Where do I start?

buzby999

Hi everyone,

I'm a newby. I've being doing lots of research but I'm getting confused over what action to take. I know that I need to start approaching the debt charities and getting some professional advice. I'm not sure if bankruptcy is the way forward but it doesn't look like I have much to offer an IVA. My husband isn't sure what he is going to do with his portion of the debt. I haven't been living an amazing lifestyle on credit cards these have built up over a period of 2 years of maternity leave and a three year course that involved lots of placements, so needed to involve childcare costs. I have attached a SOA. Any advice would be really appreciated.

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.................... 1
Monthly Income Details
Monthly income after tax................ 1500
Partners monthly income after tax....... 1600
Benefits................................ 134.8
Other income............................ 0
Total monthly income.................... 3234.8
Monthly Expense Details
Mortgage................................ 773.8
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 83
Electricity............................. 76.79
Gas..................................... 50
Oil..................................... 0
Water rates............................. 23.1
Telephone (land line)................... 24.5
Mobile phone............................ 30
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 18.37
Groceries etc. ......................... 495
Clothing................................ 80
Petrol/diesel........................... 109
Road tax................................ 23.33
Car Insurance........................... 51.72
Car maintenance (including MOT)......... 30
Car parking............................. 20
Other travel............................ 63
Childcare/nursery....................... 800
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 30
Buildings insurance..................... 70.15
Contents insurance...................... 0
Life assurance ......................... 10.04
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 30
Entertainment........................... 45
Holiday................................. 0
Emergency fund.......................... 100
Total monthly expenses.................. 3118.92

Assets
Cash.................................... 0
House value (Gross)..................... 108000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 108500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 114509...(773.8)....4.78
Total secured & HP debts...... 114509....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Mint credit card..............3020.16...67.8......2.207
MBNA credit card...............9033.25...256.1.....2.207
Virgin credit card.............5000......135.......0
Husband's bank od..............1000......0.........0
Joint bank overdraft...........2000......0.........0
My bank overdraft..............3000......0.........0
Husband other c card...........6300......200.......0
Husband's credit card..........4066.02...100.......0

Thank you, in advance!...

Ox1987

If you can cut a bit more costs lots of people here or over on the debt free wannabee can make recommendations then i would consider a debt management plan, this would avoid bankruptcy or an iva. The IVA or bankruptcy route would cut alot of these expenses out ie entertainment and maybe they would deem the childcare excessive. Stepchange are excellent and when I thought we were doomed for BR they suggested a DMP which they manage for you

buzby999

Thanks Ox 1987,

I've just completed the Stepchange debt tool and it's come up with bankruptcy. Unfortunately, as I have no family to help out with childcare, with two children and my husband working full time, me working 30 hours, I have trimmed the childcare down to the minimum I can get away with. Nursery fees are just really high. If they were to suggest childcare that I wasn't happy with then I would have no choice but to give up work completely to look after them myself which would leave less money in the pot. I could cut entertainment completely but would this be fair on two young children for the lengthy period of a DMP? I'm finding it all a bit confusing to be honest.

Thank you for your thoughts...

PippaGirl_2

Are you both thinking of going BR or just you?

if just you, then any joint debt becomes the sole responsibility of the other person so if just you it would release you from the obligagtion of your sole debt only. Am I right in thinking that is the mint credit card 3020 MBNA 9033 Virgin 5000 overdraft 3000 so your debt is approx £20,000? That would leave your dh if he wasn't going BR with over £13,000 of his accounts and the joint?

It's an option for you on the face of things as you don't have equity and assets but do talk to step change or the CAB. I always advocate the CAB as they were so helpful with me.

One or two of your allowances are high or wouldn't be allowed but others could be higher and you may well not be given an IPA for 36 months but you might have to pay one and it couldn't be ruled out. But you are doing well looking at your options and seeking solutions.

TDMum

buzby999 wrote: »

Hi everyone,

I'm a newby. I've being doing lots of research but I'm getting confused over what action to take. I know that I need to start approaching the debt charities and getting some professional advice. I'm not sure if bankruptcy is the way forward but it doesn't look like I have much to offer an IVA. My husband isn't sure what he is going to do with his portion of the debt. I haven't been living an amazing lifestyle on credit cards these have built up over a period of 2 years of maternity leave and a three year course that involved lots of placements, so needed to involve childcare costs. I have attached a SOA. Any advice would be really appreciated.

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.................... 1
Monthly Income Details
Monthly income after tax................ 1500
Partners monthly income after tax....... 1600
Benefits................................ 134.8
Other income............................ 0
Total monthly income.................... 3234.8
Monthly Expense Details
Mortgage................................ 773.8
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 83
Electricity............................. 76.79
Gas..................................... 50
Oil..................................... 0
Water rates............................. 23.1
Telephone (land line)................... 24.5
Mobile phone............................ 30
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 18.37
Groceries etc. ......................... 495 (This could be cut down to £350 comfortably. Have a nose on the oldstyle board for some great advice on how to cut costs)
Clothing................................ 80 (Do you need to spend this every month? Could you maybe half it)
Petrol/diesel........................... 109
Road tax................................ 23.33
Car Insurance........................... 51.72
Car maintenance (including MOT)......... 30
Car parking............................. 20
Other travel............................ 63
Childcare/nursery....................... 800
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 30
Buildings insurance..................... 70.15
Contents insurance...................... 0
Life assurance ......................... 10.04
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 30 (£360 a year on haircuts, do you NEED this amount? Could you maybe lower it?)
Entertainment........................... 45
Holiday................................. 0
Emergency fund.......................... 100 (You can't really afford this much, how about lowering it to £50 for the time being?)
Total monthly expenses.................. 3118.92

Assets
Cash.................................... 0
House value (Gross)..................... 108000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 108500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 114509...(773.8)....4.78
Total secured & HP debts...... 114509....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Mint credit card..............3020.16...67.8......2.207
MBNA credit card...............9033.25...256.1.....2.207
Virgin credit card.............5000......135.......0
Husband's bank od..............1000......0.........0
Joint bank overdraft...........2000......0.........0
My bank overdraft..............3000......0.........0
Husband other c card...........6300......200.......0
Husband's credit card..........4066.02...100.......0

Thank you, in advance!...

How old are your children? What does the entertainment budget cover?

If you cut just the things highlighted in red you could save £235 a month (£245 if you cut the haircuts to £20 a month)

I'm sure others will have even more ideas shortly

EDIT: just added up what you pay out in unsecured debt and even after making cuts you're still about £400 short for your repayments, poo!

Dory68

Good morning,i was attracted to your post as you have very similar out goings to myself,my first port of call was step change who were brilliant and suggested a debt management plan:)however my husband became unable to work and we could not afford the repayments,things are so tight atm,that we are just offering token payments of £2 to each creditor,which we have set up ourselves,we were convinced bankruptcy was the only option,we have been on token payments for 6 months and prior to that a DMP for four years,step change were wonderful,and simply said you cant give what you don t have.So good luck on your journey,just wanted to add have you tried applying for help with child care costs?Also the house insurance is very high,we used to pay around the same and switched companies,managed to get this for £21 a month:j

alastairq

I'd just like to comment, with the SOA....?

It isn't about where so-called savings could be made......but what the real-time costs are.

[and, as pippa says, what is allowed under the [generous?] IS rules?]

The haircuts, for example?

These are allowed under IS rules [not very fair to identify undischarged BRs because they all have beards and long hair, is it?]....bear in mind , there are two adults, two kids, so in my view, even £30 per month [as is allowed] is pessimistic?

As an example, in my nearest [small] town, at least two barbers have raised their prices in the past year to £10 a cut for an adult....up from £7-£8?

With an SOA, it is really as much about 'what is allowed' as anything else.

Following on from that, where items are reduced or 'not allowable' under IS rules, doesn't mean BR cannot have them....simply that, their funding must come from elsewhere within the SOA.

Places like, for example, the 'haircut ' allowance??

Budgetary savings aren't really the remit of this forum.....but belong with others on this site....I acknowledge.

PippaGirl_2

Groceries allowance was one amount that could definitely be increased on this SOA for a BR petition.

An SOA for BR is not about saving money, often some things need to be paid (repairs on a car for example) that can only be done by using money that would otherwise be spent on other things allowed within your BR allowances, so when these extra expenses appear you can cut back on groceries/haircuts/clothing whereas if your starting point is the very barest minimum to get by then fixing the car (or some other unforeseen extra expense) and getting it back on the road is impossible as there is no spare money.

buzby999

Firstly, I'd just like to say thank you for replying. It feels good to talk to people that are not being judgemental of my situation, which I feel deeply ashamed about.

I can understand the instinct to cut down the budget and believe me I have done that (not represented above) with my excel spreadsheet. I have gone over it and over it to see if I could do a dmp or an iva. The truth is I cook from scratch and can cut back to £350, I haven't had my hair cut for 2 years, we haven't had a family holiday for 3, we have no central heating and I've never been massively materialistic. My credit cards have been built up because of insufficient income to cover costs: I have only just started work after my course finished. However, having been burnt by cars breaking down previously (I work shifts and the buses don't run early enough and our car could realistically break down as it has over 100k on the clock) and being on a NR together mortgage (rotten decision on our part) which is now on a variable rate so we are expecting it to go up substantially at some point, my concern was the unexpected and trying to create some flexibility to draw from elsewhere if needs be.

Pippa: your understanding is correct with our debts but my OH can't go bankrupt because of the profession he's in. The idea I was working on was bankruptcy for me and a dmp for him (although am open to all ideas). OH is looking very pale whenever I mention money at the moment so I am trying to do the legwork for him. My OH worked endless overtime during my course to try to make ends meet and I really feel for him at the moment. Overtime for him is no longer an option.

So Pippa, Alastair and everyone any suggestions that you have will be greeted with open arms as I really need the support. Which allowances do you think could go higher and which allowances do you think will be disallowed? Baring in mind that I plan to continue to live frugally anyway, and pray that if my hair does go grey in the process that I can afford the hair dye.

Dory: we're not entitle to help with childcare as one is under 3, we're not on benefits, and the other one is in school. The childcare costs are made up of one in nursery the other in before, after and holiday clubs as needed. As I work shifts you end up paying for a great deal of childcare that you don't use and this is as low as this can go, although with my current provider there will be some months where it will be nearer £700.

Thanks again!

TDMum

I only put up savings as she asked if BR was the way to go. I was offering advice on what savings "could" be made as she wasn't sure which path to go down.

After doing so and then adding up the monthly payments (for some reason they've been cut off the SOA) I realised there wouldn't be enough savings to be able to afford the monthly payments.

I agree that a money saving budget and a BR budget are 2 separate entities.

buzby999

'Bump'. Any further advice on what to increase or decrease for a bankruptcy soa please guys?:think::think: