This is terrifying

CoffeeAndCake

Hello everyone,

Well, I've finally admitted to myself that I have a debt problem. Posting on here is definitely one of the most terrifying things I have ever done

I've been on the StepChange website, plugged in all of the numbers, cried at the results, taken a deep breath, and come on here.

My debt is £15k. Just looking at that number makes me feel sick.

I have a few questions, if anyone's around to answer them?

One of my debts is an overdraft that's attached to my current account. Will I have to change my account in order to pay this off (set up a basic account maybe?)

I've spent some time this evening switching gas and electricity suppliers, and internet and phone suppliers in order to save money each month. Will I need to wait until that is completed before I start the DMP?

I've also gone over my mobile usage and I'm on a much higher contract than I need (unlimited everything, I really don't use it). Is it worth trying to switch that too before the DMP, or will it be possible to do it after (I'm locked into contract with O2 with a few months remaining).

StepChange reckon I can be debt free in 3 years. I really hope I can make this happen, but I'm so scared about the phone calls and letters

Thanks for any help,
C&C

Little_Miss_Broke

hello I'm new too and I have the same amount roughly, I hope someone will be along shortly to help you xx

CoffeeAndCake

Hello, thanks for the reply - it's nice to know I'm not the only one xx

antonia86

Welcome.


Well done on joining the forum, it can be a great help.


Personally I have gone from 26k (!!!) in debt in 2011 to 9.5k today - it is possible and is a case of one foot in front of the other.


You will get there and this forum will support you whilst you do, and afterward x

WifeandMummy

Hi C&C

Well done on making the first steps, I wish you all the luck in your journey, i'm not good with advice but i'm sure someone will be along to help you soon xxx

Saver-upper

Hi CoffeeAndCake,well done facing the debts It is a very big step.
I am sure you will get lots of fantastic advice on these boards over the next few days.
One thing that will be suggested is you fill out an SOA.When people can see exatly what you spend where,you will get loads of help.Good luck .
Here is a link :
http://www.stoozing.com/calculator/soa.php

CoffeeAndCake

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.................... 2

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 2150
Other income............................ 0
Total monthly income.................... 2150

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 7
Electricity............................. 46
Gas..................................... 46
Oil..................................... 0
Water rates............................. 33
Telephone (land line)................... 25
Mobile phone............................ 38
TV Licence.............................. 13
Satellite/Cable TV...................... 28
Internet Services....................... 25
Groceries etc. ......................... 500
Clothing................................ 0
Petrol/diesel........................... 20
Road tax................................ 0
Car Insurance........................... 55
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 40
Buildings insurance..................... 0
Contents insurance...................... 11
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1527


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Capital One....................3200......112.......35
Vanquis........................3000......134.......35
Barclaycard....................5000......116.......0
Very...........................1000......50........0
Wonga..........................660.......0.........0
Halifax........................1200......0.........0
Natwest........................1250......0.........0
Total unsecured debts..........15310.....412.......-


Monthly Budget Summary
Total monthly income.................... 2,150
Expenses (including HP & secured debts). 1,527
Available for debt repayments........... 623
Monthly UNsecured debt repayments....... 412
Amount left after debt repayments....... 211

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -15,310
Net Assets.............................. -14,310

A few things:
As I said, I switched energy providers and broadband/phone providers last night, so those figures will be coming down. We have Sky due to living in a rural area with very little TV signal (we've tried the freeview that's built in to our TV, also borrowed MIL's freeview box to try, got no signal at all.) It looks like we should have spare money, but I'm short every month - trips to Co-Op, and getting "treats" are the culprits. Appreciate any and all advice on how to prepare for a DMP.

Oh and the cars - we will be selling one (it needs work done first) - as we got a second due to a death in the family, so it was unexpected.

C&C

DawnW

Hello,
Didn't want to read and run. Your groceries look a bit high for a family of 4. Can you cut down? I know that the choice of supermarkets etc is not so good in rural areas, but have you tried dropping a brand level, meal planning, cooking from scratch?

Landline, internet and mobile looks a bit high. I know landline charges are high - we hardly use ours but it doesn't really make any difference (a bit of a racket, I think, and wouldn't be surprised if this were revealed as some kind of mis-selling or whatever at some stage) But would it be cheaper to have your landline and internet bundled with sky for example? If it already is, ring them up and see if you can get it reduced.

Are you on the cheapest tariffs for gas and electricity?

Do you have anything you can sell on ebay, facebook selling pages etc?

When will you be able to sell the car? How much do you expect to get for it?

Good luck x

moohound

You will need a new bank account with a bank unrelated to any of your creditors. I would open a savings account as well, to help you budget, before you go into your DMP (I didn't do this and when I wanted to open one they wouldn't let me have one)

Regarding your SOA, some figures are zero and need an amount, like clothes (even if the adults manage without new clothes, the kids will grow out of theirs), haircuts (unless you do it yourself of course) and the emergency fund needs something in even if it just £10. the SOA needs to be realistic, you can live very frugally for a short time, but it becomes very hard after a while, you should have a reasonable standard of living especially when you have children. The SOA looks like you have £211 left a month, is this the case in reality?

Some people make token payments for the first couple of months while their new account is sorted out, and use the spare money to stash as an emergency fund, you could of course use the money from the sale of the car as your emergency fund though.

As you are on benefits , have you looked into a DRO, your debt would need to be under £15000 though, and there is a limit on what your car can be worth though. Are any of the benefits for any kind of disability?

Good luck on your journey, there are lots of people on here who are very clued up and will give you good advice.

CoffeeAndCake

Thank you for the replies

With the gas and electricity, I found a cheaper supplier last night so that will be reducing. Broadband and phone are going to be bundled in with Sky, which will save money once everything gets switched over.

I'm hoping to get £400 back from the old car, it needs new tyres and other little bits - I can only do that as and when I have the funds to do it though.

In reality no, we never have the extra money at the end of the month, hence the Wonga loan (I've just noticed I forgot to include the payment for it in the SOA - grrr).

I'm disabled as is my son, which is why our benefit payment is high. I've looked at DROs but SC said I don't qualify. I will adjust the SOA to add clothes and birthdays.

Can I send a letter to creditors saying that I'm going to start a DMP? Is there a template for this? How can I stop people like Wonga taking payment?

Where is the best place to open a basic bank account?

C&C

When_the_going_gets_tough

Mmm once your debt is under £15000 you might like to investigate a DRO again. You have to have savings of under £300 a car of less than £1000 and no more than £50 per month left after essential expenditure. - as far as I can remember - but check with the experts. National debtline is a good place to go, but you need to get your debts under £15000 first.