Best Debt Solution

emilyp89

Hi all,

I have total debts of approx £3,500. The companies i owe to are mainly Vanquis (now transferred to Moorcroft Debt Recovery), Aqua (now transferred to Link Financial), Capital One (two accounts) & Bulb.

I have previously had a DRO (discharged in 2015), so that is not an option again.

I have a really bad financial history from about 2012 to present. I won't go into details but i was in a bad relationship for 10 years, i have finally left and moved into a 2 bed council house with my 2 children. I want to clean up my finances as soon as i can and start all over again really.

I was hoping to use StepChange to do a DMP with, but because my UC i receive every month varies (due to childcare costs that vary), they seem to find it difficult to set one up as my income is different (give or take a few hundred pounds) each month. Surely this can be worked out by using an average? (I have only been receiving UC since April this year).

I have been considering setting one up myself, but not sure how to go about it really so any advice would be fab? Does anyone else have any experience in dealing with the companies i've mentioned above? Will they except a DMP from myself?

Thanks in advance! :eek:

MovingForwards

You can set a DMP up yourself, national debtline have all the information you need.

When you do your income and expenditure I would calculate it on the lowest income, saves any nasty surprises.

Are you able to budget and manage your money ok aside from the above?

Willing2Learn

I self-managed my DMP a few years ago and everything went relatively smoothly.

For anyone wanting to SM their DMP, there is an invaluable resource available at NEDCAB. Apparently, once you sign up, NEDCAB will auto-generate letters for you... Have a look at their website and see what you think. NEDCAB did not exist when I SMd my DMP. But a lot of MSEers have successfully used their system to SM

https://nedcab.cabmoney.org.uk/dmp.asp

GN_TDCI

A self managed DMP would be best, and I would work on your lowest monthly income rather than an average. The difference between you income is a few hundred you say, that a big jump. Working on an average will still see you short one month, even if you are up the next - and managing finances needs to be as routine as possible.

If you can use your lowest income, then you can set up a repayment plan that allows you to make affordable payments that won't leave you in hardship.

emilyp89

Thanks everyone, so i have spent some time today doing a financial statement using my lowest income and my lowest budget for food and housekeeping etc. and i basically don't have a penny left. I used the nedcab website as suggested and it told me to send token payments of £1 to each creditor, but how long can i do that for? I will be paying it off for years!
I can't have a DRO as i had one which ended in Feb 2015. Not really sure what other solutions i have?

Willing2Learn

Hi Emily,

Post up your Statement of Affairs (SOA), so that we can see your exact circumstances and can advise accordingly.
http://www.stoozing.com/calculator/soa.php


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emilyp89

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1109
Partners monthly income after tax....... 0
Benefits................................ 988
Other income............................ 0
Total monthly income.................... 2097

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 453
Management charge (leasehold property).. 0
Council tax............................. 126
Electricity............................. 87
Gas..................................... 10
Oil..................................... 0
Water rates............................. 37
Telephone (land line)................... 0
Mobile phone............................ 65
TV Licence.............................. 31
Satellite/Cable TV...................... 57
Internet Services....................... 0
Groceries etc. ......................... 303
Clothing................................ 0
Petrol/diesel........................... 108
Road tax................................ 14
Car Insurance........................... 37
Car maintenance (including MOT)......... 17
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 600
Other child related expenses............ 36
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 8
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1989


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 900
Other assets............................ 0
Total Assets............................ 900


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0<
Council Tax....................606......(0)........0
Total secured & HP debts...... 606.......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
CREDIT CARD....................634.......0.........0
CREDIT CARD....................616.......0.........0
CREDIT CARD....................275.......0.........0
ELECTRIC (OLD HOUSE)...........993.......0.........0
RENT (OLD HOUSE)...............288.......0.........0
CREDIT CARD....................243.......0.........0
Total unsecured debts..........3049......0.........-


Monthly Budget Summary
Total monthly income.................... 2,097
Expenses (including HP & secured debts). 1,989
Available for debt repayments........... 108
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 108

Personal Balance Sheet Summary
Total assets (things you own)........... 900
Total HP & Secured debt................. -606
Total Unsecured debt.................... -3,049
Net Assets.............................. -2,755

emilyp89

Forgot to mention i have a family loan which i owe £900 on and currently pay £100/mth back on.

Also, my TV licence will go down to £12 in Oct.

My ex should start paying me maintenance once the CMA sort it out, i think that will be approx. £40/week.

I want to reduce my mobile phone contract but EE won't let me.

The £57 for is for Sky TV and broadband.

The £36 for other child expenses are for dance and swimming lessons.

£37 for water includes arrears and £10 for gas is for outstanding bill from previous home i'm paying off.

I have not included anything for clothes, hair cuts or sundries as i just can't afford them!

Willing2Learn

Are you basing your UC income on the minimum you can expect monthly?

My assessment:
Okay then, so by March 2020, you will have £100/month extra, once the family debt is repaid.

TV license reducing in October will give you an extra £19/month.

If it were me, I would write to the Water and Gas companies to whom you owe money, and advise them you can currently only make token payments until March 2020. I would also write to all your other creditors, to advise them all that you can only make token payments until March 2020.

Once March comes your financial position should have improved a lot. Hopefully by then your ex will be paying CMA, plus the extra income above. You could then increase repayments to all your creditors with the main focus on getting rid of the Council Tax arrears as that debt is your only high priority debt.

Things may seem crappy right now, but it seems to me that you are close to turning the corner.

Hopefully by next March, you will also be in a position to terminate your contract with EE and go onto a cheap SIM-only deal with sky (you would get a bundle discount I believe)

Edit: I know March seems a mile away. But time will pass so quickly. Christmas will be on us again before you know it.

Edit #2: Forgot to say. Once you have the council tax arrears paid off, you can then snowball your debts the Dave Ramsey way. Little baby steps. Paying off the smallest debts first.
https://www.daveramsey.com/blog/how-the-debt-snowball-method-works

Exodi

Adding to Willing2Learn's comments above, presumably you are still in contract with EE (hence their refusal). How long does this have left to run and can you not consider selling the handset to repay some of your debts? £65 a month suggests you have a pretty good phone...

£300 a month is also pretty excessive for groceries for one adult and two children (though you don't list any entertainment costs so this may be why). I'd look into buying ingredients and making meals (plenty of information on these forums about this).

You definitely can't afford sky, cancel your package and get a basic broadband package for ~£20 a month.

Willing2Learn

Exodi wrote: »

£300 a month is also pretty excessive for groceries for one adult and two children (though you don't list any entertainment costs so this may be why). I'd look into buying ingredients and making meals (plenty of information on these forums about this).

I forgot to mention groceries even though I had thought it was too high too.
@Emily - Have you got an Aldi or Lidl within driving distance of you? If so, you could save a bundle on your monthly groceries.