First Time Poster Need Advice!

Leeann_2

Hi Everyone.

Hope you are well?

Im new to posting and this site, so please bare with me if i do anything wrong!

Im 22, live at home, and earn £12,000 p.a im currently in £5422.94 of debt, all unsecured cards/loans/overdrafts.

Ive put my head in the sand for a long time trying to ignore it all (not a good idea i know!) and now i have sent out letters to all my creditors (well the debt agencies they are now with!) offering them a monthly payment.

One of my loans is from Provident, and im not too sure how to go about making a payment arrangement with them, ive missed 3 payments, the payments are at 38.90 per week which for me at the moment is unaffordable, I was made redundant in January from a job where i earnt double what i earn now, so them sort of payments are just unaffordable. i offered my agent £10 per week before i had even missed a payment as i said i was struggling etc. they declined this offer, and now i do not know what to do! any help or advice would be really appreciated.

Tixy

Hi leeann and welcome.

Someone who has dealt with provident will hopefully give you some advice on negotiating with them.

In the meantime it would be a good idea to work out how much you can afford for this and your other debts each month (unless you have already done this). We use the statement of affairs calculator which shows your income, outgoings before debts and then what you have left for debt repayments. It might be handy to fill one in and post up here (if you live with parents you obviously won't have all the household costs so leave that blank and just put any board you pay to your parents in the rent box).
This is a link to the calculator http://www.makesenseofcards.com/soacalc.html

Leeann_2

Thanks for your reply Tixy!!!

Ive done the SOA as below:



Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 875
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 875

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 145
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 45
TV Licence.............................. 0
Satellite/Cable TV...................... 10.95
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 100
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 7.5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 30
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 478.45


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
Catalouge......................162.35....0.........0
Overdraft......................1748.13...0.........0
Catalouge......................307.82....0.........0
Credit Card....................220.......0.........0
Credit Card....................200.......0.........0
Provident......................1438.25...0.........0
Credit Card....................1316.39...0.........0
Total unsecured debts..........5392.94...0.........-


Monthly Budget Summary
Total monthly income.................... 875
Expenses (including HP & secured debts). 478.45
Available for debt repayments........... 396.55
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 396.55

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -5,392.94
Net Assets.............................. -5,392.94

Tixy

Right so it says you have £396 a month for debt repayments - the offer letters you have sent out - how much did they come to? Really you should make the offers giving them each a fair share of the £396 compared to the balance you owe each one.

So for provident that would be 396/5393 x 1435 = 106 a month

That said your clothing budget is too high per month given your finances and debts. You really need to cut this at least in half in the short term, if not further - maybe you can look at selling old clothes you no longer wear on ebay and using that money to buy new ones instead.

Is your phone in contract? if it is can you see if they will let you drop to a cheaper tariff, if not in contract look around for a cheaper deal to try to cut this cost.

If you can cut back and clear your debts now whilst your living costs are so low then you'll be in a much better position when you want to move out of home.
Perhaps you could look at other ways of making money as well - so selling things you no longer want and things like doing online surveys or reviews (some you earn vouchers but still handy). You could also consider something lke mystery shopping to earn a little extra.

Leeann_2

Hi,

Thanks for getting back to me!

Ive offered :

Shop Direct £162.35 - £30

Lloyds £1748.13 - £100

Lowell £307.82 - £30

Halifax Ltd £1316.39 - £100

Provident £1438.25 -After checking my budget i will re-offer £20 a week.

Credit Card - £250 - £10

Credit Card £200 - £10

Is £100 a month on clothes too much? to be honest at the moment im probably spending more then that.

My phone is a contract, but as its an iphone i dont think i can change the tariff, i will have to find out!!

I have such a problem managing my money (as you can see) i tend to just get paid and spend everything and have no money for 2 weeks until i get paid again.

My friends are all financially quite well off, and have no outcome really, so i do find it hard not being able to have the spend available as they do, currently im probably spending £100 a week going out.

obviously all this needs to change, me and my boyfriend want to move in together soon etc, so i want to clear as much as i can!

I really need to get everything sorted, and just sort out my finances!

Tixy

Hopefully the creditors will accept your offers, some might ask to see an income & expendiute account to show you can't afford the minimums. You don't have to send this but if you have any debts that are still charging interest it can often help trying to get it frozen

Leeann wrote: »

Is £100 a month on clothes too much? to be honest at the moment im probably spending more then that.

Sorry but it really is in your financial position (and I've been there as well, with clothes & shoes). You know there is a crazy clothes challenge on here where people try to spend no more than £100 a year on clothes!! I'm not suggesting you get that extreme but think you do need to cut down.

tiddly_widdly

I think its great that you are tackling this debt but if you are already spending more than £100 per month on clothes then I would suggest that you probably have more clothes than you need anyway and could quite easily go for 12 months without buying any new ones and put the money towards the debt or a savings account. It all comes down to priorities.

poppasmurf_bewdley

Don't buy any clothes for the next three months. Cut down on going out. Once you get used to not spending, the easier it will become.