My SOA

jonotharn

Hi;

I have spent some time writing my SOA, it doesnt make pretty viewing but I thought I would open it up to the community, to hopefully get some positive suggestions on ways forward.

The main issues are;

I recently lost my job, I have an offer for a new one but at a much reduced wage (I could try and hold out for a better paid job, which may take a while), which has made it impossible for me to meet bills, let alone repayments. Looks like a lot of cutting back is in order.

I have 2 young boys, one of which is 7months and so my partner is on maternity leave, statury minimum.

We are based in London which is very expensive.


I visited the CAB today who gave me a debt booklet, I plan to speal to CCCS also. Are there any draw backs with the CCCS compared to the CAB?

Many thanks

Jon

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1850
Partners monthly income after tax....... 0
Benefits................................ 500
Other income............................ 0
Total monthly income.................... 2350

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1200
Management charge (leasehold property).. 0
Council tax............................. 170
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 15
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 500
Clothing................................ 50
Petrol/diesel........................... 25
Road tax................................ 20
Car Insurance........................... 35
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 150
Childcare/nursery....................... 200
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 2892


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Current Account...........761.......0.........24
HSBC Mastercard................9664......250.......24
HSBC Loan......................1434......179.......0
Amex...........................1128......29........19.9
Halifax........................2155......41........25
Mint...........................3833......86........15
Natwest........................1238......27........24
Barclay card...................5472......125.......7.9
Opus...........................1780......40........2.9
Egg............................4605......140.......25
MBNA...........................1615.66...25........25
First direct C,accnt...........273.5.....25........0
First Direct Card..............4704.97...125.......25
Total unsecured debts..........38664.13..1092......-


Monthly Budget Summary
Total monthly income.................... 2,350
Expenses (including HP & secured debts). 2,892
Available for debt repayments........... -542
Monthly UNsecured debt repayments....... 1,092
Amount short for making debt repayments. -1,634

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -38,664.13
Net Assets.............................. -36,664.13

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using Firefox browser.

ViolaLass

jonotharn wrote: »

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 1850
Partners monthly income after tax....... 0
Benefits................................ 500
Other income............................ 0
Total monthly income.................... 2350

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1200
Management charge (leasehold property).. 0
Council tax............................. 170
Electricity............................. 50
Gas..................................... 50 Gas and elec seem a little high, are you paying any arrears?
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 15
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 500 You could cut this by at least £100, if not £250
Clothing................................ 50 Needed every month? Are you using Freecycle/family/Gumtree to get cheap baby clothes when needed?
Petrol/diesel........................... 25
Road tax................................ 20
Car Insurance........................... 35
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 150
Childcare/nursery....................... 200 Why do you need this when your wife is on maternity leave?
Other child related expenses............ 100 What does this cover?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 0
Entertainment........................... 100 Can you cut this?
Holiday................................. 100 You can't afford this. Cut.
Emergency fund.......................... 0
Total monthly expenses.................. 2892


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Current Account...........761.......0.........24
HSBC Mastercard................9664......250.......24
HSBC Loan......................1434......179.......0
Amex...........................1128......29........19.9
Halifax........................2155......41........25
Mint...........................3833......86........15
Natwest........................1238......27........24
Barclay card...................5472......125.......7.9
Opus...........................1780......40........2.9
Egg............................4605......140.......25
MBNA...........................1615.66...25........25
First direct C,accnt...........273.5.....25........0
First Direct Card..............4704.97...125.......25
Total unsecured debts..........38664.13..1092......-


Monthly Budget Summary
Total monthly income.................... 2,350
Expenses (including HP & secured debts). 2,892
Available for debt repayments........... -542
Monthly UNsecured debt repayments....... 1,092
Amount short for making debt repayments. -1,634

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -38,664.13
Net Assets.............................. -36,664.13

Are you snowballing your debt payments?

NeverAgain_2

Jon,

Your rent is a ridiculously high proportion of your income, which is almost certainly why you've had to use the credit cards for, I'm guessing, day-to-day living.

A predicted drop in income will only make matters worse, but the job loss is an opportunity to reduce that rent by moving to a cheaper part of the country.

As regards CAB/CCCS, opinions vary, but my take is some CAB advisors lack good knowledge of debt, while those at CCCS are generally better informed.

Tixy

Hi

Well done for finding a new job, even if at a reduced wage. I guess you can still look out for a better paid one whilst you start this one.
You say your wife is on maternity - is this just for a short time? are you expecting her to go back and be earning again soon? (as some ideas might be manageable in the short term but not so in the long term).

Regarding CAB or CCCS, I guess with CAB you can see someone in the flesh but aside from that no drawbacks with using CCCS. In fact in a lot of CABs if the recommend a DMP they will refer you to CCCS anyway.

On to the SoA

jonotharn wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2 are both cars needed? could 1 be sold?

Monthly Income Details
Monthly income after tax................ 1850
Partners monthly income after tax....... 0
Benefits................................ 500
Other income............................ 0
Total monthly income.................... 2350
Rent.................................... 1200 is this competitive for where you live? its a huge chunk of your reduced income, would it be feasible to move? without being able to reduce this I can't see a way your budget will balance.
Council tax............................. 170
Electricity............................. 50 looks quite high for elec. Have you shopped around recently for gas & elec to see if you can find a better tariff or cheaper supplier?
Gas..................................... 50
Groceries etc. ......................... 500 This is very high for a family of your size. Even with a child and baby stuff you should be able to reduce this to £300, and quite possibly less. Have a look on the old style board for ideas on cutting this, try the drop a brand challenge and try meal planning before you do the main shop.
Clothing................................ 50 drop to essentials only, as close to 0 as you can get.
Petrol/diesel........................... 25 that's very little mileage to have 2 cars sitting doing nothing most of the time
Road tax................................ 20
Car Insurance........................... 35
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 150 is this commuting? could 1 or both cars be sold?
Childcare/nursery....................... 200 what does this relate to? can it be reduced while OH is on maternity?
Other child related expenses............ 100 what does this relate to? can you reduce it?
Presents (birthday, christmas etc)...... 40 need to reduce in the short term at least
Haircuts................................ 0 do you not pay this?
Entertainment........................... 100 will need to reduce this
Holiday................................. 100 can't afford this at the moment
Emergency fund.......................... 0
Total monthly expenses.................. 2892


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Current Account...........761.......0.........24
HSBC Mastercard................9664......250.......24
HSBC Loan......................1434......179.......0
Amex...........................1128......29........19.9
Halifax........................2155......41........25
Mint...........................3833......86........15
Natwest........................1238......27........24
Barclay card...................5472......125.......7.9
Opus...........................1780......40........2.9
Egg............................4605......140.......25
MBNA...........................1615.66...25........25
First direct C,accnt...........273.5.....25........0
First Direct Card..............4704.97...125.......25
Total unsecured debts..........38664.13..1092......-


Monthly Budget Summary
Total monthly income.................... 2,350
Expenses (including HP & secured debts). 2,892
Available for debt repayments........... -542
Monthly UNsecured debt repayments....... 1,092
Amount short for making debt repayments. -1,634

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -38,664.13
Net Assets.............................. -36,664.13

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using Firefox browser.

How far are you behind with repayments at the moment? Have you opened a new bank account unconnected to any of your existing overdrafts or accounts to have you new salary paid into?

have you done the debt remedy online on the cccs website? did it recommend a possible solution to you? at the moment you are so far short that even with cutting back to just minimal essentials you are still going to have a shortfall before debt repayments. Unless you expect things to improve quickly (such as wife returning to work and generating a good income) then I think you will have to look for somewhere cheaper to rent.

jonotharn

Thanks everyone.

To answer a few questions. Before I lost my job I was able to pay all bills on time, I havnt missed a single repayment for 5+ years. I wasnt using credit to live on, but, I also wasnt paying it off!. The rent we pay is low for the area we live, and London in general, for a two bedroom flat. We actually need a large place as my 7 month old is going to need to move out of our room soon, so maybe a move out of london makes sense (although my new job is in London). There is definately room to cut my outgoings, I'm going to have too, no choice. I did do the debt remedy, it basically recomended I contact my creditors and explain the situation and say i will pay a token payment of £1 to each.

Now, I am uncertain whether to do this, since it will impact on my credit rating (in the future). I do fully expect to be able to either a) negotiate my new job to a higher wage or b) find a different job with higher wage, which will allow me to meet my CC payments and start to get my debt down, but these may take a couple of months. I may repost this dilema on a different thread, but I am trying to decide whether to continue paying my CCs (loans from friends if I have too) in the short term, so that I am more likely to maintain good credit for when things get better.

The new question maybe then what effect restructuring debt with CC companies, doing debt plans, etc, has on my credit rating and for how long. I am under the impression it will affect my credit rating for several years, if not up to 5.

Thanks for all your help

Jon

Tixy

Hi
You are right if you try negotiating with cc companies / asking to pay reduced payments it will have a long term affect on your file. They might mark an arrangement to pay marker but more likely they would issue a default notice. This would stay on your file for 6years and will affect you for all that time. Though the affect does diminish as the default gets older and is less of an impact once the debt is settled.

If it really is likely to be only a short term issue (because you or wife should be able to start earning more) then I would try to preserve your rating somehow and cut back on all non essentials to try to manage. But be realistic and maybe just give it a couple of months and if you still can't manage I think you are likely to have start negotiating and accept the damage to your credit file.

Good luck with the job hunt.

Baberuth153

It stikes me that you have a simple way to reduce your outgoings. That is to get rid of 1 or indeed both cars!

You are paying £150 for "other travel" which looks like a zone 4 travel card. So you must be commuting in to Town everyday. Then why have 2 cars!

Owning a car in London is a luxury that is almost alway unnecessary. The bus, tube and train networks mean you can to everywhere you need to go without them.

If your wife is at home on maternity leave then she might be using 1 of the cars on a daily basis but I know plenty of families in London getting around with a car and still getting their kids to daycare/nursery/school!

If your flat is far from a tube or bus stop, then it would be better to get rid of both cars, save the money and try and move closer into town. Even moving to zone 3 will save you £30 a month on the travelcard and if you can be closer to amenities then you really won't need the cars.

josephine82

Hi

Just thought I would add- I live in Beckenham which is zone 4 and you can get a 2 bed flat for about £850/£900. And my travelcard is £151.30. So you could save a few hundred on rent. And its nice here

tronski

You've got under 'benefits' £500 - is this your partners SMP?

Have you included your child benefit and tax credits?

I'd agree that the grocery cost is high. We're a 2 adult 1 child (14 month) household and spend about £160 a month. For baby clothes, check out NCT nearly new sales, boot sales, freecycle and eBay. You can get some good deals on eBay when you buy clothes bundles. They're too young to realise that they're not wearing brand new stuff so might as well do it while you can!

Good luck.

jonotharn

Hello everyone;

Thanks for the tips and suggestions, very useful, there are certainly ways we can reduce our outgoings, we've been looking hard at doing this in the last week or so, some (lots of) sacrifices (1 car, relocatting, meal planning etc) are going to have to be made.

But, even with budgetting, I am still going to find it difficult to keep up repayments. I have been advised by a colleque who has advised a CAB before that in his experience, couples where one partner has a debt issue, and the other has none, find it possible for the debt ridden partner to restructure the debt and obtain bad credit rating, whilst the other partner maintains a good rating. In future, any mortgages or new cra purchases would be purchased by the partner with the good rating.

Is this a recognised tactic? My partner and I have no shared bank accounts, bills (apart from c/tax), mortgages, debt at all. A drawback would be that the 'good' partner will need to maintain a high income for the rating to be of any use.

Unsure about doing this myself, seems like a last resort.

many thanks

Jon