Debts and fresh set of eyes required

jill02

Hi there, am new to this site but have been amazed at all the advice on here and I wondered if anyone could offer any advice on my debt situation.

Basically, I have debts with 37 creditors consisting of payday loans, credit cards, loans which most are a few years old now and I have been making monthly payments ever since they went into default however as my daughter has left education I am now without tax credits child benefit etc and have hit a brick wall. I have wrote to all my creditors offering a token payment of £1 each which most have replied and accepted .

I have been on the National Debtline website and also completed mymoneysteps to get tailored advice, they suggested bankruptcy but I would like other peoples opinions on this.

My mortgage is interest only I am concerned that if I file for bankruptcy, I could be wasting my money if it gets rejected because of how close the amount of equity is (including my car) to my debts.

My car is currently secured on a logbook loan and due to be paid off in approx 11 months time, car is worth approx £3500 and the logbook loan balance stands at £930.

The situation is driving me crazy as I keep running over everything trying to find the best way forward. Thanks in advance


Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1127
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 20
Total monthly income.................... 1147

Monthly Expense Details
Mortgage................................ 240
Secured/HP loan repayments.............. 79
Rent.................................... 0
Management charge (leasehold property).. 79
Council tax............................. 95
Electricity............................. 65
Gas..................................... 23
Oil..................................... 0
Water rates............................. 29
Telephone (land line)................... 23
Mobile phone............................ 15
TV Licence.............................. 19
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 240
Clothing................................ 0
Petrol/diesel........................... 55
Road tax................................ 14
Car Insurance........................... 0
Car maintenance (including MOT)......... 5
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 14
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
DWP .................................... 69
Car Insurance .......................... 55
Total monthly expenses.................. 1154


Assets
Cash.................................... 0
House value (Gross)..................... 86000
Shares and bonds........................ 0
Car(s).................................. 3500
Other assets............................ 0
Total Assets............................ 89500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 75560....(240)......6.5
Hire Purchase (HP) debt ...... 930......(79).......224
Total secured & HP debts...... 76490.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Various creditors .............14500.....37........0
Total unsecured debts..........14500.....37........-


Monthly Budget Summary
Total monthly income.................... 1,147
Expenses (including HP & secured debts). 1,154
Available for debt repayments........... -7
Monthly UNsecured debt repayments....... 39
Amount short for making debt repayments. -46

Personal Balance Sheet Summary
Total assets (things you own)........... 89,500
Total HP & Secured debt................. -76,490
Total Unsecured debt.................... -14,500
Net Assets.............................. -1,490

Annisele

It looks as though your expenses are already budgeted pretty tightly. Perhaps a bit too tightly - you are eventually going to have to spend something on clothes! I don't think I can make any suggestions there.

I am puzzled by the £69 payment to 'DWP' - is that a benefit overpayment of some sort?

On the income side, is the £20 a month 'other income' you receive something that's guaranteed in future? Is it likely to be increased?

owlet

Hi :-)

Great that you have spoken to National Debtline and got advice. It does look as though you are running on pretty much minimum.

My comments on your soa are for BR purposes. If you decide to go that route, you are allowed a reasonable standard of living.

Clothing £0 - you will need clothing during the the year
Car park £0 - you really don't pay anything for parking? Unless you really don't, be realistic!
Entertainment £0 - never buy a book or dvd? Pop out for a coffee etc?
Emergency £0 - something needs to go in here too. £10?
Car maintenance inc mot £5 - also very low, I would up that amount.
Haircut £15 - also seems low, is this a genuine amount?
Building ins £0 - you don't have this?

How old is your daughter? Does she contribute?

Have you actually had your house valued or are you basing it on other properties in your area? For the purposes of BR you need actual valuations & based on a quick sale ie lowest possible.

I'm sure someone will be along soon to give advice on your car & house situation. It's not an area I'm 100% confident with!

kazwookie

Looks like you need to up your income, get a 2nd job etc

Good luck

TheGardener

Hi - Firstly - get some buildings insurance! Does your mortgage company not insist on that - no point at all having contents insurance if you don't have the house bricks and mortar covered (maybe just a typo?)
I can see money is already tight. If you decide to go along the BR route there is a chance - if there is enough equity in the property, that the OR will require it to be sold so you need to think really carefully and get some good advice. However, selling the house is not always in the ORs best interest but it can happen. So I guess you need to think hard about whether you want to keep the house. Even if you went BR and were left with no debts and a fresh start - your budget is going to be incredibly tight - looking into the future - will you be able to pay the mortgage? Try and work out what your budget would look like after BR and without any access to emergency credit.

BR needs a LOT of planning on your part if its to be a successful fresh start. Get more free advice from StepChange/National Debtline etc and talk to them about how this will work.

debt_doctor

Hi,


I wondered a few things;
What arrangements do you have to pay off the capital part of the mortgage (the original amount borrowed)?
Is the property jointly owned or solely (and if solely, in who's name)?
What is the equity in the property now, and where do you see the equity in 3 years time?
Can you demonstrate a NEED for the car?


DD

lilybankrupt

Re: the OP and building insurance, I'm guessing since there's a property management fee in the budget he lives in a leasehold block of flats or similar and this fee covers building insurance on a shared basis? That's how it worked when I lived in a mortgaged leasehold block of flats.

jill02

Annisele wrote: »

It looks as though your expenses are already budgeted pretty tightly. Perhaps a bit too tightly - you are eventually going to have to spend something on clothes! I don't think I can make any suggestions there.

I am puzzled by the £69 payment to 'DWP' - is that a benefit overpayment of some sort? Hi, it is from a budgeting loan I had when I was made redundant last year

On the income side, is the £20 a month 'other income' you receive something that's guaranteed in future? Is it likely to be increased?

This is what my daughter contributes each month, she only works a few hours per week at present although looking for more hours

jill02

Annisele wrote: »

It looks as though your expenses are already budgeted pretty tightly. Perhaps a bit too tightly - you are eventually going to have to spend something on clothes! I don't think I can make any suggestions there.

owlet wrote: »

Hi :-)

Great that you have spoken to National Debtline and got advice. It does look as though you are running on pretty much minimum.

My comments on your soa are for BR purposes. If you decide to go that route, you are allowed a reasonable standard of living.

Clothing £0 - you will need clothing during the the year
Car park £0 - you really don't pay anything for parking? Unless you really don't, be realistic!
Entertainment £0 - never buy a book or dvd? Pop out for a coffee etc?
Emergency £0 - something needs to go in here too. £10?
Car maintenance inc mot £5 - also very low, I would up that amount.
Haircut £15 - also seems low, is this a genuine amount?
Building ins £0 - you don't have this? This is included in the service charge

How old is your daughter? Does she contribute? She is 18 and contributes £20 month at present until she finds a job with more hours

Have you actually had your house valued or are you basing it on other properties in your area? For the purposes of BR you need actual valuations & based on a quick sale ie lowest possible. I did find simialr properties on right move and also went on the London County Mortgages website and this was index linked valuation, but thanks, yes I will seek a valuation from a estate agent.

I'm sure someone will be along soon to give advice on your car & house situation. It's not an area I'm 100% confident with!

Thanks :-)

jill02

TheGardener wrote: »

Hi - Firstly - get some buildings insurance! Does your mortgage company not insist on that - no point at all having contents insurance if you don't have the house bricks and mortar covered (maybe just a typo?) This is included in the service charge as I live in a leasehold flat

I can see money is already tight. If you decide to go along the BR route there is a chance - if there is enough equity in the property, that the OR will require it to be sold so you need to think really carefully and get some good advice. However, selling the house is not always in the ORs best interest but it can happen. So I guess you need to think hard about whether you want to keep the house. Even if you went BR and were left with no debts and a fresh start - your budget is going to be incredibly tight - looking into the future - will you be able to pay the mortgage? Try and work out what your budget would look like after BR and without any access to emergency credit.

BR needs a LOT of planning on your part if its to be a successful fresh start. Get more free advice from StepChange/National Debtline etc and talk to them about how this will work.

Thanks for yocur advice, I called National Debtline this morning, very helpful and advised that I offer token payments of £1 or Nil which is what I did yesturday and that if I was go to bankrupt I nedd to watch that my property wont be valued higher than I have quoted and also if they didnt sell the property, in three years they could apply a charge on the property and use that to pay off my creditors which Im not too concerned about as Im paying interest only anyway ad was also considering just selling up and paying off the creditors that way .

jill02

debt_doctor wrote: »

Hi,


I wondered a few things;
What arrangements do you have to pay off the capital part of the mortgage (the original amount borrowed)? Thats another problem, I don't have any funds set aside for the capital, I could potentially switch to a repayment mortgage in years to come but not until my debts are paid off and credit score improved.
Is the property jointly owned or solely (and if solely, in who's name)?My name only
What is the equity in the property now, and where do you see the equity in 3 years time? equity approx £8 to £10k, in 3 years time, probably not a huge difference
Can you demonstrate a NEED for the car? This is something I have thought about and definately if I had to move to rented accomodation, obviously I would still require a bus pass which are about £55 month


DD

Thanks ;-0