First timer here - need advice please credit card debt

kimwp

Cheers @sourcrates, I didn't mean that it was necessarily your wires that were crossed, more that the message the OP was getting from the debt management company wasn't lining up with understanding here. I think the detail you've provided explains a lot, is that explanation of the process in a sticky somewhere (because I feel it should be!)

What is an IP?

crm23

[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......... 2

Number of cars owned.................... 0[b]

Monthly Income Details[/b]

Monthly income after tax................ 2091

Partners monthly income after tax....... 1744

Benefits................................ 140

Other income............................ 0[b]

Total monthly income.................... 3975[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 907

Secured/HP loan repayments.............. 473

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 190

Electricity............................. 56

Gas..................................... 56

Oil..................................... 0

Water rates............................. 65

Telephone (land line)................... 0

Mobile phone............................ 100

TV Licence.............................. 13

Satellite/Cable TV...................... 35

Internet Services....................... 20

Groceries etc. ......................... 280

Clothing................................ 20

Petrol/diesel........................... 240

Road tax................................ 18

Car Insurance........................... 40

Car maintenance (including MOT)......... 30

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 250

Other child related expenses............ 35

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 55

Buildings insurance..................... 11

Contents insurance...................... 11

Life assurance ......................... 68

Other insurance......................... 0

Presents (birthday, christmas etc)...... 20

Haircuts................................ 30

Entertainment........................... 15

Holiday................................. 0

Emergency fund.......................... 0[b]

Total monthly expenses.................. 3038[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 305000

Shares and bonds........................ 0

Car(s).................................. 0

Other assets............................ 0[b]

Total Assets............................ 305000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 240000...(907)......0

Hire Purchase (HP) debt ...... 23000....(473)......0[b]

Total secured & HP debts...... 263000....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

NatWest loan...................12236.....294.......0

NatWest credit card............1830......40........0

Barclaycard ...................4047......61........0

Paypal credit .................2800......63........0

Marbles loan...................5000......143.......0

Marbles........................6800......120.......0

Barclaycard ...................2479......62........0

Hitachi sofa ..................816.......68........0

Tesco credit card .............7840......78........0

Mbna...........................17138.....230.......0[b]

Total unsecured debts..........60986.....1159......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,975

Expenses (including HP & secured debts). 3,038

Available for debt repayments........... 937

Monthly UNsecured debt repayments....... 1,159[b]

Amount short for making debt repayments. -222[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 305,000

Total HP & Secured debt................. -263,000

Total Unsecured debt.................... -60,986[b]

Net Assets.............................. -18,986[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

crm23

Thank you so much for the info re the IVA. I’m not sure that’s the best option, but really don’t know where to go next. Our childcare fees (approx £400 a month currently due to corona, but will go down to £200 again hopefully soon) won’t stop for at least 18 months. £243 comes out of my salary in childcare vouchers. 

We’re looking at sky options to get that gone and I’ll shop around for insurances etc when they’re up (I do anyway but appreciate some are high) 
the expenses also include having my step son with us 5 days a week (we don’t get child benefit but have an amicable arrangement that works) however, he’s 14 and a growing boy so we essentially have 3 adults and 2 children in the house when it comes to food and energy usage etc.. 

crm23

Also forgot to add, both of our cars are on HP (due to own in 4 years roughly, my NatWest loan £294 a month and Marbles loan £143 are both up in 5 years and 3 years respectively. As will the £250-400 childcare be up within the next 3 years and Hitachi sofas in 12 months £68. Is there a short term fix re the cards we could look at before we pay off the above? Within the next 3-5 years we will have on best case scenario another £905 available a month to clear credit cards.. or am I dreaming we can manage this until the above are paid off? 

sourcrates

kimwp said:

Cheers @sourcrates, I didn't mean that it was necessarily your wires that were crossed, more that the message the OP was getting from the debt management company wasn't lining up with understanding here. I think the detail you've provided explains a lot, is that explanation of the process in a sticky somewhere (because I feel it should be!)

What is an IP?

An “IP” is an Insolvency practitioner.

Only an IP can set up an IVA.

crm23

I’ve put all my details into step change who have recommended a debt management plan. Is that what I should be looking at over an IVA  now? 

sourcrates

crm23 said:

I’ve put all my details into step change who have recommended a debt management plan. Is that what I should be looking at over an IVA  now? 

Debt management is an unregulated informal way to repay what you owe, but at a more affordable rate.
Its flexibility is its biggest asset, creditors usually stop interest, they are not obligated to do so, but it’s almost standard practice these days so most do.

My vote is for the DMP, the IVA would cost you more, is not very flexible should your situation change, and is a very long haul @ 6 years on a very strict budget.

kimwp

Great step on posting your SOA @crm23. Is this actual (is from at least several months of accounts, ideally a year) or estimates for things like haircuts, presents etc? Also, are the loans really on 0%?

I don't know if it is enough to make up the difference, but;

- your energy bill seems high given that you both work and therefore presumably the house is unoccupied during the day. If you need to keep the house warm for pets, it might be a matter of just heating one room for them in the winter.

- Water rates also seem high, have you considered a meter? I pay £14 a month for one person and when I had a lodger (who liked long showers!) it was still under £20, so a meter might mean a £15 a month saving and (I think) you can revert back to the old system within a certain timeframe. If that is the cost on a meter then action is required to reduce water usage!

- Phone bill is high, even with four (three?) mobile phones - if you can get these onto a sim only deal then that's a saving of £60-£70 pounds a month - appreciate that you might not be able to do this straight away

- Satellite (as you've said) can go - £35 per month.

- Groceries - you can probably save money here, but I'm not the one to advise on this. Taking a look at Jack Monroe's books/story (Cooking on a Bootstrap) might help. I think you might be able to take £80 off this by Lidl shopping, planning carefully and going for the cheaper veg eg peas, carrots, sweetcorn, maybe wonky veg boxes which seem very good value.

Probably worth looking at some of these regardless of what option you choose.

crm23

sourcrates said:

crm23 said:

I’ve put all my details into step change who have recommended a debt management plan. Is that what I should be looking at over an IVA  now? 

Debt management is an unregulated informal way to repay what you owe, but at a more affordable rate.
Its flexibility is its biggest asset, creditors usually stop interest, they are not obligated to do so, but it’s almost standard practice these days so most do.

My vote is for the DMP, the IVA would cost you more, is not very flexible should your situation change, and is a very long haul @ 6 years on a very strict budget.

Thanks for this.
the monthly repayment on the DMP
Is coming out at £259 but for
15 years. The IVA was more but for only 6 years.
if I was to do the DMP does that effectively leave my credit file in tatters for the foreseeable? Just thinking when it comes to remortgage in 4 years etc? I know I’m in a lose lose, but it’s hard to change when everything is being paid and our credit files are good, albeit we are not really ‘living’ as such at the minute
just surviving..

crm23

kimwp said:

Great step on posting your SOA @crm23. Is this actual (is from at least several months of accounts, ideally a year) or estimates for things like haircuts, presents etc? Also, are the loans really on 0%?

I don't know if it is enough to make up the difference, but;

- your energy bill seems high given that you both work and therefore presumably the house is unoccupied during the day. If you need to keep the house warm for pets, it might be a matter of just heating one room for them in the winter.

- Water rates also seem high, have you considered a meter? I pay £14 a month for one person and when I had a lodger (who liked long showers!) it was still under £20, so a meter might mean a £15 a month saving and (I think) you can revert back to the old system within a certain timeframe. If that is the cost on a meter then action is required to reduce water usage!

- Phone bill is high, even with four (three?) mobile phones - if you can get these onto a sim only deal then that's a saving of £60-£70 pounds a month - appreciate that you might not be able to do this straight away

- Satellite (as you've said) can go - £35 per month.

- Groceries - you can probably save money here, but I'm not the one to advise on this. Taking a look at Jack Monroe's books/story (Cooking on a Bootstrap) might help. I think you might be able to take £80 off this by Lidl shopping, planning carefully and going for the cheaper veg eg peas, carrots, sweetcorn, maybe wonky veg boxes which seem very good value.

Probably worth looking at some of these regardless of what option you choose.

Thank you, definitely a few things to look at there. We’ve both been working from home since March, but prior to then I’m wfh 3 days a week. We have a lot of showers/baths with there being 5 in the house and I do cook a lot. The water isn’t on a meter, I’ve been scared to swap given the amount I think we use but as you say, it’s worth trying because if we’re worse off then we’ll revert back. I do shop around for food and we never buy ready meals. Takeaway treat at the weekend may need to stop, but given we don’t go out to pubs or drink/smoke regularly I see this as our treat. Plus the one I night I don’t have to cook for 5 after a busy working week. Appreciate I can’t have it all ways at the minute though 😞