Light Bulb Moment!

PrettyWoman

[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.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 1658.64

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

Benefits................................ 0

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

Total monthly income.................... 1658.64[/b][b]

Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 140

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

Management charge (leasehold property).. 0

Council tax............................. 80

Electricity............................. 37.5

Gas..................................... 37.5

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

Water rates............................. 26

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

Mobile phone............................ 13

TV Licence.............................. 6.7

Satellite/Cable TV...................... 0

Internet Services....................... 33

Groceries etc. ......................... 216

Clothing................................ 50

Petrol/diesel........................... 50

Road tax................................ 12.08

Car Insurance........................... 16.5

Car maintenance (including MOT)......... 25

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

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

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

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

Medical (prescriptions, dentist etc).... 25

Pet insurance/vet bills................. 30

Buildings insurance..................... 7

Contents insurance...................... 7

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

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

Presents (birthday, christmas etc)...... 50

Haircuts................................ 40

Entertainment........................... 100

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

Emergency fund.......................... 65

Pension................................. 99.5[b]

Total monthly expenses.................. 1166.78[/b]

[b]

Assets[/b]

Cash.................................... 4000

House value (Gross)..................... 280000

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

Car(s).................................. 5800

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

Total Assets............................ 289800[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 0........(0)........0

Hire Purchase (HP) debt ...... 4800.....(140)......9.9[b]

Total secured & HP debts...... 4800......-.........-   [/b]

[b]Unsecured Debts[/b]

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

M&S............................8025......200.......26.9

Capital One....................4426......192.......24.9

NewDay.........................11900.....376.......25.9

Barclaycard....................8334......188.......22.9

MBNA...........................1949......61........23.9[b]

Total unsecured debts..........34634.....1017......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 1,658.64

Expenses (including HP & secured debts). 1,166.78

Available for debt repayments........... 491.86

Monthly UNsecured debt repayments....... 1,017[b]

Amount short for making debt repayments. -525.14[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 289,800

Total HP & Secured debt................. -4,800

Total Unsecured debt.................... -34,634[b]

Net Assets.............................. 250,366[/b]

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

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

After being self employed for 18 years I sadly closed my business last month when I realised I was working 50 hours per week to pay my staff and service the interest on my unsecured debts. I’ve secured a job I love, I’m only working 35 hours per week, but I am earning less than before. I’m ready to take control of my financial situation. 

I am married and mortgage free, the HP debt is my car and has 33 months left to run. I need my car to get to and from work so it’s not a saleable asset.
Household expenses are split equally between my husband and myself so the SOA contains my share.

All my payments are up to date but the minimum is basically covering the interest and very little capital. I can use my savings to keep going for a few more months but I think the sooner I make a start the better.

I have put all my details into Stepchange and the recommendation is a DMP. My understanding is that I should now cease all payments and save the money I would have been paying for an emergency fund?

I bank with NatWest and don’t think my account will be affected by any of my debts but happy to be corrected?

Any advice going forward gratefully received, thank you 😊 

saving_is_good

I hope all goes well in your debt free journey. I’m sure many will be on to give you good advice. You’re not alone here. Everyone is supportive and often they’ve been through something similar enough to empathise and give excellent advice. Chin up. You’re not alone. 

TheAble

A few observations:

£100 on entertainment - hard to justify when you're in debt;
£40 on hair - similarly;
£50 on clothing - similarly. You've got plenty of clothes already, no?
£100 into pension - how big's your pot and when do you plan to retire? If your pot's sufficiently large you may wish to consider dropping this;
£33 on internet - if this is your half of a shared cost i.e. £66 it's high. Can be got for much less;
£65 to emergency fund - you have £4000 in cash already. But I've no expertise on DMPs so will leave to others to comment on your proposed strategy;
£50 on presents - a lot if it's just you and your husband? Again hard to justify when you're so far in the red.

Another idea to consider throwing into the mix is selling your car to clear the HP and buying something cheaper. Yes you may need a car but do you need your current car? Up to you though.

Of course you have to be honest with yourself and ask yourself how and why you accumulated all these debts in the first place. You had your own business so maybe covid's part of it but there's maybe more than that, ie a lack of self discipline.

fatbelly

I have put all my details into Stepchange and the recommendation is a DMP. My understanding is that I should now cease all payments and save the money I would have been paying for an emergency fund?

I bank with NatWest and don’t think my account will be affected by any of my debts but happy to be corrected?

That's correct. You are borderline between a dmp and an iva so I'd start with a dmp and take it from there

PrettyWoman

fatbelly said:

That's correct. You are borderline between a dmp and an iva so I'd start with a dmp and take it from there

I’m not sure of the difference between a dmp and an iva but SC said I had too many assets for an Iva?

PrettyWoman

TheAble said:

A few observations:

£100 on entertainment - hard to justify when you're in debt;
£40 on hair - similarly;
£50 on clothing - similarly. You've got plenty of clothes already, no?
£100 into pension - how big's your pot and when do you plan to retire? If your pot's sufficiently large you may wish to consider dropping this;
£33 on internet - if this is your half of a shared cost i.e. £66 it's high. Can be got for much less;
£65 to emergency fund - you have £4000 in cash already. But I've no expertise on DMPs so will leave to others to comment on your proposed strategy;
£50 on presents - a lot if it's just you and your husband? Again hard to justify when you're so far in the red.

Another idea to consider throwing into the mix is selling your car to clear the HP and buying something cheaper. Yes you may need a car but do you need your current car? Up to you though.

Of course you have to be honest with yourself and ask yourself how and why you accumulated all these debts in the first place. You had your own business so maybe covid's part of it but there's maybe more than that, ie a lack of self discipline.

£100 entertainment is my half of our pitch fees for our touring caravan. Justified, no, but if we take it off the pitch then we have to pay for storage anyway so probably not a massive cost saving.

£40 on hair, I have changed hairdresser and stretched appointment an extra week to 7 weeks instead of 6. My company have a dress code and a standard of appearance, and I am customer facing in a sales role. It is in my terms and conditions of employment.

£50 on clothing, yes I have plenty of clothes for the role I was doing for 18 years. I am now office based with a dress code and consequently have had to invest in suitable clothing.

£100 pension, my pot is £100. I am 52 and plan to retire at 67. I am auto enrolled into Nest and contributing 5% of my salary.

£33 on Internet includes broadband, landline and Netflix as there was nowhere else to put it. I will look at this as we are with Vodafone and I haven’t shopped around for a while.

£65 emergency fund is what was recommended when I filled in the SC budget. I filled that one in first and then copied the figures to this one.

£50 on presents for husband, two sons + 1, one parent, two siblings, one niece, one nephew. I don’t buy for wider family and we don’t buy for birthdays, only Christmas. This is effectively my Christmas budget.

I need a reliable car for work and not sure the equity I have would get me something reliable enough to last the length of the dmp. My current car is cheap to run and at three years old I’m hoping will not run into mechanical problems just yet.

I ran a successful childcare setting for 18 years but underfunding by the government when they introduced 30 “free” hours for parents hit the sector hard. Couple that with increasing wage costs and then a pandemic, it was a perfect storm. I tried for as long as possible to keep everything going but finally admitted defeat in August when SC said they could only help me if I was employed.

I have been employed for four weeks now and hoping to move forward 😊

Sea_Shell

PrettyWoman said:

TheAble said:

A few observations:

£100 on entertainment - hard to justify when you're in debt;
£40 on hair - similarly;
£50 on clothing - similarly. You've got plenty of clothes already, no?
£100 into pension - how big's your pot and when do you plan to retire? If your pot's sufficiently large you may wish to consider dropping this;
£33 on internet - if this is your half of a shared cost i.e. £66 it's high. Can be got for much less;
£65 to emergency fund - you have £4000 in cash already. But I've no expertise on DMPs so will leave to others to comment on your proposed strategy;
£50 on presents - a lot if it's just you and your husband? Again hard to justify when you're so far in the red.

Another idea to consider throwing into the mix is selling your car to clear the HP and buying something cheaper. Yes you may need a car but do you need your current car? Up to you though.

Of course you have to be honest with yourself and ask yourself how and why you accumulated all these debts in the first place. You had your own business so maybe covid's part of it but there's maybe more than that, ie a lack of self discipline.

£40 on hair, I have changed hairdresser and stretched appointment an extra week to 7 weeks instead of 6. My company have a dress code and a standard of appearance, and I am customer facing in a sales role. It is in my terms and conditions of employment.

This bit stood out to me.  What exactly does your contract say?  Can your employer insist that you have your hair in a certain style/colour.   Are you not allowed to let your roots show?    Surely you'd be allowed to let your natural hair grow and tie it up.   I know that "inbetween" stage of growing your hair can be painfully slow.

If you do dye your hair, can you next get it dyed back to your natural colour, even if that is grey?

fatbelly

PrettyWoman said:

fatbelly said:

That's correct. You are borderline between a dmp and an iva so I'd start with a dmp and take it from there

I’m not sure of the difference between a dmp and an iva but SC said I had too many assets for an Iva?

An IVA is insolvency for someone with assets to protect. So their advice was a bit odd but we'll let that pass

alfadaz

PrettyWoman said:

£100 entertainment is my half of our pitch fees for our touring caravan. Justified, no, but if we take it off the pitch then we have to pay for storage anyway so probably not a massive cost saving.

I would look at selling the touring caravan.  You will free up cash and save £100/month.

peewhyeff

Can't see caravan listed as asset.  Could it be that caravan owned by someone else but Pretty Woman  has use of it by contributing to pitch fees.  I'm not judging but £8k M&S !!   and other cards too!
I hope you are able to sort something out. 
Apologies, I misunderstood the M&S card as being a storecard..
I am also worried for you, with the planned increase for the cost of  electric and  gas.  My advice on your situation is limited......more just an observation.   

pelirocco

peewhyeff said:

Can't see caravan listed as asset.  Could it be that caravan owned by someone else but Pretty Woman  has use of it by contributing to pitch fees.  I'm not judging but £8k M&S !!   and other cards too!
I hope you are able to sort something out. 

You do realise that its an M&S credit card ,not a store card for only spending in M&S ? And yes you are judging