Valencia's SOA - I need help pls!

Valencia

Hi

I've been a member of this site for ages and regularly read the threads which are full of sound advice but I have too scared to post.

I'm 23 and I owe £47k excluding my student loan of around £10k and mortgage of £108k.

I feel so upset because until I sat down and worked it out, I can't believe how much I owed and how it’s happened. I got paid on Friday and by Tuesday I will be broke again, once all my DDs go out. Almost ¾ of £24k salary goes on servicing debt.

When I left uni 2 years ago, I think my debt was around £10k and in two years it has grown so much. It’s now started to affect my relationship with my mum, who in the past has been my saviour and kindly done 0% offers as she could get bigger limits on cards and last year took out a £20k loan in her name to repay everything. But now I can't afford to repay back the loan repayments, what I owe her and there’s nothing worse than having your mother calling you up, asking where her money is, as they have taken it out her account and I’ve not paid her - I hate it.

The frustrating thing is that I have learnt that debt consolidation does not work for me at all, as it has just made by debt bigger. The cards that were paid off with the loan, were never closed (psychologically I felt that I might need them, so should keep them) and subsequently were used again.

I think it all started when I went to university. I started first year with no money at all as I had gone travelling the summer before. I was working throughout 6th Form (I had two jobs) but I always seem to live beyond my means. When I turned 18 I applied for my first CC and it went on from there.

I’ve posted my SOA below because I need help. I don’t know what to do.


Income
Salary £ 1,415.00
Rental Income £ 567.00
Other Income £ -
£ 1,982.00

Expenditure
Mortgage £ 460.48
Rent £ 300.00
Landlord Insurance (rental) £ 34.27
British Gas Homecare (rental) £ 11.00
Gym Membership (ends Sept) £ 36.95
Water (rental tenants pay me back) £ 18.00
Internet (rental tenants pay me back) £ 17.99
Rent Bills £ 75.00
Car Maintenance - Peugeot £ 5.56
Mobile Phone £ 47.99
Mobile Phone £ 15.00
Phone insurance £ 5.99
Car Insurance £ 92.93
Life Insurance £ 36.34
Health Cash Plan £ 26.00
Car emergency fund £ 26.00
Transport (bus and card) £ 50.00
Food £ 50.00
Work 5 yr sharesave scheme £ 75.00
Meals Out/Birthdays Entertainment £ 150.00
Toiletries £ 50.00
Hair (every 2 months) £ 50.00
£ 1,634.50


Debts
Car Loan £ 153.02
Graduate Loan £ 100.50
Egg Money £ 10.00
HSBC Credit Card £ 102.00
Amazon Card £ 50.00
Dorothy Perkins Card £ 5.00
Edge Card £ 30.00
RBS Gold Card £ 20.00
Mum £ 400.00
Egg Card £ 131.00
£ 1,001.52

Other
Tithe £ 150.00
NSPCC £ 3.00
UCB £ 13.00
Offering £ 80.00
£ 246.00


TOTAL EXPENDITURE £ 2,882.02

BALANCE -£ 900.02


Information about the debts
Lender Limit APR Balance
Dorothy Perkins Store Card £ 300.00 29.9% £ 289.09
Edge Card £ 1,150.00 29.9% £ 924.05
Amazon Mastercard £ 2,850.00 15.9% £ 2,850.09
RBS Gold Card £ 950.00 15.9% £ 950.09
HSBC Mastercard £ 3,500.00 9.9% £ 3,496.18
RBS Personal Loan £ 20,000.00 8.1% £ 19,000.00
HSBC Graduate Loan £ 5,000.00 7.9% £ 3,718.50
Egg Money Card £ 500.00 7.9% £ 492.89
RBS Overdraft £ 1,250.00 0.0% £ 1,259.40
Natwest Overdraft £ 1,450.00 0.0% £ 1,448.94
Egg Card £ 7,000.00 0.0% £ 6,473.93
HSBC Overdraft £ 1,500.00 0.0% £ 1,444.00
Mum £5,000 0.0% £ 5,000.00
Student Loan £ 10,000.00
Car loan 13.9% £ 4,700.00
TOTAL £ 62,047.16



Just to explain a couple of things:
- I own my own house, but it is currently rented as when I got promoted I had to change location and I currently live with a member of my family and rent from them as its closer to my new place of work. Mortage £108k fixed at 4.99% for 3 years (2 yrs left)
- My rental income covers my mortgage and associated costs.
- Life insurance includes: life cover and critical illness for house and income protection
- Rent bills are the bills I pay to my sister in her house, there are three of us (her bf incl) and the bills include tv licence, water, gas, elect, sky, internet, council tax & phone
- I tithe as it a biblical principal I believe in where I give 10% of my income back to God. That's something I can't remove.
- Work shareshave thing I started it last year and its a 5 year thing, basically long term savings really, with a nice return at the end. I don't really want to stop it, as in 4 years I will get a real benefit from it.
- Did health cash plan with HSA as I had to see the dentist urgently and they were the only provider I could find which didn't have a waiting period. I don't have an NHS dentist. I also wear glasses so I plan to use for that as well.
- Mobile phones - I have 2 line rentals, one tmobile and one O2. When it came to end of contract in May, O2 had the better deal and the phone that I wanted but T mobile wouldn't give me my PAC code before the O2 deal finished. Also because I had spent so much with Tmobile in the last 18 months, they gave me a really good phone for nothing and on a 12 month £15 a month max tariff. So I was happy with that, as I kept my old number. The phone that I chose on O2 after having that for 2 months, I don't really like and I'm putting it on ebay this wkd and should hopefully get just under £200 for it. The tariff I'm on with O2 I really like and my bills never go over £40 (7.99 is insurance which will be cancelled when phone is sold). My mobile bills used to be around £70 so this is a saving for me.
- I have been decluttering and in the last two months have made around £350 on Amazon just from selling dvds, cds and books.
- UCB is a christian charity I donate too.
- I take the bus to work most days, but when I have to see customers I use my car, for which work gives me back my expenses

If you need any more clarification on things please let me know.

Thanks in advance!

hypno06

Hi there, I am not very good at the whole SOA thing but others will be able to give you lots of constructive ideas.

I hope you don't think this sounds bad, it is not intended to! I know you believe that you should give 10% of your salary back to the church, and I have no argument with that. However, does it need to be done on a monthly basis? Is there any way that you can agree with yourself to stop making that monthly payment now, which would free up the £150 a month at the moment, and draw up some sort of agreement with yourself/church/whoever to pay an equivalent amount when you are back on an even keel.

I am not saying to stop paying for ever, but is there a way that you can stop paying now, then make a lump sum payment, or a bigger payment when you are in less debt? So for example, if you didn't pay this for a year, this equals £1800, so you pledge to pay £1800 in due course?

Sorry, don't know if this is workable at all in any way.

red74

Hi, like hypno I don't mean to cause offence but stopping your payments to the church just for the time being could make a big difference - even if it just allowed you to get rid of the 2 cards with the 29.9% APR. Like hypno suggests, later on when you're more financially stable you could overpay. Alternatively, could you not do some voluntary work in the community/curch whilst not making these payments. I'm sure your time is would be as equally - if not more - valued as your money.

anniestar

Firstly welcome. Looking over the SOA a couple of things leap out. The eating out/entertainment £150. Toiletries £50 Hairdresser (every two months) £50. These are pretty high. Could you leave a bigger gap between hairdressing visits(I KNOW its hard but it CAN be done) AND the toiletries and eating out can be cut significantly down. It will be hard but will help a lot. Good luck with your efforts.

Eager_Elephant

Hi Valencia,

Can I just confirm that you are getting £900 further into debt each month or are you just not paying some bills.ie. your mum.

I know others have mentioned the tithe and I am afraid I will as well - the way I see it is that you are borrowing at a high interest rate just so you can give money to the church, so it is not your own money which is paying the tithe which is what the bible says it should be.

Your creditors if you had to do a SOA for them would not accept a tithe as part of expenditure.

If you are £900 short each month it is a lot to make up when your salary is not much more than that.

I don't think your SOA is complete as you have put in £50 per month for food, that would be a normal weekly amount.

Also your car insurance is nearly £100 pm, what car are you driving - do you need a car - could you use taxis instead?

I certainly don't think anyone needs 2 mobile phones, again this would not be acceptable if you had to send a SOA to your creditors.

Any thoughts on what I have said so far?

EE

SarahNeedle1872

Hi Valencia... I'd echo what the others said about the tithe, I know its something u believe in, but u are effectively borrowing money to give to the church.
One thing I did notice is that u have 3 or 4 cards that are over limit - only by a little tho. I would suggest u get those to within the limits ASAP (even if u stop the tithe money for 1 month, u'd cover it) otherwise u'll be charged over limit fees too.

Do u have any bank charges/CC charges u could claim back for?

Sarah x

JonnyBravo

Hi Valencia,

well done on coming to the board. There are so many people with experience of what to do in situations like this on this board youll get some good advice.

First off you, the obvious.... you need to find £900 a month of saving/extra income to stop you going further into debt.

Thats going to require some radical changes and some uncomfortable conversations.

Other
Tithe £ 150.00
NSPCC £ 3.00
UCB £ 13.00
Offering £ 80.00
£ 246.00
You can save £284 a month by cutting out your charitable donations. It's tough for you as its something you beleive in, but as has been stated you are borrowing this money to give to charity and I'm sure those organisations/bodies wouldnt want you to lose your home to finance this.

British Gas Homecare (rental) £ 11.00 - cut this. Insurance on these kind of things rarely costs less than the odd repair on a boiler etc

Gym Membership (ends Sept) £ 36.95 - bluntly put its non essential and should go.

Water (rental tenants pay me back) £ 18.00
Internet (rental tenants pay me back) £ 17.99 - if your tenants do pay you back and its not included in the 567 you put down as rental income, this isnt actually an expenditure as its paid by someone else. If it is included in the income it needs to stay as an expenditure - so im not sure whether you can take this £36 off?? More info please

Car Maintenance - Peugeot £ 5.56 - whats this? similar to Homecare on the gas? If so I'd lose it

Mobile Phone £ 47.99
Mobile Phone £ 15.00
Phone insurance £ 5.99 - is it possible to cut the insurance and then get the bill down on one line to £40 asap. You've simply got to cut costs here.... this is a huge outlay.

Car Insurance £ 92.93 - does seem expensive but im no expert on costs for 23 yr olds. Is it an expensive car? Is it up for renewal soon? Can you even look at a cheaper car? Perhaps not ,your loan is only for £4,700 on the car which suggests its not overly flash so maybe this is just 23yr old insurance costs.

Health Cash Plan £ 26.00 - I dont know enough about the policy but I'd be surprised if you get out more than you pay in by its nature of course. Can it be cut, I think so.

Work 5 yr sharesave scheme £ 75.00 - nice payout in 4 years it may be but if in effect youve borrowed the money to put into this then your gains wont be as great as youve convinced yourself. Plus of course if you do pull out you can get a years worth of money back. If youve paid in for 1 yr youll be getting £900 you can use on the top priority debts.

Car emergency fund £ 26.00 - whats this? Can it go? I'll assume so for this bit of maths.

Meals Out/Birthdays Entertainment £ 150.00 - as youve gathered im making lots of assumptions in all this.... can this be trimmed to £100?




ok even adding all this up......

246+11+36.95+18+17.99+5.56+28.98(phone saving)+26+75+26+50=

541.48


thats a long way short of £900.... im sure youll agree....

it seems inevitable youre going to have to have a serious discussion with your mum. clearly you pay her £400 at the moment and who knows what is acceptable to her and you but i think you need to chat to her.
parents constantly surprise us with how good they are!!
she may be able to help by holding onto your cards to prevent spending if youre having trouble controlling it yourself.


your debts at 29.9% are your priority, thats an extortionate rate and those need to be paid asap. perhaps by your sharesave money, that would cover 900 of the 1200 you owe at this rate.

as has also been said before make sure you arent over limits and being charged extra on some cards.

the more i consider it, the more it is clear you need to get to the CAB and get some proper plans drawn up.... these are just some rambling thoughts but i hope they help in some small way. youve made a serious tep towards tackling this by posting on here.... dont give up and tackle this asap.

I wish you the best of luck with it all and let us know how you get on

Valencia

Thank you so much guys for your quick responses.

Eager_Elephant wrote: »

Hi Valencia

Eager_Elephant wrote: »

Can I just confirm that you are getting £900 further into debt each month or are you just not paying some bills.ie. your mum. Yes that is the case. I’ve missed last month and I won’t be able to pay this month, which equals £1400 as I pay her the rent as its half her house. Hence why she is a bit p*****!


I don't think your SOA is complete as you have put in £50 per month for food,that would be a normal weekly amount. Believe me I don’t shop that much, I eat out a lot and any food that I do buy is mainly bread, milk, eggs and cereal.

Also your car insurance is nearly £100 pm, what car are you driving - do you need a car - could you use taxis instead? See below. I drive an 2002 307. Have thought about selling but since its on finance I not sure I would get for it what I paid.
EE

SarahNeedle1872 wrote: »

One thing I did notice is that u have 3 or 4 cards that are over limit - only by a little tho. I would suggest u get those to within the limits ASAP (even if u stop the tithe money for 1 month, u'd cover it) otherwise u'll be charged over limit fees too. When I did that debt tally it was about 2 weeks ago and I have since sent payments to the respective cards to get them within their limits.

SarahNeedle1872 wrote: »

Do u have any bank charges/CC charges u could claim back for? I’ve been pretty fortunate, haven’t had any real bank charges (£25 I think two months ago - which I’m not too bothered about, as on the whole my bank have been very understanding and have allowed be to be O/D with no charges and paid items when I have had no money, so I’d rather not rock the boat). Credit card wise didn’t know you could claim back charges from them, again though I think I had a £12 on my last RBS statement, but I can’t be bothered to go through the hassle, as I was in the wrong and went over my limit. Thanks tho.

Sarah x

JonnyBravo wrote: »

Hi Valencia,

well done on coming to the board. There are so many people with experience of what to do in situations like this on this board youll get some good advice.

First off you, the obvious.... you need to find £900 a month of saving/extra income to stop you going further into debt.

Thats going to require some radical changes and some uncomfortable conversations.

Other
Tithe £ 150.00
NSPCC £ 3.00
UCB £ 13.00
Offering £ 80.00
£ 246.00
You can save £284 a month by cutting out your charitable donations. It's tough for you as its something you beleive in, but as has been stated you are borrowing this money to give to charity and I'm sure those organisations/bodies wouldnt want you to lose your home to finance this. I will cancel UCB, but I feel bad writing to the NSPCC to cancel a £3 donation! Tithe and offering wise, I see everyone’s point, but on the church giving thing, I’m prepared to reduce my offerings but my tithe is something I can’t compromise on and I am prepared to cut back in other areas to compensate for this.

British Gas Homecare (rental) £ 11.00 - cut this. Insurance on these kind of things rarely costs less than the odd repair on a boiler etc. I got a new boiler for the house with BG so there is cover for the boiler and central for free any way. The £11 is for drain and electrics. I’m just one of those people who worries that if something did go wrong I wouldn’t be able to afford to fix it.

Gym Membership (ends Sept) £ 36.95 - bluntly put its non essential and should go. It is getting cancelled. I have to give one months notice, which I will do straight away.

Water (rental tenants pay me back) £ 18.00
Internet (rental tenants pay me back) £ 17.99 - if your tenants do pay you back and its not included in the 567 you put down as rental income, this isnt actually an expenditure as its paid by someone else. If it is included in the income it needs to stay as an expenditure - so im not sure whether you can take this £36 off?? More info please It is included in the rent they pay me, so it is effectively cancelled out.

Car Maintenance - Peugeot £ 5.56 - whats this? similar to Homecare on the gas? If so I'd lose it This is the for the service on my car. It’s a service plan for two services at £50k miles and 60k miles, that I would have had to pay for anyway but the payments are spread over 18 months so its more affordable. Its interest free and it allowed me to get a free MOT in April which was good. Started in Dec 2006 and it runs for 18 months.

Mobile Phone £ 47.99
Mobile Phone £ 15.00
Phone insurance £ 5.99 - is it possible to cut the insurance and then get the bill down on one line to £40 asap. You've simply got to cut costs here.... this is a huge outlay. Like previously mentioned will cancel my insurances, will sell the newer phone and get some cash. The phone that is £15 a month, I would prefer to cancel this but I think I’m locked into a contract for another 10 months.

Car Insurance £ 92.93 - does seem expensive but im no expert on costs for 23 yr olds. Is it an expensive car? Is it up for renewal soon? Can you even look at a cheaper car? Perhaps not ,your loan is only for £4,700 on the car which suggests its not overly flash so maybe this is just 23yr old insurance costs. My instalments are spread over 11 months and there was no deposit to pay, which may be why it’s a little higher. Its provided through work so it is 0%. It was much cheaper, but when I move house my premium went up by £150!!! Gutted! I also got points put on my licence in March 06 so that contributed to the increase from last year.

Health Cash Plan £ 26.00 - I don’t know enough about the policy but I'd be surprised if you get out more than you pay in by its nature of course. Can it be cut, I think so. Again for anyone who knows much about Health cash plans, the one I have is provided through HSA and its their top tier. I will pay £312 per yr and for dental and optical will get back £300. I get £150 chiropody and £150 Physiotherapy, Osteopath etc. I have already claimed on it, so not sure whether I can cancel. Again if it wasn’t for the fact that I needed a company with no waiting period, and I had really bad toothache, I would have shopped around as there are other providers around.

Work 5 yr sharesave scheme £ 75.00 - nice payout in 4 years it may be but if in effect youve borrowed the money to put into this then your gains wont be as great as youve convinced yourself. Plus of course if you do pull out you can get a years worth of money back. If youve paid in for 1 yr youll be getting £900 you can use on the top priority debts. When you put it that way, it’s not very money savey! I have been thinking about this a lot. I started one last year and put £25 a month in, this year’s option is £50 a month, hence the total of £75. If I took out last year’s contributions that would be £300 plus any interest and I could pay of my Dorothy Perkins card. 2007 option they have just started taking out of my salary, so I could cancel that too.

Car emergency fund £ 26.00 - whats this? Can it go? I'll assume so for this bit of maths. Originally this was for my car tax as I paid it every 6 months, so the £26 came out so that I would have the money there to pay for my car tax. This year though, at car tax time I had extra cash and for the first year ever bought 12 months car tax. Now its used as an emergency car fund in case anything happens, but all that happens is that I save some money in there and end up withdrawing from it because I’m broke.

Meals Out/Birthdays Entertainment £ 150.00 - as youve gathered im making lots of assumptions in all this.... can this be trimmed to £100? Def could be trimmed. I did a educated guess on this, because sometimes its more, sometimes its less. Also if I have any money I don’t go out anyway. I’ve tended to eat out a lot in the past, due to convenience, laziness and because everyone else is. Now I can’t afford it, so I may trim it down to half that and go out once a month as a treat.

it seems inevitable youre going to have to have a serious discussion with your mum. clearly you pay her £400 at the moment and who knows what is acceptable to her and you but i think you need to chat to her.
parents constantly surprise us with how good they are!!
I think she has reached the end of helping me now. She’s pretty mad with me right now.

she may be able to help by holding onto your cards to prevent spending if youre having trouble controlling it yourself. I’ve cut up all my cards bar my debit cards

Eager_Elephant

Hi Valencia

Thanks for replying.

Can you confirm the value of your house and the outstanding mortgage.

I hate to be the first to say it but unless your income is going to increase by loads in a short space of time or your house has a lot of equity then I think bankruptcy may be an option you have to consider.

Obviously you could loose the house, possibly your job and there would be issues over the loan your mum has taken.

On the subject of your job, I know jobs are important for people but to be honest what you are earning could easily be earnt in a non-financial role.

A Debt Management programme would last years and that would mean including your mum's debt which means she would get less each month - I'm wondering how she is able to pay her bills if you are not paying the loan or her rent???

To stop any issues with your family I think you need to cancel all debt direct debits, except the Hp of the car until you know what you are going to do about it. This way you can pay your essential outgoings.

Do you know how much the car is worth?

I rejigged your SOA according to what you want to keep and as you can see you only have £300 per month left to service debts which isn't enough to pay your mum let alone your Hp:

Income
Salary £ 1,415.00
Rental Income £ 567.00
Other Income £ -
£ 1,982.00

Expenditure
Mortgage £ 460.48
Rent £ 300.00
Landlord Insurance (rental) £ 34.27
British Gas Homecare (rental) £ 11.00
Gym Membership (ends Sept) £ 36.95 0.00
Water (rental tenants pay me back) £ 18.00
Internet (rental tenants pay me back) £ 17.99
Rent Bills £ 75.00
Car Maintenance - Peugeot £ 5.56
Mobile Phone £ 47.99
Mobile Phone £ 15.00 0.00
Phone insurance £ 5.99 0.00
Car Insurance £ 92.93
Life Insurance £ 36.34
Health Cash Plan £ 26.00
Car emergency fund £ 26.00
Transport (bus and card) £ 50.00
Food £ 50.00 150.00
Work 5 yr sharesave scheme £ 75.00 25.00
Meals Out/Birthdays Entertainment £ 150.00 40.00
Toiletries £ 50.00 10.00
Hair (every 2 months) £ 50.00 20.00
£ 1,634.50 1446.56


Other
Tithe £ 150.00 150.00
NSPCC £ 3.00 0.00
UCB £ 13.00 0.00
Offering £ 80.00 20.00
246.00 170.00 Total 1616.56

So as you can see drastic measures are called for.

What about a 2nd job?

I would also contact either CAB, Payplan or CCCS but as I said in a previous post a lot of your expenditure will not be allowed including the tithe and I can't see where you can disguise it anyway.

As you rightly pointed out at the start you have lived above your means for a very long time and now your 'future self has to pay for your past self' which means cutting back drastically which will be very hard.

EE

SarahNeedle1872

petterson wrote: »

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you can also get loan from them they are very reliable in fact they

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it is
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Mr Watters

I wonder if they'd give me £234.6m to build a wood fertory - anyone know what a fertory is!?!?!:spam:

Sarah x

hypno06

petterson wrote: »

Hello you need loan right?
i know of a lending company i will introduce to you now this company

offered me £234.6 million pounds with which i build my new wood fertory

you can also get loan from them they are very reliable in fact they

sent the loan to me just 48hrs i still have their mailling adress
it is
[EMAIL="diamond_loan_lenders@yahoo.com"]diamond_loan_lenders@yahoo.com[/EMAIL]
contact them now directly they have help many they can help you out now

fast.

Mr Watters

Great, thanks :rolleyes: