Arrangement to pay help

Newmum92

Hi, thanks for the message. I have gone through all my bills, they are all accurate. The reason I have put £10 for TV licence is because my partner contributes the rest. Also haven’t listed council tax or life insurance as that comes out of his account if that makes sense. 

MEM62

Gas and electricity likely to be under-estimated too.  Particularly bearing in mind recent increases.  

Newmum92

MEM62 said:

Gas and electricity likely to be under-estimated too.  Particularly bearing in mind recent increases.  

MEM62 said:

Gas and electricity likely to be under-estimated too.  Particularly bearing in mind recent increases.  

Hi thanks for the message. I did a meter reading 2 weeks ago and my current bill based on that is £130. But yes will increase soon again I imagine, by how much I do not know. 

Sncjw

Could your partner work more hours? 

Newmum92

Sncjw said:

Could your partner work more hours? 

Hi, he works part time as he looks after our son half the week while I work- we can’t afford full time nursery. And I earn more. 

Would be helpful to have some answers to my original questions on the post if possible. 

Angry_Bear

You need to know have a plan if you want to deal with your creditors yourself - and lots of people do, there's nothing I've ever seen to suggest that they "play ball" more with Step Change or PayPlan than if you do it yourself.

Ideally you want them to default your accounts as soon as possible, as Sourcrates says, this is of benefit to you even if it sounds scary.

Your creditors will want to see an SOA and know that you're treating them all "fairly". I would strongly suggest having another version of your SOA that allocates a bit more to expenses so that you will be able to save a small emergency fund and not set yourself up to fail. It's not a bad idea to show your creditors an SOA that only has a very small amount "free" for debt repayments, then build up a pot to be able to offer them full and final settlements in 6 months or so (there's a long and useful thread on F&Fs somewhere). 

At the moment your SOA is a bit confused because you have both you and your partner's income but don't account for all the bills you both pay. Are the debts yours or joint? Make sure your SOA reflect this (i.e. is entirely yours, or is completely joint).

For now, I'd write to your creditors telling them that you are unable to meet your contractual minimums and offering a token payment of £5 or even £1 per month while you arrange a repayment plan. Keep it at that level while you build up a buffer and let them default you.

fatbelly

They're not allowed to treat self-plans differently from managed ones - that was established in the old OFT  guidelines that became the current FCA ones.

Now we've seen your soa it's a definite debt management plan at something like £500 per month.

Once you get going on it, you'll be fine

enthusiasticsaver

Newmum92 said:

Hi everyone 

thanks for the replies so far it’s good to have some honest advice. For what it’s worth I’m very ashamed about the debt I have racked up. In terms of reasons behind the debt, as !!!!!! poor as this sounds, it has been pure stupidness, ignorance and just spending what I don’t have. Over the past 10 years since leaving uni on severs occasions I have consolidated, and a huge mistake was the AA loan which was supposed to my breakthrough moment by consolidating everything, and within the space of a year I’d racked up more debt. I have had a light bulb moment and I am going to watch each penny I spend, budget for luxuries that I want and a positive is that I have a decent income. 

Here is my SOA 

[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......... 1

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

Monthly Income Details[/b]

Monthly income after tax................ 1900

Partners monthly income after tax....... 670

Benefits................................ 84

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

Total monthly income.................... 2654[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 866

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

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

Management charge (leasehold property).. 0

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

Electricity............................. 70

Gas..................................... 60

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

Water rates............................. 37

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

Mobile phone............................ 38

TV Licence.............................. 10

Satellite/Cable TV...................... 10

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

Groceries etc. ......................... 300

Clothing................................ 5

Petrol/diesel........................... 70

Road tax................................ 0

Car Insurance........................... 42

Car maintenance (including MOT)......... 10

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

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

Childcare/nursery....................... 435

Other child related expenses............ 20

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

Pet insurance/vet bills................. 23.5

Buildings insurance..................... 5

Contents insurance...................... 5

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

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

Presents (birthday, christmas etc)...... 10

Haircuts................................ 20

Entertainment........................... 10

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

Emergency fund.......................... 50[b]

Total monthly expenses.................. 2096.5[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 285000

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

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

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

Total Assets............................ 285000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 204000...(866)......1.99[b]

Total secured & HP debts...... 204000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

AA loans.......................20100.....354.......10.9

Lloyds credit card ............10400.....145.......38

Virgin credit card.............5400......112.......30

Very ..........................1100......50........40

Starling overdraft ............5000......58........15

Barclays overdraft ............5000......130.......45

Mbna CC........................1380......51........38

Barclaycard ...................4400......147.......45[b]

Total unsecured debts..........52780.....1047......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,654

Expenses (including HP & secured debts). 2,096.5

Available for debt repayments........... 557.5

Monthly UNsecured debt repayments....... 1,047[b]

Amount short for making debt repayments. -489.5[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 285,000

Total HP & Secured debt................. -204,000

Total Unsecured debt.................... -52,780[b]

Net Assets.............................. 28,220[/b]

FYI- council tax comes out my partners account and is all paid up. 

No need to be ashamed. 

You have fallen into the trap of consolidating which we never recommend on here as it just kicks the can down the road and usually leads to higher debt as it delays the moment you need to deal with it.  I don't think you have any option but to default so although obviously we do not know your profession it is not like a DMP  is announced like a bankruptcy so I do not know how they would know unless you tell them. The interest rates are very high so doing a DMP will stop that and allow you money to live. The TV license repayment is incorrect so you need to make sure there are no other inaccuracies. Why isn't the car shown under assets? Be wary of setting the DMP repayment too high.  You need to make sure you can live to that budget.  A lot of people are relieved once a DMP is set up and they can see that the debt is actually coming down.  

fatbelly

Good advice. The other thing (and this is easier with a diy plan) is that if you can save on the side while in a dmp, you can finish off with full & final settlements. I notice you have a large spend on childcare. At some point that will drop out and you should have more surplus.

Newmum92

sourcrates said:

Its a pretty simple scenario debt management, if a creditor doesn't accept your payment offer, you still pay them that anyway, it just hastens up the process of the creditor offloading the debt and selling it onwards.

It makes no difference one way or the other if a creditor accepts the payment amount you are offering, or not, if they are not happy with it, they simply sell the debt on, that doesn't affect you in the slightest, you just pay whoever is writing to you.

Ideally you want all your accounts to default, this benefits you in two ways, first all interest and charges stop, forever, second, you have a clear 6 year window for your credit file to recover, that is what`s called good debt management on your part my freind.

Hi thanks for the message. Just a quick follow up question if you don’t mind… I’m still very anxious and wary but have felt a lot more reassured since being on here. My one anxiety now is the fact I’m a home owner. Do you know what the risk is of a creditor seeking a CCJ / charging order due to the fact I have a home (with a mortgage)? Tbh I really don’t see what alternative I have as my debt payments are £1000 a month and I no longer can afford that but I guess I’m just stressing that this could inevitably happen and then I’ll be really up !!!!!! creek- with my job in serious jeopardy too if they seek a CCJ. 

Thank you!