My SOA, your input greatly appreciated!

melf_2

DEBTS TOTAL MONTHLYFIRSTPLUS UNSECURED LOAN £35,000.00 £400.00
PARENTS £25,000.00 £260.00
STUDENT LOAN £7,000.00 £-
STUDENT LOAN £6,000.00 £30.00
GOLDFISH CREDIT CARD £5,400.00 £120
MBNA CREDIT CARD £5,200.00 £120
EGG GREEN CREDIT CARD £2,950.00 £70
LLOYDS OVERDRAFT £2,030.00 £-
EGG BLUE CREDIT CARD £1,693.00 £70
LLOYDS OVERDRAFT £1,500.00 £-
LLOYDS OVERDRAFT £1,500.00 £-
LITTLEWOODS £200.00 £15
ORANGE £42.00
WATER £185.00
ELECTIC £200.00
TOTAL £93,900
MINUS PARENTS £68,900

EXPENDITURE EACH MONTH

MORTGAGE £650.00
COUNCIL TAX £120.00
HOUSE INSURANCE £20.00
ELECTRICITY £40.00
GAS £40.00
WATER £40.00
SCOTTISH EQUITABLE (life ins) £39.00
PHONE / BROADBAND £30.00
ROYAL SUN ALLIANCE (car ins) £28.00
SCOTTISH EQUITABLE (life ins) £23.00
ROYAL SUN ALLIANCE (car ins) £23.00
FOOD / HOUSEKEEPING £300.00
PETROL £250.00
BUPA(50)/OPTICIANS(30)/DENTIST(10) £90.00
MOBILES £60.00
CAR TAX £35.00

TOTAL £2,873.00

INCOME £2300
£573-

Bakeybadoo

Is this for your BR forms or are you asking for money saving advice?

melf_2

Just advice!

Richard_S

Good morning melf,

After reading your posts I think you should approach the situation as follows.

Firstly, I know you’ve spoken to Insolvency Practitioners but I would still take the time to speak to one of the debt charities. They have no vested interest and offer professional advice that genuinely reflects the individual’s circumstances.

Secondly, make a decision on what you intend to do with regard to housing. If you intend to purchase another property, now would be the best time to do that. If you ultimately decide to declare bankruptcy you won’t be able to get a mortgage until you’re discharged and even then you’ll almost certainly pay a couple of %age points higher than the high street bank average.

Thirdly, make a decision on what you intend to do with your debt. My personal opinion is that an IVA would be too demanding and you’d be stuck with that for five years and the effect on your credit rating is almost the same as bankruptcy.

I would guess the biggest problem you’re facing from a personal perspective is how to repay the money to your parents. If you take either the IVA or bankruptcy route you won’t be able to show any preference to your parents in terms of repaying the money.

Assuming you decide on bankruptcy, an IPA would be calculated as follows. Your income is £2,300 per month and assuming your essential outgoings are £2,000 per month then out of that surplus £300 you’d be expected to pay £180 per month into an IPA. Obviously, if your expenditure is greater than that you’d pay proportionately less. If you then chose to pay that £120 to your parents for the remainder of the IPA you’d be doing nothing wrong. Once the IPA has finished you’d be able to increase the amount in line with your circumstances at the time.

Student Loans are not included in bankruptcy so whatever you choose to do they’ll still be there. That is not the same for your other debts. The loan from FirstPlus and all other loans and credit card debts will be wiped out.

I hope this helps a little,

Best regards

Richard

AlanD_3

Good advice.

NekoZombie

I agree! Good advice given this morning Rich!

melf_2

black-saturn wrote: »

OK, heres my four penneth:

MORTGAGE £650.00
COUNCIL TAX £120.00
HOUSE INSURANCE £20.00 This is high, you could get a better quote I will certainly look around if this is high, thought it was a decet deal.
ELECTRICITY £40.00 This is high. Switch to energy saving light bulbs, sit by candlelight in the evenings and don't have the TV on all the time. I do have energy saving lightbulbs and I do like using candles. TV is on from about 7pm until 10pm.
GAS £40.00 Cook 2 meals at a time and reheat one in the microwave the next day. Put on a sweater instead of the heating. Measure out water for boiling. We always cook fresh, we don't own a microwave and I have a big fleecy blanket on the sofa at night! Cost is based on last property which was three bed, new one is 1 bed so hopefully I've overestimated.
WATER £40.00 Take showers instead of baths, wash up once a day and in as little water as you can. Don't put the washing machine on until it is full. Always shower, wasjing machine is always full (also do 30 min washes not long ones)
SCOTTISH EQUITABLE (life ins) £39.00 Cash this in and pay it off the debts and pay the extra £39 a month into the debts too. We've only had them for a year so doubt we can cash in. Also this goes with mortgage so its a bit dangerous to stop them. Maybe I wrote this wrong, its life ins/mortgage protection. Can't not have that, if I get run over by a bus my partner needs a tiny bit of security. Or does he seeing as we're in such a mess. I'll re-consider if everyone thinks I should?
PHONE / BROADBAND £30.00
ROYAL SUN ALLIANCE (car ins) £28.00 Why 2 car insurance? Do you need 2 cars or even do you need a car at all? One of us works 35 miles away from house so we need a car. I agree that we will have to get rid of one.
SCOTTISH EQUITABLE (life ins) £23.00 Why 2 life insurance? Do you need life insurance at all? See above
ROYAL SUN ALLIANCE (car ins) £23.00 As above See above
FOOD / HOUSEKEEPING £300.00 Blimey, how many is this for? Cook meals from scratch and work to a menu planner. Look on the old style board for inspiration. I only spend £45 a month on food for 3 people. Thats unbelievable! Please note thought that hosekeeping is not just food, its everything else like repairs, cleaning products, pet food ...
PETROL £250.00 Do you really need a car or could you walk or use the bike to cut down on this? It's so high. See above, as one of us works a long way from home this can't be cut, the train fair is only about £30 cheaper and it takes twice as long due to having to change trains. I am looking for a new job in the town we live but it aint easy! Do have interview tomorrow though.
BUPA(50)/OPTICIANS(30)/DENTIST(10) £90.00 Sorry but when your in debt like this the NHS has to do. Difficult one this. I know the bupa thing is extravagent but I've had a lot of family illness in the past 3 years and the waiting around and some of the treatment has been horrible. I know we can't afford it but I desperately want to hold onto it. I am also seeing a consultant at the moment which I need to continue doing until I get results. I hope you can understand why this means a lot to me. My boyfriend has major problems with allergies and asthma so his presciption costs are high. I think the dentist cost is reasonable though.
MOBILES £60.00 Do you need these and a home phone? Totally agree that we should get rid of these. Get so used to having one thats all. Happy to let mine go.
CAR TAX £35.00 Again, do you really need a car? See above explanations

I missed a lot overnight didn't I! Only just responded as I was not near a computer last night.

I should have made my position more clear for people that haven't read my other posts. My fault there.

Basically we are unsure what to do. I think BR is what we should look at but its hard to accept. IVA would be 'nicer' in some ways but the more I look at our outgoings the less I think practical.

I hope people are still looking at my post and can advise.

Take care all, obviously everyone is very emotional and stressed. I know I fly off the handle at home these days, one minute angry and the next in tears. Didn't want to create war!

gettingitsorted

melf wrote: »

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I missed a lot overnight didn't I! Only just responded as I was not near a computer last night.

I should have made my position more clear for people that haven't read my other posts. My fault there.

Basically we are unsure what to do. I think BR is what we should look at but its hard to accept. IVA would be 'nicer' in some ways but the more I look at our outgoings the less I think practical.

I hope people are still looking at my post and can advise.

Take care all, obviously everyone is very emotional and stressed. I know I fly off the handle at home these days, one minute angry and the next in tears. Didn't want to create war!

Morning Melf ,

you did not create a war ,it can get quite heated over here if we think people are jumping in giving there advice without giving a dam about the poster.


Indeed Bankruptcy is hard to accept and is not a step to be taken lightly this is why we advise people to explore every avenue available ,have you had chance to talk to one of the debt charities previously mentioned?

melf_2

Yeah I have tried but they all have given me appointments in a couple of weeks time - thats the earliest they can speak to me unfortunately. Shame I hadn't come on here 6 months ago and got some advice but nothing I can't turn back time.

gettingitsorted

melf wrote: »

Yeah I have tried but they all have given me appointments in a couple of weeks time - thats the earliest they can speak to me unfortunately. Shame I hadn't come on here 6 months ago and got some advice but nothing I can't turn back time.

Wouldnt we all wish for that,but focus on the future melf,which of the charities have you tried ?

melf_2

Richard_S wrote: »

Good morning melf,

After reading your posts I think you should approach the situation as follows.

Firstly, I know you’ve spoken to Insolvency Practitioners but I would still take the time to speak to one of the debt charities. They have no vested interest and offer professional advice that genuinely reflects the individual’s circumstances.I'm in the queue for an appointment!

Secondly, make a decision on what you intend to do with regard to housing. If you intend to purchase another property, now would be the best time to do that. If you ultimately decide to declare bankruptcy you won’t be able to get a mortgage until you’re discharged and even then you’ll almost certainly pay a couple of %age points higher than the high street bank average.I want to go ahead with the house now, it may be the wrong decision but we're so far into buying it and so desperate to move out of parents spare bedroom...

Thirdly, make a decision on what you intend to do with your debt. My personal opinion is that an IVA would be too demanding and you’d be stuck with that for five years and the effect on your credit rating is almost the same as bankruptcy. It will be too demanding, the figures just don't leave us with enough to make the payment each month so it will be down to other half working his a**e off to get loads of overtime.

I would guess the biggest problem you’re facing from a personal perspective is how to repay the money to your parents. If you take either the IVA or bankruptcy route you won’t be able to show any preference to your parents in terms of repaying the money. I just can't do this to them, they can't afford to take on the debt, I feel guilty enough that they lent to us in the first place. They have both had serious illnesses and Mum is still in recovery. They have too much on their plates to even contemplate not paying them. I hope everyone understands and can offer me advice on how to make sure I pay them at least £150 pm?

Assuming you decide on bankruptcy, an IPA would be calculated as follows. Your income is £2,300 per month and assuming your essential outgoings are £2,000 per month then out of that surplus £300 you’d be expected to pay £180 per month into an IPA. Obviously, if your expenditure is greater than that you’d pay proportionately less. If you then chose to pay that £120 to your parents for the remainder of the IPA you’d be doing nothing wrong. Once the IPA has finished you’d be able to increase the amount in line with your circumstances at the time.

Student Loans are not included in bankruptcy so whatever you choose to do they’ll still be there. That is not the same for your other debts. The loan from FirstPlus and all other loans and credit card debts will be wiped out.

I hope this helps a little,

Best regards

Richard

Thanks for everyones support and advice