Confused and in debt

Tixy

Show_me_da_money wrote: »

Unfortunately when Step Change put the plan in place they did not take into consideration the bank overdrafts.

Presumably there were not aware of the overdrafts then? Stepchange will only do a DMP if all your debts are included within it (unless the overdrafts are in joint names?)

Show_me_da_money wrote: »

Payplan have advised me that they cannot guarantee that the creditors and banks will cease to charge me interest, so its a gamble in that respect; unless its a caveat they quote just to be on the safe side...

One half of me tells me that I should accept this, wifey's first instinct is a 'no'... and she is usually right. If I had her backing straight away I would not hesitate for a minute. Me thinks we need to sit down and weigh up our options.

Nobody can guarantee they will freeze interest, but a lot of creditors will if they can see that you are treating them fairly and are paying back all you can afford.

If you go in to the DMP and can only afford the 137 now, hopefully at some point in the future you'll be able to increase payments and get the debts paid off quicker. Maybe you'll get payrises or find better paid work or be able to decrease some other outgoings or have another change in circumstances

antonic

I had 4 creditors when I started my DMP (3 Credit Cards & 1 O/D).

2 of the Credit Cards (Cahoot & Cap One) froze interest from day1 and never charged me a penny.

HBOS froze interest for 2 years, then charged for 2 years (I think) and then froze for the remainder of the DMP.

I would think you are more likely to get it frozen if :

1) Your on a DMP and stick to it
2) Whenever possible you increase your payments and
3) If the debt gets sold to a DCA.

I had holidays during my DMP, but they were paid for my loving & supportive family.

Take the DMP route being offered to you, its the best way to resolve your debts.

Deep_In_Debt

I was very lucky on my dmp too - all of my creditors (and I had loads) bar one kept interest frozen for the duration of my 5 year dmp. The one that didn't, added interest after 2 years but at a low rate - something like 8%, so I put up with that.

As others have said, sounds like the DMP is best for you. I was lucky enough to be able to reduce my dmp term from 9 years to 5 years due to combination of finding a job paying more money, pay rises, bonuses and just saving every penny I could and paying off smaller debts along the way.

Good luck.

Larac

When you start a DMP you are giving an assessment of how long it will take to clear which can be quite horrifying. However you will find that as get into the DMP you will end up increasing payments as a result of pay rises, career progression, releasing expenditure from other loans that are paid off etc. For example last year I paid an extra £34 a month and this knocked off a further 9 months off my DFD. I am hoping that eventually my DFD will get to five years rather than the original 9 that I started with.

fatbelly

quantic wrote: »

I would be careful borrowing off family and friends, I can't see how - in for foreseeable future you would be able to pay them back. Is the payment plan with Payplan affordable to you? With those repayments it will take you 19 years to pay back the debt, assuming interest is frozen forever.

Could you post an SOA so we can get an idea of your finance, difficult to advise without this...

http://www.stoozing.com/calculator/soa.php

Enter all your info, click calculate, then MSE and copy and paste the results here.

I agree with this, op. Posters are trying to give advice based on partial information. A 19 year dmp may be the least worst option but no-one can say for sure - did Payplan discuss any other options?

sourcrates

Dude,
DMP`s are ok for smaller debts, but you owe quiet a bit more inc the overdraughts, have you considered an IVA ? An individual voluntary arrangement is a legally binding contract between you and your creditors where you pay an affordable amount on a monthly basis for five years, after that your debts are cleared, your creditors are forbidden to contact you, and it removes a lot of the worry, you do have to stick to a rigid budget though, another option would be bankruptcy, scary I know but not really as frowned upon as it used to be, you could be discharged in less than a year and free to start again, 19 years paying off debt, in my opinion is not an option, I know there are people on here who say you "should not have done this if you cant pay it back etc etc" but sometimes in life, no matter how hard you try, events conspire against us, and we have to deal with them as best we can, do a search for "debt solutions" on the old net and get more info on your options, because there are plenty. Good luck with it !

theoretica

antonic wrote: »

I had holidays during my DMP, but they were paid for my loving & supportive family.

Borrowing from family has pitfalls if you something happens and you cannot afford the repayments agreed. Accepting gifts is often less dangerous for relationships.

Show_me_da_money

Here is the Stoozing statement;

Statement of Affairs and Personal Balance Sheet

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2100
Partners monthly income after tax....... 250
Benefits................................ 180
Other income............................ 0
Total monthly income.................... 2530

Monthly Expense Details
Mortgage................................ 826
Secured/HP loan repayments.............. 170
Rent.................................... 1
Management charge (leasehold property).. 0
Council tax............................. 180
Electricity............................. 180
Gas..................................... 180
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 10
Mobile phone............................ 60
TV Licence.............................. 12
Satellite/Cable TV...................... 20
Internet Services....................... 10
Groceries etc. ......................... 450
Clothing................................ 20
Petrol/diesel........................... 300
Road tax................................ 21
Car Insurance........................... 55
Car maintenance (including MOT)......... 30
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 60
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 20
Life assurance ......................... 50
Other insurance......................... 30
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 10
Holiday................................. 0
Emergency fund.......................... 10
Total monthly expenses.................. 2803


Assets
Cash.................................... 1000
House value (Gross)..................... 360000
Shares and bonds........................ 100
Car(s).................................. 6000
Other assets............................ 1200
Total Assets............................ 368300


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 248000...(826)......3.07
Hire Purchase (HP) debt ...... 5000.....(170)......4.32
Total secured & HP debts...... 253000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Tesco Loan.....................6501......135.......6.37
Barclays Loan..................5430......234.......14.9
MBNA Credit Card...............7236......120.......1.46
Bank O/D.......................2000......150.......0
Bank O/D.......................6000......200.......18.6
Total unsecured debts..........27167.....839.......-


Monthly Budget Summary
Total monthly income.................... 2,530
Expenses (including HP & secured debts). 2,803
Available for debt repayments........... -273
Monthly UNsecured debt repayments....... 839
Amount short for making debt repayments. -1,112

Personal Balance Sheet Summary
Total assets (things you own)........... 368,300
Total HP & Secured debt................. -253,000
Total Unsecured debt.................... -27,167
Net Assets.............................. 88,133

You valued feedback would be appreciated...

theoretica

Available for debt repayments........... -273
This is your first and biggest problem - you are spending more than you earn even before debts are taken into account. You really, really need to get this number positive.

Show_me_da_money wrote: »

Partners monthly income after tax....... 250
Could this increase soon? For instance when does the youngest starts school?
Council tax............................. 180
Electricity............................. 180
Gas..................................... 180
Do all three of these cover arrears? Can you negotiate to pay off over a longer period or include the utilities in your debt management plan? How soon will they go down?
Mobile phone............................ 60 Are you near the end of contracts and could go PAYG?
Satellite/Cable TV...................... 20 You can't really afford this.
Groceries etc. ......................... 450
This is probably your biggest area of possible saving - try the old style board for ideas and aim to cut down - £300 is probably possible.
Petrol/diesel........................... 300
Can you cut anything here with less driving or different driving style?
Car parking............................. 20
Can you park further away and walk?
Car Insurance........................... 55
Buildings insurance..................... 20
Contents insurance...................... 20
Life assurance ......................... 50
Other insurance......................... 30
Have you shopped around for the best deal on all these insurances? Is the other insurance necessary?

Heffi1

I have added a couple of comments below.

Show_me_da_money wrote: »

Here is the Stoozing statement;

Statement of Affairs and Personal Balance Sheet

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2100
Partners monthly income after tax....... 250 Can this be increased
Benefits................................ 180
Other income............................ 0
Total monthly income.................... 2530

Monthly Expense Details
Mortgage................................ 826
Secured/HP loan repayments.............. 170
Rent.................................... 1
Management charge (leasehold property).. 0
Council tax............................. 180
Electricity............................. 180Is this correct
Gas..................................... 180 Is this correct
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 10
Mobile phone............................ 60 That is huge change to pay as you go
TV Licence.............................. 12
Satellite/Cable TV...................... 20
Internet Services....................... 10
Groceries etc. ......................... 450
Clothing................................ 20
Petrol/diesel........................... 300
Road tax................................ 21
Car Insurance........................... 55
Car maintenance (including MOT)......... 30
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 60 Can you get a prepayment certificate to reduce this down
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 20
Life assurance ......................... 50
Other insurance......................... 30
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 10cancel for now
Holiday................................. 0
Emergency fund.......................... 10
Total monthly expenses.................. 2803


Assets
Cash.................................... 1000
House value (Gross)..................... 360000
Shares and bonds........................ 100
Car(s).................................. 6000
Other assets............................ 1200
Total Assets............................ 368300


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 248000...(826)......3.07
Hire Purchase (HP) debt ...... 5000.....(170)......4.32
Total secured & HP debts...... 253000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Tesco Loan.....................6501......135.......6.37
Barclays Loan..................5430......234.......14.9
MBNA Credit Card...............7236......120.......1.46
Bank O/D.......................2000......150.......0
Bank O/D.......................6000......200.......18.6
Total unsecured debts..........27167.....839.......-


Monthly Budget Summary
Total monthly income.................... 2,530
Expenses (including HP & secured debts). 2,803
Available for debt repayments........... -273
Monthly UNsecured debt repayments....... 839
Amount short for making debt repayments. -1,112

Personal Balance Sheet Summary
Total assets (things you own)........... 368,300
Total HP & Secured debt................. -253,000
Total Unsecured debt.................... -27,167
Net Assets.............................. 88,133

You valued feedback would be appreciated...

I hope that makes sense, you need to cut right back to the bone at this time to make savings where you can, it will take some adjusting, but is manageable if you want to do it.