Considering DMP - SOA advice please

AliceBanned

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 2040
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2040
Monthly Expense Details
Mortgage................................ 278
Secured/HP loan repayments.............. 0
Rent.................................... 347
Management charge (leasehold property).. 100
Council tax............................. 81
Electricity............................. 20
Gas..................................... 27
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 15
Mobile phone............................ 16
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 120
Clothing................................ 10
Petrol/diesel........................... 30
Road tax................................ 20
Car Insurance........................... 19
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 170
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 8.5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 20
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 5
Total monthly expenses.................. 1436.5

Assets
Cash.................................... 0
House value (Gross)..................... 78000
Shares and bonds........................ 0
Car(s).................................. 1200
Other assets............................ 0
Total Assets............................ 79200

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 51800....(278)......1.99
Total secured & HP debts...... 51800.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................3200......75........18
Halifax........................3098......48........19
First Direct...................1990......58........19
M& S Current account...........500.......0.........14.9
First Direct overdraf..........500.......0.........12
Littlewoods....................140.......0.........0
La Redoute.....................110.......5.........23
Coop Credit Card...............2500......45........6.9
Capital One....................890.......11........34
Capital One....................990.......40........0
Total unsecured debts..........13918.....282.......-

Monthly Budget Summary
Total monthly income.................... 2,040
Expenses (including HP & secured debts). 1,436.5
Available for debt repayments........... 603.5
Monthly UNsecured debt repayments....... 282
Amount left after debt repayments....... 321.5
Personal Balance Sheet Summary
Total assets (things you own)........... 79,200
Total HP & Secured debt................. -51,800
Total Unsecured debt.................... -13,918
Net Assets.............................. 13,482
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.


Hello. I have spoken to StepChange today as my debts are getting on top of me and I have had 4 payday loans in the past few months just to meet all my outgoings. I am wondering whether a DMP would be my best option but am nervous about doing it because of the long-term impact on my credit rating. However as you can see I owe quite a lot so would not get more credit at the moment anyway (for a mortgage as I am in shared ownership). I am also concerned about future mortgage rate after two year fix), and have a low quality of life apart from a nice flat and roof over my head. I have been struggling in particular for two years since I bought the flat but it is a nearer and far better commute, and at least my own place which I prefer in the long term.


I suppose it is a close call as to how far the debts are already damaging my changes of increasing my mortgage in the future, and how badly a DMP might affect things? Thanks for any advice. It has got to me emotionally quite a lot as well, and it is a relief to speak to StepChange (not for the first time but reality is hitting harder at the moment as I seem to be finding things increasingly difficult).


I need to update my signature so please ignore that figure.


Any comments on DMP experience would be greatly appreciated. I don't want to feel even worse if I go ahead or have even greater longer term problems with money.

AliceBanned

PS doh just realised I have missed out two credit union loans, one repaying £70pm and the other £163 pm (latter repaid in 3 months' time and former 10 months' time).

HappyMJ

I think with that level of debt you should be able to manage without a DMP which as you say will have a long term impact on your credit rating.

You have spare income where is it going?

You should be able to clear that debt within 3 to 4 years if you can stick to that SOA is that a fair SOA or are you missing more expenses.

cybertortoise

Hi AliceBanned. Love the username!


I'm relatively new but hopefully I can help a bit. I see £50 for entertainment and £20 for haircuts. Could that be lower? Your local college may have a hairdressing dept that offers cheap cuts, they just take a bit longer.


Do you need a home phone and a mobile? Of course your landline cost could include internet so that may be a different story. Pretty sure you could reduce your grocery bill too, especially if you look through some of the other threads and challenges.


You should have spare income after debt repayments, where is that going? Maybe start a spending diary if you aren't sure.

AliceBanned

Thanks both for replying. Some spare income has gone on interest for payday loans and overdrafts, some on car repairs, a recent camping hol (very cheap and in the rain and my only proper hol this year!) and the two loans which I forgot to add - mentioned at the end of the SOA. I don't have an emergency fund so over the past year I have borrowed more for essentials only and have spent a tiny bit on clothes for work, and some social things as I live alone and feel it is unhealthy not to go out and socialise and meet new people too.


Going forward I am not having any breaks away/hols for at least 6 months, and even after that it would have to be cheap. The car should make it until next MOT end Feb. So trying to really have a go at these debts over this autumn/winter. If only I can get some lower interest rates on the CCs I will feel I am getting somewhere, but for the Barclaycard and Halifax I am not paying much more than the interest charges each month.

AliceBanned

Think I am just panicking that it will get worse as I just had time off and went away for a break and spent more than usual. A friend and I went in a few charity shops in Cornwall and bought some clothes!:D


Hopefully after September wages things will start to settle again. I just thought the DMP would stop me from having debt problems, ie StepChange would take charge a bit and I would be forced to repay my debts in a strict manner. However I have YNAB and should be budgeting that way, though it keeps falling apart with each crisis/repair/car issue/depression episode. I suppose I need support.

crazy_cat_lady

Plenty of support available here. Please don't think this is me having a go, but it's the truth as far as I see it. Letting Stepchange 'take charge' won't address the cause of the problem - and whilst it might be a short term fix unless you look at your spending habits then it won't work for long term.
Things like car repairs need to be budgeted in your SOA, and I would recommend getting back on board with YNAB. According to your SOA you should have money left over (even with the payments you missed out), but it's obviously going somewhere if you can't make ends meet. I've been in a DMP with Stepchange for over 5 years - it has made me look at how to budget and where my money goes but it also has to be something you can live with too so budgets need to be realistic. Oh, and I can't remortgage yet - I have defaults on my file... and my mortgage rate is 4.78% so I'm paying way more than I should be...
Hope I haven't sounded too harsh - good luck.

AliceBanned

Thanks crazy cat lady. Going forward this is as accurate as I can get the SOA but if I added what I have spent over the past month it isn't. Yes I have spent more then but am trying to stick to a new budget and I do struggle - without being extravagant. I am sure you know what it's like - when once you have paid everything off there is only money left for food - it all starts to spiral because I never have money to put aside unless I deny myself absolutely everything, which I understand I probably will have to do.


Eg I have just done a calculation and there is no money to pay min payment on Barclaycard or FD credit card this month. When this happens I get a payday loan usually as it is better than defaulting but this is very recent ie not having the funds to pay my cards. That is why I contacted StepChange. I might just let them default for the first time or at least make late payments, as I can't cope with it any more.

AliceBanned

I am £120 in credit with First Utility for my gas and elec and they are happy to refund! Means I should be able to get through this month's payments for all credit cards and then get on top of things if I keep budgeting. I was wracking my brains trying to find out where I might have money. I appreciate going into winter it is not ideal but it is better than payday loan or default.


Someone on another thread criticised me for coming off of DD for my water bills..this is the reason why sometimes they are not ideal.

HappyMJ

AliceBanned wrote: »

Thanks crazy cat lady. Going forward this is as accurate as I can get the SOA but if I added what I have spent over the past month it isn't. Yes I have spent more then but am trying to stick to a new budget and I do struggle - without being extravagant. I am sure you know what it's like - when once you have paid everything off there is only money left for food - it all starts to spiral because I never have money to put aside unless I deny myself absolutely everything, which I understand I probably will have to do.


Eg I have just done a calculation and there is no money to pay min payment on Barclaycard or FD credit card this month. When this happens I get a payday loan usually as it is better than defaulting but this is very recent ie not having the funds to pay my cards. That is why I contacted StepChange. I might just let them default for the first time or at least make late payments, as I can't cope with it any more.

Payday loans should never be used more than once and only in the most dire of emergencies. As soon as you are paid pay all the minimum's even if it leaves you with virtually nothing that's what you have to spend in the next month do not get another payday loan unless a dire emergency pops up but as you've just had your car repaired that shouldn't happen again for a while. You've only got £600 of minimum repayments and £2,000 of income so you've got more than enough left each month. There's no need to destroy your credit rating with so much left over.

It's obvious your excess money is going somewhere else apart from the minimum payments that you should be making so it's essential you get the SOA as accurate as you can. Keep a spending diary.

I don't pay my water bill by DD. I don't pay it at all. There is nothing they can do in regards to late payment so it can be one of the last bills you pay and worry about it (much) later. They don't charge late fees, they don't report to credit reference agencies and they can't cut you off so get your minimum repayments sorted first.

rockm87

Hi!

not to be mean, but at the moment I don't think you've had your lightbulb moment. You may not be being extravagant but you aren't sacrificing yourself to clear up your debt mess either..!

You need to have a sense of urgency about your debt, cutting down for a month or two could really help you out. and I mean everything but the essentials (roof, food, heat).

There is lots of inspiration and help on these forums to cut your expenses, and if you have anything you can sell, or any evening work you can take on...you can quickly cut your debt.

Then make sure you close your catalogs and don't use their credit again.