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Best way forward?

ThunderHoof
ThunderHoof Posts: 92 Forumite
Third Anniversary 10 Posts Name Dropper
in Debt-free wannabe
Hi, I've been struggling to make the monthly payments recently, although I am due a £500 backpayment for a payrise I don't think that's going to put much of a dent in my monthly outgoings. From what I understand a DMP from the likes of stepchange is the least damaging option as far as my credit record is concerned. I can put aside maybe £250-300 a month to pay off my debts, does this seem like a reasonable amount for a DMP? I'm not currently in arrears and am managing to pay all my priority debts on time. I have stopped the problems that were causing the debt to accumulate so it's just a matter of trying to pay it all off now.

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0[b]

Monthly Income Details[/b]
Monthly income after tax................ 1632.51
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 1632.51[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 105
Electricity............................. 114
Gas..................................... 0
Oil..................................... 0
Water rates............................. 23
Telephone (land line)................... 0
Mobile phone............................ 11
TV Licence.............................. 0
Satellite/Cable TV...................... 10
Internet Services....................... 22
Groceries etc. ......................... 120
Clothing................................ 5
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 110
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 1170[/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
Loan...........................3500......210.......90
Newday Amazon..................3050......140.8.....18
Virgin.........................5800......175.6.....18
Overdraft......................1266......0.........40[b]
Total unsecured debts..........13616.....526.4.....-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 1,632.51
Expenses (including HP & secured debts). 1,170
Available for debt repayments........... 462.51
Monthly UNsecured debt repayments....... 526.4[b]
Amount short for making debt repayments. -63.89[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -13,616[b]
Net Assets.............................. -13,616[/b]

[i]Created using the SOA calculator at www.stoozing.com. 
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Comments

  • enthusiasticsaver
    enthusiasticsaver Posts: 16,137 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    I would contact stepchange but yes a DMP does seem to be an option for you. You should let the debts default and save up an emergency savings account as you won’t hav3 access to credit. You need a new basic bank account separate from the debts and overdraft. Check out the DMP sticky. 
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.

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  • ThunderHoof
    ThunderHoof Posts: 92 Forumite
    Third Anniversary 10 Posts Name Dropper
    enthusiasticsaver said:
    I would contact stepchange but yes a DMP does seem to be an option for you. You should let the debts default and save up an emergency savings account as you won’t hav3 access to credit. You need a new basic bank account separate from the debts and overdraft. Check out the DMP sticky. 
    Thanks, when it comes up to setting another bank account I guess I need to buy a new passport as I don't have any valid ID?
  • Sncjw
    Sncjw Posts: 3,582 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Check what the bank accepts as id
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment paused to pay off cc 

    Starting balance £66,565.45

    Current balance £56099

    Cc around £3200 

  • EssexHebridean
    EssexHebridean Posts: 24,714 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 2 February 2022 at 1:44PM
    ThunderHoof said:

    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 1
    Number of children in household......... 0
    Number of cars owned.................... 0[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 1632.51
    Partners monthly income after tax....... 0
    Benefits................................ 0 You've checked you're not entitled to anything here?
    Other income............................ 0[b]
    Total monthly income.................... 1632.51[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 600
    Management charge (leasehold property).. 0
    Council tax............................. 105 Single person discount applied?
    Electricity............................. 114 This seems quite high - why so much? We're almost entirely electric, just use gas for cooking, and currently pay under £80 a month for both. I Am expecting this to increase shortly but right now that's where we're at. 
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 23 Metered I assume? If so you may be able to reduce use a little?
    Telephone (land line)................... 0
    Mobile phone............................ 11 You could potentially shave a small amount off here.
    TV Licence.............................. 0 Is this correct? You never watch TV as live, or use iPlayer? 
    Satellite/Cable TV...................... 10
    Internet Services....................... 22
    Groceries etc. ......................... 120 I reckon you could reduce this a bit with meal planning, careful shopping and batch cooking.
    Clothing................................ 5
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 20
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10 
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0 why nothing here? This is an absolute must - it's a false economy not to have it. And if you think you have nothing worth insuring - you do - think about replacement cost of even simple basics like your clothes if you lost everything. 
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 10
    Haircuts................................ 10
    Entertainment........................... 110 Nick £10 a month  from here for the contents insurance. I'm afraid that for someone who currently has a shortfall for paying debts this amount probably needs to reduce a bit anyway. 
    Holiday................................. 0
    Emergency fund.......................... 0 You need to start getting something saved here[b]
    Total monthly expenses.................. 1170[/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
    Loan...........................3500......210.......90 
    Newday Amazon..................3050......140.8.....18
    Virgin.........................5800......175.6.....18
    Overdraft......................1266......0.........40[b]
    Total unsecured debts..........13616.....526.4.....-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 1,632.51
    Expenses (including HP & secured debts). 1,170
    Available for debt repayments........... 462.51
    Monthly UNsecured debt repayments....... 526.4[b]
    Amount short for making debt repayments. -63.89[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -13,616[b]
    Net Assets.............................. -13,616[/b]

    [i]Created using the SOA calculator at www.stoozing.com. 
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

    Some notes marked in bold above... The interest rate on that loan is eye watering. 

    I'm going to agree that a DMP seems like the best route for you as you really need the interest to stop. 

    On the ID front, there are various options that can be used for money-laundering checks where there is no photo ID available. 

    The biggest question here is have you sorted out whatever the issue was that caused you to need to use credit in the first place? Are you still using credit cards on a month to month basis now? 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
    Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
    Balance as at 31/08/25 = £ 95,450.00
    £100k barrier broken 1/4/25
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • ThunderHoof
    ThunderHoof Posts: 92 Forumite
    Third Anniversary 10 Posts Name Dropper
    edited 2 February 2022 at 7:01PM
    EssexHebridean said:
    ThunderHoof said:

    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 1
    Number of children in household......... 0
    Number of cars owned.................... 0[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 1632.51
    Partners monthly income after tax....... 0
    Benefits................................ 0 You've checked you're not entitled to anything here?
    Other income............................ 0[b]
    Total monthly income.................... 1632.51[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 600
    Management charge (leasehold property).. 0
    Council tax............................. 105 Single person discount applied?
    Electricity............................. 114 This seems quite high - why so much? We're almost entirely electric, just use gas for cooking, and currently pay under £80 a month for both. I Am expecting this to increase shortly but right now that's where we're at. 
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 23 Metered I assume? If so you may be able to reduce use a little?
    Telephone (land line)................... 0
    Mobile phone............................ 11 You could potentially shave a small amount off here.
    TV Licence.............................. 0 Is this correct? You never watch TV as live, or use iPlayer? 
    Satellite/Cable TV...................... 10
    Internet Services....................... 22
    Groceries etc. ......................... 120 I reckon you could reduce this a bit with meal planning, careful shopping and batch cooking.
    Clothing................................ 5
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 20
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10 
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0 why nothing here? This is an absolute must - it's a false economy not to have it. And if you think you have nothing worth insuring - you do - think about replacement cost of even simple basics like your clothes if you lost everything. 
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 10
    Haircuts................................ 10
    Entertainment........................... 110 Nick £10 a month  from here for the contents insurance. I'm afraid that for someone who currently has a shortfall for paying debts this amount probably needs to reduce a bit anyway. 
    Holiday................................. 0
    Emergency fund.......................... 0 You need to start getting something saved here[b]
    Total monthly expenses.................. 1170[/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
    Loan...........................3500......210.......90 
    Newday Amazon..................3050......140.8.....18
    Virgin.........................5800......175.6.....18
    Overdraft......................1266......0.........40[b]
    Total unsecured debts..........13616.....526.4.....-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 1,632.51
    Expenses (including HP & secured debts). 1,170
    Available for debt repayments........... 462.51
    Monthly UNsecured debt repayments....... 526.4[b]
    Amount short for making debt repayments. -63.89[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -13,616[b]
    Net Assets.............................. -13,616[/b]

    [i]Created using the SOA calculator at www.stoozing.com. 
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

    Some notes marked in bold above... The interest rate on that loan is eye watering. 

    I'm going to agree that a DMP seems like the best route for you as you really need the interest to stop. 

    On the ID front, there are various options that can be used for money-laundering checks where there is no photo ID available. 

    The biggest question here is have you sorted out whatever the issue was that caused you to need to use credit in the first place? Are you still using credit cards on a month to month basis now? 

    I've checked and I'm not entitled to benefits, being a young man with no dependents or disabilities, and a reasonable income.

    Single person discount is applied, band B, should be band A though by my calculations so I'm requesting a review.

    I have been hit by the 50% energy price increase already because I only recently moved in and that's what was being supplied to the property, my direct debit may decrease significantly in a couple of months when they get a more accurate picture of what I use.

    Yes water is metered, rain water removal accounts for something like £100 a year of the bill, my usage of fresh water is only 135m3!

    Yeah no tv licence, haven't watched legacy tv channels for years, just Netflix and Youtube now.

    I'll take on board what you've said about insurance, as the front doors on these apartments aren't the most sturdy!

    I'm not using the credit cards any more, I set them to frozen. The situations that were causing me to build up debt have been resolved now, I had periods of redundancy but am now in a full time job that's about as secure as you can get.

    I'm currently on a reduced payment plan for the next 3 months on my cards, and a break from interest on my overdraft.

    Given that, what would be least damaging to my credit record, pay the £5x minimum for the next 3 months on the cards while putting all my income in a new basic bank account and then set up a DMP when the plans get close to their review date? At the moment I don't have any arrears or defaults you see. Obviously I'm not going to be applying for credit, but will still need to be able to get contracts for things like broadband and mobile phone service.


  • EssexHebridean
    EssexHebridean Posts: 24,714 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    On the insurance thing - it's not the sturdiness of your front door you need to be concerned about - it's the always present possibility of an electrical item malfunctioning. Think Grenfell Tower - there were a lot of folk there left literally without a spare pair of pants - that is truly NOT a situation you want to find yourself in for the sake of £10 or less a month. Jut get it sorted for goodness sake - it really isn't something you should delay while you think about it. 

    As far as your credit file goes, you'll already most likely have or be about to have arrangement to pay markers applied so the damage will already be done - I'd prioritise looking for the right way forward for you to get the debts managed and cleared rather than worrying about it to be honest.  You shouldn't have an issue with things like mobile phones and utilities so don't worry too much about that side of things.

    Personally I'd just stop paying the debts, stash anything you can away to form an emergency fund in that new account, yes, or preferably in a savings account linked to it that might actually pay you some interest. (An EF should really be separated from your current account as it needs to be ring-fenced to only use in a proper emergency). The hope is that inside 3 - 6 months two things happen - the debts default, meaning interest will stop, and you have a decent savings pot ready for your EF. Then you can look to enter into a DMP and get a proper plan in place to get things cleared. Allowing that you are going to get defaults it makes sense to get them as soon as you can. 


    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
    Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
    Balance as at 31/08/25 = £ 95,450.00
    £100k barrier broken 1/4/25
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • ThunderHoof
    ThunderHoof Posts: 92 Forumite
    Third Anniversary 10 Posts Name Dropper
    So as an update, I've got contents insurance cover, £40 a year with £31 cashback!

    Sold my camera which I haven't used much in a while so got around £1k in my ISA now.

    I've also created a DMP paying out £300 a month which is manageable, Halifax immediately defaulted my bank account with the overdraft, with the 2 credit cards is it worth phoning them up to explain the situation a bit more and ask for them to default the accounts?
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