Need urgent debt advice and not sure where to start

EssexHebridean

jamiesmack wrote: »

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.................... 2

Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 1200
Benefits................................ 0 There should be child benefit here, no?
Also check what else you might be entitled to - your income is not particularly high.
Other income............................ 0
Total monthly income.................... 2200

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 850 That is a HUGE percentage of your monthly income. Any chance of moving to somewhere a little cheaper?
Management charge (leasehold property).. 0
Council tax............................. 108 If you're not paying this over 12 months already get that changed as it will help you with budgeting.
Electricity............................. 50 This is high - go round turning everything off that doesn't need to be on, and then instigate rules about turning lights off/not leaving things on standby/not staying under the shower for hours if it's an electric one
Gas..................................... 50 Turn the thermostat down a couple of degrees and pop jumpers on.
Oil..................................... 0
Water rates............................. 70 YOu're in the South West at a guess?
You *might* be better on a meter, but investigate carefully.
Telephone (land line)................... 30 This is high - why so much?
Mobile phone............................ 60 [COLOR="red"This is very high - can you switch to SIM only deals?[/COLOR]
TV Licence.............................. 12.25
Satellite/Cable TV...................... 0
Internet Services....................... 20 You might be able to get a cheaper deal bundled with landline costs.
Groceries etc. ......................... 400 This is extortionate - you can halve this,
honestly! Meal plan and shop to a list, cut out the "just popping out for milk" type shops as this means spending more than what you've gone in for, and think about switching to Aldi or Lidl.
Clothing................................ 40
Petrol/diesel........................... 150
Road tax................................ 60 Do you actually pay this out monthly?
Car Insurance........................... 80 Assume you've checked the comparison sites to make sure you're getting the best deal on this?
Car maintenance (including MOT)......... 20 Not sure this is realistic for two cars I'm afraid - throw some of your grocery savings here.
Car parking............................. 20 Can you cut this by parking a wee bit further out and walking?
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 18
Buildings insurance..................... 0
Contents insurance...................... 15 This is high - use comparison sites to find the best deal
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 15
Entertainment........................... 10 This is really low - is it definitely realistic?
Holiday................................. 0
Emergency fund.......................... 0 You need to start building sopmething here even if only at £25 per month.
Total monthly expenses.................. 2108.25


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 10000
Other assets............................ 0
Total Assets............................ 10000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card debt tota..........17500.....0.........18.9 OK I wondered where you SOA was unrealistic and here it is - you've not put in the monthly payments here so the SOA doesn't show your true situation.
Total unsecured debts..........17500.....0.........-


Monthly Budget Summary
Total monthly income.................... 2,200
Expenses (including HP & secured debts). 2,108.25
Available for debt repayments........... 91.75 No - it's not available is it as you've not got your debt payments in there.
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 91.75

Personal Balance Sheet Summary
Total assets (things you own)........... 10,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -17,500
Net Assets.............................. -7,500

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

There are savings you can make, but without the full picture on the SOA you can't see where you really stand.

As someone else says, investigate whether you can get 0% balance transfers to help take the pressure off perhaps but until you've made a decision about whether a DMP will work for you don;t commit to taking any new cards out.

Above all you MUST keep your heads out of the sand now.

National_Debtline

Hi Jamiesmack


Dealing with debts can be difficult but the important thing is you have come back for help. Your SOA shows that after paying all your normal bills you have £91.75 spare, which I can guess is not enough to cover the minimum repayments on your credit card debt.


If you enter into a DMP it would currently take around 16 years to be debt free. That's a very long time and would normally mean a DMP is not recommended. However you mention you expect your income to increase significantly over the next 12 months. The more you pay into a DMP the shorter the term, so depending on how much your income will increase it could still be an option.


Alternatively you may be able to consider bankruptcy which would see your debts written off after 12 months. You could only be asked to make payments towards your debts for 3 years but the implications of bankruptcy are more serious. As you are self employed I would recommend speaking to Business Debtline for free and impartial advice on all of your options. They have a webchat service if you prefer not to speak on the phone www.businessdebtline.org. Good luck with it all.


Susie
@natdebtline

jamiesmack

Thanks for the advice.

I had considered bankruptcy, but it would mean me losing my business (vehicle, business equipment etc) so It doesnt seem like a viable option.

Could I enter a dmp for now, to take some of the pressure off and then readdress in a couple of months? does that sound sensible?

enthusiasticsaver

I think a DMP would definitely be the way forward. Bankruptcy obviously is not an option you want to consider because of your business assets so I would think talking to stepchange and setting up a nominal payment for now until you are in a position to offer larger payments. Whether you do the online chat or talk to them over the phone stepchange can take a lot of the donkey work off you which will help you at the start of the process. They have seen it all before so don't be nervous about talking to them.

So so sorry about your son. This must seem quite trivial in comparison but it is best to get it sorted.

EssexHebridean

jamiesmack wrote: »

Thanks for the advice.

I had considered bankruptcy, but it would mean me losing my business (vehicle, business equipment etc) so It doesnt seem like a viable option.

Could I enter a dmp for now, to take some of the pressure off and then readdress in a couple of months? does that sound sensible?

Re-do the SOA with the minimum payments included first off - I *think* I may be right in saying that to be considered suitable for A DMP you need a surplus - and currently you may not have one?

If you want to go down that route then your first port of call I suggest is to nail down your budget and make savings wherever you can - then you'll start to get a picture of what you actually have to offer to your creditors. I agree with ES though - have a natter with Stepchange and see what they suggest.

One thing - you're not still using the Credit Cards now are you? If so stop immediately!

Sarastro

I agree bankruptcy seems a bit drastic as other options might be available.

I can't advise if you tell your wife, that will have to be up to you but are you realistically going to be able to keep it hidden?

I think DMP might be a way forward but are you able to move any of your debts onto 0% (or just lower %) as that would help.

I don't normally advise it but asking relatives to help might not be a bad plan, but I'm talking gifts not loans.

And, is your business a limited company? If so, you can take a director's loan of up to £5k with no interest implications at all. You do have to pay it back within 9 months of the end of your current financial year. So, if your financial year runs April to April, you have to have paid it back by December. If you have some cash in your company it might be a way to pay off some of the most expensive debt and reduce the interest burden, although you do still have to pay the company back.