DEBT/DONT KNOW WHAT TO DO

Willing2Learn

My thoughts on your SOA:

Do you have any dependant children?
Do you own a car (as you have vehicle related costs listed)?  If yes, how much is it worth?
Is your council tax paid across 12 monthly payments?
Are your water rates paid over 12 monthly payments and is it metered?
You can shave a bit off of your mobile costs by going SIM-only.
How come your internet services are so much each month (£47)?  Is that including tv services or something?
Is your monthly clothing cost really only £5?  (Do you only spend £60/annually on clothes?  If so, then you are doing well).
Car maintenance (incl MOT) @ £10/month is very low?  Do you really only spend £120/year on car maintenance (incl tyres, oil,l brake pads, wiper blades etc) 
You need to allocate something each month toward entertainment.
You need to allocate something each month toward your Emergency Fund.


If you were to default on all your unsecured accounts, then you could set up a DMP.  You could withhold payments toward your unsecured debts for six months so that they default you as well as giving you the breathing space to build up a nice size emergency fund before the DMP starts.

Edit:  With regard to your council tax, I forgot to ask whether you are receiving a single-person 25% discount?

Edit 2:  I was also wondering what you are doing to improve your psychological and emotional health?  It is possible that the depression and gambling are linked.  There is evidence to support the fact that CBT talking therapy can be very effective in treating depression and gambling...Maybe you could ask your GP for a referral...

ronnies6

Hi All, firstly thankyou all very much for you advice. Sorry when I said "we" I meant my colleagues in work as im on my own. In regards to mobile I still have 10 months contract on that and the £47 a month is for landline and phonecalls and internet and 
a package im in contract and that still has a year to go. Water rates is a meter and is 6 monthly its around £480 a year sometimes less but I put £40 a month. My car is over 20 years old Im the second owner and I have had it 11 years. As for the maintenance my nephew is a mechanic so im very lucky and its in great condition. Clothes I have too much and I donot go out socialising so wear what I have when not in work. Yes I claim 25% single persons for council tax. Willing 2 learn you say I could with hold payments and default on unsecured debts and you mention 6 months. Do they give you 6 months as im confused? In regards to my gambling and depression and I also drank,  Its been a long road and I have had counselling took up exercising and was on antidepressants for a long time, however I gradually came off these and am getting there. Just confused on this debt. Should I get the shares and ask for the 3 months holiday (if they will agree). Or do I default not pay then do DMP. I would probably panic not paying as wouldnot know what to say if they pestered me and for six months . Sorry so confused and not sure the best route. Thankyou all

ronnies6

Sorry no I have no children. 

ronnies6

Also the life insurance is with Scottish Provident and ive been with them for many years. I am waiting on a reduced figure due to them stopping unemployment cover

ronnies6

Yes council tax is monthly also

ronnies6

If DMP is the best route is it best to default or do this as soon as. Is it worse having defaults on my credit file. So sorry im so confused

monetxchange

Well done for adding everything up. It's so hard to do but it's a relief to face up to it.

I think you've had some brilliant suggestions already that I'd echo. I think the main thing with the life assurance is why bother with it? You don't have any kids or a partner so who would benefit and why do you need to be supporting them to the cost to you of over £600 a year? I don't think it's necessary. Maybe start a savings pot for funeral expenses or whatever it is you're worried about covering instead. As you say, many insurances have proved not worth their money by not covering pandemics etc.

Has the debt all been ran up with gambling? It just seems unlikely that you've never been spending on entertainment, going out, clothes,o expense for the car etc. These things add up. If you realistically do spend on them, they need to be budgeted and saved for, of course at a reduced rate.

Willing2Learn

ronnies6 said:

Willing 2 learn you say I could with hold payments and default on unsecured debts and you mention 6 months. Do they give you 6 months as im confused?

The FCA handbook states that "A firm must suspend the active pursuit of recovery of a debt from a customer for a reasonable period where the customer informs the firm that a debt counsellor or another person acting on the customer's behalf or the customer is developing a repayment plan."

A reasonable period "should generally be for thirty days where there is evidence of a genuine intention to develop a plan and the firm should consider extending the period for a further thirty days where there is reasonable evidence demonstrating progress to agreeing a plan."

So the rulebook says you could have up to 60 days breathing space.  Well, if you keep your creditors 'in the loop' of your plan, by writing to them, then you can get away with a good six-months.  Additionally, the guidance says that an account may be defaulted "when you are 3 months in arrears, and normally by the time you are 6 months in arrears." 

So, the above is the reason why I say 6 months.  It represents an opportunity to take back control of your finances.  An opportunity to relieve the psychological pressure that you may be feeling.  An opportunity to build a respectable Emergency Fund.


Something below for you to read.  It gives you a bit more information on how a DMP could work.
https://nedcab.cabmoney.org.uk/dmp.asp 


Edit:  With regard to the impact of defaults on your credit file.  Yes, your credit file would be trashed for six years from the dates of default.  But you do not have the financial resources to make your contractual payments, and may well end up defaulting anyhow.  (Although the method I describe allows you to do this as part of a measured approach whilst remaining in control).

Madhatter20

Hi
Can any one help, I need to create a new thread to post my query.  DOnt know how to start a new thread.
Thanks

EimearF

Madhatter20 said:

Hi
Can any one help, I need to create a new thread to post my query.  DOnt know how to start a new thread.
Thanks

On the main page there is a pink 'new thread' button under the green 'debtfree wannabe' banner. Click that and it will give you the option to type a heading and then write you post. 

Use this link  https://www.lemonfool.co.uk/financecalculators/soa.php  to type up an SOA and then we can give help on the best way forward for you.