SOA and Unsecured Debt Advice

dmo73av

Hi all,

I've attached my latest SOA.

The SOA may look somewhat unusual as I live at home with my parents and rent my flat out.

Rent/Mortgage 635
Service charge/ground rent 0
Water (supply & waste) 0
Council tax 0
Electricity 0
Building and contents insurance 40
Landline 0
Internet 0
Mobiles 10
TV licence 0
Spares/servicing 10
Road tax 10
Car insurance 10
AA, RAC etc 8
Fuel & Parking 40
Food, toiletries & cleaning 100
Meals at work 40
Clothing and footwear 20
Sky 55
Sports 0
Rent to parents 100
Sundries 10
Hairdressing 10

Total 1098


At present my business brings in c.£800 and I have rent coming in for £450 per month. So I have a combined income of £1250 a month.

The business income has been weighted so as to account for 4 weeks holiday a year.


I have the following unsecured debts:

HSBC 6000
Llloyds 10000
Egg 5000
MBNA 4500
A&L 5400
Cap One 2500
Sains 4000

Total 37400

The min payments across all of them are c.£700.

I currently have £3,000 in credit in my bank account.

There is a further £3000 credit available through overdrafts on bank accounts and also remaining balances on credit cards.

I am familiar with the terms DMP and IVA's but am unsure what is best and when it would be appropriate to go down that route.

My business is picking up and I hope to increase my income by £100 per month.

Do I keep with the min payment each month until I run out or do I go on a DMP or look at an IVA?

Many thanks in advance for your time and advice.

Dave

gettingitsorted

Hi Dave and welcome to DFW.

If you call either the cccs or payplan they will be able to give you advise on what is the best thing for you to do ,links to there websites can be found at the top of the page .

hope this helps

woohoo_postingid

Sell the flat?

dmo73av

Long term, i'm confident the business will do well as the figures increase each month so I'd rather not sell the flat.

Also the flat is worth 125k and there is about 10k equity in the property. Most of the equity would be used to sell the property.

in*the*red_6

dmo73av wrote:

Hi all,

I've attached my latest SOA.

The SOA may look somewhat unusual as I live at home with my parents and rent my flat out.

Rent/Mortgage 635
Service charge/ground rent 0
Water (supply & waste) 0
Council tax 0
Electricity 0
Building and contents insurance 40
Landline 0
Internet 0
Mobiles 10
TV licence 0
Spares/servicing 10
Road tax 10
Car insurance 10
AA, RAC etc 8
Fuel & Parking 40
Food, toiletries & cleaning 100
Meals at work 40
Clothing and footwear 20
Sky 55
Sports 0
Rent to parents 100
Sundries 10
Hairdressing 10

Total 1098


At present my business brings in c.£800 and I have rent coming in for £450 per month. So I have a combined income of £1250 a month.

The business income has been weighted so as to account for 4 weeks holiday a year.


I have the following unsecured debts:

HSBC 6000
Llloyds 10000
Egg 5000
MBNA 4500
A&L 5400
Cap One 2500
Sains 4000

Total 37400

The min payments across all of them are c.£700.

I currently have £3,000 in credit in my bank account.

There is a further £3000 credit available through overdrafts on bank accounts and also remaining balances on credit cards.

I am familiar with the terms DMP and IVA's but am unsure what is best and when it would be appropriate to go down that route.

My business is picking up and I hope to increase my income by £100 per month.

Do I keep with the min payment each month until I run out or do I go on a DMP or look at an IVA?

Many thanks in advance for your time and advice.

Dave

Hi Dave

Just some of my observations on your SOA....

It might be useful to list the APRs and credit limits along with your debts to create a fuller picture. Also, I can't see any business expenses, are you saving for the inland revenue, paying class 2 NI contributions etc? Surely there are other expenses that go along with running your own business??

At the moment you are overspending by at least 500 a month, unless you can increase income fairly substantially it seems to me the credit available to you is going to run out pretty fast. Can you take a part time job to make ends meet while the business is growing perhaps?

Also, are you paying the buildings insurance for the flat and the contents cover for your own possessions? If not I don't think you should be paying contents cover for the flat, and wouldn't your possessions be covered by your parents policy? Anyway £40 is a lot for buildings and contents cover, try insure supermarket to look for a better deal.

If you do go down the DMP route I think it's unlikely that you'd be able to keep sky at £55 a month. Think it would be worth contacting CCCS/Payplan/National Debtline for some advice anyway, you don't have to commit to anything straight away.

Also with regard to the flat, it's costing you £735 a month to hold onto it, (£635 in mortgage and £100 to your parents) and you are only getting £450 a month back - is this sensible?

ITR

raq

think i'll also give them a call as I wasn't aware they give advice on what's the best road to go down. thanks

do_it_today!

Can you remortgage your flat to get a lower rate at all?
take lunch to work?
(dare I say it (knock sky on the head or down grade package?

dmo73av

Hi all,

Thanks for your responses.

My business costs and taxes have already been applied. The £800 profit is what I take home after costs and taxes.

My flat is on a fixed rate over another 3 years (2 years into the 5 years).

The flat is a ballache. Soemhow I feel compelled to keep it as anyone with property would do.

Extra income. I did look into the extra job, but I wanted to spend as much time as I can on increasing my business.

I have started the matched betting and that is going well, but I have not included that in the figures in the original post, seeings as it is not really a guaranteed income over a long period of time. What i make from that is a bonus.

While I have £6k (£3k in bank and £3k in overdraft and cards avalable) I will continue and I hope to expand the business by what equates to an extra £100 a month next year. this is feasbale based on what I have achieved so far providing I go and knock some doors.

I would be prepared to drop Sky if it came to it. A base package would be best as aeriel rection here is very poor.

From what I can see, I would be heading towards a DMP/IVA. How does this tend to come about? Does it come after not paying your cards for x amount of months? How long roughly?

Would i be forced to sell the property?

CLAPTON

can you clarify the business growth ; do you mean that in 12 months time you expect to be making 900 per month or do you mean that each month will increase by 100 , so by dec you will make 900 and jan be making 1000 and feb by 1100 etc.

also when you say you have 3k in the bank do you mean you can borrow an additional 3k on your overdraft or do you mean you have savings of 3k.

dmo73av

hi clapton

the business should make 900 by end of jan, 1000 by end of feb and so on.

by 3k i mean that is positive without my overdraft. i also have 3k available in terms of cards and overdraft. so i have 6k in total at my disposal

CLAPTON

as i see it you currently have a deficit each month of 550.
but by July /August 2007 you should be able to breakeven.
you seem to have enough credit to last that long.
so if you are confident that you can increase you income month on month until July/august and as you have sufficient funds to last that long.

if thats so then you dont need to consider DMP or an IVA as you can pay your minimum payments with your credit and then you will be able to start repaying your debts from July/August.