Drowning - Help

Floss

Lenners134 said:

Floss said:

Can I just check that there is just you, no children? But you have £100 for childcare and £250 for other travel on top of your petrol cost of £80?

I have a 10 year old son although he lives with his mum.  I help out with food\all the sport he does\school trips etc

Is that a formal maintenance agreement or just what you're asked for? It may be beneficial to get that formalised if it isn't already, so that money is not seen as repayment monies.

Lenners134

Floss said:

Lenners134 said:

Floss said:

Can I just check that there is just you, no children? But you have £100 for childcare and £250 for other travel on top of your petrol cost of £80?

I have a 10 year old son although he lives with his mum.  I help out with food\all the sport he does\school trips etc

Is that a formal maintenance agreement or just what you're asked for? It may be beneficial to get that formalised if it isn't already, so that money is not seen as repayment monies.

It's informal.  I pay for his swimming and his football fees, everything is adhoc

fatbelly

Lenners134 said:

fatbelly said:

Some of the items seem Ok

Some of the items seem a bit high - mobile phone, Sky, Entertainment, haircuts

Some of the items seem like they could go up if needed - food.

However, I don't think any amount of juggling will allow you to continue making those debt payments

Your choice is between a dmp that is going to take 5 years or bankruptcy with a 3-year payment from income.

I don't think a £800 would cause any problems provided you need it. I don't know if you are in the sort of job where bankruptcy would be a problem?

Maybe start the dmp and see how it goes.

If I go down the DMP route, do people recommend managing this myself or should I go through someone like Step Change? 

I don't think Bankrupcy would affect my job as I don't work in the finance industry but this just seems like a real last resort to me..It could also affect my living arrangements as I'm pretty sure my landlord would want me out if I did declare myself bankrput.

Entirely your choice whether to self-mange or go through stepchange.

I agree bankruptcy is a last resort  - so hold it in reserve - but your landlord will be OK with it as long as you are looking after the place and paying your rent regularly. Why would he take a chance with an unknown tenant?

Rob5342

I'm in a debt management plan and I've done it both ways. Stepchange are good as they take care of all the correspondence and payments for you which makes it really easy. Doing it yourstcan be more flexible, especially when it comes to wanting to make accounts default or stopping payments when you find out debts are unenforceable.

Whichever you choose make sure the debts default before you start the plan, as they drop off your credit file sooner then (6 years after the default date). I made the mistake of going straight into a dmp and a year later some of my accounts are still marked as arrangement to pay, which means they won't drop off until 6 years after I have paid then off.

enthusiasticsaver

I would not  go bankrupt  but a DMP looks unavoidable.  I would approach stepchange initially but later on you may wish to switch to self managed.  As others have said you need a clean bank account not linked to your debtors and cancel the direct debits for all debtors and non essentials.  Rent and utilities are essentials. You are allowed to account for child maintenance so make sure that stepchange are aware of that. 

Floss

Lenners134 said:

Floss said:

Lenners134 said:

Floss said:

Can I just check that there is just you, no children? But you have £100 for childcare and £250 for other travel on top of your petrol cost of £80?

I have a 10 year old son although he lives with his mum.  I help out with food\all the sport he does\school trips etc

Is that a formal maintenance agreement or just what you're asked for? It may be beneficial to get that formalised if it isn't already, so that money is not seen as repayment monies.

It's informal.  I pay for his swimming and his football fees, everything is adhoc

You should record that as maintenance to ring-fence it.

Lenners134

Rob5342 said:

I'm in a debt management plan and I've done it both ways. Stepchange are good as they take care of all the correspondence and payments for you which makes it really easy. Doing it yourstcan be more flexible, especially when it comes to wanting to make accounts default or stopping payments when you find out debts are unenforceable.

Whichever you choose make sure the debts default before you start the plan, as they drop off your credit file sooner then (6 years after the default date). I made the mistake of going straight into a dmp and a year later some of my accounts are still marked as arrangement to pay, which means they won't drop off until 6 years after I have paid then off.

Thanks Rob. 

Typically how long do accounts take to default?  Did you speak to your creditors before defaulting or did you just stop payments all together?

I've seen a YouTube video about making token payments, say a £1 a month whilst I get back on my feet.

Is this recommended or do I just cancel the direct debits and not pay anything until they default my accounts?

How did you deal with the letters\phone calls from the banks etc asking for payment?

Sorry for all the questions but I want to get this all clear in my mind before I take the next steps

RAS

Lenners134

Making £1 payments prolongs the agony. You want the creditors to default as quickly as possible, so that your credit record starts to clear up after 6 years.

Creditors can't take legal action until they defaulted you, so give them the incentive to get on with it.

MovingForwards

Looking at your budget I'd be increasing food to £200 per month. Which wouldn't be unrealistic now for a single person.

Add £10+ pm for medical as this covers eye tests, prescription charges, dentist, over the counter meds etc. As you drive, you should be having an eye test every 2 years (about £20) and even the cheapest Specsavers glasses are about £20.  Then there's the occasional sprain or pain requiring OTC meds. Prescriptions are nearly £10 per item. Annual dental check up is about £20. So that's about £70 you have to find as there's nothing in your budget to cover it.

EssexHebridean

A note about increased amounts - make sure where you are putting down things like "£10 - medical" which of course are an "in case" rather than a regular payment out that you do actually save this money for that very "just in case" situation. Otherwise when something comes up that you need a couple of prescriptions, on a tight budget you will be scrabbling around for pennies, and that is when the temptation to hit the credit again can bite. Same with anything else you budget for monthly but pay less often - set up a savings account - or even accountS where you can stash the money each month so it's there when needed.