speccy gits so need to budget for specs and you have to pay for dental checks round here
hairdressing - me, i'm happy to zip ding with the trimmers at home once a week, but i can't see mrs t being happy with a grade 0! but i'll negotiate with her over that
union - with the current financial climate and job fears, its non negotiable - unison may be a useless bunch of toerags sometimes, but i'd like to keep them at the back of me in case everything goes tits up!

und finallement!

sports/hobbies/entertainment - its a 'corporate rate' council card for us both, so we can take the small change swimming every weekend and i can take out my frustration at leading my family down this crappy path by throwing the iron around at the local leisure centre gym and mrs t can wobble her bits at zumba. tied in till dec(oh how good was my planning there then?)

i had two lovely letters from pratvest and scallywax today, saying they were upping the apr on their respective cc's, yay!
it also looks as though for the first time in my life i'll have to take cash out on a card to make sure i've enough in the account to cover a different cc payment, how better can this get

how long does a dmp plan normally take to take effect? i get the feeling that it can be two or three months, is that right?

i'm also ringing the bank to see if i can make an appointment to discuss the mortgage, see if we can do anything before the tie-in ends and get a new deal, any kind of deal...

tenpence(feeling like ninepence) shy

DVardysShadow

Have a go at the standard SoA. Yours is for forwarding to creditors, but we really need to know about your debt - APR's, minimum payments, time left to run for loans. There are 3 prongs to dealing with this

• Increase Income
• Reduce Expenditure
• Manage the debt

In your situation, you need to manage the debt, so you really need to post the info.