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Help needed. SOA completed.

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Help needed. SOA completed.

edited 17 January at 6:40PM in Debt-Free Wannabe
11 replies 1.9K views
StruStru Forumite
4 posts
edited 17 January at 6:40PM in Debt-Free Wannabe
Hi all

Was hoping to get some much needed advice. I have read a lot of posts and I know a SoA is important. I have completed it the best I can at the moment - I'm unsure of a lot of the interest rates but am aware that they are all high.

I live with my partner and our 2 children. We have separate finances so I have just included my income and outgoings on the SoA.

I have included my take home pay as my salary after pension deductions.

I have been managing each month by spending more on credit cards or getting things on credit and now I'm in a total mess. I have not missed any payments on anything yet but I am going to struggle this month to meet the minimum payments for everything.

Any suggestions of how I can manage this debt? I have looked at various options of debt plans/bankruptcy but I really don't know what to do for best.

Happy to provide any further info needed.

Thank you

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details

Monthly income after tax................ 1550
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1550


Monthly Expense Details

Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 15
TV Licence.............................. 0
Satellite/Cable TV...................... 79
Internet Services....................... 0
Groceries etc. ......................... 450
Clothing................................ 20
Petrol/diesel........................... 130
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 40
Car parking............................. 80
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 9
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 7
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 980



Assets

Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0 (partner got car on PCP so not owned)
Other assets............................ 0
Total Assets............................ 0


No Secured nor Hire Purchase Debts


Unsecured Debts
Description....................Debt......Monthly...APR
Lloyds credit card.............2986......49........0
Lloyds overdraft...............1500......0.........0
HSBC credit card...............5484......140.......21.9
Zopa loan......................8477......283.......25.7
PayPal credit..................248.......5.........0
New Look store card............85........5.........0
Very...........................150.......5.........0
Studio.........................375.......23........0
Simply Be......................1759......139.......0
Argos credit card..............283.......5.........0
Aqua credit card...............2385......85........0
Barclaycard....................1195......39........26.93
Capital One c/card.............2011......94........0
Total unsecured debts..........26938.....872.......-



Monthly Budget Summary

Total monthly income.................... 1,550
Expenses (including HP & secured debts). 980
Available for debt repayments........... 570
Monthly UNsecured debt repayments....... 872
Amount short for making debt repayments. -302


Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -26,938
Net Assets.............................. -26,938
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Replies

  • PurpleFairy26PurpleFairy26 Forumite
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    if there is no option to work this through with your partner you should contact a none fee paying debt charity like step change to discuss your options. As whilst food looks on the high side and you could loose the paid for tv package , there isn't much else to be reduced from your SOA (assuming parking costs are for work and can't be reduced by parking further away and walking or getting public transport in) taking the shortfall out to balance to pay all your creditors will be tricky.

    You also need to build up a bit of an emergency fund, start with £500 so you have some savings and don't resort to credit anymore if something happens.

    Best of luck on your journey to be DF.
  • fatbellyfatbelly Forumite
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    If you have £500 before debt payments then a debt management plan could work for you, clearing your debts in 54 months, which is just about acceptable.

    The other option you should look at is bankruptcy which, although it has a fee of £680, only requires payment from income for 36 months. If the PCP agreement is in your partner's name then the car should not be affected and the assumption (if partner does not agree to give info) of a 50/50 split in all household expenses could work for you.
  • StruStru Forumite
    4 posts
    Many thanks for the replies. I think the groceries figure may have been overstated - that amount probably includes clothes/shoes for the children too. I am sure I could cut back on the groceries a bit too although the majority of my shopping is done in Lidl or Aldi already.
    Do you think Step Change are the people I should go to for advice? I think before I contact anyone, I need to check if my job will be affected by any of the options. Should I try and scrape some money together to pay the debts I haven't paid yet this month, I still need to pay some of the credit cards and catalogues or should I wait until I have spoken to someone? I could afford the bankruptcy fee next month if I didn't pay my debts but bankruptcy scares me, I don't know enough about it, I will have to do some research. I could cope with paying £500 per month if it would clear my debts in a number of years. I just can't go on robbing Peter to pay Paul whilst making no dent whatsoever in my debts apart from the loan which I have been paying for 3 years. Thanks for the input.
  • edited 16 January at 8:11PM
    fatbellyfatbelly Forumite
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    edited 16 January at 8:11PM
    I think Stepchange are worth talking to, maybe also National Debtline.

    You should stop paying creditors for now and start putting the £500 per month into an account not connected to your debts.

    You could send them this letter

    https://www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx

    If you're still using Lloyds for your main current account you need a new one, again an account not connected to your debts
  • StruStru Forumite
    4 posts
    Thank you. I have got a current account with nationwide that my wages go into, I don't have an overdraft or any debt with nationwide so I will transfer my Virgin direct debit to that account, my mobile phone direct debit is already set up on that one.
    Many thanks for the link to the letter, I will get that sent off to everyone.
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • middleclassbutpoormiddleclassbutpoor Forumite
    764 posts
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    can you earn more money?
  • edited 16 January at 9:58PM
    Willing2LearnWilling2Learn Forumite
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    edited 16 January at 9:58PM
    Hello Stru,
    I'm going to suggest something a little bit different:

    I think you should hold off paying any of you accounts for six months so that they are all defaulted. A defaulted account has interest frozen. A defaulted account is removed from your file automatically after six years, which means your credit files will clean up much sooner. :)

    Another positive impact of not paying off the debts for the first six months, would mean you were depositing your £500/month payments into a savings account for this time, so that you can build a healthy £3,000 Emergency Fund. And as we all know, an Emergency Fund is an essential component of all successful monthly budgets. :)

    You could approach StepChange to manage your DMP in five months time...
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • StruStru Forumite
    4 posts
    Hi middleclass, I can't think of a way I could earn more.

    Interesting idea willing2learn, I just don't know what to do for best.

    I completed some information on the Step Change website but I completed as if I pay 50% of household bills and 50% of all other expenditure as I thought this would look the most 'normal'. The information I got back was that they recommend an IVA. The other options it mentioned was bankruptcy and a DMP.

    The way I understood the information it provided about a DMP is that I would pay a monthly payment that was affordable and this would be split between all the creditors, I would continue paying this until the debt was paid off. It said it would take 18 years or longer if the creditors did not freeze interest. Is that what a DMP is? It sounds like my credit rating would be bad for at least the 18 years which doesn't sound like my best option.

    The IVA option said they estimate I would pay £120 per month for 60 or 72 months.

    Or the bankruptcy option is to pay the fee and then a monthly payment as well I think? I'm not sure how long that monthly payment would go on for.

    Obviously the advice they gave was based on me paying 50% of household expenses which works out to be more than I have estimated what I actually pay out. With any of the options, will someone check what I actually pay out or will they accept that I pay half the bills?

    Thanks
  • fatbellyfatbelly Forumite
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    Stru wrote: »
    I completed some information on the Step Change website but I completed as if I pay 50% of household bills and 50% of all other expenditure as I thought this would look the most 'normal'. The information I got back was that they recommend an IVA. The other options it mentioned was bankruptcy and a DMP.

    The way I understood the information it provided about a DMP is that I would pay a monthly payment that was affordable and this would be split between all the creditors, I would continue paying this until the debt was paid off. It said it would take 18 years or longer if the creditors did not freeze interest. Is that what a DMP is? It sounds like my credit rating would be bad for at least the 18 years which doesn't sound like my best option.

    The IVA option said they estimate I would pay £120 per month for 60 or 72 months.

    Or the bankruptcy option is to pay the fee and then a monthly payment as well I think? I'm not sure how long that monthly payment would go on for.

    Obviously the advice they gave was based on me paying 50% of household expenses which works out to be more than I have estimated what I actually pay out. With any of the options, will someone check what I actually pay out or will they accept that I pay half the bills?

    Thanks

    Payment from income in bankruptcy is for 36 months.

    As you don't have a property to protect, IVA payments would be for 60 months, not 72 and I cannot see the advantage there.

    I think you need to talk to someone rather than use an online tool.
  • AndyjfletAndyjflet Forumite
    332 posts
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    Morning, didn't want to read and not saying anything. I'm sorry you cant work this with your other half, but get it sorted and protect yourself.

    In my opinion your debt is large compared to your level of income and it seems to me that unless you can drastically increase your income then you should contact stepchange and ask their advice.

    I doubt that your monthly payments are really covering much more than just interest, and I cant really see a way of you improving this much until salary increases.

    Good luck
    Baby Step 1 - £1350 saved for emergency fund
    Baby Step 2
    M&S Loan £12345.02
    M&S Credit card 0% £3302.47
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