Got worried due to debts

john3105

Hi all, great support here as always. Got lot of debts, now I have difficulty to pay minimum payments on credit cards and loan. Was actually trapped in balance transferred and eventually paying high interest after all offers expired, after all my income expenditure calculations I have got 200 pounds disposable money now every month and minimum payments of all credit cards and loan are around 950 pounds, total debts around 48k. All are unsecured, I have no house or any other asset, in house me and my wife with three children. Got car worth around 1300 pounds.
Please advise me the options as my nights are sleepless. Barclaycard, M&S card, Tesco and Lloyds loan.

sourcrates

Hi John,

An SOA is the normal starting point, (statement of affairs) however, from what you say, having no assets and a large debt, it could be some kind of insolvency, or bankruptcy, may be the answer.

Do the SOA first, that`ll give us a better idea of where your at :

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

john3105

What about IVA or dmp ?

sourcrates

john3105 wrote: »

What about IVA or dmp ?

All options are open, but an SOA will narrow it down.

john3105

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 600
Partners monthly income after tax....... 0
Benefits................................ 1120
Other income............................ 0
Total monthly income.................... 1720

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 580
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 50
Gas..................................... 75
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 20
Mobile phone............................ 30
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 425
Clothing................................ 50
Petrol/diesel........................... 50
Road tax................................ 20
Car Insurance........................... 50
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 45
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 15
Entertainment........................... 15
Holiday................................. 0
Emergency fund.......................... 40
Total monthly expenses.................. 1663


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 0
Total Assets............................ 1300

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
m&s............................13500.....350.......0
barclaycard1...................14000.....260.......0
barclayscard2..................5500......120.......0
lloyds loan....................18000.....350.......0
tesco credit...................1600......35........0
Total unsecured debts..........52600.....1115......-


Monthly Budget Summary
Total monthly income.................... 1,720
Expenses (including HP & secured debts). 1,663
Available for debt repayments........... 57
Monthly UNsecured debt repayments....... 1,115
Amount short for making debt repayments. -1,058

Personal Balance Sheet Summary
Total assets (things you own)........... 1,300
Total HP & Secured debt................. -0
Total Unsecured debt.................... -52,600
Net Assets.............................. -51,300

Karonher

john3105 wrote: »

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 600 Can you increas this?
Partners monthly income after tax....... 0Can your partner work some hours - around yours and childcare?
Benefits................................ 1120
Other income............................ 0
Total monthly income.................... 1720

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 580
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 50 This is high - can you shop around or turn things off?
Gas..................................... 75 Same as electricity
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 20
Mobile phone............................ 30 How many phones - look for £5 sim only - provider may agree to drop cost if you explain circumstances
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 425 This is high - I am sure this could come down by up to £100
Clothing................................ 50
Petrol/diesel........................... 50
Road tax................................ 20
Car Insurance........................... 50
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 45
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 You need something here
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 15
Entertainment........................... 15
Holiday................................. 0
Emergency fund.......................... 40
Total monthly expenses.................. 1663


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 0
Total Assets............................ 1300

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
m&s............................13500.....350.......0
barclaycard1...................14000.....260.......0
barclayscard2..................5500......120.......0
lloyds loan....................18000.....350.......0
tesco credit...................1600......35........0
Total unsecured debts..........52600.....1115......-


Monthly Budget Summary
Total monthly income.................... 1,720
Expenses (including HP & secured debts). 1,663
Available for debt repayments........... 57
Monthly UNsecured debt repayments....... 1,115
Amount short for making debt repayments. -1,058

Personal Balance Sheet Summary
Total assets (things you own)........... 1,300
Total HP & Secured debt................. -0
Total Unsecured debt.................... -52,600
Net Assets.............................. -51,300

As the cut backs will not cover much of the shortfall, earning more seems to be a better option. Is there a reason for what looks like part time hours? Is there a reason why your wife does not work - even around your hours?

sourcrates

Over £1000 shortfall in payments, how are you managing to service these debts at present ?

Its all very well saying you have to increase your income, but that's not as easy as it sounds, yes there may be plenty of seasonal work at present, but your debt is far too big for it to make much of a dent.

You don't have much disposable income, so an IVA would not be possible on these figures, likewise a DMP would take forever.

Based on this information i would say Bankruptcy is your only realistic option, you can go on putting sticking plasters on the open wound, but that wont heal it.

Some hard decisions need to be made here, i suggest getting advice from stepchange/national debtline, see if they reach the same conclusion.

john3105

thanks, only option is to minimise expenses, what should be possible disposable income for IVA, as self employed I think bankruptcy not in interest.

Spoke to M&S credit card people few days ago, they are very helpful and sending income expenditure form to me. so will ask them to freeze interest with token payment for sometime.

But on other hand BARCLAYCARD people are cruel, they are very rude and not helpful, I told them my 15 years history never missed any payments, I told them it will be difficult for me to pay next months minimum payment as financial difficulty and they took income expensive details similar which i mentioned here, The rude lady told me only option to make you default now, and talk to stepchange, you have 30 days, today i found my cards are blocked even still due time to pay minimum payment by 7th january 2018.

john3105

after all unfair dealing by barclaycard people, should i ignore them and make some emergency fund to deal with them after year or 2.

sourcrates

john3105 wrote: »

thanks, only option is to minimise expenses, what should be possible disposable income for IVA, as self employed I think bankruptcy not in interest.

Right, understood, realistically you would need in the region of £200 plus surplus income a month, i`ve seen IVA`s for less than this, but various factors come into play, especially when your self employed and your income is erratic.

I think a first step would be to try to cut back on your budget as much as you can, if extra work is available, take it, for a stop gap with the debts, stop paying them, and save the money up for an emergency fund, then in a few months, just pay each one a token payment (not a fan of token payments, but in your case it may just help).

Seek advice as advised before.

john3105

Karonher wrote: »

As the cut backs will not cover much of the shortfall, earning more seems to be a better option. Is there a reason for what looks like part time hours? Is there a reason why your wife does not work - even around your hours?

3 young children,, so wife can not take time to work. its already enough work to take care of 3 young children.

regarding food expenses, can reduced by £50, say £350,
after all decrease expenses, can spare £200 as a disposable amount.

If you think, I can talk to stepchange or just i wait to deal my self after getting default, i see in both cases i have to be defaulted anyway.