Separation has financially ruined me - what should I do?

Confused_Mr_E

I'm not making excuses for the state I have allowed my (our) finances get in - but the catalyst for me finding myself writing this thread today is my wife and I separating earlier this year.

It's emotionally battered me (another thread is heading for the marriage board where I had support in the past on this issue) - basically my wife had an affair and I had to leave my home & two young children and try to start again.

I had been with my wife for 5 years but only married for 1. She had an appalling credit history and therefore I ended up (stupidly) taking out credit to fund our lifestyle. So all of the credit shown in my SOA below is in my sole name.

I find myself in way to deep and I just can't cover everything any more. I can't see a way to tackle this so am considering my options. I AM planning on going to CCCS for help, but appreciate input here as well. I have trimmed my outgoings as much as I can manage - I NEVER go out drinking, never eat out, don't smoke, have no hobbies. No life really. I work, see my kids on my allocated days and sit at home the rest of the time. I can't continue like this for the next 20 years

Anyway, here is my SOA. I have added explanations where it's needed to explain why some figures are zero for example (as they are covered elsewhere).

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.................... 1
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 38 My father-in-law is paying for the DFS sofa payments as a wedding present. This comes in 2 days before the DFS payment of the same amount goes out.
Total monthly income.................... 1638
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 520 I rent a room in a shared house. This single payment made to the LL covers rent, gas, elec, water, council tax, tv licence, internet). Factoring all these in, this is very competitive for region.
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 90 Shamefully I have 4 x contracts and this is the collective amount. One finishes later this year, two during next year and the fourth just under 2 years from now. I am ashamed to say I took these out in desperation so I could sell the handsets on eBay and raise some cash to keep my going
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100 I've averaged this, taking into account household things as well as food/drink. I can probably trim this to £20pw (£80pm) and always buy reduced stuff and freeze it.
Clothing................................ 20 I havent bought clothes for ages, but figured I should factor something in here.
Petrol/diesel........................... 100 For travelling to work and visiting my children 3 times per week.
Road tax................................ 22.5 Annual amount / 12 months
Car Insurance........................... 55 yes, this is the cheapest I could find. Renewal is in Nov and I will compare again then
Car maintenance (including MOT)......... 20 An averaged figure to cover any faults/tyres/etc
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 320 Maintenance for my 2 kids. I dont have my own place, so I can never have them overnight so I get hit with full whack for them.
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)...... 10 An averaged figure, no one gets much of a present from me now
Haircuts................................ 10 One per month, unavoidable if I am going to maintain professionalism in my job
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1267.5

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 900 Yeah, an old banger. Has a few outstanding problems so not even sure I'd get this for it.
Other assets............................ 100 My laptop, a rough estimate
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
AA Loan........................5000......134.......14.9 originally a £7k loan, think this is how much is left. Ends in 07/2015
Halifax CC.....................2500......75........29.9
Santander CC...................2800......85........19.9
Teeth repayments...............2000......94........11.9
Sofa DFS.......................1300......38........0 payment covered by FIL (see incomes above)
Smile Overdraft................500.......0.........0
Natwest Overdraft 2............700.......9.........14.9
Natwest Overdraft 1............2000......22........14.9
Very...........................800.......15........24.9
Barclay Card...................2500......75........19.9
Barclay Card (Egg).............2500......75........24.9
Total unsecured debts..........22600.....622.......-

Monthly Budget Summary
Total monthly income.................... 1,638
Expenses (including HP & secured debts). 1,267.5
Available for debt repayments........... 370.5
Monthly UNsecured debt repayments....... 622
Amount short for making debt repayments. -251.5
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -22,600
Net Assets.............................. -21,600

Confused_Mr_E

Is a DMP realistic in my situation? I used the SOA calc and then clicked "Offer to Creditors" and it suggested the below is what I could afford to offer each creditor. This would take just over 5 years to clear if interest was also frozen.

---

Debt Details & Offer to Creditors

Unsecured Debt Description Debt(£) Offer(£)

AA Loan 50008 1.97
Halifax CC 2500 40.98
Santander CC 2800 45.9
Teeth repayments 2000 32.79
Sofa DFS 1300 21.31
Smile Overdraft 500 8.2
Natwest Overdraft 2 700 11.48
Natwest Overdraft 1 2000 32.79
Very 800 13.12
Barclay Card 2500 40.98
Barclay Card (Egg) 2500 40.98
Unsecured Debt totals 22600 370.5

370.5 * 12 = £4446 pa
22600 / 4446 = 5 years 1 month

Tixy

I would think a DMP may be a suitable option in your situation.

There doesn't seem to be a lot you can cut back on - aside from the mobiles which you will obviously reduce when you can (or you could include the ones you don't use in the DMP).

Did you own a house with wife? and if so what is the current legl situation with that? are you still legally a co-owner?
Is there equity in it - and if so is there a chance you will receive some money from this at some point?

A DMP would leave you with small budgets for things like entertaining, so in reality they might advise you to pay a little less than the £370. But it makes it more manageable to stick to the DMP - because it doesn't sound like the life you are leading at the moment (or lack of) is sustainable long term.

Confused_Mr_E

No - my wife is also renting (it was a joint tenancy). We had no assests as we are only in our late twenties.

I've been reading the CCCS website and it seems a DMP would clear it in 5 years if all agreed - which would be exactly the same as an IVA. So it seems an IVA would be pointless?

Confused_Mr_E

RE: mobile phones, what I planned to do is use the one which is due to end the soonest and when it ends, use the "next one" and so on. They all have similar tariffs and my usage is quite minimal (mainly texts and some calls <200 mins per month, never data).

Confused_Mr_E

Would the DFS sofa payment be excluded from a DMP due to the fact my FIL pays me the amount each month to cover it? (and that it's interest free anyway)

Limana68

HIya
An IVA is legally binding, and protects you from any legal action and added interest form creditors,but if you have your own house there is normally an equity clause, but a DMP is a more formal arrangement and depends on the individual creditors as to whether they add interest or take legal action to recover debts.
If you go with CCCS or Payplan, they dont charge you fees for their service, and they have a good relationship with most creditors so can often get interest stopped.

I have been on my dmp for 3 years all my creditors have stopped interest, and I am upping my payment soon to get my debts paid off quicker!

Good luck with it all!

Li

BlushingRose

You sound very down chuck - but you are taking steps in the right direction and this WILL get sorted. Might not be tomorrow, but it will.
Stay strong x

quantic

Can't really offer any advice other than what other people have already said, just wanted to say that I feel for you and hope you get back on your feet quickly.

All the best fella.

:beer:

Confused_Mr_E

Limana68 wrote: »

HIya
An IVA is legally binding, and protects you from any legal action and added interest form creditors,but if you have your own house there is normally an equity clause, but a DMP is a more formal arrangement and depends on the individual creditors as to whether they add interest or take legal action to recover debts.
If you go with CCCS or Payplan, they dont charge you fees for their service, and they have a good relationship with most creditors so can often get interest stopped.

I have been on my dmp for 3 years all my creditors have stopped interest, and I am upping my payment soon to get my debts paid off quicker!

Good luck with it all!

Li

Thanks for the info. If I can do it via a DMP then I think that is the best option. So, if I get a pay rise at work next year (they are done in April) - it is straight forward to up your payment to CCCS for example and reduce the period of repayments? If creditors see you up a payment, aren't they more likely to want to apply interest again or seek more than originally agreed?

RAS

An IVA is that it is an Insolvency arrangement. Your name goes on the Register permanently and you have to declare it whenever your are asked, for the rest of your life.