DMP Help

spooney7

Hi

I've come to the realisation I need to tackle my debt sensibly, however I'm slightly confused. I put my debt details in on the StepChange website, and it recommended a DMP. But based on my details, it talked about paying £300 a month to pay my debt off in a few years.

The thing is, I'm already paying £200 a month now and I'm struggling. How does StepChange work their figures out? I can't afford to declare bankruptcy, and I don't think I'm eligible for a debt relief order.

Can anyone with experience of using StepChange give me some advice please?

fatbelly

It's easy to make a mistake when entering figures into a website. That's why it's better to talk it through with a human being.

You are right that with £200 available per month you would not be eligible for a DRO (unless you are using DLA/PIP to achieve that surplus). But how long will it take you to pay off your debts at £200 per month? If more than 3 years it may still be worth looking at bankruptcy and you could save the fees in 3/4 months by stopping payments.

Do you want to post a statement of affairs so we can take a closer look?

spooney7

I'm not sure how to go about writing an SOA, because me and my OH don't split things equally. I work full-time, he works part-time (looking for extra work) and neither of us receive any benefits.

I pay for the rent and food, he pays for the utilities, Internet and council tax.

When I work out my commitments, it's less than my overall income. I just don't understand how I've got myself into this. I can't declare bankruptcy because I can't afford to pay £700 in fees.

sourcrates

spooney7 wrote: »

I'm not sure how to go about writing an SOA, because me and my OH don't split things equally. I work full-time, he works part-time (looking for extra work) and neither of us receive any benefits.

I pay for the rent and food, he pays for the utilities, Internet and council tax.

When I work out my commitments, it's less than my overall income. I just don't understand how I've got myself into this. I can't declare bankruptcy because I can't afford to pay £700 in fees.

If your on a low income, you can get remission on court fees, otherwise people usually stop paying there creditors in order to save up the fees for Bankruptcy.
It would help if you could provide more details about your debts, how much you owe in total etc.

http://www.fbu.org.uk/wp-content/uploads/2014/04/HM-Court-and-Tribunal-fees.pdf

spooney7

I owe nearly £9000 in total, made up of £6000 to Barclaycard, £1000 to Capital One and a £2000 overdraft with Barclays.

My monthly outgoings are as follows:

Rent 380
Groceries (for 2) 120
Barclaycard 140
Capital One 30
Overdraft fees 45
Phone 20
Bus fare 80
Gym 20
Netflix 10
Union (for work) 15

My wages every 4 weeks come out to around £900, and yet I still end up barely scraping by.

~Beanie~

Well that lot adds up to £860 so leaves you with £40.

Don't you spend any money on entertainment, birthday presents/cards, haircuts, lunch at work, magazines or overspend on groceries anytime? You don't seem to have accounted for any of these in your budget and that could easily be where your £40 (and more) is going every month.

Pixie5740

How have the debts been built up? General overspending for both you and your OH? If so then put together a household SOA which includes your income, his income and all the expenditure that you both have.

sourcrates

On your income, its quite likely you would qualify for fee remission for Bankruptcy, at least partly, however its not a step to be taken lightly.
Seems the Barclaycard is your biggest problem, how long have you had the account, was it opened prior to April 2007 ? or later ?


There are many ways to tackle this, but it really comes down to your available income for debt repayment, and how quickly you want to be rid of it.

spooney7

That figure accounts for overspending on groceries, but I guess it's other little bits which probably add up.

I'd say around half of it is old debt that I've dragged around since university- I have 2 degrees, one was a professional qualification. However, I was let go from my position because I was not up to scratch (which I accept), and have been unable to return to the same field. The only other jobs I'm apparently qualified for are minimum wage food service, or call centre jobs, which don't work for me long-term because I get too anxious at the thought of my job security depending on reaching targets.

My OH knows about my debt, but I hate that it affects him as well. He's already been through bankruptcy himself several years ago, and now this with me. I know it gets better, I've seen that with him- he's built his score up, and has a small credit card for emergencies. I just don't want to ruin things for him.

fatbelly

As long as the two of you do not have joint financial products like a joint loan or current account then whatever you do will not affect him.

The suggestion above about a joint soa is good, as my suspicion is that once we add in your proportionate contribution to:

gas
electricity
water
council tax
tv licence

and something for clothes and the 'other' bits that Beanie mentioned

then your surplus will come down from >200 to <50 and you will qualify for a dro.

There's no harm in trying to link with a DRO intermediary as these are debt advisers who will run you through the options and pick the best one for your circumstances. Most DROs are done through CAB, Stepchange and National Debtline.

Pixie5740

There's no such thing as a universal credit score. These credit score are just made up numbers invented by the credit reference agencies (none of whom lend money) to sell people products and services they don't need.

Any improvement in his finances is in part down to you supporting him whilst he works part time and taking on the household overspending on your credit cards. You need to sit down with him and be open about your finances and come up with a workable household budget that doesn't plunge you further into debt each month. He has gone through bankruptcy himself so you'd like to think he would be sympathetic about your situation and support you.

Is there anything else you can do with your degrees? Diversify someway into teaching or studying part time to give you some more career options? I worked in a couple of call centres whilst I was at university and there were lots of people in the same position as you. They had degrees but couldn't get jobs in their chosen field and call centres and retail seemed to be the only sectors that would hire them without going back to study something else.