Slowly understanding my situation and I'm incredibly worried

atlinford

Hello Everyone,

I've made a couple of posts here and there, and been in the background trying to take in any advice possible.

I'm getting to the point of realisation that I am well over my head, and have been for a while now.
I'm recently married (that certainly didn't help the bank balance) and we now stuck in a very crappy and unhappy situation.

Below is a brief overview of my current situation;

Below is a list of my creditors and the monthly payments;
- Halifax Personal loan = £438.31
- 118118 money = £234.92
- Barclays Partner Finance (0%) = £50.01
- Evolution Money (Secured) = £465.98
- Wonga 6 month flexi (£613) = £164.75
- Lending Stream (£838) = £194.91
- Sunny (£720) = £134.67
- Black Horse (PCP Car) = £278.24
- Halifax Credit Card (£989 balance) = £29.94
- Aqua Credit Card (£2101.64 balance) = £68.92
- Capital One Credit Card (£182 balance) = £182
- House of Fraser Store Card (£830.11 balance) = £31.18
- Next Store Card (£1908 balance) = £102
- Very store card (£1239.97 balance) = £2 currently
- Cash Plus credit card (£84.16 balance) = £10 currently
- Halifax overdraft = £3000 regularly used to its limit. Fees are currently about £55 a month however this is changing from 1st of November and will double.

I currently have £1200 of priority bills (such as mortgage etc) and if I include the car and secured loan it is £1930 in total.

I earn on average £3000 after tax a month, however this is highly overtime reliant.

StepChange have recommended I enter into a debt management plan, and I'm beginning to accept that a debt management plan may be my only option. I originally thought it was just the payday loans pushing me over the edge, but I think it is my overall commitments that are a problem.

I have a few concerns regarding a DMP;
1) would all my spare income go towards paying it? As I don't want to continue having to work 70 hours a week to meet repayments.

2) my car is on PCP with approx 30 months left. SC estimate my debt to be cleared in 42 months if I repay £785 a month. If all my disposable income goes towards my DMP repayment, I would not be able to make the final balloon repayment, and my credit file would be so poor I'd be unable to finance another car. What do other people do in this situation?

3) with me been recently married I was hoping to buy a bigger house in 5/6 years. If I enter a DMP and my creditors default me do you think I'd be in a situation in 7/8 years to buy a bigger house to start a family.

I'm sorry if my questions are stupid, or even if I'm rambling, but I'm completely lost and feel as if our lives are over when they should of just been starting.

Thanks in advance and I appreciate any answers/reassurance you can provide.

atlinford

It's also worth noting I've cancelled the payday loan CPA's today so they won't be taken out tomorrow (hopefully).
It only took me 2 attempts, as at first Halifax refused to remove them because they were payday loan companies and they apparently aren't allowed to remove them.

I can't wait until all this is sorted and I can sleep properly for a night.

Puddylove

Hi
Well, there's no problem without a solution, you just need to work a bit to get the best one for you.

And the first bit of work is to complete a Statement of Affairs (SOA) showing ALL your income and expenditure, so the MSE folks can help.

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

sourcrates

Big line needs to be drawn in the sand me thinks.

You can't go on with such a large amount of debt.

Debt management plan may be the way out of this.

Your car payment would be a priority debt, however the balloon payment may be a problem, you need to do a realistic budget for your actual spends, a DMP is not a regulated arrangement, so you can pretty much run it how you like as long as you are treating creditors fairly.

Defaults stay for 6 years, to be honest, you need to get rid of this debt before you can think of another house move.

enthusiasticsaver

You are heavily overcommitted and I think that a DMP probably is the only solution for you. You should declare your basic income without the overtime or just normal overtime you can cope with. Working 70 hours weekly is unsustainable for the amount of time you will need to be on the DMP.

You wont be able to get a larger mortgage or move house until the debt is cleared and the defaults are no longer showing on your file so that will need to be put aside for now. The car balloon payment will be a problem so I would suggest you live as frugally as possible and put any spare money aside to either buy a used car when you have to hand the car back or pay off the balloon payment depending on how much it is.

What is your partners situation? Is he/she in the same amount of debt and are they contributing to household finances?

atlinford

Thanks everyone for their replies.

I'll do a SOA when I have the time to properly sit and go through everything as their is no point rushing it.

My wife's credit situation is dire, everything is in my name due to her mother taking £2k of storecards in her name and never paying a penny towards them causing them to default. We only found out when we went to buy our home.

She has commitments of her own and after her bills has around £300. She gives me £400 a month also, but this just contributes straight into our outgoings.

I am very overstretched and think this is the best case scenario, my wife is also considering entering a DMP to finally clear her credit file up.

As you mentioned enthusiasticsaver, I'm going to work a DMP from my standard wage as this will massively reduce any stress. It really is amazing how much credit companies will give you based on overtime earnings.

I've talked to my wife and if we both enter at the same time and become debt few in the years to come it will allow us to finally get a mortgage together once the defaults have cleared, luckily we have a home already so it's just a case of staying put for now and learning massively from our mistakes.

atlinford

The start is in sight, I've just sent off for my DMP application pack.

Wish me luck

enthusiasticsaver

I think that is the only way to go. As you say you have a house. Are you on a fixed rate deal? You may have difficulty remortgaging but I cannot see another solution for you and a DMP is the least worst for both of you. Realistically you will be looking at about 8 years though before your credit score will start to improve.

My suggestion would be to save overtime for full and finals later on in your journey which may get rid of the debt a bit sooner. Is that £785 that SC have quoted you dependent on your continuing to work the same level of overtime? You may want to point out that overtime is not guaranteed and you would rather that was not included in your income and expenditure details. Just give them basic wage details.

kram

You could also keep a spending diary, that will will help you see where the moneys going.

Once you get things moving in the right direction it does get easier & not so stressful.

Good luck

K

Karonher

If I have read this correctly you earn £3000 including overtime and have priority bills of £1200. Add to this the £785 it seems that SC are suggesting you pay and it is just £1985 leaving you just over £1000 a month. This is before the money you mentioned your wife pays. I would put as much of this away as I could in case you can no longer do as much overtime then you have options. Save towards a deposit, save towards paying the car off or just save for the future problems - telly breaks or you are off sick for a while.

enthusiasticsaver

Karonher wrote: »

If I have read this correctly you earn £3000 including overtime and have priority bills of £1200. Add to this the £785 it seems that SC are suggesting you pay and it is just £1985 leaving you just over £1000 a month. This is before the money you mentioned your wife pays. I would put as much of this away as I could in case you can no longer do as much overtime then you have options. Save towards a deposit, save towards paying the car off or just save for the future problems - telly breaks or you are off sick for a while.

The OP has priority bills of £1930 including car and secured loan. Add the £785 for DMP and the OP has outgoings of £2715 against a salary heavily dependant on overtime.