SuzyN's Debt Free Diary

SuzyN

I have decided to have a go at keeping a diary. I have had what I now realise is a LBM. I had one or two before but they have stopped short of actually reaching out for help. I think this was due to embarrasment - how can I possibly have a good income and have finances that are a total mess?

Our parents bailed us out after uni when we had close to £15000 debt - each got us a loan. We ran them up again.

A number of years later we re mortgaged - again cleared MOST of our debts but ran them up again.

Neither of these were LBM - these were completely irresponsible of us and pre children.

Post children things got harder - £1200 a month childcare to start with but then a group of friends who all had plenty of available cash and our lack of ability to say no got us started in the downward spiral.

My two previous mini LBM's are documented in my paper finance diaries I've kept over the years. A flick back to 2012 tells me I investigated IVA's and before that I remember having a total meltdown over thinking I was going to have to declare myself bankrupt (which could cause me my career). I saught NO help or assistance and did not know of these forums then. If only someone had told me about a DMP then... if only... why is debt such a taboo subject?!

And here we are - debts high having lived WAY outside our means and struggling to the max.

Im not sure why this time it feels different?! Over the last few weeks Ive come to terms with the fact that we will never be able to pay anything off and then a ban on overtime in work which we were relying on to meet our BASIC needs simply pushed me over the edge. What was I going to do??

It was time to get the laptop out and find out some figures. Just who did we owe what to???

The result was astronomical :(:(:(

Scott-Weiland

Good luck with your journey Suzi first port of call is do an SOA

SuzyN

So this is what I found....

Mortgage - £142,980 (incs secure loan of £23,629) - 18 years 6 months left

PCP Car - £6767 (ends July 19)
HP Car - £10137 (ends May 2022)
Loan 1 - 4761 (ends April 2023)
Loan 2 - 7436 (ends Jan 2023)
Loan 3 - 8691 (ends Jan 2023)
TOTAL - £37,792

Halfords Finance - £222
Barclays Finance - £396
Barclays Finance - £396
TOTAL - £1014

Overdraft 1 - £3600
Overdraft 2 - £100
TOTAL - £3700

Next - £2435
MBNA 1 - £869
MBNA 2 - £2687
Santander - £869
Barclaycard 1 - £2322
Barclaycard 2 - £14,337
Barclaycard 3 - £4472
Capital One - £55
Tesco - £3452
BOS - £3570
Barclays - £1914
TOTAL - 36,982

Also Owe...

Drs Bills - £200
Vet - £350
TOTAL - £550

GRAND TOTAL - NOT INC MORTGAGE - £80,038

GRAND TOTAL INC MORTGAGE - £223,018

:eek::eek::eek::eek::eek::eek::eek::eek::eek::eek::eek::eek::eek::eek::eek:

**********PLEASE EXCUSE ME WHILE I LIE IN A DARK ROOM**********

COMING NEXT.... WHAT IS THE PLAN?!?!?

SuzyN

THE PLAN....

I read and read and read and read the debt free wanna be forums. "Me me me" I thought, I want to be that person. There are SO SO many inspirational people on these forums.

I found the DMP thread by accident (well by nosiness if Im honest as I wanted to know what DMP stood for) and I was hooked. Really?! There are others like me?!?! Other people also can't meet their outgoings?! I read story after story of people helping others and providing advice to others. I read diaries and old threads and most importantly I shared my findings and our debt figures with my husband who was totally on board and we agreed that this time we would fix things properly and for good.

I put up a post asking for help and followed the advice and completed a SOA which I will post below. To be honest I had no idea how much I was spending on food etc... and there are lots of figures that are not quite right as I was mixed up between what it was currently and what I wanted it to be lol!!!

Anyway my first post and starting SOA....

Help needed - no judgement please - 26th Jul 18 at 11:24 PM

Hi,

not sure where to begin but long story short for various reasons my finances are out of control. I can "technically" live on what I earn but run out of money every month and always end up resorting to my credit cards. I pay the minimum payments for them all but I will never ever pay them off and pay nearly £1000 on them alone a month - the interest rates I have discovered tonight are horrific. Mostly 29-34%.

I don't know where to start. I need help. I have not cut items out of my statement below e.g. I know that someone will tell me my cleaner needs to go but many things are tied into contracts etc...

Its a nightmare. Can someone look and see if they have any advice. I was thinking of contacting my credit card companies and asking for a break from interest or a lower interest rate to prevent me defaulting.

One card nearly always defaults as it gets collected on 29th and I don't get paid to the 30th/31st so it gets collected on 1/2 as a re run. Another card is £300 over its limit. Barclaycard no longer charge £12 every month but its just getting bigger over the limit.

I have declared simply everything below - I have added in childcare costs that I don't pay atm but they will be paid from September onwards so this is why I need to sort things out. This is the items for myself and husband.

Thanks for your thoughts,

SN

Number of people in my household
Adults - 2
Children under 18 - 2

Income - Monthly
Wages / Salary - 2200
Wages / Salary (Partner) - 2000
Child Benefit - 137

Total Income - 4,337.00

Outgoings
Monthly
Mortgage(s) - 966
Council Tax - 72
Food / Housekeeping - 500
Electricity - 55
Gas - 55
TV Licence / Rental - 13.00
Hire Purchase / Conditional Loan - 380.00 (x2 cars - 1 PCP and 1 finance)
Clothing - 50
Telephone - 70
Travel / Car Costs / Petrol - 320
School Meals - 100
Insurances - 239
Health Costs / Prescriptions - 30
Childminding - 400
Gas Finance (installation) - 67
Halfords - 37
Credit Union Loan - 166
Phone Apple Loan - 44 (0%)
Phone Apple Loan - 44 (0%)
Sky - 52 (tied in)
Ipad - 31 (tied in)
Netflix - 8
iTunes music - 15 (children use)
Cleaners - 125
Overdraft Interest - 50 (overdraft 3600 all used)
Cat Food - 30.00
Dog Food - 35
Vet fund - 50.00

Total Outgoing - 4,004.00



Money for Creditors

Monthly Total Income - 4,337.00
Total Outgoing - 4,004.00

Money For Creditors - 333.00

SuzyN

I then posted my outgoings that we had been living with/to...

These are the bills I HAVE to pay then see what I have left over. Does not include things like cars needing serviced, new school uniforms and shoes etc, food, petrol (we use a lot to get to work) and the new childcare costs from Sept. I usually live on about 700/900 a month.


MORTGAGE - original 119,351.13 806.08 4.74 svr Household Monthly total - 965.66
MORTGAGE - sec loan 23,628.43 159.58 4.74 svr Household Totals - 142,979.56

Next Directory 2435.46 122 22.9% Credit Card Unsecured Debt
MBNA LIMITED 868.51 29.53 29.9% Credit Card Unsecured Debt
Santander UK PLC 868.83 12.62 30.24% Credit Card Unsecured Debt
BARCLAYCARD 2321.45 52.35 28.9% Credit Card Unsecured Debt
MBNA LIMITED 2686.94 63.40 17.9% Credit Card Unsecured Debt
CAPITAL ONE 55.46 £5.00 34.08% Credit Card Unsecured Debt
RBS PLC TESCO 3451.31 92.35 24.09% Credit Card Unsecured Debt
Bank of Scotland 3569.58 94.87 22.2% Credit Card Unsecured Debt
BARCLAYCARD 14,336 321.52 25.9% Credit Card Unsecured Debt
BARCLAYCARD Egg 4471.48 132.09 26.9% Credit Card Unsecured Debt

Totals!!!8230; 35065.19 owed 925.73 (monthly)

Santander (car 1) 171.40 Finance Secured Debt
Santander (car 2) 211.17 Finance Secured Debt
Gas Finance - Barclays 66.67 Finance Unsecured Debt
Halfords Finance 36.43 Finance Unsecured Debt
Credit Union Loan 166.00 Finance Unsecured Debt
Apple Phone (Barclays) 43.95 Luxury Unsecured Debt
Apple Phone (Barclays) 43.95 Luxury 739.57 Unsecured Debt

TV LICENSING £12.37 Household
DOE RATES 71.61 Household
SSE Electric 53.00 Household
SSE GAS 50 Household
CAR TAX 1 12.25 Household
CAR TAX 2 2.62 Household
CAR TAX BIKE 7.43 Household

Life Insurance £75.90 Insurance
Motorbike Ins 17.12 Insurance
Home Ins 50.58 Insurance
Pet Ins 14.33 Insurance
Car Ins both 80.46 Insurance

SKY 52.00 Luxury
H3G Ipad 31.00 Luxury
netflix 7.99 Luxury
ITUNES 14.99 Luxury
Phone 17.00 Luxury
Phone 20.08 Luxury
BT (BB/Ph) 31.99 Luxury
Cleaner 124.00 Luxury

OVERDRAFT INT 1 40.64 INTEREST
OVERDRAFT INT 2 6.00 INTEREST

TOTAL OUTGOINGS - 3662.71

UncannyScot

Hello an welcome SuzyN

I saw your earlier posts on the other section and I am so glad to see that you have decided to join us on the diaries section.

As you will soon see, you're not on your own and that there is a whole lot of help and advice from real people in a similar situation to you.
Welcome to the community, join in, visit (read) our diaries, post comments.
If you need owt, shout out (post) and one of your local neighbourhood DFW's will pop along to help.
Yeah, it's a long haul but as you will see there are a few on here that have been there and done it and they are still around to help the rest of us get there... that's the kinda community we are here

SuzyN

The plan continued....

I spent last Friday to Sunday consumed and I mean completely consumed by it all. I called into work on the friday and said I was taking a days leave and then on the Monday I did the same. I'd say it was on my mind every waking moment but then it was also on my mind in my sleep.

What to do, what to do?!?!?

Over the weekend I opened a new bank account with Nationwide and was accepted - yay

On Monday I was fit to be tied. I got up and went and got all my old bills and notebooks out of the garage. I really really wanted to phone StepChange but I couldn't verbalise my debts. I am the most emotional person I know, I cry at everything but yet I didn't cry all weekend as I was beyond crying - I still haven't cried. I think I am honestly still in a state of shock.

Over that weekend I had filled in the StepChange Debt remedy online but the answer it gave was that there were a number of options and to phone them.

On Monday I did it again hoping it would say that I could just do it all online without speaking to anyone. It then came out with the result suggesting I take an IVA. Nearly hit the floor. Its not an option. IVA or bankruptcy would cost me my career. Again it asked me to phone for advice.

I saw that there was an online chat so thought I know, lets use that instead lol!!!

So I tap tap tapped... and there was a SC advisor who took the reference number, asked a few questions and then asked could he phone me. PANIC!!!!!!

I bit the bullet and gave over my number. The phone then rang and I looked at it not knowing what to do. Do I answer?? I somehow hit the answer button and said hello.

I would love to tell you it was a simple phone call and that I found it easy but that would not be true. what would be better is to say that although I found it difficult I was able to do it. I received NO judgement what so ever. I was never given condecending advice on how I ended up where I did - which I truly deserved and he was so nice. At one point I apologised and he told me not to and that it is what it is and lets see what plan we could put in place to fix it. Relief didn't even cut it.

By the end of that phone call I had a plan in black and white emailed to me to print and sign. I had phone numbers if I had more questions and I had reassurance that there was a way to fix things.

The advisor helped me to make that plan and made sure that I allowed myself enough money to live.

I finished that phone call renewed. With a plan. With kind of excitement! A 64 minute phone call that may change my life.

What I did next astounded me - I had found a letter from my mortgage provider earlier in the day telling me to phone for a better mortgage rate. I had laughed when I got it as I am in negative equity so who was going to give me any different rates?!?! I remortgaged my house in 2007 for £220,000 and it worth something around the £100,000 now - awesome isn't it. I decided to phone and make an idiot of myself as my current rate was the standard variable rate and was 4.75%. I had been on that rate for 9 years due to my assumptions that in negative equity I was stuck there.

The result of that phone call was that they offered me a 5 year fixed rate at 3.99% which saves me £58 a month - I took this offer, knowing that it fitted into my 6 year plan and gives me stability. Imagine my relief when I read the news on Wednesday and it told me that the interest rates had risen 0.25%. If I had not changed then it would have went up £20 so I am now basically £80 better off. Cant believe it.

WHAT A DAY!!!!!!!

Next... The details of the plan.....

SuzyN

UncannyScot wrote: »

Hello an welcome SuzyN

I saw your earlier posts on the other section and I am so glad to see that you have decided to join us on the diaries section.

As you will soon see, you're not on your own and that there is a whole lot of help and advice from real people in a similar situation to you.
Welcome to the community, join in, visit (read) our diaries, post comments.
If you need owt, shout out (post) and one of your local neighbourhood DFW's will pop along to help.
Yeah, it's a long haul but as you will see there are a few on here that have been there and done it and they are still around to help the rest of us get there... that's the kinda community we are here

Thank you so so much! :j

SuzyN

Some of my debts are small and some are tied into items I need and can't stop paying and others come directly out of my wages. I have some things I need to pay to bring myself up to date e.g. the vet and I also have read that I need an emergency fund gathered up.

I think the key thing that I have learnt is that the DMP needs to be manageable so I discussed this with the SC advisor and he suggested delaying my plan until mid October. I have decided that I am going to delay until the start of November as that will give me the best possible chance to succeed.

I cancelled most of my direct debits that are going on the plan (bar who I am banking with atm) and that will be missed payments in Aug / Sept / Oct - Im hoping this makes some of the companies default me (which Ive learnt in DMP world is good) and give me 3 pay packs to get sorted.

Debts that I need to clear before DMP starts:

Dr's Bills - £200
Overdraft - £100
Car tyres and service - £300
Capital One - £55
Vet - £350
Halfords Finance - £222
Barclays - £396
Barclays - £396
Emergency Fund - £1000

Debts I have to continue paying in full:

HP 1 - £172 / mth
HP2 - £212 / mth
Loan 1 - £166 / mth
Loan 2 - £211 / mth
Loan 3 - £244 / mth
(Loan 2 & 3 come from our wages and are not included in my budgets as they are out before my "IN" amounts hit the bank.)

Debts going into DMP:

Next Card - £2436
MBNA CC 1 - £869
MBNA CC 2 - £2687
Santander CC - £869
Barclaycard 1 - £2322
Barclaycard 2 - £14,337
Barclaycard 3 - 4472
Tesco CC - 3452
BOS CC - 3570
Barclays Finance - £1914

Totals in DMP - £36,928

I expect these figures to rise with interest and charges but these are the real figures the weekend of my LBM - onwards and upwards!!

NOTE - I will add that the reason I have posted the figures is that firstly I had already posted most of them while seeking advice and secondly it is what I looked for when I was searching for advice before I asked. If it helps someone then its worth the full disclosure.

Going forward I am going to work with two figures to reduce...

TOTAL HP / LOANS Debt: £37,792

TOTAL DMP Debt: £36,928

pidge04

Hello. I have read your diary several times and I really feel for you in this. I am so pleased you were able to talk to StepChange. I wish you well with this. Good news about your mortgage!

Scott-Weiland

Hi Suzi well done re contacting stepchange,

If it were me and ignore this if you want your call but the first thing i would be looking at is this

SKY 52.00 Luxury
H3G Ipad 31.00 Luxury
netflix 7.99 Luxury
ITUNES 14.99 Luxury
Phone 17.00 Luxury
Phone 20.08 Luxury
BT (BB/Ph) 31.99 Luxury
Cleaner 124.00 Luxury

Thats just shy of 300 per month step change will tell you this but if you even could reduce this by a third thats a heck of a lot more cash to pay off your debits and it will reduce your debit repayment time by months. I know both yourself and your partner work, but maybe seeing if you could reduce the cleaners hours ie they come in every other week not once a week as an example. Balance the difference between yourself/partner kids etc

re sky maybe call them and see if you could get say your tv package cheaper, look at now tv as an idea, i have now tv's cinema and entertainment package i pay 15quid for the 2 and i have broadband which is 23quid for fibre. Just an idea.

Do the same with bt maybe, people on here even though there under contract i hear all the time say well i have rang sky or bt etc etc and said i was struggling and they found me a better deal.

Next lol when these are due for renewal i would try top cashback/go compare and maybe see if you can get quotes cheaper.

Life Insurance £75.90 Insurance
Motorbike Ins 17.12 Insurance
Home Ins 50.58 Insurance
Pet Ins 14.33 Insurance
Car Ins both 80.46 Insurance

The home insurance and life insurance i would look at straight away, has to be a saving made there and potentially cashback for switching.

Would i be right in assuming you work in financial services?? If bankruptcy or an Iva are not an option.