Horrified. Minimum payments for life or DMP

Callister0405

Hi all.
As the title states I am completely horrified at the state of my finances and the huge sum of debt. Over £30k of debt 

I have lurked around the forum for a few months as I’ve come to realise this is a problem I must deal with. 

I did complete a SOA, however it shows I am 500+ short for minimum repayments, however I always manage to
make my minimum payments but it is a struggle. I think I need to sit down and redo SOA and I will post it. I do end up having to use a CC for things towards end of the month and my wage goes in and goes straight back out again. 

I have approx 8 credit cards, most of them high interest, Aqua card is my worst £5948 with APR 39%. 2 loans and a car on HP.

i know the forum encourages no judgement and I have no reason to explain myself but to try and understand how I ended up in this mess; we as a family had a lot of grief and sorrow in a short space of time. I think I tried to make up for this with “things” for short lived happiness. When really I should’ve just been grateful of how fragile and wonderful life is. My eldest daughter starts university this  year and due to my income she will get little student finance, I feel terrible that I will barely be able to support her. 

I just feel ashamed of myself, In 2018 I had approx £12k in savings and now I’m sitting with over £30k debt. 

I had hoped doing a SOA would make me see where I could cut back and start increasing what I pay beyond the minimum payments, as I’d prefer to just pay these off. I hadn’t realised how bad it truly was until I did this and I don’t think I have any hope unless we don’t eat or heat! 

If I go for DMP self managed is there anywhere that had a guide or template letters?

 My biggest concern in what option I chose is the worry about my car, I have 18 months until it’s due to be paid off or changed, I usually just change it. As I need a reliable car for work. Will being in a DMP stop this being an option? No car = no work for me as I work in the community visiting people in their homes. If I go for DMP does that mean I would have to include my car finance or can I continue my car payments? 

Any advice would be really appreciated.

Callister0405

Has anybody been in a dire situation and managed to continue making minimum repayments? Does the balance eventually come down or will I be paying these until my dying day?

RobM99

Post the SOA and I'm sure the forumites can help.

You've made a major step forward by not hiding from it any more.

born_again

Speak to someone like

https://www.stepchange.org/

Debt charity. 

Callister0405

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

Monthly Income Details[/b]

Monthly income after tax................ 2300

Partners monthly income after tax....... 840

Benefits................................ 86

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

Total monthly income.................... 3226[/b][b]

Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 218

Rent.................................... 430

Management charge (leasehold property).. 0

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

Electricity............................. 60

Gas..................................... 80

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

Water rates............................. 0

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

Mobile phone............................ 85

TV Licence.............................. 14

Satellite/Cable TV...................... 21

Internet Services....................... 48

Groceries etc. ......................... 280

Clothing................................ 35

Petrol/diesel........................... 60

Road tax................................ 18

Car Insurance........................... 52

Car maintenance (including MOT)......... 30

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

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

Childcare/nursery....................... 440

Other child related expenses............ 40

Medical (prescriptions, dentist etc).... 50

Pet insurance/vet bills................. 28

Buildings insurance..................... 0

Contents insurance...................... 0

Life assurance ......................... 30

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

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

Haircuts................................ 10

Entertainment........................... 0

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

Emergency fund.......................... 25

Union................................... 17

Professional fee ....................... 12[b]

Total monthly expenses.................. 2133[/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]

Secured & HP Debts[/b]

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

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

Hire Purchase (HP) debt ...... 9362.....(218)......12[b]

Total secured & HP debts...... 9362......-.........-   [/b]

[b]Unsecured Debts[/b]

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

Creation.......................560.......46........16

Fluid..........................2112......75........32

Dad (repayment)................1500......100.......0

Capital one....................522.......48........31

Credit union ..................250.......46........6

Next...........................960.......49........24

Vanquis .......................1350......63........35

Updraft .......................10035.....240.......16

Lendable ......................5147......333.......28

Novuna ........................1900......39........0

HMRC ..........................1180......30........0

Argos..........................2340......110.......36

Aqua...........................5948......243.......39

Zopa...........................3960......70........11

118............................1540......62........26[b]

Total unsecured debts..........39304.....1554......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,226

Expenses (including HP & secured debts). 2,133

Available for debt repayments........... 1,093

Monthly UNsecured debt repayments....... 1,554[b]

Amount short for making debt repayments. -461[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 0

Total HP & Secured debt................. -9,362

Total Unsecured debt.................... -39,304[b]

Net Assets.............................. -48,666[/b]

It’s so shocking. 

Our mobile phone covers eldest daughter also as she moved to uni last week and I wanted to continue paying it for her even just for her first year as she’s quite far from home.

My contract ends soon so I will move to pay and go. 

I think I am beyond managing it.

Callister0405

Thanks born again. I will try there

sourcrates

born_again said:

Speak to someone like

https://changesindebt.co.uk/

Debt charity. 

I wouldn`t use this company for debt advice, its initial advice may be sort for free, but it smells of being a lead generator for certain fee charging debt management companies, which you should really try to avoid.

They are usually geared to selling you an IVA, which may not be totally appropriate for you.

Only the debt charities in my signature offer free advice and charge no fee`s for debt management (other solutions may have a statutory fee to be paid).

Being in debt management will inevitably result in defaults on your credit file, this cannot be avoided, so your ability to obtain credit will be severely impacted, you will find you need to adopt a totally new attitude to money and how you deal with credit, this is why saving a good emergency fund is imperative, you should also try to add to this fund monthly as well.

You may have to keep your car longer, or even buy something cheaper, if you decide to go self-managed (best option) then you can choose how things are run, your car finance will be a priority debt, the rest are all non-priority debts.

Good budgeting is essential, you separate your essential debts, your mortgage or rent/council tax/food/utilities and your car finance, etc, from your non-essential debts, which is everything else basically, as previously mentioned, you must have an emergency fund, whatever is left, referred to as your "disposable income" can be distributed between your non-essential creditors, so you repay your current borrowings, at a reduced rate, over a longer period of time, with (hopefully) all interest and charges stopped.

Just a note regarding interest, creditors do not always stop charging you interest straight away, some refuse completely, although they are a small minority, but to avoid this becoming a problem, we recommend you try to have all your accounts defaulted prior to starting debt management, this can be easier said than done, as FCA guidelines tell them to do the opposite, as in don`t default, but make an arrangement instead, *** so it can be an issue, but it`s usually resolved by a combination of non-payment, and complaining as much as you possibly can to your lender, as I said, it`s a whole new ball game from what you will be used too.

*** Arrangement to pay markers stay on your credit file for 6 years from your last payment, so potentially quite a long time.

Defaults stay on file 6 years from date of default, so you have a clear 6-year window till your credit file recovers.

RobM99

Plan A. Reduce mobile and presents. 

No council tax or water rates?

Callister0405

Hi my rates are built in to my rent payment and I think our water rates are included in our monthly payment. We are in NI so I think water rates are different. 

So I could keep the car until the end of the term at least and continue to pay it? If I were in DMP I probably could not afford to buy another car and I’d have defaults I may not be able to renew as I’d imagine it’s a new credit check but I’d have the possibility of looking for a new job by then. I just don’t think I would get as good a position as I have now. 

I do get overtime but it’s difficult to predict could be £300 one month and nothing the next.

I did think about opting out of pension but I don’t think it would give me enough to make much more of a payment as I would pay more tax & it’s an NHS pension, which would probably be daft to opt out of. 

I just wanted to try and get on top of it and pay it all how it should be done but I don’t think it’s a reality anymore.

Callister0405

Yes I can reduce gifts and look at handmade crafty things for Christmas. Once my contract is up I will move to pay and go. I have been looking for other internet as we are with Virgin and it seems to have increased quite a bit.

Callister0405

Ok thank you for all the advice. So I should stop payments and hope that they default BEFORE starting DMP? 

All unsecured debts must be included? I will read plenty about it beforehand. 

Yes, I used to be so good with budgeting and having various savings accounts for different things I cannot believe the mess I am in now. And it’s scary how quickly it has happened and that I thought I was managing it until 3/4 months ago. 

As I’ll lose all access to credit is it advisable to increase what I’ll save per month? Or do they have a set amount that you can’t go over when entering a DMP?