It’s time to tackle this mountain

Woodsey10

EssexHebridean said:

Woodsey10 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......... 1

Number of cars owned.................... 2 But you’re reducing this to one, correct?[b]

Monthly Income Details[/b]

Monthly income after tax................ 2560

Partners monthly income after tax....... 1850

Benefits................................ 87.2

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

Total monthly income.................... 4497.2[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 980

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

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

Management charge (leasehold property).. 0

Council tax............................. 202 Are you paying this over 10 months or 12? Paying over 12 months can help with budgeting.

Electricity............................. 137 Have you checked that this is sufficient - it seems a little low for an all-electric household. 

Gas..................................... 0

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

Water rates............................. 29.9

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

Mobile phone............................ 35 Is this for two phones? If so it’s a little high but not massively so - it will be worth looking for sim only deals once contracts are up though. 

TV Licence.............................. 12.47 Check this - I think it should be 13.25

Satellite/Cable TV...................... 45

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

Groceries etc. ......................... 300 I’d suggest keeping a spending tally on this for a few months to see if it’s accurate - it’s reasonably low for a family of 3 and that can sometimes be an indicator that not all spends are being accounted for

Clothing................................ 25

Petrol/diesel........................... 360

Road tax................................ 39.8

Car Insurance........................... 55.62

Car maintenance (including MOT)......... 40 Not a chance this will cover your expenses with the mileage you are doing looking at that fuel spend. Allowing that when you lose the second vehicle your associated expenses will drop, I’d suggest incorporating the money saved into contributions to your car maintenance fund. If you run into a surplus it will pay for road tax up front next time round for the remaining vehicle which is more cost effective. 

Car parking............................. 5

Other travel............................ 15 Will this increase at all when you are down to a single vehicle?

Childcare/nursery....................... 156

Other child related expenses............ 10

Medical (prescriptions, dentist etc).... 25 Can this be reduced at all by way of a prepaid certificate for prescriptions? 

Pet insurance/vet bills................. 55

Buildings insurance..................... 12

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

Life assurance ......................... 34.41

Other insurance......................... 4.5

Presents (birthday, christmas etc)...... 40

Haircuts................................ 0 sure you don’t need to budget anything here? 

Entertainment........................... 15

Holiday................................. 100

Emergency fund.......................... 100

Child Savings account .................. 60 I understand that you wouldn’t want to stop,p this entirely but right now your focus needs to be on clearing the debts which will then free up income along the line for savings as well as experiences etc. Maybe drop  to £10 a month right now though.

Wage switch weekly to monthly .......... 120[b]

Total monthly expenses.................. 3013.7[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 470000

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

Car(s).................................. 21000

Other assets............................ 2000[b]

Total Assets............................ 493000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 223765...(980)......1.64[b]

Total secured & HP debts...... 223765....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Mbna c/card (wife).............2612.8....46........0

H/fax c/card (wife)............4590.72...67........0

Family loan int. free..........10000.....0.........0

Virgin Phone...................324.......18........0

Lendable loan..................1030......35.4......0

Betterborrow loan..............4439......114.3.....0

Novuna Loan....................4632......136.......0

Novuna Loan....................4900......114.......0

Novuna loan....................5010......99........0

Novuna loan....................7185......122.......0

Zopa loan......................9604......210.......0

Mbna c/card....................2704.28...60........0

Barclaycard....................563.......80........0

Newday int.free................1014......27........0

Mbna c/card....................2243.63...64.52.....0

NatWest c/card.................4342......43........0[b]

Total unsecured debts..........65194.43..1236.22...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 4,497.2

Expenses (including HP & secured debts). 3,013.7

Available for debt repayments........... 1,483.5

Monthly UNsecured debt repayments....... 1,236.22[b]

Amount left after debt repayments....... 247.28 So - do you have this? If so that is an immediate amount you can start hitting one of the debts with…if you don’t have it, then your budget needs work![/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 493,000

Total HP & Secured debt................. -223,765

Total Unsecured debt.................... -65,194.43[b]

Net Assets.............................. 204,040.57[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Well done for putting together the SOA - I’ve made some comments within it in bold as you will see.

I’m inclined to agree with fatbelly about a DMP being the best way forwards for you here - I assume that the interest rates on some of those debts are going to be high as there are a number that look like short term/payday loan type lenders, getting those to default so the interest stops accruing might not be the easiest, but it will be worthwhile if you can do it.  Alternatively, you set the payments to everything for a little over the current minimum - rounding up to the nearest £5 or £10 above often works - then let everything tick over on those payments while refining your budget and throwing anything spare at the highest interest rate debt first - but my concern is with interest still going on this is going to be an unceasingly long slog, and very difficult to sustain. 

Well done on getting yourself clean of gambling for the past year - I assume you are already in contact with one of the organisations that are supporting you with this? If not then it’s well worth looking into as there are some valuable resources there. 

Yes reducing to 1 vehicle in the next 4-8 weeks approx. 

Council tax is over 10 months. Will look into changing this. 

Dual fuel, so I just put that into one payment. Is now down to £101 per month with a £193 rebate just received. 

Both mobiles are in contract. Mine is closest to ending later this year. 

We do really well with food budgeting. Batch up where possible. We are still achieving £75 per week. 

Car maintenance is one I need to rework based on 1 vehicle yes.

Other travel is our 3x a year trip to see wife’s family. They visit us also.

Prescriptions/medical costs, include dental check ups, eye tests and wife’s contact lens plan. 

Bonus. Haircuts are free, my mum took courses when I was young. 

Child savings reduced from £60pm to £20pm

No on the excess money. I’m currently rectifying a job from my self employed days that has gone wrong. Working on this alongside my main job. Costing approx £50 a weekend on materials. A large porcelain patio that has debonded. I’m 2 weeks away from finishing it (for the second time 🥳)
They are very nice people and it’s my duty to rectify. 

Oh and on the gambling, signed up to gamstop and self excluded for 5 yrs previous to gamstop. 

lillypoo

Hi woodsey

I'm not in a position to offer advice but wanted to say good luck.

I am at a similar point if the debt recovery journey to you although I got into this state for different reasons and I have no family to consider.  I stopped payments on a credit card on 1st May,  will stop payment on two others on 1st June. This month I've been keeping track of exactly where my money goes andcits been a real eye opener. The cc company I haven't paid has called my mobile 8 or 9 times and left automated voice mail. It felt a bit scary at first  now I just ignore it. They've sent one letter. 

I'm hoping to have six months to build up my emergency fund as well as save for next years essential bills AND I'm doing a small "s*d it fund" so that if I get a realky desperate urge to splurge I can do it (VERY RARELY!) without blowing everything out of the water.

I had done the quick online  assessment with step change and dmp came up as the best suggestion of resolution.

It's scary just not paying ...it goes against everything we have struggled to do for months/years. But from  all the advice on here I believe going for defaults is the best option.

So just wanted to wish you luck. I shall follow your story.

Woodsey10

Hi lillypoo, thanks I hope your journey goes as smoothly as possible too. 

I agree it does feel strange taking this step, especially as I was slightly proud I had never missed a payment before. It’s like I was holding on to my credit score and credit history as if it really meant something. I suppose similar to the loyalty people used to have by staying with the same bank for years on end. 

It’s taken me a couple of weeks to decide yes, go for it. 

When I come out the other side of this, obtaining credit will become an absolute last resort in life. Apart from a mortgage, everything needed will be saved for and any emergency repairs will have an emergency fund to call back on. 

A big benefit of starting this DMP will be the ability to save into an emergency fund. I’ve wanted to get an established fund going for a while and budget for home repairs, car maintenance etc. 

I too will follow your journey, stay strong and the very best of luck! 

Sly72

lillypoo said:

Hi woodsey

I'm not in a position to offer advice but wanted to say good luck.

I am at a similar point if the debt recovery journey to you although I got into this state for different reasons and I have no family to consider.  I stopped payments on a credit card on 1st May,  will stop payment on two others on 1st June. This month I've been keeping track of exactly where my money goes andcits been a real eye opener. The cc company I haven't paid has called my mobile 8 or 9 times and left automated voice mail. It felt a bit scary at first  now I just ignore it. They've sent one letter. 

I'm hoping to have six months to build up my emergency fund as well as save for next years essential bills AND I'm doing a small "s*d it fund" so that if I get a realky desperate urge to splurge I can do it (VERY RARELY!) without blowing everything out of the water.

I had done the quick online  assessment with step change and dmp came up as the best suggestion of resolution.

It's scary just not paying ...it goes against everything we have struggled to do for months/years. But from  all the advice on here I believe going for defaults is the best option.

So just wanted to wish you luck. I shall follow your story.

It is very scary ignore the letters and phone calls, stopped paying Nov 22 and defaults are just kicking in now, and debts been sold on. Next stage now is sorting out a monthly payment i can afford.

lillypoo

Sly72 said:

lillypoo said:

Hi woodsey

I'm not in a position to offer advice but wanted to say good luck.

I am at a similar point if the debt recovery journey to you although I got into this state for different reasons and I have no family to consider.  I stopped payments on a credit card on 1st May,  will stop payment on two others on 1st June. This month I've been keeping track of exactly where my money goes andcits been a real eye opener. The cc company I haven't paid has called my mobile 8 or 9 times and left automated voice mail. It felt a bit scary at first  now I just ignore it. They've sent one letter. 

I'm hoping to have six months to build up my emergency fund as well as save for next years essential bills AND I'm doing a small "s*d it fund" so that if I get a realky desperate urge to splurge I can do it (VERY RARELY!) without blowing everything out of the water.

I had done the quick online  assessment with step change and dmp came up as the best suggestion of resolution.

It's scary just not paying ...it goes against everything we have struggled to do for months/years. But from  all the advice on here I believe going for defaults is the best option.

So just wanted to wish you luck. I shall follow your story.

It is very scary ignore the letters and phone calls, stopped paying Nov 22 and defaults are just kicking in now, and debts been sold on. Next stage now is sorting out a monthly payment i can afford.

That's reassuring. Thank you

fatbelly

Your emergency fund will also constitute a fighting fund and in the later stages of the dmp can be used for full & final settlement offers.

sourcrates

Sly72 said:

lillypoo said:

It's scary just not paying ...it goes against everything we have struggled to do for months/years. But from all the advice on here I believe going for defaults is the best option.

It is very scary ignore the letters and phone calls, stopped paying Nov 22 and defaults are just kicking in now, and debts been sold on. Next stage now is sorting out a monthly payment i can afford.

Debt collection is often thought of as a scary experience, but really its not, its just someone doing a job, much like you probably do yourself, its the call handlers job to recover the debt, now these days the guidelines they must adhere too are far stricter than in the past, so the threats and intimidation just don`t happen any more, its all softly softly nowadays, affordability is key to any arrangement, as firms do not want to be faced with the wrath of the FCA.

You don`t even have to take the call anyway, you can request contact in writing only, its never been a better time in history to be in debt, pardon the pun, but all the odds are stacked in the debtors favour, you have GDPR (General Data Protection Regulations), tighter debt collection protocols, new legislation on statute barred debts coming in soon, there is no need for any of this experience to be bad, yes debt can be tough on you, but the options open to you have never been more easily accessible, or as easy to implement.

When call handlers refer to "collection activity" all they are referring too is phone calls and letters, which are not that hard to live with, and eventually they will default you.

Humdinger1

@sourcrates that's interesting re new statute barred debt laws coming soon.  What's changing? Thanks Humdinger 

sourcrates

Humdinger1 said:

@sourcrates that's interesting re new statute barred debt laws coming soon.  What's changing? Thanks Humdinger 

Not new law as such, there's a new FCA Consumer Duty coming in at the end of July which has quite firm views on statute barred debts, amongst other things.

Implementing the Consumer Duty for Debt Purchasing, Debt Collecting and Debt Administration Services (DPCA) portfolio (fca.org.uk)

Designed so that existing guidelines are adhered too, which isn`t always the case at present.

Woodsey10

It’s been a few months since my last post. In that time I have been waiting for defaults, budgeting and saving into my emergency fund. 

Also during this time, one of my lenders (Lendable) had instructed fieldcall to visit my home to attempt to regain communication. An agent visited on 2 occasions. I ignored the contact and they’ve passed back to the lender. 

I have also just received a letter from CreditSecurity, a debt collection agency, dated 27/09/23 instructed by Betterborrow. The following statement is at the base of the letter “It is important you are aware that our client has registered your defaulted account with the credit reference agencies and this may prevent you from obtaining further credit”. 

Is this account now officially defaulted? 

Do I start my affordable payments to them?