26K of debt...DMP, IVA or do it myself?

Ostrichnomore

Hi,

So I have 26k of debt across two loans, two credit cards and an overdraft so all unsecured. I began to get into debt at university and it has since spiralled. The lenders kept offering me money and I foolishly kept taking it. The two loans, one credit card and overdraft are with one lender. I am behind on the credit card payments with this lender but the loans are upto date and I do not go over the overdraft limit. The other card I missed two payments but have since spoken to them and got to paying a regular amount.

It seems so daunting and I spoke to someone at citizens advice and they suggested thinking about an IVA or bankruptcy. This seems a little extreme to me but I have looked into a DMP. I'm just looking for some advice and wondering what options other people have gone with. I also have not disclosed any of this to my family, only to one close friend and I would prefer to keep it that way.

Thanks

sourcrates

Hi,

We need to know a few more details before any specific advice can be given, that's why it's best to provide an accurate SOA (statement of affairs) so we can see what money you have coming in and going out.

You can't offer detailed advice on a debt solution without this information unfortunately.

Link here :

http://www.stoozing.com/calculator/soa.php

Ostrichnomore

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1309
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1309
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 31
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 20
Petrol/diesel........................... 160
Road tax................................ 15
Car Insurance........................... 54
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 30
Entertainment........................... 100
Holiday................................. 81
Emergency fund.......................... 0
Total monthly expenses.................. 931

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................8926.09...248.......6.99
Loan...........................3667.26...128.......6.99
Overdraft......................2750......55........0
Credit Card....................4602.08...145.......19.9
Credit Card....................6897.23...175.......27.9
Total unsecured debts..........26842.66..751.......-

Monthly Budget Summary
Total monthly income.................... 1,309
Expenses (including HP & secured debts). 931
Available for debt repayments........... 378
Monthly UNsecured debt repayments....... 751
Amount short for making debt repayments. -373
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -26,842.66
Net Assets.............................. -25,842.66
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using other browser.


Hopefully this is what you referred to.

sourcrates

26k of debt, no real assets, a DMP would probebly take 10 years plus to complete.

IVA is a possibility, however I don't think you could muster enough spare cash for the payments for either of these options.

You have missed a number of essential payments from the SOA, council tax, electric, water, tv licence.

CAB recommends Bankrupcy ?

To be honest I agree with them, get rid of the debt, start again.

Ostrichnomore

I haven't missed them I don't have to make them. I moved back in with my parents so other than the items listed I have that money available for payments each month. That SOA is also based on my spending at the moment and I know I could reduce certain parts of it. The £300 rent payment is money I give to my parents.

sourcrates

Ah, ok, so you have around £370 a month to pay towards your debt, so there's probebly no reason why a DMP would not be feasible.

Have you done the "debt remedy tool" on the stepchange website ?

I'd advise you to do that, it will throw out a recommendation based on your own circumstances.

That would be the place to start.

Ostrichnomore

If I do a DMP and my wages are still being paid into the bank account with the overdraft on can the bank take the money that way? I am just wondering if I should open another bank account somewhere else? Thank you for your help so far and sorry if I wasn't clear in what I was saying.

National_Debtline

Ostrichnomore wrote: »

If I do a DMP and my wages are still being paid into the bank account with the overdraft on can the bank take the money that way? I am just wondering if I should open another bank account somewhere else? Thank you for your help so far and sorry if I wasn't clear in what I was saying.

Hi

Yes, if you start a payment plan such as a DMP the bank could call in the overdraft debt and take money from your income to repay it if you still use a bank account with the same organisation. You should start using a basic bank account with a company you don’t have any debts with.

James
@natdebtline

National_Debtline

If you have £378pm surplus an IVA wouldn’t be a good option as you would pay nearly all of your debt back which misses the point of an IVA. If the IVA lasted 6 years you could end up paying all of your debts back plus insolvency fees.

DMP seems like the best option as long as you use a free provider such as Stepchange.

James
@natdebtline

chevalier

Welcome to the boards. My suggestions are in blue.

Ostrichnomore wrote: »

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1309 any chance of getting more income? Bar work or similar. Any old mobiles around you could sell, dvd/cd at music magpie. Are you signed up with survey sites? they don't pay out much at a time but it all adds up. When you shop (if at all) online, do you go via cash back sites like quidco and topcashback?
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1309
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300 Is this a fair reflection of what it costs to have you at home? Or could it be a bit less. Can you negotiate this with your parents? They must have some inkling that you are in trouble financially because you moved back home.
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 31
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 20
Petrol/diesel........................... 160
Road tax................................ 15
Car Insurance........................... 54 ouch, can you get this less? And this is a prime one to got through a cash back site at renewal.
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Medical (prescriptions, dentist etc).... 0 always handy to have a pot for this...
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 30
Entertainment........................... 100 suggest you reign this in for a while
Holiday................................. 81 unless this is a situation where you would lose a deposit, can you cancel this.
Emergency fund.......................... 0
Total monthly expenses.................. 931

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................8926.09...248.......6.99
Loan...........................3667.26...128.......6.99
Overdraft......................2750......55........0
Credit Card....................4602.08...145.......19.9ouch to both of these. What is your credit score lik? you can look on NOddle for free to see. Getting this and the debt below on to 0% or low life of balance terms would be the difference between not breaking even and doing so.
Credit Card....................6897.23...175.......27.9
Total unsecured debts..........26842.66..751.......-

Monthly Budget Summary
Total monthly income.................... 1,309
Expenses (including HP & secured debts). 931
Available for debt repayments........... 378
Monthly UNsecured debt repayments....... 751
Amount short for making debt repayments. -373
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -26,842.66
Net Assets.............................. -25,842.66
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using other browser.


Hopefully this is what you referred to.

Hi Ossie . You could get this SOA to nearly balance if you ditched the entertainment, holiday and grew long hair:rotfl:. But that would be pretty excessive. On the other hand if you could boost your income AND cut back in these areas then you could balance you income and outgoings.

However you also need to figure out what you have spent the money on in the past and put plans in place, so that you have the money set aside for such things in the future.

Actually going through your credit card bills and categorising the spending can me painful but also will give you a better idea on your triggers for spending.

On the basis of changing nothing, then I agree an DMP seems the way to go. As Sourcrates said above, if you plug your SOA figures into the Stepchange Debt Remedy calculator, they will give you an no strings answer to which they think is best. If you work in any sort of financial job be aware that an IVA or bankcruptcy would likely impact your job.

Good luck with moving forward.
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