Don't Know Where to Begin!!

SBarras

Soo I'm relatively new to this so please be kind!

I looking for some advice on where to begin, over the last couple of days I sat down and calculated all my debt which I currently have. I currently have £5,895 including, a student overdraft and various credit cards all of which have been passed onto debt management company called Moorcroft. I have a very low/bad credit score currently because of all the missed payments. Ive worked on my budget and each month I can pay off £220 per month to get the complete debt free in two years time ... however I need some advice on where to begin paying the debt off? Do i set up payment plans on all the different debts? or do i start with the lowest debt (£95) and pay of the lower debts in full first and slowly tackle the largest debt (1700)? Please help as im a little lost at the moment

Wookey

Post up an SOA, with regard to clearing debts it's usually best to start with the one that incurs the highest interest. An SOA is the best place to start with as it will give everyone an idea of whats owed and what you can manage to put aside to clear debts.

http://stoozing.com/calculator/soa.php Make sure that it is formatted for MSE and be as truthful as you can be with yourself when filling it in.

sourcrates

Hi,

Firstly, Moorcroft are a debt collection agency, who mange clients accounts, not a debt management company, similar name, big difference between the two.

Its up to you to decide how to deal with them really, as you have a few debts, maybe a debt management plan would suite you, best to do a statement of affairs, link is in the stickies under stoozing.com at the top of the forum.

National_Debtline

Hi SBarras

Welcome to MSE. It's good to hear you've worked out a budget and are going to be able to clear your debt in a relatively short period of time. It’s important to be fair to all of the debts, and that means splitting the £220 per month you have available proportionally. The biggest debt will get the biggest share and the smallest debt will get the smallest share. That way they all get something and should be paid off at around the same time. You can find out how to calculate your offer here https://www.nationaldebtline.org/EW/steps/step4/Pages/Step_4_03.aspx.

Hopefully interest has already been frozen, but if not, you should ask Moorcroft to freeze it and accept your offer of payment. You need to send them a copy of your SOA as it’s evidence that your offer is reasonable.

I also agree with Sourcrates, a debt management plan (DMP) could be a good option. You’ll make one monthly payment and the debt management company will do all the negotiating for you. If you do go down this route, make sure you use a company who will not charge you a fee. You can find out more on how to do this by contacting one of the free debt advice agencies. Good luck with it all.

Susie
@natdebtline

SBarras

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................ 1266
Partners monthly income after tax....... 1400
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2666

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 170
Rent.................................... 425
Management charge (leasehold property).. 0
Council tax............................. 183
Electricity............................. 56.5
Gas..................................... 56.5
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 18.99
Mobile phone............................ 15
TV Licence.............................. 13
Satellite/Cable TV...................... 87.99
Internet Services....................... 20
Groceries etc. ......................... 250
Clothing................................ 40
Petrol/diesel........................... 45
Road tax................................ 30
Car Insurance........................... 35
Car maintenance (including MOT)......... 160
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 15
Buildings insurance..................... 0
Contents insurance...................... 18
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 50
Holiday................................. 200
Emergency fund.......................... 0
Total monthly expenses.................. 1978.98


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 5000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 5000.....(170)......0
Total secured & HP debts...... 5000......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Overdraft, Moorcroft...........1744.71...0.........0
Credit Card, Moorcrof..........381.85....0.........0
Credit Card, Moorcrof..........350.77....0.........0
Next, Fredrickson..............347.08....0.........0
EE, Moorcroft..................170.......0.........0
Gym, Zinc......................450.......0.........0
Shop Direct, Littlewo..........144.19....0.........0
Shop Direct, Very..............666.55....0.........0
Payday Loan, BW Legal..........149.3.....0.........0
Payday Loan, Moorcrof..........585.83....0.........0
Total unsecured debts..........4990.28...0.........-


Monthly Budget Summary
Total monthly income.................... 2,666
Expenses (including HP & secured debts). 1,978.98
Available for debt repayments........... 687.02
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 687.02

Personal Balance Sheet Summary
Total assets (things you own)........... 5,000
Total HP & Secured debt................. -5,000
Total Unsecured debt.................... -4,990.28
Net Assets.............................. -4,990.28

SBarras

Sooo above is my SOA , just want ot say thank you for all the useful help so far... it really feels like it working being able to actually talk to people about my spiralling debt problem! I think im going to go on a debt managment plan if anyone could recomend a reliable/good free one?

sourcrates

SBarras wrote: »

Sooo above is my SOA , just want ot say thank you for all the useful help so far... it really feels like it working being able to actually talk to people about my spiralling debt problem! I think im going to go on a debt managment plan if anyone could recomend a reliable/good free one?

Contact stepchange, have a look on there website first.

Silver_Queen

I'm a bit confused where you've got the sum of £5,895 from? From your SOA it looks like you owe £9,990.28 including the HP?

bexster1975

I'm confused about quite a lot here.

As Silver Queen says but then in your SOA:

Over £100 a month on gas and electric for two of you?! Are you paying arrears? If not, you need to shop around.

£160 a month on car maintenance. What on earth do you drive that requires close to £2000 a year to maintain!

£200 a month towards holidays. I'm very glad this is a priority for you at the moment - I think this requires reconsidering.

£50 per month on water is also high. If you are not metered you should consider it.

£90 almost for satellite / cable. Please refer to my comment on holidays.

£250 per month for two on groceries does not seem necessary unless there are unusual circumstances.

I'm sorry if this seems harsh, but I'm confused. There is a £687 surplus per month by your calculations to clear less than £5k of unsecured debt. If we assume until the debt is clear you simply forego the £200 per month holiday saving then this means somewhere in the order of 6 months to pay off without resorting to any drastic measures.

Based on this, I'm going to assume I'm missing something and someone much smarter than me can help with this.

Good luck

Bexster

MrsSave

As above, this is very fixable if your soa is accurate. If you threw all your spare money (and made a few cutbacks) you could pay off your debts in no time by yourself.

You mention in your op that you can only pay £220 off per month. According to your soa, you have £687.02 spare each month.

Just to compare (I know different areas could have different costs, etc.) we're a family of 4 and pay £66 per month for gas/electric, £40 per month for water, £220 per month on groceries, £25 on landline/internet which has all calls included (any time) and unlimited internet and our treat is our sky, which after a quick phone call is now down to £13.50 per month for 18 months for the basic package.

By giving these companies a call and getting the prices down as far as you can and using the holiday money for debts until they're paid off, according to your soa you can have over £900 per month (£1000 or more if you really want it) to pay off these debts. If your debts are under £6k then it'll be paid off in under 6 months.

SBarras

Ok so to clear a few things up about my SOA

- Firstly the HP is through one of my parents, therefore, I didn't include this in my over all 5k debt as I would rather get rid of all the unsecure debts first and formost.

- yes, we are currently in arrears with the follow, gas, elec & water, but we are paying them back hence why the monthly bills are soo high

- The sky bill is also in arrears I would like to cancel gut scared in case they add more fees on top of the 125 we already owe. If anyone has advice on this im all ears?

- The holiday is for a close family members wedding who we would be devastated to miss. This is to cover the cost of the holiday, spending money and outfits for the wedding.

- The car maintance £160 for my yearly MOT & service i wasnt sure if to add this into the SOA as there is no section for yearly 1 off costs

Also, the SOA has added my partners pay into this who I would never want to pay my personal debts all of which i gained before we even where in a relationship together over 5 years ago. Obviosuly we pay the household arrears together