Stepchange debt remedy questions

Pinkwhisk

Hi,

I wanted to ask a quick question. I did stepchange debt remedy last night and it recommended a token payment plan, which is great. I just wanted to know what your thoughts are, as I didn't put anything in for prescriptions or dental etc, but obviously these need to be budgeted for.

Is it best to put down what they recommend as an amount? Also, my partner unfortunately smokes - they recommended £47 or less, but the reality is around £90 a month is spent. I know, I know, he needs to cut down or stop. He is trying too, but it's a long road.

Is there anyway I can up another section to accommodate this? - I put down our grocery shopping at £200 but it said it was too little so I changed it to their minimum of £239. We also save for Chrismas and birthdays - where can I put this, or is that knocked on the head for now.

If anybody's got this far reading well done, it wasn't supposed to be so long, sorry!

PW

MrsTinks

Smoking - if he won't/can't quit or cut down then he needs to at least change to roll ups. For reference then he's spending over £1000 a year on smoking...

Prescriptions and dental - check what you normally spend: is this in line with what they recommend?

Birthdays and Christmas - I doubt there is a section for that so you will need to squirrel it from any spare that you have from other budgets. Cut back on this as much as you can though - DO make sure you have put in emergency fund savings each month. You can't take out more debt once you're in a DMP (nor should you) so you need to make sure you can build up a little pot should the car have a blow out, if you need to get the boiler fixed etc.

Try to make sure your budget is realistic - if it's not and you can't stick to it then it will soon become an issue and you will need to go back to the creditors to re-jig the DMP.

You understand that you will default on all your debts doing this and that your credit file will be marked for 6 years once your debts default? (You probably do know - I am just making sure )

fatbelly

Online tools like debt remedy can only be of partial help and you really need to talk to someone who can help you to discuss all your options rather than just leap to one of them.

I don't like token offers anyway.

Your financial statement needs to be realistic so if £90 gets spent on cigs, that's what goes down. If you spend £200 on food, write that. If you buy presents, work out the total roughly for the year and divide by 12.

If you wanted to post a financial statement (we tend to call it a statement of affairs for some reason) there is a tool to help you here

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

Just remember to 'format for mse'

Another thing you might want to do is run this past National Debtline who do not charge and have no product to sell you.

Pinkwhisk

Hello,

Unfortunately that is roll ups, I will be tackling him on this tonight!

Thank you for the input on prescriptions - touch wood we rarely get them so what they recommend is more than enough.

I will be cutting back on the presents too - my family are happy not receiving gifts, it's my partner who wants to spend £20 PP! So infuriating, but there we go. Yes, the sundries section allocated £22 - I must insure that goes away in reality, same with clothing.

Yes I know about the credit rating - our IVA failed last year so I'm not worrying about that right now! thank you for the heads up though.

We were recommended a DRO but have now been served notice on our current property and will have to go into council housing as we don't earn enough to rent privately and our credit rating requires a guarantor which we don't have, so hopefully within 12 months we might have more money to go into a DMP.

PW

Pinkwhisk

Thank you fatbelly, I shall have a look now

PW

Pinkwhisk

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 800
Benefits................................ 491.2
Other income............................ 0
Total monthly income.................... 1291.2

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 750
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 80
Gas..................................... 0
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 19
Mobile phone............................ 17.5
TV Licence.............................. 25
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 70
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 8
Life assurance ......................... 25
Other insurance......................... 0
Presents (birthday, christmas etc)...... 81
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Tobacco................................. 90
Total monthly expenses.................. 1475.5


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
CC1............................1250......0.........0
Court old rent.................3000......0.........0
CC2............................600.......0.........0
Partner finance (DFS)..........900.......0.........0
Overdraft old bank.............320.......0.........0
Payday loans...................2000......0.........0
Current electric...............145.......0.........0
Current water..................46........0.........0
SSE old........................600.......0.........0
Virgin ........................500.......0.........0
EON old........................500.......0.........0
Water old .....................84........0.........0
Total unsecured debts..........9945......0.........-


Monthly Budget Summary
Total monthly income.................... 1,291.2
Expenses (including HP & secured debts). 1,475.5
Available for debt repayments........... -184.3
Monthly UNsecured debt repayments....... 0
Amount short for making debt repayments. -184.3

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -9,945
Net Assets.............................. -9,945

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

A few notes

1) we are awaiting our housing benefit entitlement to be reassessed - we believe this will increase by around £200.

2) I have left council tax blank as we have just had a letter asking us to pay what we owe this year - they want us to call back once we have been paid and make a token payment, then split the rest

3) we are expecting our situation to improve slightly over the year once we have a council property, but we don't know how long that will be, or what our rent/benefit entitlement will be then.

4) we don't pay anything towards our debts now, and we know this needs to change.

I think that's all you need please ask questions as you see fit

PW

Vkz

You could always try the website entitledto to double check your receiving the correct amount of benefits. X

sourcrates

From what I can see you would be an ideal candidate for a debt relief order.

You have more going out, than coming in, so the budget requires a little tinkering with, apart from that, what was the problem with a DRO ?

January2015

A debt relief order might be an option. Others who have more knowledge of this option will come along and comment soon I expect.

On the subject of your partner's smoking - making the decision to work to become debt free is stressful in its own way. So, yes, I would discuss cutting back on smoking but I wouldn't push it hard at this point. If that's what he/she smokes then that's what goes down on the SOA and that's what you will continue to spend for a while. Worry about asking them to cut down once you are on the path to becoming debt free and have settled into it. If they can't you will be no worse off on your DFW path than you are now. If they can cut down or stop, then you will be better off and able to put more towards clearing your debts.

Pinkwhisk

Thank you for your reply. As our situation may improve during the year, I want sure if a DRO would be best? From what I gather council rent is between 400-500, although our housing benefit entitlement will stop with the lower rent.

Yes, I think I may have to gently approach the smoking situation in a few months!

PW