Almost maxxed out

desperado1973

Hi,
I have been gathering together advice on debt and the information needed to move on to action for about a month and thought I would run this by the forum to see if I am on the right course.

Currently I have around £35,000 of unsecured debt an salery of £16,500 tax credit income of £2,500 per annum.

After paying my monthly payments for rent etc plus minimum payments on c/cards, i don't even have enough left for fuel to get to work. I am therefore buying all fuel, food, clothing etc. on c/cards. they will all be maxed out in 2 months. If I stop paying the c/card bills I may have enough to scrape by but looks like maybe not enough to live!

Thinking of stopping paying then going BR. Don't see how I can even make any offers to pay them back when I have negative desposible income.

Also like the idea of being debt free quickly and not repaying for the rest of my life!

Any advice would be gratefully recieved.

Thanks, Amy.





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.................... 1
Monthly Income Details
Monthly income after tax................ 1150
Partners monthly income after tax....... 0
Benefits................................ 260
Other income............................ 0
Total monthly income.................... 1410
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 575
Management charge (leasehold property).. 0
Council tax............................. 113
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 36.55
Telephone (land line)................... 30
Mobile phone............................ 20
TV Licence.............................. 13
Satellite/Cable TV...................... 10
Internet Services....................... 16
Groceries etc. ......................... 200
Clothing................................ 40
Petrol/diesel........................... 200
Road tax................................ 36
Car Insurance........................... 70
Car maintenance (including MOT)......... 42
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...................... 13
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1479.55

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 0
Total Assets............................ 1300

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
c/card.........................9309......105.......20
c/card.........................2365......24........0
c/card.........................11000.....160.......20
Benefit over payment ..........1973......8.........0
debt collectors................6548......0.........0
Over draft.....................3700......0.........20
Total unsecured debts..........34895.....297.......-

Monthly Budget Summary
Total monthly income.................... 1,410
Expenses (including HP & secured debts). 1,479.55
Available for debt repayments........... -69.55
Monthly UNsecured debt repayments....... 297
Amount short for making debt repayments. -366.55
Personal Balance Sheet Summary
Total assets (things you own)........... 1,300
Total HP & Secured debt................. -0
Total Unsecured debt.................... -34,895
Net Assets.............................. -33,595
Created using the SOA calculator at makesenseofcards.
Reproduced on Moneysavingexpert with permission, using IE browser.

chanz4

does your partner not work?

mildredalien

Hi desperado, welcome to DFW! You can manage debts without going bankrupt, many people successfully use debt management plans to pay back their debts at an affordable rate for them given their income/outgoings. Not that this is an easy option, you will have bad credit for a while with this - but then it might be a good thing not to be able to get credit!! You do have enough income to make some payments towards your debts even if it isn't the minimum payments. I'd recommend going to a debt management charity like CCCS or Payplan for advice on how to start dealing with this.

In the meantime, there are ways that you might be able to reduce your outgoings, for example reducing your food bill (2 people can live off much less than £200/month, check the old style board for advice) and not spending money on clothes.

Is there any way of using public transport to get to work? May be able to reduce debts and outgoings by removing petrol and insurance costs and selling the car. Is car maintenance really 42 per month? Would moving to a smaller/cheaper place be feasible to reduce rent costs?

Is there any way of your partner contributing to the household income/bills?

mildredalien

p.s. when you do a budget for a debt charity, you will need to include realistic expenses for haircuts, presents, entertainment and emergency funds which you currently have 0 in for. Nothing extravagant but it's fine to be spending some money on keeping yourself sane while you are on a DMP. As long as you have reduced all other outgoings as much as possible they can advise you on how much can be budgeted for these things.

hojkoff

Here's your problem:

Total monthly expensess > Total monthly income

Bankruptcy is not your solution.

Your solution is to work out how to make more money than you spend.

Some points to work on:
1. Does your partner not work (as said above)
2. £40 on clothes a month, when you've got ~£35k on credit cards? really?
3. £10 on cable, what's wrong with freeview? It is FREE after all
4. £20 on a mobile? You must be able to reduce that, even by a bit....
5. Get a job that pays more/get more hours
6. REDUCE YOUR RENT! Or make the other person in the house pay half!!!!! Someone must be living rent free here, no?

A couple of those things are small, but you only have to save about £80 a month to stabilise. You MUST STABILISE FIRST before you can start thinking how to get out the hole.

Also, you pay £575 on rent, then you pay council tax, then you pay ALL utility bills???? Is that normal? Unless you're living in the middle of Mayfair that seems pretty heavy going. You must be able to do better than this even with 5 minutes of looking.....


Your can't solve this by getting a judge to write it all off for you, you will only kick the can down the street, where you will find lots of cans/BIGGER PROBLEMS!

amorge

Your petrol seems exceptionally high at £200 a month with only one income...

desperado1973

Thanks for your quick replies.

Further information.
Myself and my partner have been living together for 5 years and the expenditure is joint. The income is from my job and our tax credits so is also joint income. I understand this will be problematic, particularly if BR is best outcome, but see no way to separate it while my partner has no job and cannot claim individually for benefits as they are my partner? they are totally dependent on me.

I lost my well paid job in 2007 and have not been able to get another, after 3 years of not even getting rejection letters I have therefore been forced to take a lower paid job . My partner has been unable to get any employment since loosing their job in 2008.

Rents are expensive on the south coast, believe it or not £575 is a good price for a 2 bed flat. We were paying £950 for a 3 bed bungalow in 2007.

The money on clothes was suggested by a debt avice line, not my idea, but after not having anything new for 2 years we need new clothes so put it in.

Cable TV - this is a package with phone and internet and is difficult to rearrange.

I have a pay as you go mobile which costs me very little, my partner has this mobile bill and will not give it up, as is thier right BTW.

Work more hours you say? that's what put me in hospital last week! When I was 25 I would work 90 hour weeks, now I am 50 I struggle to do my 40 hours.

Thanks for the advice on getting a better job and if anyone has one they would like to offer then I would be very interested. I would remind you that we are in the middle of a recession which looks like lasting a while longer. I cannot even begin to describe the efforts I have made towards that goal or the mental pain of having giving up my home after being unemployed for so long. I even put myself through a Masters in IT thinking that would improve my chances. Passed with distinction, lots of hard work, I don't even get replies to my applications. Paid to have my CV redone, no replies, Jobcentre redid CV - no replies. I would seem to be unemployable. I have to be thankful I have the job at all. There is nothing out there and hasn't been for a number of years.

I have down sized, economised, applied for work, again and again. They say something about banging your head on a wall....

hojkoff

amorge wrote: »

Your petrol seems exceptionally high at £200 a month with only one income...

£7.15 a day average ~ 50 per day on a small engine, can't believe I missed that one.

desperado1973 you do need to seriously think about tightening these things up as small as they may seem at the moment. You must focus on stability first, this downward spiral must end to allow you to get your feet set to start aiming for freedom.

(also 'amorge' I love your dept counter as your signature!)

desperado1973

I travel 50 miles a day to work that's 1050 a month. 40 to the gallon. that comes to £160.

My partner is regularly travalling to find work and is trying to manage on £10 a week.

Have you seen the price of fuel?

rising_from_the_ashes

Groceries - should be able to get this down to £100 (saving £100) pop over to the Old Style board and try the Grocery Challenge (loads of friendly people with great tips - many couples managing on £100 incl toiletries/household products etc)

Clothes - cut just now (saving £40)

Landline / cable / internet - currently costing £56. Cut the cable and have a landline & internet only, I pay £25 for the 2 (saving £30)

Mobile - switch the other phone to PAYG. I appreciate what you say about your partner but if they're not bring income into the household just now, needs must (saving £10)

Your car costs are quite high - shop around for insurance at renewal time etc. Is there anyway you could advertise for a car share?

You say your partner has been unable to get work since 2008 - have they looked at everything? Although it could mean taking something outside their field of expertise anything would help - even NMW is better than earning nothing!

Rent - you say you live in a 2 bed place... could you downsize to 1 bed for a while? This would save a bit I imagine and may well make up the shortfall.

I'd advise having a chat with one of the debt agencies - sticky at the top of the thread as it may be a DMP is an option.

ALIBOBSY

If your partner can't find work then they have a perfect opportunity to cut that grocery bill by at least half. They have the time to research best offers online, download coupons etc and mealplan then cook everything from scratch.
I can feed 6 of us on around what you are using for 2 so that can really come down. With 2 mobiles the landline could go?

If you are on such a low income surely you could claim some council tax benefit to reduce the amount you pay?

The car insurance seems high worth shopping around?

If you can cover the bills (with the cuts above and that others have mentioned you can) that just leaves the cards.
Cut them up and go via a debt charity (or approach them yourselves) and what is left after the other bills is split pro rata between them (even if its just £5 per card per month or simular).

Or you decide its too much work and go bankcrupt, but given your age this likely means you will never get credit again, it is not the easy option by any means and you partner may not want to go with that.

Have a good hard look at the finances, and chat through things with one or more of the debt charities to decide what is best for you and your partner.

A long term help maybe looking at if any of the loans/cards either of you have/had, had a ppi policy on them-have a look at the ppi reclaiming thread IF it was misssold you may be able to reclaim the premiums. BUT it takes time and effort and going via the FOS is long winded so not a quick fix. Also if you do get any refunds please learn from this and use it to clear the debt and never borrow like this again, it may be a way to enable you to have a better happier retirement.

Good luck whatever you decide
Ali x