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Help My Sister Please!

13 replies 2.1K views
MartialArtManMartialArtMan Forumite
567 posts
Part of the Furniture 100 Posts Combo Breaker
✭✭
My sister has come to me in a state of despair having racked up a load of debt that is spiralling out of control could you please offer advice on how to advise her please?

This is her Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2 (mum and son)
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2 jobs - Job no.1 £1120pm, Job no.2 £500pm
Other income............................ Fuel (petrol) allowance approx £350pm
Total monthly income....................£1970

Monthly Expense Details
Secured/HP loan repayments.............. Loan 1 - £140, Loan 2 - £198, CC - £78, Store card £30
Rent.................................... £380
Council tax.............................£140
Electricity............................. £80
Gas.....................................£30
Water rates............................. £43
Telephone (land line) in broad band................... £27
Mobile phone............................ £27 + £66 for son
TV License.............................. £13.50
Satellite/Cable TV...................... Netflix £10
Groceries etc. ......................... £260
Clothing................................ £20
Petrol/diesel........................... £350 - covered by fuel allowance
Road tax................................ 18
Car Insurance........................... £35
Car maintenance (including MOT)......... £10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... £12.50
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, Christmas etc)...... £70
Haircuts................................ £6
Entertainment........................... £40
Holiday................................. £70
Emergency fund.......................... 0
Professional subscriptions.............. 0
Total monthly expenses.................. £2145


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. £800
Other assets............................ 0
Total Assets............................ £800


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 0...............0.............0
Total secured & HP debts...... 0

Unsecured Debts
Description....................Debt......Monthly.. .APR
Loan 1 £7200 £140
Loan 2 £5700 £198
CC £4500 £78
Argos £750 £30
................0...........446pm...........0
Total unsecured debts.................£18150


Monthly Budget Summary
Total monthly income....................1970
Expenses (including HP & secured debts). 2145
Available for debt repayments...........0
Monthly Unsecured debt repayments.......0
Amount short for making debt repayments. 0

Personal Balance Sheet Summary
Total assets (things you own)...........800
Total HP & Secured debt.................
Total Unsecured debt....................18150
Net Assets..............................0
I suggested bankruptcy or a Debt Relief Plan but she is concerned about not being able to cope in an emergency ie taking out credit (!)
Thanks in advance for any input 
«1

Replies

  • edited 10 March at 8:37PM
    Willing2LearnWilling2Learn Forumite
    6.2K posts
    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    edited 10 March at 8:37PM
    You have not completed the SOA correctly.  Here is what the SOA should be (I hope you don't mind)
    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]
    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 0
    Number of cars owned.................... 1[b]
    Monthly Income Details[/b]
    Monthly income after tax................ 1620
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 350[b]
    Total monthly income.................... 1970[/b][b]
    Monthly Expense Details[/b]
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 380
    Management charge (leasehold property).. 0
    Council tax............................. 140
    Electricity............................. 80
    Gas..................................... 30
    Oil..................................... 0
    Water rates............................. 43
    Telephone (land line)................... 27
    Mobile phone............................ 93
    TV Licence.............................. 13.5
    Satellite/Cable TV...................... 10
    Internet Services....................... 0
    Groceries etc. ......................... 260
    Clothing................................ 20
    Petrol/diesel........................... 350
    Road tax................................ 18
    Car Insurance........................... 35
    Car maintenance (including MOT)......... 100
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 12.5
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 70
    Haircuts................................ 6
    Entertainment........................... 40
    Holiday................................. 70
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 1798[/b]
    [b]
    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 800
    Other assets............................ 0[b]
    Total Assets............................ 800[/b]
    [b]
    No Secured nor Hire Purchase Debts[/b]
    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Loan 1.........................7200......140.......0
    Loan 2.........................5700......198.......0
    CC.............................4500......78........0
    Argos..........................750.......30........0[b]
    Total unsecured debts..........18150.....446.......-  [/b]
    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 1,970
    Expenses (including HP & secured debts). 1,798
    Available for debt repayments........... 172
    Monthly UNsecured debt repayments....... 446[b]
    Amount short for making debt repayments. -274[/b]
    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 800
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -18,150[b]
    Net Assets.............................. -17,350[/b]
    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • edited 10 March at 8:48PM
    Willing2LearnWilling2Learn Forumite
    6.2K posts
    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    edited 10 March at 8:48PM
    My quick thoughts on the SOA:

    Is your sister receiving any rent from her son?  If not, then I recommend that she does charge him for room and board.

    Her son should pay for his own mobile phone.

    Is the holiday already booked @ £70/month? If not, then she needs to not have a holiday while repaying the debts.

    She cannot afford £70/month on presents.  That's £840/annum.  It is unaffordable

    You sister needs to be putting money aside each month for her Emergency Fund (EF).  An EF is an essential component of all successful monthly budgets.  It means that when the unexpected costs occur, then they can be paid for without using any line of credit.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • John_John_ Forumite
    547 posts
    500 Posts Name Dropper
    ✭✭
    The total wage looks far too low for two adults, what’s the story there?
  • MartialArtManMartialArtMan Forumite
    567 posts
    Part of the Furniture 100 Posts Combo Breaker
    ✭✭
    My quick thoughts on the SOA:

    Is your sister receiving any rent from her son?  If not, then I recommend that she does charge him for room and board.

    Her son should pay for his own mobile phone.

    Is the holiday already booked @ £70/month? If not, then she needs to not have a holiday while repaying the debts.

    She cannot afford £70/month on presents.  That's £840/annum.  It is unaffordable

    You sister needs to be putting money aside each month for her Emergency Fund (EF).  An EF is an essential component of all successful monthly budgets.  It means that when the unexpected costs occur, then they can be paid for without using any line of credit.
    Her son is in and out of work unfortunately but yes I agree he needs to start taking some responsibility and at least pay for his phone. 
    Holiday is already booked yes and I agree with the present thing, we've agreed not to buy for each other this year to help reduce her expenses. 
    She needs to get her credits and loans in order, if she can eliminate those via a Debt relief Plan she could then afford to put £100+ away for an emergency fund 
  • edited 11 March at 11:44AM
    sourcratessourcrates Forumite, Board Guide
    20.2K posts
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    ✭✭✭✭✭
    edited 11 March at 11:44AM
    Debt relief order I think your referring too, does she meet the criteria in all other aspects ?
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • MartialArtManMartialArtMan Forumite
    567 posts
    Part of the Furniture 100 Posts Combo Breaker
    ✭✭
    Debt relief order I think your referring too, does she meet the criteria in all other aspects ?
    Looking at her finances and having read about it online and it appears she does but maybe I'm missing something? Or maybe there is a better option? 
  • MartialArtManMartialArtMan Forumite
    567 posts
    Part of the Furniture 100 Posts Combo Breaker
    ✭✭
    Looking on here I have put her in touch with Step Change who will be able to offer her the best course of action and act on her behalf. Fingers crossed they'll help to get her sorted
  • patman99patman99 Forumite
    8.5K posts
    Part of the Furniture 1,000 Posts Combo Breaker Photogenic
    ✭✭✭✭
    Son's mobile - any reason why he is not paying this himself?.
    Netflix - does she need this?. If it for the son, then another thing he can either pay for himself or loose the use of.
    Never Knowingly Understood.

    Member #1 of £1,000 challenge - £13.74/ £1000 (that's 1.374%)


    3-6 month EF £0/£3600 (that's 0 days worth)


  • edited 11 March at 8:09PM
    monetxchangemonetxchange Forumite
    325 posts
    100 Posts First Anniversary Name Dropper Photogenic
    ✭✭
    edited 11 March at 8:09PM
    Agree the son needs to sort out his income situation and start to contribute properly, even if he needs to check his benefit eligibility while seeking regular work.

    I'd also advise gently that she takes a hard look at if she can afford the holiday. If her finances are such a mess, I'd bet the monthly amount is just paying off what she owes on it and she hasn't put aside for spending money, taxis, meals out etc when she's there. I know it's hard to let go when you've sunk money into something, but sometimes it's best to cut your losses if it's going to further increase her debt.
    LBM: 05/05/2019 Highest Debt: £37,514 Debt Free: 06/03/2020 B)
  • zippygeorgeandbenzippygeorgeandben Forumite
    1.1K posts
    Part of the Furniture 1,000 Posts Debt-free and Proud!
    ✭✭✭
    Son not contributing yet he must have a £66 per month.  The entitlement of the young!  Don't wanna earn it!
    Savings as of April 2020
    Savings account 1 - £12048.33(12034.37)Savings account 2 - £3500.00(3000.00)
    Current account - £3905.05(2405.53)
    Total - £19453.38 (17439.90)
    Plus £840 (£120 per month between CS/BS) HTB £200
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