IVA or DMP or DRO

edited 24 October 2022 at 9:41PM in Debt-free wannabe
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Jetjet_12Jetjet_12 Forumite
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edited 24 October 2022 at 9:41PM in Debt-free wannabe
Hi Everyone. So basically I am seeking advice with regards to my debts. I have approximately £16000 unsecured debts (Loans, 4 Credit Cards, Creation and Overdraft).Almost 2 years ago I was in contact with Stepchange and I really should have taken their advice of doing an IVA. But I was proud that I would be able to pull it off and pay my debts accordingly. However, I must admit I am finding it now more difficult. My Santander loan balance of £2800 will finish by March 2023 so I am thinking I don't have long to go. I am paying £438 per month for that.

Meanwhile I have been in touch with Barclays today and I have just agreed a repayment plan of £92 × 47 months. My credit card balance is £2747. Calculating it that means I would be paying £4324. So that means in interest alone I would have paid £1577. Now this really got me disheartened as we can barely make ends meet now plus the fact that we don't have any savings. I have also a little girl which I feel so sorry for coz I can barely provide for her needs. I do not have any priority debts and all my other credit cards are up to date but on minimum payment. 

I am not British but a permanent resident and I am hoping to get my citizenship next year. I am not sure if this will affect it? 

Plus we are hoping to be able to save for a mortgage in the next 2-3 years but is just finding it so hard with every little expense that we have. What would be your advice for me? I might be in touch with Stepchange again and see what their advice would be. 
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  • EssexHebrideanEssexHebridean Forumite
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    First step - as always - is to put together your SOA as without knowing your income and necessary outgoings it's not possible to say what will likely work best for you. the link to the SOA (Statement of Affairs)  calculator can be found in my signature. Complete it as openly and honestly as possible - and remember it needs to reflect what's going on right now - warts and all. There is no point in putting together an SOA that tells us (and you) what you "think" you should be spending - that just fools us into giving incorrect advice, but more importantly it will fool YOU into not really having control of your finances, too. Pay special attention to make sure you include things that are paid as big annual one-offs like any insurances that aren't currently paid monthly - those are easy to forget.

    Once you've done that ("format for MSE" then copy/paste into here) we can take a look, remind you about anything it looks like you might have missed, hopefully identify a few savings you might make and also someone here should be able to suggest which way might be best for you in terms of getting to grips with things. 
    🎉 MORTGAGE FREE 30/09/2016 🎉
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    2023 "Gym Neutral Fund" - £0.00/£280 (Membership taken 01/2/23)🏋🏻♀️ 2023/24 Gym cost per use: at 01/02/23 £280.00 per visit! (0) 🏋🏻♀️
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  • Jetjet_12Jetjet_12 Forumite
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    I think I am hyperventilating now looking at the figures.

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

    Household Information[/b]
    Number of adults in household........... 3
    Number of children in household......... 1
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 2373.56
    Partners monthly income after tax....... 1750
    Benefits................................ 87.2
    Other income............................ 0[b]
    Total monthly income.................... 4210.76[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 0
    Secured/HP loan repayments.............. 623.9100000000001
    Rent.................................... 1600
    Management charge (leasehold property).. 0
    Council tax............................. 170
    Electricity............................. 142
    Gas..................................... 187
    Oil..................................... 0
    Water rates............................. 25
    Telephone (land line)................... 0
    Mobile phone............................ 15
    TV Licence.............................. 14
    Satellite/Cable TV...................... 0
    Internet Services....................... 39
    Groceries etc. ......................... 450
    Clothing................................ 50
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 70
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 200
    Childcare/nursery....................... 0
    Other child related expenses............ 107
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 34
    Other insurance......................... 10
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0
    PH...................................... 300[b]
    Total monthly expenses.................. 4076.91[/b]
    [b]

    Assets[/b]
    Cash.................................... 11.2
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 8832
    Other assets............................ 0[b]
    Total Assets............................ 8843.2[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 0........(0)........0
    Hire Purchase (HP) debt ...... 8832.06..(251)......0<
    V12............................626.31...(78.31)....0<
    Ikano..........................519.8....(37).......0<
    Creations......................1828.75..(257.6)....0[b]
    Total secured & HP debts...... 11806.92..-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Loan...........................2383.9....438.1.....0
    Santander......................3115.68...73........0
    MBNA...........................1394......25........0
    Barclays.......................2715.34...92........0
    Virgin.........................2673......73........0[b]
    Total unsecured debts..........12281.92..701.1.....-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 4,210.76
    Expenses (including HP & secured debts). 4,076.91
    Available for debt repayments........... 133.85
    Monthly UNsecured debt repayments....... 701.1[b]
    Amount short for making debt repayments. -567.25[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 8,843.2
    Total HP & Secured debt................. -11,806.92
    Total Unsecured debt.................... -12,281.92[b]
    Net Assets.............................. -15,245.64[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • Jetjet_12Jetjet_12 Forumite
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    I also have an overdraft of 1500 which I have used but not sure where to put it in the SOA.
  • RASRAS Forumite
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    Thanks for the SOA.

    The overdraft goes in unsecured debt.

    A few questions.

    With respect to loans, can you add the end date for the loan.

    Who is the third adult and where is their income/contribution to the household income?

    You have a shiny car, car insurance, but no petrol, road tax, parking or maintenance? And £200 of other travel?

    Are you sure this is Hire Purchase rather than PCP or leased? And can you explain why you have a shiny car but no running costs AND pay other travel costs?

    V12, Ikano and Creations have obviously been used to buy new shiny things. Whilst you've obviously bought stuff, are you sure the debts are secured on those things?

    Is your partner fully aware of the situation.
    The person who has not made a mistake, has made nothing
  • edited 26 October 2022 at 9:01AM
    EssexHebrideanEssexHebridean Forumite
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    edited 26 October 2022 at 9:01AM
    OK - you've clearly got a significant issue with that shortfall - and while there might be some savings to be made in the SOA (Groceries, Maybe some tweaks to electricity in particular as that is high compared to your gas payment, clothing, probably internet, and there should be a contribution from the third adult added to income really) there are also so many things not making an appearance at all (contents insurance stands out to me, but also all the motoring costs mentioned above, entertainment, holidays and emergency fund) that will realistically cancel out most of the savings. 

    You mention that you save £30 a month towards Christmas and birthdays - does this realistically cover the household spend on these? Consider presents, extra/special food, travel to see relatives if that occurs, and anything else you spend on for those events - and decide whether £360 a year actually covers it - my guess is it doesn't. (I know it wouldn't for me and I don't have a child to buy presents for!) Also - if it is being saved then where is it? With less than 2 months to go ahead of Christmas now I'd be expecting to see more than £11 in cash assets to cover the expenditure at that stage? 

    Good solid question from RAS above re all the secured finance - what exactly are those loans secured ON? If it is a big flashy TV and similar items, and the loans are straightforward Hire Purchase agreements, then is there an option to simply stop paying and let them repossess? Or hand the items back and be able to terminate payments? 

    You are also showing all the debts at 0% - my feeling is that this is very much not the case though. Is anything at all on 0%? Have you double checked to see if any of the CCs can be BT'd to 0% cards? (My suspicion is it will be a no but you have nothing to lose by looking and applying if anywhere shows even a small chance of acceptance.)

    Bottom line is that unless you can find £600 more income, OR make £600 of savings on your routine household costs (Spoiler alert - that one's not going to happen), then you are going to have to stop making payments to the unsecured debt immediately. Initially you could ask the providers of all unsecured debt for breathing space - that will buy you a couple of months thinking and decision making time. That gives you time to complete the missing areas of the SOA, revise your budget going forwards, and to decide whether a DMP is going to be suitable for you or whether a different approach is needed. That's not my area so I'll leave one of our resident experts on debt solutions to advise on that aspect. Whatever route you go, it may be best to look at something that can be revised in March next year when the loan finishes as that will obviously free up a lump of money each month. 

    You've actually taken the hardest step by acknowledging that there is a problem and looking for help on it. Now it's time to build on that and start repairing the problem. I will say that I think you'd do best to put thoughts of mortgages o the back burner for the time being - I'm afraid your credit file is not going to emerge from this unscathed. Right now though that isn't your biggest concern so don't let that worry you. 
    🎉 MORTGAGE FREE 30/09/2016 🎉
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    2023 "Gym Neutral Fund" - £0.00/£280 (Membership taken 01/2/23)🏋🏻♀️ 2023/24 Gym cost per use: at 01/02/23 £280.00 per visit! (0) 🏋🏻♀️
    she/her
  • fatbellyfatbelly Forumite
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    It's definitely not an IVA situation.

    I'd be looking at a dmp on the unsecured debt as you can afford the secured debt.

    However. like the others I'm not sure that it actually is secured.

    can you talk us through the following

    Hire Purchase (HP) debt ...... 8832.06..(251)......0<
    V12............................626.31...(78.31)....0<
    Ikano..........................519.8....(37).......0<
    Creations......................1828.75..(257.6)....0[b]


  • Jetjet_12Jetjet_12 Forumite
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    With respect to loans, can you add the end date for the loan. 15 March 2023

    Who is the third adult and where is their income/contribution to the household income? Stepson. No contribution yet as just turned 18, attending college full time and has ongoing health issues

    You have a shiny car, car insurance, but no petrol, road tax, parking or maintenance? And £200 of other travel? My husband covers the petrol, road tax and maintenance. It seems I forgot to include car insurance cost though.

    Are you sure this is Hire Purchase rather than PCP or leased? And can you explain why you have a shiny car but no running costs AND pay other travel costs? It is PCP. I have just checked. The travel cost is for my commute. 

    V12, Ikano and Creations have obviously been used to buy new shiny things. Whilst you've obviously bought stuff, are you sure the debts are secured on those things? I need to check on this one actually.

    Is your partner fully aware of the situation. He is. 
    Thanks for taking the time to make me reflect on my current situation. Bit of a back story. I had a good income a few years ago and good credit score, etc. The car and most of the stuff i took were done before i had a setback.  Life gave me a very bitter pill to swallow. My mom was diagnosed with breast cancer in the Philippines. I had to pay for probably 85-90% of the treatment. She had mastectomy (£1500-2000) then 18 rounds of chemotherapy. One chemo drug alone was costing me on average of £1850 every 21 days and she had 18 of those plus other drugs, scans, blood test etc. These don't include planned hospital admission, professional fees of a few consultants and also sudden emergency hospitalisation. I also get paid at the end of the month so it was a struggle. I saw the loans and credit card as a way of keeping my head afloat not thinking of the repercussion at that time as my goal was to just find money for her treatment. She is okay now but I am suffering from the aftermath of all these money lending. I had tried to make it work hence Ive reached this far with only 5 months left on my loan but with the rising cost of living now I am at my wits end and is struggling to cope hence I have decided to reach out. 


  • SanguineOnSaturnSanguineOnSaturn Forumite
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    My husband covers the petrol, road tax and maintenance

    Is this not also coming from the 1750 listed as partners income then?

  • kimwpkimwp Forumite
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    My husband covers the petrol, road tax and maintenance

    Is this not also coming from the 1750 listed as partners income then?

    Ideally jet-jet12, you do a whole house SOA - all income, all outgoings. If you have separate finances, then just do yours - just your income, just your commitments (but noting which bills are solely yours, solely his and shared alongside each item, otherwise there will be lots of questions about the numbers being unusual)
    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • RASRAS Forumite
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    You need either to include all income and expenditure of all parties, or only your own income and only your expenditure.

    You should still be getting CT for the step-son until he finishes college. And if he has another parent, she needs to be be chased for support as well.
    The person who has not made a mistake, has made nothing
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