New & struggling to make sense, SOA & help please?

lissa_tynant

Hi everyone

I've been lurking for a while now and have some questions that I'd be forever grateful if anyone could help make sense of. 

Quick background... I have just short of £38k debt in my name. All built up over the last 5 years, moving house multiple times, private fertility treatment, redundancy etc. It's held across multiple credit cards, loans, catalogues. I have one child and live with my partner, despite the debts being incurred together as a family made we made the decision to keep them all in my name. He does however contribute equally to the house and helps to pay off things. We have one toddler and another baby due in November. 

I worked with Stepchange around Dec 2020 and embarked on a DMP, paying £392 a month towards the debt, purposefully a bit lower than we could have scraped by on as we were trying to fund fertility treatments and an unexpected house move when our landlord needed his house back. The plan was to increase payments again at some point. Fertility took longer than expected and cost significantly more, as did moving house and some emergency vet bills. Since pregnant and needing to buy some things, I reduced the plan down to £202 last month with a view to go onto a token payment plan of £5 per creditor once on Mat leave and my income drops (in order to look after children I need to save some money to cover the last few months of mat leave where I won't get paid). 

My questions are these:

1. I work for HMRC (non customer facing, no cash handling or financial advice. I'm a process designer) - I've checked with HR generally and the guidance is to just tell manager immediately if thinking about BR. I'm worried this will cause me a problem with my job - does anyone have experience of working for HMRC and being BR?

2. I'm not married so haven't included my partners income on the SOA (when I did it said we had surplus of £2 which isn't accurate) - but I have included all bills split equally 50/50. Is this the right thing to do? 

3. My partner has a car on finance that's in his name alone, it's a lease car so we don't own it. I've put down that I contribute half for things like the finance payment, fuel, tax etc. Is this the correct thing to do? It's a family car that we share for work and children etc.

4. The figures for the debts and minimum payments aren't actually what we pay at the moment as we're doing the DMP but I wasn't sure how else to put this in here? The numbers for min payments is what I used to pay before the DMP.

5. We rent and our lease us up in Feb, so my plan was to wait until declaring BR until then just to make sure no hiccups with re-signing the lease. I don't think there should be an issue as I guess landlord/letting agent won't even know as not behind on rent ever but worried just in case. My thing is - by then I'll be on Mat leave and come May and then June 2022 my income drops significantly until I go back to work (planned to be December/Jan next year). How would I go about doing this with the statement of income etc.?

6. Some things we don't pay for yet... i.e. road tax (car less than a year), RAC (free for first year) but we will need to pay these not long after declaring BR. Is it ok to put these on even thought they wouldn't show on my bank statement yet?

7. I have an engagement ring that my partner obviously paid for, would this be classed as an asset I'd have to declare? I literally own nothing else of value.


Here is my first go of an SOA.. I've included my 2nd child as if they already born as they will be by the time we're ready to submit the forms. Does anything seem wrong? I just guessed at things like holiday and emergency fund as they're not luxuries we've saved for/had in a long while so not sure what would be classed as reasonable. 

Sorry for the long post, but just wanted to cover all basis!

Melissa

[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................ 1973

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

Benefits................................ 152.31

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

Total monthly income.................... 2125.31[/b][b]

Monthly Expense Details[/b]

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

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

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

Management charge (leasehold property).. 0

Council tax............................. 98

Electricity............................. 50

Gas..................................... 50

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

Water rates............................. 14

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

Mobile phone............................ 59.97

TV Licence.............................. 6.41

Satellite/Cable TV...................... 18.5

Internet Services....................... 36

Groceries etc. ......................... 550

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

Petrol/diesel........................... 110

Road tax................................ 6.78

Car Insurance........................... 31.34

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

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

Other travel............................ 50

Childcare/nursery....................... 0

Other child related expenses............ 30

Medical (prescriptions, dentist etc).... 20

Pet insurance/vet bills................. 26

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

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

Life assurance ......................... 9.56

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

Presents (birthday, christmas etc)...... 30

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

Entertainment........................... 50

Holiday................................. 30

Emergency fund.......................... 30

Partner's Car finance................... 165.5[b]

Total monthly expenses.................. 2012.06[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 0

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

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

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

Total Assets............................ 0[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

PRA Group Limited..............22392.....519.......0

MBNA Limited...................6059......120.......0

PRA Group Limited..............5717......119.......0

Barclaycard....................285.72....10........17.62

Virgin Money Credit............392.97....25........0

Moorcroft - LLoyds.............413.18....30........0

Next Online....................2631......106.......0[b]

Total unsecured debts..........37890.87..929.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,125.31

Expenses (including HP & secured debts). 2,012.06

Available for debt repayments........... 113.25

Monthly UNsecured debt repayments....... 929[b]

Amount short for making debt repayments. -815.75[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 0

Total HP & Secured debt................. -0

Total Unsecured debt.................... -37,890.87[b]

Net Assets.............................. -37,890.87[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

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

lissa_tynant

is there anyone who could offer any help or guidance with my post please? Sorry it’s a long one, just wanted to cover all info! Thanks!

sourcrates

Can`t help with the HMRC bit, you would need to look at your employment contract, or discuss with your line manager/HR dept. beforehand.

In bankruptcy, you are allowed certain spend levels in various different categories, just make your budget as accurate as it can be bearing in mind any future upcoming changes, if you need to make changes in the future, you can.

During your telephone interview, it may be wise to discuss your circumstances regarding returning to work etc.

I doubt the OR would want to take your engagement ring, you are not checked up on, no one will be coming to your door, going round your house looking for hidden treasure, personal items, etc.

This is from Debt Camel -

"The OR does not want your wedding ring unless it is very unusual and very expensive.

Engagement rings… well it does depend a bit on how much it is worth. But second-hand jewellery is often worth a lot less than you think…

You are not expected to list your engagement ring on your bankruptcy application form. You won’t be asked by the OR why it isn’t there or how much it is worth. Does that give you a clue ?"

More info here -

Will I lose my lawnmower? and other unusual bankruptcy questions (debtcamel.co.uk)

A Guide to Bankruptcy in England, Wales and N.Ireland (debtcamel.co.uk)

luvchocolate

We have had posters who had to hand over their engagement rings..think value is over £1,000 
I gave up a £1 premium bond!!

JCS1

luvchocolate said:

We have had posters who had to hand over their engagement rings..think value is over £1,000 
I gave up a £1 premium bond!!

All premium bonds are taken, regardless of how much.

Brie

Can't help with a lot of your questions but wanted to suggest that you either pay off the barclaycard as the only one that is charging you interest.  That way any money you do pay is actually clearing the principle.  

Also you include:

Mobile phone............................ 59.97

Satellite/Cable TV...................... 18.5

Internet Services....................... 36

You say that you are including bills at 50% so this means that your household total for TV & internet is £107 a month!  I know lots of people love their cable & need the internet but this seems very high to me.  We don't pay for cable or satellite as we have Freesat.  And our total for landline and broadband/internet is half yours - just £36 a month including all international calls. (EE)

Likewise mobile - nearly £120 a month!  I admit my mobile is fairly basic but I bought it outright for £75 and have a sim which currently costs my under £7 a month.  It's under notice to go to £11 a month so I'll be shopping around.  (again EE).  OH also owns a mobile and pays £20 a month for a sim.

Good luck with your endeavours to get the debt sorted - it's a difficult chore and it's great that you are tackling it.

sourcrates

Brie said:

Can't help with a lot of your questions but wanted to suggest that you either pay off the barclaycard as the only one that is charging you interest.  That way any money you do pay is actually clearing the principle.  

Also you include:

Mobile phone............................ 59.97

Satellite/Cable TV...................... 18.5

Internet Services....................... 36

You say that you are including bills at 50% so this means that your household total for TV & internet is £107 a month!  I know lots of people love their cable & need the internet but this seems very high to me.  We don't pay for cable or satellite as we have Freesat.  And our total for landline and broadband/internet is half yours - just £36 a month including all international calls. (EE)

Likewise mobile - nearly £120 a month!  I admit my mobile is fairly basic but I bought it outright for £75 and have a sim which currently costs my under £7 a month.  It's under notice to go to £11 a month so I'll be shopping around.  (again EE).  OH also owns a mobile and pays £20 a month for a sim.

Good luck with your endeavours to get the debt sorted - it's a difficult chore and it's great that you are tackling it.

The OP is considering bankruptcy, you can`t favour one creditor over another, prior to bankruptcy, and if going bankrupt, there is no point paying any of her creditors.

OP was looking for advice on allowable budget limits, not cutbacks, what`s allowable under the budget rules.

Think you got mixed up with the DFW board.

lissa_tynant

Thanks everyone for you replies and advice!

Ive spoken to my HR department and checked my contract etc and it all seems to be purposefully murky. It just states that I must notify them and give a detailed explanation of events and the HR advisor mentioned it would be down to each internal governance dept as they need to ensure we’re ‘holding the standards of HMRC’ and so dismissal wouldn’t be out of the question. So that gives me the fear.. trying to sort out finances leading to being unemployed and even worse off seems so unfair eh! I’m going to speak to the union and see if they have any advice. 

The Barclaycard isn’t the only one charging interest, they’re all eye wateringly high but that’s the only one I know exactly what it is so I left the others blank. 

For the expenses, I know they’re crazy high but unfortunately we’re stuck into 18/24/36 month contacts for things like tv, WiFi, phones and our child’s iPad. So we can’t get out of them yet, as soon as we can though we’ll look to cut down to the bare minimum for sure.

With the SOA have I done it correctly to keep my partners income off the form? 

Thanks!

lissa_tynant

Just as a further explanation too, we’re only considering bankruptcy as with our debt and payments Stepchange advised we’d be looking at over 12 years to repay which they don’t think is manageable 

sourcrates

lissa_tynant said:

Just as a further explanation too, we’re only considering bankruptcy as with our debt and payments Stepchange advised we’d be looking at over 12 years to repay which they don’t think is manageable 

OK,

Lets look at this from a different perspective.

Bankruptcy would be a good solution to this, however, if it puts your job at risk, then there are other ways you can tackle this, slightly less conventional methods, granted, but your job would not be at risk.

I notice a few of your debts are already with debt purchasing companies, most likely the rest will follow at some point, are you familiar with section 77/79 of the consumer credit act  ?

A quick and basic explanation of this is - Its one of your statutory rights to be able to request a copy of your credit agreement, at any time, so long as a balance remains on the account, its known as a "CCA Request".

If the creditor cannot provide what you ask for, the debt becomes unenforceable in court, and you cannot be forced to pay it.

That would be my first move, see what results come back from that.

Secondly, as you have no assets to be taken, the worst any of these companies can do, is obtain a CCJ against you, but these judgements are normally repaid according to your disposable income, so if all you can afford is £10 a month, then that is what the judgement can be for.

Third, make token arrangements with these companies, whatever is affordable, then, when you go back to work, keep these arrangements going, put what you can aside into a "full and final fund".

When you have a reasonable amount of money, make settlement offers to them, your debts will have been bought for peanuts, usually less than 10% of face value, so discounts are always obtainable, be persistent, it may take a while, but it will be a whole lot less than 12 years in a DMP, and your job will be safe.

In your situation, this would be my strategy.