Current situation

markscottuk

I currently have major debts totaling 20.6K including loans of 4 and 12K and a credit card of around 5K.

Back in November I went with DFH but managed to come out of the agreement in March as they were taking £85 a month from me. (moral: Don't GO there!!)

Currently I am paying £95 a month against my 4K loan, £250 a month against the 12K loan and £120 a month from my 5K card (both loans are below contracted payments).

Because DFH messed up my SOA, they made low offers to all my creditors which were accepted, I now have £500 "extra" a month to save. I am currently putting this towards my 5K credit card.

I also have an Argos card with £600 limit but I buy on interest free plans and pay it off before interest is charged. I also have a £600 credit card with Barclays which I am paying £30 a month towards.

DOes anyone have any advice on whether what I am doing is sound or should I rotate the £500 extra between creditors each month?

If you require further information, please let me know

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
Monthly income after tax................ 1700
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1700
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 190
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 15
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 45
Groceries etc. ......................... 50
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 3
Entertainment........................... 25
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 353

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 2000
Total Assets............................ 2000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card 1..................5000......120.......12.9
Credit Card 2..................550.......30........24.9
Loan 1.........................11800.....250.......0
Loan 2.........................4000......95........0
Total unsecured debts..........21350.....495.......-

Monthly Budget Summary
Total monthly income.................... 1,700
Expenses (including HP & secured debts). 353
Available for debt repayments........... 1,347
Monthly UNsecured debt repayments....... 495
Amount left after debt repayments....... 852
Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -21,350
Net Assets.............................. -19,350

bottleofred

Hi Mark,

I think you should consider posting your statement of affairs to get ideas on how to save extra cash which can go towards the debts. You should also consider contacting the consumer credit counselling service, although you can self manage your dmp. If you continue on your own, pay the highest interest debts first with the extra £500 per month.

Good luck

Red

elfen

markscottuk wrote: »

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
Monthly income after tax................ 1700
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1700
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 190 - live at home?
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 15 - not bad, can't really improve this...PAYG or contract?
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 45 - what does this get you? can it be reduced?
Groceries etc. ......................... 50 - what is this for?
Clothing................................ 10 - are you sure you only spend this?
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10 - are you sure you only spend this?
Haircuts................................ 3
Entertainment........................... 25 - what does this cover? are you sure this is right?
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 353

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 2000 - what is this?
Total Assets............................ 2000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card 1..................5000......120.......12.9
Credit Card 2..................550.......30........24.9
Loan 1.........................11800.....250.......0
Loan 2.........................4000......95........0 - what about the other credit card and Argos card? need amounts and APRS to get a true picture?
Total unsecured debts..........21350.....495.......-

Monthly Budget Summary
Total monthly income.................... 1,700
Expenses (including HP & secured debts). 353
Available for debt repayments........... 1,347
Monthly UNsecured debt repayments....... 495
Amount left after debt repayments....... 852 - do you really have this left over a month?
Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -21,350
Net Assets.............................. -19,350

OK...there's a couple of things. Are you sure the amounts for entertainment/clothes/presents is correct?
You need ot put the balances/credit limit/APR for the Barclays card and the Argos card (am sure this is relatively high even if only used for interest free deals)
Realistically, what left over do you have that you can put towards your debts? Your amount left is relatively high, is it possible to open a savings account and put say £100 into this either for emergencies, or to save a bit more and do full and finals when it's built up?

The first place to put the excess would be towards either the highest debt, or the one with the highest interest, so on your SOA this would be the Credit Card no. 2. You'd also need to put some of this towardss your highest debt, which is the Loan 1. How much do you feel you could reasonably put towards debts and savings and still leave enough for any incidentals?

Teekaylon

i think in the current climate to be paying or be able to afford to pay that much to your creditors each month so TBH i personally think that as long as you are actually reducing your debt then does it really matter who you are giving the money to...?

have you spoken to your creditors yourself to see what they will each accept as monthly repayments? ...

you could allways contact the CCCS (totally free) advice service... google them, i am in a very similar situation to yourself and have found them very helpful, they can set up a free Debt Management Plan for you and your creditors

Tixy

Hi Mark

If any of your creditors have frozen interest (and it looks like the loans might have done) then if they realise you are favouring other creditors with these large lump sums its possible they may start charging interest again. Similarly if you are paying less than the minimums on any debt then when they ask for a revised income & expenditure account they may also realise all are not be treated equally.
If you are on agreed reduced repayments (basically a self-admin DMP) then what you should 'really' do is work out a monthly amount for all debts and split that pro-rata between your creditors based on the outstanding balance.

If you are paying more than minimum/contracted payments then its usual to focus on paying off the most expensive debt first (have a look at the snowball calculator).

But as already said do make sure you have budgeted enough for your expenses that don't hit every month.

Elmo1985

Hey - have you tried the snowball calculator on whatsthecost.com? it works out how to pay off your debts according to interest rates - i think from memory there is a number of ways it works it out but its definately helped me over the years x

markscottuk

A quick update:

Major debt is now down to 16.5K:

Loan 1 - 10.7K
Loan 2 - 3.6K
Card 1 - 2.2K

Paid off 6.2K since December 2010

Happytogetdebtfree

Well done that's amazing keep up the good work :-)