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Help and Advice please!

Siglid
Siglid Posts: 1 Newbie
in Debt-free wannabe
Much as most people on this forum I’ve reached a point I need to do something about my debts.


Background
Ive ended up in this situation over a number of years, main factors for me are multiple and include
  • 2 periods of being out of work, 
  • poor mental health (and using shopping as a crutch)
  • A drug addiction that cost c£200 a month - now addressed and no longer a factor, other than the financial consequences
  • Poor financial awareness and limited maths skills (taking courses to address both issues, but I will always have issues with numbers)
  • Long, long hours of work and weekend working which ultimately added to me taking my eyes off the ball
  • Supporting a partner with PTSD and depression and family life with 2 kids.
Current situation
My partner is aware of the situation, albeit we’ve not discussed the overall balance for a while and can’t as they are very fragile and have been for some time, Total credit card is c40k. We live fairly frugally and haven’t used cards for months now, but with 0% periods coming to an end, cost of living increases, return to office and associated costs etc it’s now looking like I can never realistically repay with the monthly payments and current interest rates.

 We have one car (partners) and I’ve recently paid off a small loan. My partners salary only covers their own bills, so I cover all household bills and spending money for groceries, kids clubs etc.

I have no missed payments and I’m not behind on any bills.

I’ve put my SOA below.  I’ve a good number of questions.
  1. as I’m in Scotland, considering a DPP or a DMP - is there less likely to be issues with employment via a DMP vs DPP?
  2. I work in financial services, so very concerned the impact of defaults or missed payments on my employment - has anyone else been in this situation and what did they find helped or any learnings?
  3. How have people found surviving on a DMP / DPP - it looks from the outside that things become easier once adjusted to not having any credit facilities.

I’ve been in touch with Stepchange and I’d be looking at having 700 a month available for repayments, with full repayment in 6.5 years. Again the worry is the impact of defaults on my employment as I’d rather avoid over 12 years of AR markers on my credit record.


[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.................... 1[b]

Monthly Income Details[/b]
Monthly income after tax................ 3310
Partners monthly income after tax....... 0
Benefits................................ 136
Other income............................ 0[b]
Total monthly income.................... 3446[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 463
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 152
Electricity............................. 120
Gas..................................... 80
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 75 (this is my own mobile, 2 kids and partners)
TV Licence.............................. 13.6
Satellite/Cable TV...................... 53 (this includes broadband, tv and landline - most of this is broadband as I need the bandwidth as a developer)
Internet Services....................... 0
Groceries etc. ......................... 650 (this is all monthly costs not covered elsewhere)
Clothing................................ 65
Petrol/diesel........................... 150 (for my partners car)
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 150 (kids clubs, lunches and 7.50 a week pocket money)
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 50
Buildings insurance..................... 12
Contents insurance...................... 15
Life assurance ......................... 65
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 40
Entertainment........................... 150
Holiday................................. 50
Emergency fund.......................... 50[b]
Total monthly expenses.................. 2453.6[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 100000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 92187....(463)......1.69[b]
Total secured & HP debts...... 92187.....-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Mbna...........................15289.....401.......21
Natwest........................6150......93........7.2
Tesco..........................7600......153.......19
Loan...........................10300.....317.......3.59
Virgin.........................11100.....270.......26[b]
Total unsecured debts..........50439.....1234......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 3,446
Expenses (including HP & secured debts). 2,453.6
Available for debt repayments........... 992.4
Monthly UNsecured debt repayments....... 1,234[b]
Amount short for making debt repayments. -241.6[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 100,000
Total HP & Secured debt................. -92,187
Total Unsecured debt.................... -50,439[b]
Net Assets.............................. -42,626[/b]

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


Comments

  • EssexHebridean
    EssexHebridean Posts: 21,887 Forumite
    Name Dropper Second Anniversary Photogenic 10 Posts
    Siglid said:


    [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.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 3310
    Partners monthly income after tax....... 0
    Benefits................................ 136
    Other income............................ 0[b]
    Total monthly income.................... 3446[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 463
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 152
    Electricity............................. 120 How come the electricity is so much higher than the gas? usually when folk have both it's the opposite way round - you may be able to reduce usage to bring the electricity figure down.
    Gas..................................... 80
    Oil..................................... 0
    Water rates............................. 0 Note that this is included in the council tax as you are in Scotland.
    Telephone (land line)................... 0
    Mobile phone............................ 75 (this is my own mobile, 2 kids and partners) You said your partner covers their own bills, so why are you paying this?
    TV Licence.............................. 13.6
    Satellite/Cable TV...................... 53 (this includes broadband, tv and landline - most of this is broadband as I need the bandwidth as a developer)
    Internet Services....................... 0
    Groceries etc. ......................... 650 (this is all monthly costs not covered elsewhere) You need to break this down and start monitoring what you're actually spending where - a good solid budget DOES cover things so there is no "not covered elsewhere"
    Clothing................................ 65 This is a lot - why so much? 
    Petrol/diesel........................... 150 (for my partners car) Assume this is just "shared" motoring as your partner is covering their own bills? If so it seems like a lot... 
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 150 (kids clubs, lunches and 7.50 a week pocket money)
    Medical (prescriptions, dentist etc).... 0 
    Pet insurance/vet bills................. 50
    Buildings insurance..................... 12 You have done comparisons for this and contents ins to ensure you're getting a good deal, yes?
    Contents insurance...................... 15
    Life assurance ......................... 65 As above - compare and make sure you're not overpaying.
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50 Where is this being saved as you're showing no cash assets? Even if you've had birthday spending there should be something showing against building a cushion for Christmas. 
    Haircuts................................ 40
    Entertainment........................... 150 This feels like quite a lot for a household carrying the amount of debt you are, when the kids already have clubs etc paid for elsewhere? 
    Holiday................................. 50 Again - where is this being saved? And does £600 a year actually cover whatever holidays you have planned/booked? Remember to factor in travel, accommodation, spending money etc...
    Emergency fund.......................... 50[b] Again - where is this? 
    Total monthly expenses.................. 2453.6[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 100000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0[b]
    Total Assets............................ 100000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 92187....(463)......1.69[b]
    Total secured & HP debts...... 92187.....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Mbna...........................15289.....401.......21
    Natwest........................6150......93........7.2
    Tesco..........................7600......153.......19
    Loan...........................10300.....317.......3.59
    Virgin.........................11100.....270.......26[b]
    Total unsecured debts..........50439.....1234......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 3,446
    Expenses (including HP & secured debts). 2,453.6
    Available for debt repayments........... 992.4
    Monthly UNsecured debt repayments....... 1,234[b]
    Amount short for making debt repayments. -241.6[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 100,000
    Total HP & Secured debt................. -92,187
    Total Unsecured debt.................... -50,439[b]
    Net Assets.............................. -42,626[/b]

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


    Comments on SOA in bold...

    What bills does your partner pay that take all of their income? 

    Are you still using the cards, allowing that your income currently isn't meeting your outgoings according to this? Had you actually realised that there as a shortfall? 

    I'd urge you to have a really close look at that grocery/"everything else" figure - allowing that groceries for a family of 4 should be able to come in at no more than £300 - £350 a month, there is currently a great big chunk of money being lost each month on the basis of "we don't really know" - and that needs tackling and dealing with. That is not only the shortfall you currently have, but also a small amount to start with building an emergency fund and then looking to overpay the debts. 

    I'm wary that the above is an "aspirational SOA" - and that the things you have noted as having money set aside monthly to cover are in fact just currently being taken from that "lost" £300 or so a month. I'm also conscious that right now you seem to be taking the full responsibility of dealing with the debts all on your own - I'm not sure what percentage break down in the various areas of "cause" that you've listed above, but it feels as though it might be better for you & your partner to have a proper conversation about this, and then to tackle ALL your household expenses together, combining your income. Something to think about - you say your partner is "fragile" - so what happens if, god forbid, something happen to you tomorrow - and the first they know about the actual level of debt here is when they start opening post etc - how much more of a negative impact will that have? My suggestion would be - form yourself a plan of attack to deal with thigs, then be open and honest with each other and then work as a team to tackle things. 
    🎉 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
    SOA CALCULATOR (for DFW newbies): SOA Calculator
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