Help Needed Please

David_20

Hello, Im really in need of some advice. I have been putting this off for some time now but  going have to face up to these debts. Our story is me and my partner currently live with my parents with our young children (not ideal i know). We have just shy off 64k debt  of which 40k of it is joint debt. 

Any thoughts of what the best course of action is, any reply's would be much appreciated. Cheers. 

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 1510

Partners monthly income after tax....... 0

Benefits................................ 800

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

Total monthly income.................... 2310[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 400

Management charge (leasehold property).. 0

Council tax............................. 0

Electricity............................. 0

Gas..................................... 0

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

Water rates............................. 0

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

Mobile phone............................ 60

TV Licence.............................. 0

Satellite/Cable TV...................... 15

Internet Services....................... 0

Groceries etc. ......................... 700

Clothing................................ 80

Petrol/diesel........................... 130

Road tax................................ 12

Car Insurance........................... 80

Car maintenance (including MOT)......... 50

Car parking............................. 5

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

Childcare/nursery....................... 50

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 11

Pet insurance/vet bills................. 0

Buildings insurance..................... 0

Contents insurance...................... 0

Life assurance ......................... 0

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

Presents (birthday, christmas etc)...... 60

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

Entertainment........................... 70

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

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

Total monthly expenses.................. 1753[/b]

[b]

SweetPotatoPie

700 per month for groceries? Where do you shop? That needs addressing immediately - 
what are the debts? Interest rates etc? You can add them into your SOA. 

David_20

Theres so many to list.
 700is alot but includes nappies and food for work Etc.
But agreed its to much but we end up living day to day because  we live in a over crowded house with my parents ,the situation is not ideal at all.

emwi

Well done on taking the first step. You need to list the debts and the interest rates to get a handle on it. Try and list a few at a time if you are feeling overwhelmed. 

David_20

i will try list the main ones.
Shortfall of mortgage -  20k

17k loan - 4%

7k loan 11%
8k loan 8%
I owe 6500 on a voluntary car repossession also. Also these debts are  the main ones.

fatbelly

So there's 64k debt in total. There's a mortgage shortfall, a hire purchase debt, three loans and some others. Mostly joint.
Living with your folks you have £600 per month surplus at best.

A classic debt management plan would take 9 years to pay off. 

I think you will need to bite the bullet and do bankruptcy x 2. Fees will be £1360 total. The worst case is an income payment arrangement for three years. It would still be the cheapest option.

I note you have a car. It will need to be valued at less than £1000 and then if you need it for work you can keep it.

I assume you have no other assets like savings or another property.

Once you have agreed that that is the way forward you need to get your ducks in a row, as sourcrates would say. If you want your own rented place then do that first but do the sums as you will be paying for gas, electric, water, tv licence(?) and council tax, none of which you are paying for now and that no benefit will pick up. Increased rent will get picked up partially by Universal Credit but again use online benefits checker and do the sums.

If you're paying any of those debts then stop. If you are banking where you have dbts then you need a new bank account.

That's enough for now I think

David_20

Thank you for that reply it helped.
I did ring step changers a week or so ago and they recommended the same thing. Its just the word bankruptcy  scares us both.
This month is the first month since i have not made any sort of payments to the debts.

David_20

Sorry   We have no savings or any other properties. Car is value around 1200

sourcrates

I would say use the time you are living with your folks wisely, 9 years in a DMP is far to long, especially when its unnessesary.

That kind of debt does not vanish overnight, i would agree with fatbelly`s stratagy on this, take the hit now, and the effects will lessen over time, 6 years from now you wll be home free.

Bankrupcy is a lot less stringent than it used to be, a simple phone interview, and a possible IPA for 3 years, but your debt will be gone, allowing you to start again.

In the end its your decision,take the long haul for 9/10 years, or take the insolvency route and be done in 6 years.

David_20

Thank you really helpful information.
Im assuming if i go for the  br route That it will be harder for us to find private rent.
We are on the council list but no joy as yet.
But finding somewhere to rent now Will be really hard as we literally have nothin furntiure wise etc.

sourcrates

I won`t lie, finding rental accomodation will be difficult, but you must have a pretty much trashed credit file already anyway, if you have defaults, then looking to rent will be no harder now than with a bankrupcy on your file, even with debt management the defaults will still be there.

Its not an easy situation i grant you, but there will be landlords that will accept you, you may need to pay a substantial deposit, i don`t know, i`m not an expert on the rental market, so will leave others to comment on that side of things.

Is there a possibility of staying where you are for the time being, not the best solution, but its a roof over your heads at least.