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12/18 month DMP?

Hi All

I'm looking for some advice. Without boring you all i find myself in a bit of a situation. Firstly i have a good credit history and never missed a payment on anything but myself and my partner have over stretched ourselves recently. The plus side is some of the debt we currently have has been invested into residentail development sites that will yield there return within 12/18 months.
In a nutshell

Mortgage - 135k
Secured Loan - 19k (Low Rate)
House value - 235k

Joint credit card debts 80k (High rates)
Personal loans taken out for investment 67k (Low Rates)

We are due to receive lump sums back from the investments of around 100k in 3 tranches starting in around 6 months. We also have a second property that we are about to put on the market which will return us around 20k back in about 3 months additionally i have a 2nd car that i could sell for around 10k.

The problem being is that the monthly payments have eaten into our savings and are over and above our income. I'm very worried that in the not too distant future that payment of all the payments will become very difficult. I know its our own fault, things just ran away with us.

Thoughts? thanks in advance for any help or suggestions.
«1

Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    An SOA would be the place to start, before hurling yourself headlong into a DMP.
  • andoui
    andoui Posts: 9 Forumite
    Hi Sorry what is a SOA?
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    Tenth Anniversary 1,000 Posts Combo Breaker
    Hi andoui


    It's best to start with a statement of affairs (SOA). That will show us your income and outgoings and more detail about your debts and assets. From there it will be easier for members on the board to offer you advice. You'll find a SOA to complete here http://www.stoozing.com/calculator/soa.php. Just remember to format it for MSE before posting back on here.


    Best wishes


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • andoui
    andoui Posts: 9 Forumite
    hi Susie

    The form doesn't support 2nd homes or future payments. How do i deal with that?
  • andoui
    andoui Posts: 9 Forumite
    Statement of Affairs and Personal Balance Sheet

    Monthly Income Details

    Monthly income after tax................ 2800
    Partners monthly income after tax....... 1000
    Benefits................................ 150
    Other income............................ 0
    Total monthly income.................... 3950


    Monthly Expense Details

    Mortgage................................ 533
    Secured/HP loan repayments.............. 319
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 165
    Electricity............................. 100
    Gas..................................... 80
    Oil..................................... 0
    Water rates............................. 55
    Telephone (land line)................... 15
    Mobile phone............................ 50
    TV Licence.............................. 15
    Satellite/Cable TV...................... 65
    Internet Services....................... 15
    Groceries etc. ......................... 400
    Clothing................................ 100
    Petrol/diesel........................... 300
    Road tax................................ 65
    Car Insurance........................... 120
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 75
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 40
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 2512



    Assets

    Cash.................................... 3000
    House value (Gross)..................... 235000
    Shares and bonds........................ 0
    Car(s).................................. 15000
    Other assets............................ 0
    Total Assets............................ 253000



    Secured & HP Debts

    Description....................Debt......Monthly...APR
    Mortgage...................... 134000...(533)......0
    Secured Debt.................. 19000....(319)......0
    Total secured & HP debts...... 153000....-.........-


    Unsecured Debts
    Description....................Debt......Monthly...APR
    Credit Cards...................78900.....2532......0
    loans..........................68000.....2218......0
    Total unsecured debts..........146900....4750......-



    Monthly Budget Summary

    Total monthly income.................... 3,950
    Expenses (including HP & secured debts). 2,512
    Available for debt repayments........... 1,438
    Monthly UNsecured debt repayments....... 4,750
    Amount short for making debt repayments. -3,312


    Personal Balance Sheet Summary
    Total assets (things you own)........... 253,000
    Total HP & Secured debt................. -153,000
    Total Unsecured debt.................... -146,900
    Net Assets.............................. -46,900
  • andoui
    andoui Posts: 9 Forumite
    Ive completed the above with the information i have at hand and combined the debt for both of us. I can see a positive end sight in the not too distant future but im worried about the next 3 months until the sale of our second home takes place. I haven't included the rental income in the SOA above as this will be cancelled out upon the sale of the subject property.

    The loan amounts are reducing quite quickly month on month but the credit card debt is staying the same as they are min payments.
  • NelliePie
    NelliePie Posts: 280 Forumite
    Fourth Anniversary 100 Posts
    So a quick look at your SOA..

    Can you reduce your mobile/tv/internet costs? They're quite high. If you have a good handset you can try sim only. Do you watch £65 per months worth of TV that you couldn't get from freeview?

    You may be able to shave some off your groceries too, depending on how many are in your house hold. My partner and I pay under £200 for the two of us. Cooking fresh rather than ready meals can help keep costs down.

    Is £65 per month accurate for car tax? Would you be better off in the long run paying it annually? I know this may not be an option straight away.

    You have nothing in your entertainment/holiday/haircuts/emergency savings budget - is this accurate? Does what you have left in your accounts at the end of the month match what's shown above (£1400) if not - where is the deficit?
    Little One born 19/12/18
    5/5/18 I became Mrs Pie
    FTB June '17 - £144k mortgage, £134k remaining
  • andoui
    andoui Posts: 9 Forumite
    the 1400 figure is before unsecured debts are paid.
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    Tenth Anniversary 1,000 Posts Combo Breaker
    Hi again andoui


    The SOA doesn't perfectly fit your scenario, but basing it on your current situation is a good starting point. You could also complete another SOA based on what you expect the situation to look like at a specific point in the future.


    From what you said earlier about expected returns, it looks like over the next 6 months plus you will receive enough money to pay off the majority of your unsecured credit. And the issue you have now is what to do in the short term. Are you still using the credit cards to pay for day to day living expenses (if so, how close are you to the limits)? Or are you making up the shortfall on your SOA with the cash in the bank?


    You have shown that you are not being charged interest on the loans or credit cards. When will the 0% balances on the credit cards come to an end? With your current level of debt you may find it hard to transfer the balances again. Is there a reason you are not paying interest on the loans?


    These factors are going to affect whether you can wait for the sale of your property/return on your investments, or whether it may be necessary to negotiate reduced payments on your debts. Negotiating reduced payments is going to affect your credit file though.


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • andoui
    andoui Posts: 9 Forumite
    Hi again Susie, sorry i must have miss entered on the interest. Only one of the credit cards is 0%. The rest of the monthly payments are the minimum payments so interest only. The loans are all high street level loans ranging from 3 to 9% aprx.

    Your right in your quote stating the majority of the unsecured debt can be cleared within the next 12/18 Months. Although i would be happy with the card debt being paid off and servicing the loans until expiry.

    My biggest issue is the next few months the shortfall is currently coming from cash in the bank or savings depending on how you look at it and they are running out quite quickly. Most of the cards are near the limits bar a few.

    Thanks again
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