Looking for advice (& a lottery win?..)

DashDotCom

Hi everyone,

I must admit first of all that I've been lurking through this board for around a month now. In total awe of some of the feats that I've read so with that in mind have decided it's really time I take control of my finances.

Mine is the usual story - You take out two credit cards when you're young because "its fun". You then get a consolidation loan for the credit cards... but then you max the cards back out again because you're stupid.. You then try to grow up and get a car on HP to start living a "normal" 9-5 life but struggle to breathe and keep your head above water. All the while taking your anger out on your ever supportive other half.

Typical story, right?... Or just me?

Anyways, I've used Step Changes Debt Remedy tool and have been recommended to enter an IVA. I had thought I would get the DMP route recommendation.. seems not.

I thought I would post a SOA to get some subjective eyes over it and see what your thoughts are.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1510.6 (Moving forward from end of Jan this will be my take home - before now it has been around £200.00 lower)
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1510.6

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 125
Rent.................................... 350
Management charge (leasehold property).. 0
Council tax............................. 65
Electricity............................. 33
Gas..................................... 33
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 0
Mobile phone............................ 45
TV Licence.............................. 15
Satellite/Cable TV...................... 32
Internet Services....................... 0
Groceries etc. ......................... 120
Clothing................................ 0
Petrol/diesel........................... 80
Road tax................................ 12
Car Insurance........................... 100
Car maintenance (including MOT)......... 0
Car parking............................. 80
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 15
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Mobile insurance......................... 7
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1137


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3100
Other assets............................ 0
Total Assets............................ 3100


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 4500.....(125)......0
Total secured & HP debts...... 4500......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................2000......60........0
Credit Card....................800.......30........0
Very ..........................750.......30........0
Overdraft......................660.......0.........0
Overpayment wages..............500.......Not set up payment plan yet
Overpayment of Housing Benifits(from 2012)..............1100......Not set up payment plan yet
Total unsecured debts..........5810......120.......-


Monthly Budget Summary
Total monthly income.................... 1,510.6
Expenses (including HP & secured debts). 1,137
Available for debt repayments........... 373.6
Monthly UNsecured debt repayments....... 120
Amount left after debt repayments....... 253.6

Personal Balance Sheet Summary
Total assets (things you own)........... 3,100
Total HP & Secured debt................. -4,500
Total Unsecured debt.................... -5,810
Net Assets.............................. -7,210

Reproduced on Moneysavingexpert with permission, using other browser.[/i]

Although there are two incomes in our home, this is all my own debt so the household bills given at the top represent my share. The personal debts are what I pay in outgoings.

My fiance and I plan to get married in a couple of years so would love to be able to put some money aside, but as you can all see, that isn't currently possible.

I'm not sure why but I find the thought of an IVA alot scarier than a DMP. I think it feels alot more serious going down this route.

I also have concerns:
- After marriage it would be nice to think I could start saving for a mortgage, however am worried that my credit rating will not permit this ever again?!
- When in an IVA will I be able to allocate my own expenditure through the month or will someone control my spending too? (I have no doubts that I will ever fall into old borrowing habits, as I have been maintaining payments on my debts for years now and not borrowed)
- My car that is on HP; I have ready through the T&C and there is no mention of a clause that does not allow me to enter into an IVA, but does mention Bankrupcy - does this mean they cant take my car?

Wow, I'm rambling.. I guess I should get back to work now. :rotfl:

Thank you for your time.

HBBeast

Per your SOA you have £250 a month left over is this correct?

HBBeast

Id be tempted to sell the car so no HP payments and get a cheap run around - check out Dave Ramsey - I worship the guy!!

MERFE

I can't see from your SOA why you are considering an IVA or DMP. Are you meeting the minimum repayments with extra left over?

Pixie5740

Hmmm I'm not sure why Step Change suggested an IVA if you have £250 a month left over. An IVA would last for 6 years whereas if your SOA is accurate you could snowball your debts and get them paid off in under 2 years and that's without even entering into a DMP.

If it turns out an IVA is the right option for you then it won't prevent you from ever getting a mortgage. Even people who go bankrupt can still obtain mortgages further down the line,

Pixie5740

Are the interest rates on your unsecured debts really 0% APR?

DashDotCom

Sorry, Pixie, should of explained its not 0% APR - I don't have the APR to hand as I am in work.

A little misleading.

The APR on the credit card with 2k is (i think) 24%, the other slightly lower at 19%(Again, just going from memory).

The loan is 34% (Paying back 6400 for initially borrowing 4k)

Pixie5740

Even so, if your SOA is correct then you could snowball your debts, starting with that horrific loan, and repay everything within 2 years without ending up with any late payment or default markers on your credit files.

So I guess the question is, do you really have £253.60 left over each month? Well I suppose it would be £53.60 each moment at the moment as your take home £200 a month less now than you will at the end of January.

ReadingTim

Ditch the sky tv, mobile phone contract and mobile insurance for freeview, PAYG and not dropping your phone down the loo and you'll find another £85 per month - especially as you don't seem to spend anything on clothes, haircuts, entertainment etc,

But the main problem is the car - it's costing almost £400 per month for its HP, and to tax, insure, run and park it. That's a quarter of your monthly take home pay. You can't afford this.

You need to find something that's cheaper to buy and insure, and find somewhere else to park! Alternatively, investigate public transport.

Finally, the other side of the getting out of debt equation when you can't reduce the amount going out, is to increase the amount coming in, by getting a 2nd job, or finding a better paid first job.

DashDotCom

Sorry for being so clueless, but what do you mean by snowball my debts?

I think I should be left with £250, or there about after all outgoings - Overtime is always an option at work if I really need extra pennies.

MrsTinks

First question: how much would it cost you to move closer to work so you could walk or cycle?

Owning a car is currently costing you £365 per month plus bits like tyres and servicing...

You could accept a job with a serious pay cut and be better off if you could loose the car costs as a result.

If your house hold costs are only half then you need to look at your council tax, your gas and electricity costs and I can't see the consolidation loan you mentioned?