Debt management plan: reasonable expenses

debt_free_wanna_be_2

Hello all and group

Please be kind this is my first posting on the debt free board. I would like your help with what to put forward/with the plan. What I want to know is has the DMP got a reasonable chance of going ahead with the current figures. I got my email from StepChange with the details of how to set one up.

My daughter and I have gone through the debt remedy tool on the website and about to set up a debt management plan as recommended. I understand the key to setting up a successful debt management plan is having reasonable expenses. I based it around current expenditure.

I am currently on DLA+ESA+(receive a small pension) and have a grown up son living with me. I live in a rented council owned property. I drive a car to help me get around.

I realise I am going to need to cut down to meet my commitments. My state of affairs as of 28/02/2016:

Unsecured debt 35,502

Income 1,517

Housing Amount Comments
Rent £61
Mortgage
Secured loans
Charging / Inhibition order
Mortgage endowment premium
Service charge/ground rent
Water £23
Council tax
Gas £35
Electricity £50
Other household fuels
Household Services Amount Comments
Building/contents insurance
Telephone/mobile/internet £37
TV licence £13
Satellite/cable television £26
Repairs/maintenance
Household appliance rental
Child maintenance
Childcare
Fines/CCJs/decrees
Life insurance/pensions
Medical/accident insurance
Hire purchase / logbook loan
Transport Amount Comments
Spares/servicing £30
Road tax
Insurance £24
Breakdown cover
Fuel/parking £165
Public transport
Food & Housekeeping Amount Comments
Food, toiletries, cleaning £300
School meals/meals at work
Pets/pet foods/insurance £100
Tobacco
Misc. Goods & Services Amount Comments
School trips/activities
Medicine/prescriptions
Dentist/opticians
Hairdressing £24
Union/professional fees
Laundry/cleaning
Education fees
Personal & Leisure Amount Comments
Clothing/footwear £42
Newspaper/magazines
Sports/hobbies/entertainment £35
Children's pocket money
Religious contributions
Sundries & Emergencies Amount Comments
Sundries/emergencies £25
Loan from family/friends £2 Fair amount based on outstanding balance of £200.00

Your Income Amount
Take home pay
Partner's take home pay
Rent/board received £100
Pension received £47
Any other income received
Income Support / Universal
Credit
Jobseekers Allowance
Incapacity Benefit/ESA £764
DLA/PIP £606
Working Tax Credit
Child Benefit
Child Tax Credit
Child Support

Currently up to date with payments, however minimum payments from 8 creditors is exceeding what I can afford to pay. The DMP suggests payment of £525/month, I was thinking of paying £600/month.

Would be grateful for your advice.

Many thanks

DebtSlave

Hi, have you got all your car expenses accounted for?

I'm no expert, except for paying my own DMP, but I would pay what they have suggested. If you pay £600 will you have anything left over? You don't want to be stuck with nothing spare if you have an emergency. Also your creditors will expect you to increase your payment slightly each year so if you start off right up to your money you won't be able to do that if your income doesn't increase. I am paying the absolute maximum I can afford now and luckily only got a couple of months left as I couldn't keep this up long term!

Hopefully someone with more knowledge than me will be able to answer you soon.

January2015

My comments in red alongside various items in your I&E

debt_free_wanna_be wrote: »

Income 1,517

Housing Amount Comments
Rent £61
Mortgage
Secured loans
Charging / Inhibition order
Mortgage endowment premium
Service charge/ground rent
Water £23
Council tax
Gas £35
Electricity £50
Other household fuels
Household Services Amount Comments
Building/contents insurance you should really have contents insurance
Telephone/mobile/internet £37
TV licence £13
Satellite/cable television £26
Repairs/maintenance this is not just for buildings, but could cover repairs/maintenance to appliances/TVs etc.
Household appliance rental
Child maintenance
Childcare
Fines/CCJs/decrees
Life insurance/pensions ??? No life insurance ???
Medical/accident insurance
Hire purchase / logbook loan
Transport Amount Comme nts
Spares/servicing £30
Road tax ??? No road tax ???
Insurance £24
Breakdown cover ??? No breakdown cover ???
Fuel/parking £165
Public transport
Food & Housekeeping Amount Comments
Food, toiletries, cleaning £300
School meals/meals at work
Pets/pet foods/insurance £100
Tobacco
Misc. Goods & Services Amount Comments
School trips/activities
Medicine/prescriptions ??? Even if you get free prescriptions you will most likely have to buy some medicines - think about what this costs you.
Dentist/opticians ??? really - do you never have to go to dentist or optician???
Hairdressing £24
Union/professional fees
Laundry/cleaning
Education fees
Personal & Leisure Amount Comments
Clothing/footwear £42
Newspaper/magazines
Sports/hobbies/entertainment £35
Children's pocket money
Religious contributions
Sundries & Emergencies Amount Comments
Sundries/emergencies £25
Loan from family/friends £2 Fair amount based on outstanding balance of £200.00

Your Income Amount
Take home pay
Partner's take home pay
Rent/board received £100
Pension received £47
Any other income received
Income Support / Universal
Credit
Jobseekers Allowance
Incapacity Benefit/ESA £764
DLA/PIP £606
Working Tax Credit
Child Benefit
Child Tax Credit
Child Support

Currently up to date with payments, however minimum payments from 8 creditors is exceeding what I can afford to pay. The DMP suggests payment of £525/month, I was thinking of paying £600/month.

Would be grateful for your advice.

Many thanks

Sazzie23

I'm guessing maybe breakdeon cover included in insurance perhaps.

Does daughter live with you? Obviously son does and contributes £100 board...sounds like a cheap deal to me but I'm not sure how it works if you are in rented property and get rent relief etc, wouldn't want to fall fowl of some benefit rules, take advice from CAB if you need to.

If the food toiletries etc is for 3 of you then £300 probably reasonable but for 1 or 2 then sounds a lot, as does hairdressing at £24 and clothes and entertainment is also higher than some on the DMP, you might be better to spilt some of those into other categories, like newspapers, laundry, birthdays or anything else you can add it to so not to arouse closer inspection.

Make sure you will have enough to cover emergencies or access to credit via son or daughter etc so if the car breakdown, you need new teeth, the benefits get stopped or something else disasters us happens you can still function as your lines of credit are now closing.

My unforeseen expenses this year have been for train tickets to get to a course work are paying for (lucky me) but I've had to find that out of my budget for the first 2 months, as well as buying some clothes so I don't look like a skank and paying for parking etc , when there is no spare it's tough. Ok so this probably won't be your circumstances but you never know what can crop up.

Good luck though. There is a dedicated DMP thread, we are usually on the front page of the DFW forum as we chat a lot, join us we like company and have loads of suggestions and experience in getting through a DMP.

poppasmurf_bewdley

To be honest, looking at your income and the amount of debt you are in, I think you should consider bankruptcy as the favoured option.

A debt of £35k on your salary is going to take forever to pay off. Bankruptcy will give you a clean start.

Google Bankruptcy to see what is involved, but it's not as scary as you may think.

sourcrates

I`d second the above.


From April, there are some new changes to the way your Bankruptcy petition will be dealt with.


From that date, everything will be done online, there is no longer a requirement to appear in court, the fees are changing to, as well as the way you can pay them, you will now be able to pay by instalments, instead of the full fee upfront in advance, the new fee has not yet been made public.


Dependant on your income/expenditure, you may still have to pay towards the bankruptcy for up to 3 years, however the Bankruptcy itself should be discharged within 12 months, you will be debt free, and able to start again.


Certainly worth looking at if you have no assets.

nannytone_2

your benefit amount seems really high.
ESA, even with support group element and enhanced disability premium is only £500 a month. are you sure you are calculating it right?

foolofbeans

I think £165 for car travel when you don't work is a lot. I live in a rural area and HAVE to take my car every day to get children to school, go to work (part time) and go shopping (minimum of 25 mile round trip) as well as any leisure trips. I have a pretty economical car so your costs may be higher per mile but I manage on £120 a month. Reduce your trips if you can, I combine trips to the supermarket with other tasks that need doing in town so I don't have to go back and forth.

debt_free_wanna_be_2

Thanks to all who replied and your support. No my daughter does not live with me. Yes I take your points re: emergency funds. Can the DMP amount be varied every month if you have an emergency? Sought advice via StepChange and they suggested DMP if at all possible. I will have a look at the things you mentioned with my daughter and we will work on it together. Has anyone had a DMP declined for excessively high living costs suggested?

January2015

debt_free_wanna_be wrote: »

Thanks to all who replied and your support. No my daughter does not live with me. Yes I take your points re: emergency funds. Can the DMP amount be varied every month if you have an emergency? Sought advice via StepChange and they suggested DMP if at all possible. I will have a look at the things you mentioned with my daughter and we will work on it together. Has anyone had a DMP declined for excessively high living costs suggested?

Ideally you are given an allowance for sundries/emergencies etc. so you should be saving that each month and if/when an emergency hits you will {hopefully} have sufficient funds stashed away to cover costs. In reality life throws curveballs in your way and you don't have enough money stashed away when that emergency or over the top car repair bill crops up. In that case talk to Stepchange - they are supportive and flexible and they know life is not a smooth, unchanging road. They can, and will, reduce payments for a couple of months if necessary whilst you deal with the emergency situation and then put the payments back to the agreed monthly amount.

HappyMJ

debt_free_wanna_be wrote: »

Thanks to all who replied and your support. No my daughter does not live with me. Yes I take your points re: emergency funds. Can the DMP amount be varied every month if you have an emergency? Sought advice via StepChange and they suggested DMP if at all possible. I will have a look at the things you mentioned with my daughter and we will work on it together. Has anyone had a DMP declined for excessively high living costs suggested?

You are on a income based benefit. You don't have to pay anything until your income improves and you come off the income based benefit even if it appears you have money left over each month. You can put the remainder of your money aside each month to cover emergencies as and when they arise.

You do not have excessively high living costs.

Is there any potential for your situation to improve soon?