Need Advice on my SOA

powersert

Hi guys,

I'm on the verge of starting a DMP with Payplan, all forms filled out and sent in, they are just waiting on my go ahead to say my wages are being paid into my newly opened neutral bank account before the ball is fully in motion. But I'm massively conflicted. I've attached my SOA for your perusal, but I'll give a quick rundown of my situation and the reasons for my reluctance.

My outgoings have recently surpassed my income by around £200 a month. I'm in full time employment with a good salary, but having spent my 20's living beyond my means on less generous salaries I now find myself unable to enjoy my current good fortune.

All my accounts are in good standing as I've never missed a payment, but to make ends meet I am spending the money I am paying off on my cards each month on bills, therefore getting nowhere fast debt wise.

My partner is a full-time post-graduate student with a part-time job in a shop, but she brings in a pretty tiny amount each month, enough for some groceries but not a lot else. She wont complete her course until the summer of 2021.

So, having been worn down by the situation I decided a DMP might be in order to give myself some breathing room and begin to ditch these debts once and for all. I feel it would be an easier decision if I was already missing payments each month, but with all my accounts in good standing I'm wondering if I should instead ride things out for a couple of years until my situation improves.

I get an annual bonus each each, which comes in around March (last year amounting to £1700) which I usually put on to paying off some debt and I get an annual salary increase in August, which usually adds approx £100 per month to my pay. This doesn't take into account any potential promotions I may acquire as well.

I guess my ultimate question here is, should I tighten my already very tight purse strings to see if I can claw my way out of this hole in the next 2-3 years before ploughing ahead with the DMP and tanking my (already not great and useless) credit score for 6+ years, or am I just delaying the inevitable?

Any and all advice greatly appreciated.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2000
Partners monthly income after tax....... 320
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2320

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 100
Gas..................................... 80
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 120
TV Licence.............................. 12.53
Satellite/Cable TV...................... 0
Internet Services....................... 55
Groceries etc. ......................... 255
Clothing................................ 20
Petrol/diesel........................... 200
Road tax................................ 14
Car Insurance........................... 43.5
Car maintenance (including MOT)......... 35
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 13.81
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 12
Entertainment........................... 64
Holiday................................. 0
Emergency fund.......................... 20
Total monthly expenses.................. 1659.84


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Vanquis........................2296.09...140.......39.9
Aqua...........................2958.57...129.......35.95
Captial One....................1236......42........30.34
Lendable.......................2362.96...113.9.....18.96
Zopa...........................1251.81...89.42.....12.9
Halifax........................2960.94...29........27.95
MBNA...........................2350.1....68........24.93
Sainsburys.....................1504.63...43........24.9
Barclaycard....................9436.06...232.......17.93

Robin9

Who pays the council tax?

Elec and gas seem quite high

On face value you have £600 to pay your debts - do you manage to do this?

comeandgo

Why are you not paying council tax? I note your partner is a student but should you not be paying the reduced single person amount?

powersert

Sorry, I should mention I live in Northern Ireland. We don't pay water charges or council tax. Our electricity is usually 80-100 a month, but often closer to 80. Gas is often 80 in Winter, but significantly less in Summer. These figures were taken from my DMP plan, where I used the higher estimates to ensure I wasn't caught short in the middle of Jan.

My total spending on debts is close £900, so after I've spent the £600 I am minus £2-300 which is usally covered by then using the cards again, wiping out what little was just paid off.

theoretica

Why do you care about your credit rating? It is only important if you plan to take out more credit. How long would it take you to get rid of the debt and save up a house deposit?

getmore4less

the rest of the SOA with these total would be nice.

Looks to be around £26k with £900pm

look at just the interest charges (quick rough calc in red)

Unsecured Debts
Description....................Debt......Monthly.. .APR
Vanquis........................2296.09...140...... .39.9 £76
Aqua...........................2958.57...129...... .35.95 £89
Captial One....................1236......42........30.34 £32
Lendable.......................2362.96...113.9.... .18.96 £37
Zopa...........................1251.81...89.42.... .12.9 £14
Halifax........................2960.94...29....... .27.95 £70
MBNA...........................2350.1....68....... .24.93 £49
Sainsburys.....................1504.63...43....... .24.9 £31
Barclaycard....................9436.06...232...... .17.93 £142
.....................................................................£540

That should help answer your question

I guess my ultimate question here is, should I tighten my already very tight purse strings to see if I can claw my way out of this hole in the next 2-3 years before ploughing ahead with the DMP and tanking my (already not great and useless) credit score for 6+ years, or am I just delaying the inevitable?

Your current issue is the interest rates are eating your spare cash current average is around 25%

Any short term plan would need to sort those rates out quickly to make any progress

Totally frozen with £600pm you are looking at 3.5 years

If you got it down to average 13.6% £600 would pay it off in 5y but cost £10,000 in interest.

What borrowing are you planning that gets impacted by the DMP.

The main one for most is buying a house,

By the time you have saved up a deposit you will have cleared the debt and had a couple of years clean

pay rises bonus and promotions will help clear it quicker potentially saving £10k+ over trying to ride through.

Unless you can nail those rates quickly on your own this will just drag on.

powersert

Thanks everyone. I think I'll go ahead with the DMP then. I guess it's just a little difficult to get out of the mindset of trying to maintain a good credit score. But I guess I'll probably be much happier when I'm not juggling money between accounts just to meet that goal.

Humdinger1

Powersert,

I may be wrong but do Payplan charge for their services? If so, it would be worth talking to a charity eg Stepchange that would do it free. It would remove a poss conflict of interest and might give you more options. Good luck and keep us posted Humdinger

powersert

Thankfully Payplan are free. I did some serious reading of the DMP support thread before committing to anything which was a big help. I just had a sudden last minute panic the past couple of days as to whether I was making the right decision. Feeling much better about it now.

worriedDan

Hey,

If you were saying that your partner would be earning full time next year then I might suggest that you ride it out, however 2021 is a long time and your well-being and stress levels are more important that your credit history.

I am guessing that you have already tried to get 0% or low rate balance transfers? These offers are definitely becoming harder to secure.

Just out of interest, what is your partners take on your situation? Is there absolutely no way that she could increase her earnings?

D_M_E

Internet services £55 - what are you getting for £55?

Are you near the end of your contract, can you switch to a much cheaper deal?

Mobile phone £120 - £120??? Is there any chance you could go SIM only and get this cost right down? Are you paying for 2x the latest iPhone or something similar, if so would it be possible to return the handset(s) and get a cheaper deal? How long has your contract(s) got to go until they are up and you can terminate and switch?