Just dont know where to start!

woody14867

Thank you all so much for your kind & helpful advice!

sourcrates

Woody can I re-ask my original question, how much do you owe in total ?

And an answer to Fatbellys post (7) would also be helpful, thanks

woody14867

Hi guys
Sorry for not getting back sooner.
In January this year I decided to do something about my credit file. My Experian score (for what its worth, was 85 and my total debt around £25,000
I looked on various websites and used various template letters in order to get some of the debts written off either because they were statute barred or because the debt collection agency could not provide the original credit agreement etc.

This proved quite sucessfull and bought the debt down to £18,000.

By May my credit rating was up to 600.This is where I hit the wall.
I felt as though this debt would be with me forever and confided with Stepchange who advised me to do the DRO.

To be honest I felt awful about doing this, a mixture of gulit and shame.

At the end of last week I decided to enter into token payment arrangements with a handful of creditors which amounted to £7k,they accepted and I will be paying back £20/month which is good in one respect but not in another as I will be paying it forever.

The balance I still have in limbo and have sent letters asking for the debts to be written off as they are 4 & 5 years old.

I guess I am only putting the problem off by making these arrangements but it does feel better than taking the easy option with a DRO.

As an aside, I have agonised over making these arrangements and wondering if I really want to commit £20/month to clearing bills yet I spent over £50 this weekend on absolute crap and without even thinking about it. Madness I know.

Now I have another dilemma that has come into play. My wife has always managed her money well but living with me is not easy. She has around £5,000 of catalogue debt which is costing us £175/month.
Because of my situation we need that money to live on so I am asking her to default to release some funds.
Help...what do I do!

January2015

woody14867 wrote: »

My wife has always managed her money well but living with me is not easy. She has around £5,000 of catalogue debt which is costing us £175/month.
Because of my situation we need that money to live on so I am asking her to default to release some funds.
Help...what do I do!

If your wife has £5k of catalogue debt then I doubt she is managing her money as well as you seem to think.

Seriously, I think you need to take a step back, talk to your wife and look at your finances as a couple and work out the best way forward from there.

As advised in one of the posts above, post a full SOA and the lovely folk on this forum will be more than happy to give your their advice. At the moment you are asking for help without providing all the information.

fatbelly

woody14867 wrote: »

my total debt around £25,000
I looked on various websites and used various template letters in order to get some of the debts written off either because they were statute barred or because the debt collection agency could not provide the original credit agreement etc.

This proved quite sucessfull and bought the debt down to £18,000.

Thanks - so it's point 3:

3. Some of the debts are statute barred and don't need to be listed

As long as you have a letter from the creditor confirming the debt to be SB, that debt does not need to be listed.

Equally, as long as you have a letter from the creditor confirming the debt to be unenforceable or written off, that debt does not need to be listed.

Where there is any doubt, list it.

The guidance says:

The issue of statue barred debts is not at all straight forward and limitation on debt is a complex area of law, however advice has been obtained regarding whether statute barred debts need to be scheduled in a DRO application.

Section 251A (2) (a) states that a qualifying debt means a debt that is for a liquidated sum payable immediately or at some certain future time. If a debt is indeed statute barred then it is neither “payable immediately or at some certain future time” and therefore is not a qualifying debt.

Limitation periods on debts do differ: all contract claims are barred after six years but claims under deed, i.e. mortgage shortfall debts are barred after 12 years. To add to the difficulty if a debt is acknowledged then time starts to run again. Limitation, effectively, does not apply against a debt upon which judgment has been obtained.

If the creditor has previously taken a debtor to court and obtained a judgment, the debtor will be unable to use the Limitations Act 1980 to dispute the debt. If the judgment is over 6 years old the creditor may need the permission of the Court to enforce the debt.

It is also correct that a ‘debt’ exists beyond the limitation period but the creditor can lose any right to enforce the debt by virtue of limitation.
Due to the uncertainty of limitation, the first principle must be that all unpaid debts should be listed in the application for a DRO; this is so even if the debtor considers that they may be able to rely upon a defence of limitation against enforcement of that debt.

Where, prior to the DRO application being submitted, the intermediary has established that limitation applies and the debtor has evidence that the debt is statute-barred, then the debtor can choose not to list it. The intermediary should be satisfied that the debt is statute barred and keep any evidence on the debtor’s file.

Intermediaries are reminded that enforceable debts which are omitted from the application will not be included in a DRO and may be enforced after the DRO is approved. Failure to include a qualifying debt may lead to revocation of the order.

Debts that can be shown to be unenforceable for another reason, for example, a pre-April 2007 Consumer Credit Act regulated agreement that does not comply with the requirements on prescribed terms, can be treated in the same way. Where the court would have discretion whether or not to enforce a debt, it should not be regarded as unenforceable, e.g. a post-April 2007 CCA regulated agreement that does not comply with the requirements on prescribed terms.

If a debtor knows that they have a statute barred debt but has no information about it and it does not appear on any credit reference reports, an application can proceed without including the debt.

In any scenario where statute barred debts are not scheduled in a DRO application a note should be included in the application explaining that there are statute barred debts detailing the sum if known or explaining the quantum is unknown, or an email sent to the DRO Team explaining this before the application is submitted.

In summary, debts barred by limitation or otherwise unenforceable do not need to be included as qualifying debts for the purposes of a DRO and if they are not listed will not count towards the £20,000 debt limit.

Where the official receiver subsequently discovers that a debt was not statute-barred/unenforceable and as a consequence, at the date of the DRO application the debts exceeded £20,000 the DRO will be revoked.

As limitation and enforceability can be such an uncertain area the general rule should be: if in doubt, list it.

woody14867

Hope this helps...


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3
Number of children in household......... 3
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2200
Partners monthly income after tax....... 0
Benefits................................ 180
Other income............................ 0
Total monthly income.................... 2380

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1075
Management charge (leasehold property).. 0
Council tax............................. 180
Electricity............................. 50
Gas..................................... 65
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 15
Mobile phone............................ 65
TV Licence.............................. 12
Satellite/Cable TV...................... 42
Internet Services....................... 0
Groceries etc. ......................... 565
Clothing................................ 0
Petrol/diesel........................... 50
Road tax................................ 100
Car Insurance........................... 100
Car maintenance (including MOT)......... 0
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...................... 20
Life assurance ......................... 13
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2412


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Total debt ....................15000.....20........25
Total unsecured debts..........15000.....20........


Monthly Budget Summary
Total monthly income.................... 2,380
Expenses (including HP & secured debts). 2,412
Available for debt repayments........... -32
Monthly UNsecured debt repayments....... 20
Amount short for making debt repayments. -52

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -15,000
Net Assets.............................. -15,000

Just to clarify, my debts are £15k of which I am paying £20/month on £7k. The balance is being negotiated and I am aiming for £20/month

Added to this my wife has debts of £5,000

enthusiasticsaver

A few things first about your situation. Catalogue debt is one of the most expensive forms of borrowing so your wife needs to stop using them. Is your wife's credit rating good enough to get a 0% money transfer card to get rid of the £5k catalogue debt?

Looking at your soa. Your rent is high do you live in London? Are there cheaper options? Your car tax and insurance are also high. £1200 for each per year? Does your wife work and if so why is her income not showing?

The groceries figure is quite high too although I note there are 6 of you. Who is the third adult? Are they contributing to household budget. Ideally you need something in the birthdays, entertainments and haircuts budget.

January2015

woody14867 wrote: »

Hope this helps...


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3
Number of children in household......... 3
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2200
Partners monthly income after tax....... 0
Benefits................................ 180
Other income............................ 0
Total monthly income.................... 2380


Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -15,000
Net Assets.............................. -15,000

Just to clarify, my debts are £15k of which I am paying £20/month on £7k. The balance is being negotiated and I am aiming for £20/month

Added to this my wife has debts of £5,000

Hi

Does your wife have any income?
Are the monthly outgoings your share only - or are they the total costs for the entire household?

Also - you mention your debts are £15k - does that mean that you have paid off £3k since January this year (as in posts further above you mention you got them from £25k to £18k after getting some written off - you mentioned this was in January). Apologies if I have misunderstood this bit.

Muttipops

"I guess I am only putting the problem off by making these arrangements but it does feel better than taking the easy option with a DRO."


Woody, the advice all round seems to be pointing towards a DRO. and I am wondering why you don't take that advice?. I note what you said in quotes above; why do you think it is the easy option? That is what I think of as old fashioned thinking, a bit like if you have nits, you're dirty!! Well, DRO's are designed to get people out of situations like you are in BEFORE things get worse and you are backed into the corner of bankruptcy.
I an not from the UK, but in my home country I tried it all, DMP, F&F settlement, etc,etc and the thing I learnt is this; early intervention is best. It is not admitting defeat too early, it is seeing the writing on the wall and realising where you are heading and then taking steps to draw back from the brink.


It seems to me that you are supporting a large household on your one wage and the rent and council tax alone account for over half your income; no wonder things are tight. I will leave others to comment on your SOA in detail; there are a few places you could tighten your belts and I will be interested to see if any economies could mean you can put more towards your debts, but I can't see that much spare, also taking into account your wifes' £5k debt too.

Muttipops

Oops, just noticed, you don't list any cars under assets, but you have accounted for petrol, road tax and Insurance, how come?


If you do have car(s), how much are they worth?