SOA and questions about DMP

biker_rob

After taking advice (thank you) in the DMP support thread here is my SOA. Rather than type up my post again, here it is:

biker_rob wrote: »

Hi all

Firstly can I thank all of the knowledgeable and supportive people on this thread already. I started reading through the thread last week and it inspired me to face up to my debt problem head on and deal with it now. All my unsecured debt has been taken out since 2016 after divorce, depression, losing job then winning job back again. Things are steady and constant now although being behind on non secured debt is keeping me up at night and causing me anxiety again. I need to face this challenge head on and try to reduce my fears.

Yesterday, I took the step of contacting Step Change who were brilliant I have to say. Their recommendations in order were:

IVA
Bankruptcy
DMP

I chose DMP as I felt it would allow me more flexibility over IVA and bankruptcy. Also, I would prefer to pay back the money I owe rather than write it off.

Now the facts. I currently owe £22,579 to 5 creditors:

1 personal loan
2 credit cards
1 overdraft
1 payday loan

I have £97 available a month to pay into a DMP. The projection to clear this is 19 years and 5 months to pay this off. This will drop to 16 years and 11 months in March 19 as I will have brought council tax arrears up to date.

I will be looking for better deals on energy, phone/broadband etc and when my mobile phone contract expires in April 19 I will be going sim only, saving further money and of course all extra funds will go into a DMP. This will reduce the projected date even further.

The most beneficial thing I have is the ability to work extra shifts at work. There is no guarantee to how many I could do a month but any extra money from these would go into a DMP to further reduce the time paying back.

With that in mind do the experts here think it's worthwhile or should I consider going with the IVA or bankruptcy options as recommended?

Any advice would be greatly appreciated.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2000

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 875
Management charge (leasehold property).. 0
Council tax............................. 111
Electricity............................. 53
Gas..................................... 24
Oil..................................... 0
Water rates............................. 39
Telephone (land line)................... 25
Mobile phone............................ 55
TV Licence.............................. 26
Satellite/Cable TV...................... 8
Internet Services....................... 34
Groceries etc. ......................... 140
Clothing................................ 30
Petrol/diesel........................... 160
Road tax................................ 16
Car Insurance........................... 42
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 206
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 7
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 15
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1916


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 250
Other assets............................ 0
Total Assets............................ 250

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA CC........................5030......151.......0
Capital One CC.................963.......29........0
Tesco loan.....................9678......196.......0
Barclays OD....................5000......100.......0
Pounds to Pocket...............1908......159.......0
Total unsecured debts..........22579.....635.......-


Monthly Budget Summary
Total monthly income.................... 2,000
Expenses (including HP & secured debts). 1,916
Available for debt repayments........... 84
Monthly UNsecured debt repayments....... 635
Amount short for making debt repayments. -551

Personal Balance Sheet Summary
Total assets (things you own)........... 250
Total HP & Secured debt................. -0
Total Unsecured debt.................... -22,579
Net Assets.............................. -22,329

Reproduced on Moneysavingexpert with permission, using other browser.

datlex

biker_rob wrote: »

After taking advice (thank you) in the DMP support thread here is my SOA. Rather than type up my post again, here it is:



Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2000

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 875
Management charge (leasehold property).. 0
Council tax............................. 111 are you getting single person discount and paying over 12 months
Electricity............................. 53 this seems steep it is double what I pay and I am not strict abut turning everything off when out.
Gas..................................... 24
Oil..................................... 0
Water rates............................. 39 I am guessing you don't have a meter, look into getting one
Telephone (land line)................... 25
Mobile phone............................ 55ouch! when the contract ends, go SIM only contract and keep the phone- you would probably struggle to get much money for a phone, so you might be worth while keeping the phone you have for a bit longer
TV Licence.............................. 26 I am guessing this is your first TV licence in own place given that is double the normal amount, this will revet back to half this
Satellite/Cable TV...................... 8 Is this Netflix or Now? For Now you can get cheaper for using gift cards, with Netflix you can use the £5.99 package- yes no HD but is that really terrible
Internet Services....................... 34
Groceries etc. ......................... 140
Clothing................................ 30
Petrol/diesel........................... 160
Road tax................................ 16
Car Insurance........................... 42
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 206 Does this include presents for the children?
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 7
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 15 Seems a little steep
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1916


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 250
Other assets............................ 0
Total Assets............................ 250

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA CC........................5030......151.......0
Capital One CC.................963.......29........0
Tesco loan.....................9678......196.......0
Barclays OD....................5000......100.......0
Pounds to Pocket...............1908......159.......0
Total unsecured debts..........22579.....635.......-


Monthly Budget Summary
Total monthly income.................... 2,000
Expenses (including HP & secured debts). 1,916
Available for debt repayments........... 84
Monthly UNsecured debt repayments....... 635
Amount short for making debt repayments. -551

Personal Balance Sheet Summary
Total assets (things you own)........... 250
Total HP & Secured debt................. -0
Total Unsecured debt.................... -22,579
Net Assets.............................. -22,329

Reproduced on Moneysavingexpert with permission, using other browser.

There are a few cut backs you can make. Hope you get out of debt soon. Your rent is high, but I am guessing you are stuck with that for the time being.

biker_rob

datlex wrote: »

There are a few cut backs you can make. Hope you get out of debt soon. Your rent is high, but I am guessing you are stuck with that for the time being.

Thanks for the reply. Unfortunately my rent is high and that's for a 1 bedroom flat in Surrey. I have a teenage son who stays with me every other weekend so it's important for me to live near to him.

There are slightly higher payments on some of my bills due to payment plans for arrears but these will become lower over the coming months. The £206 is for child maintenance that I pay my ex wife. Presents wise, I haven't allowed for that yet.

MovingForwards

Am I missing you have kids? Assume they are not with you on a daily basis?

Tv services, if that is netflix or similar and you are not watching live tv then look to get rid of the licence (there are several threads about when you need a tv licence).

Hair cut, excuse the pun but you can trim that back a bit. If you have a buz cut type all over then buy a set of clippers for £15 and DIY.

Food, look at what you buy and see if you can trim that back a bit, even if every other month it is £100 it gives you a bit more wiggle room.

Clothes, trim that back a bit. Even reduce it by £5 a month and put the fiver into an emergency cash fund/pot.

Car insurance shop around come renewal. If your car really is an old/low value/bit tired consider TPFT as you wont get much if anything happens being fully comp, and will be written off giving you not a lot after the excess is deducted to even think about replacing it.

Keep an eye on petrol prices while you are going to work, even if you find it 1p L cheaper it will add up over the year (not much but a few extra pence in your pocket is better than on tax).

Internet, see if you can find a cheaper offer with your provider.

Everything else was covered by above poster

BookmobileBadGirl

The good news is that you have a good income, so even though things will be tight you will be able to make a dent in things.

- Your landline and internet combined are £59 a month. Are you paying money back on this, or phoning abroad a lot?

- I echo what has been said about electricity, I live in a one bed flat and am rubbish at turning things off and pay £18 a month.

- I reckon you could easily knock £20 off your groceries, £40 if you really pushed yourself.

- do you really spend £180 a year getting your hair cut? I go to lady hairdressers three times a year and that only costs me £120 in total

You have no budget for an emergency fund, I would really recommend building up at least £500 to begin with so if issues come up you can deal with them without going further into debt. This is where your overtime will really come in useful

biker_rob

Thanks for the helpful replies guys. I have one son who is 15. He lives with my ex and stays with me for 3 nights every fortnight. The maintenance I pay was calculated through the CSA website when we first separated 3 years ago. This has never changed.

I do watch normal telly so need the licence. Step Change have given me a code so that the payments can be reduced back to the normal £12 or so. I'll do this soon.

I've taken on board all of your suggestions and thank you for these. Food wise, I know I can cut back on this as recently I've managed to buy enough food for myself for a week for £15 and eat healthy.

Electricity is expensive because I'm paying back arrears. This will reduce in 4 months, the same with my water rates.

I'll be shopping around for energy/phone/broadband deals ASAP.

I'll also work on reducing my haircut expenditure

Already feeling much better thanks to the advice from SC and the support here.

I've decided to go for the DMP option and cutting back a bit further.

Emergency fund will be gathered first, basic bank account then start the DMP with Step Change.

I'm writing to all my creditors in the next couple of days.

National_Debtline

Hi Rob


One thing not mentioned so far is the amount you have budgeted for car maintenance. £10 per month is not a lot, considering it will need to cover your MOT, servicing, new tyres and anything else that could go wrong with the car. Given the car's value I'm guessing it is quite old and may be more prone to things going wrong. Have a think about whether £10 per month (£120 per year) is a realistic figure.


On the face of it, bankruptcy would appear to be your best option as you have no assets of value, your debts would be written off after 12 months, and even if you were asked to make payments that would only be for 3 years. Compare that to the DMP which could take as long as 17 years, that is a very long time. Are you expecting your circumstances to improve enough that the term of the DMP will be significantly reduce?


Of course the choice is yours but think carefully about whether you want to be tied to a tight budget for such a long time or would prefer a fresh start from your debts.


Good luck with it all


Susie
@natdebtline

Silver_Queen

Is it possible for you to hop over the border and live in Berkshire or Hampshire rather than Surrey? Surrey is very expensive and Berkshire/Hampshire may be slightly cheaper but you can still easily get to/from Surrey. If your son is a teenager, it may be OK for him to travel to you or you pick him up?

biker_rob

Silver_Queen wrote: »

Is it possible for you to hop over the border and live in Berkshire or Hampshire rather than Surrey? Surrey is very expensive and Berkshire/Hampshire may be slightly cheaper but you can still easily get to/from Surrey. If your son is a teenager, it may be OK for him to travel to you or you pick him up?

I've considered that. However, moving forward I will eventually move back to my native North East which will save a lot in rent. At the moment it works for both of us having me nearby but in a couple of years it's a real possibility that I'll move jobs and move. That will save me a lot in rent.

biker_rob

National_Debtline wrote: »

Hi Rob


One thing not mentioned so far is the amount you have budgeted for car maintenance. £10 per month is not a lot, considering it will need to cover your MOT, servicing, new tyres and anything else that could go wrong with the car. Given the car's value I'm guessing it is quite old and may be more prone to things going wrong. Have a think about whether £10 per month (£120 per year) is a realistic figure.


On the face of it, bankruptcy would appear to be your best option as you have no assets of value, your debts would be written off after 12 months, and even if you were asked to make payments that would only be for 3 years. Compare that to the DMP which could take as long as 17 years, that is a very long time. Are you expecting your circumstances to improve enough that the term of the DMP will be significantly reduce?


Of course the choice is yours but think carefully about whether you want to be tied to a tight budget for such a long time or would prefer a fresh start from your debts.


Good luck with it all


Susie
@natdebtline

Thanks for the reply Susie, it's given me food for thought, especially about bankruptcy. Maybe it's naivety on my part but the term itself sounds so drastic. However I do need to consider how long I want to be burdened with debt. I've taken on board your rationale as to why I should consider. Step Change recommended IVA then bankruptcy. I think I will speak to someone again this afternoon and go through each option in more detail.

datlex

biker_rob wrote: »

I've considered that. However, moving forward I will eventually move back to my native North East which will save a lot in rent. At the moment it works for both of us having me nearby but in a couple of years it's a real possibility that I'll move jobs and move. That will save me a lot in rent.

It certainly is a lot cheaper in the North East and depending on what job you do, not a huge difference in salaries. (But remember it's grim up North, we don't want too many folk cottoning on to it being nice) Depending also on your son's plans Durham, York, Northumbria and Teesside are all decent universities.