Can we avoid a DMP?

ChillyP

Hello Everyone,

We are in a bit of a mess. Years of not looking at what we are doing, along with a few disasters has left us in a sorry state. We are at a stage where we have to get this sorted. We are both in our early 40's and we don't want to enter our fifties with this mess.

If possible we would like to avoid a DMP or any other debt solution, but I am not sure if we will be able to acheive that given the scale of our debt. I would be grategul to hear other peoples opinions on this -

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 4093
Partners monthly income after tax....... 1476
Benefits................................ 0
Other income............................ 915
Total monthly income.................... 6484

Monthly Expense Details[/b]
Mortgage................................ 619
Secured/HP loan repayments.............. 248
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 142
Electricity............................. 140
Gas..................................... 148
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 110
TV Licence.............................. 12
Satellite/Cable TV...................... 39
Internet Services....................... 28
Groceries etc. ......................... 500
Clothing................................ 50
Petrol/diesel........................... 240
Road tax................................ 0
Car Insurance........................... 67
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 42
Buildings insurance..................... 34
Contents insurance...................... 12
Life assurance ......................... 46
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 100
Emergency fund.......................... 50[b]
Total monthly expenses.................. 2732[/b]
[b]

Assets[/b]
Cash.................................... 5000
House value (Gross)..................... 320000
Shares and bonds........................ 0
Car(s).................................. 2
Other assets............................ 0[b]
Total Assets............................ 325002[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 67000....(619)......2.1
Secured Debt.................. 20000....(248)......0[b]
Total secured & HP debts...... 87000.....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
credit card 1..................12800.....256.......6.9
Credit Card 2..................5100......123.......6.9
Natwest loan...................8000......296.......7.9
Dad loan.......................3000......300.......0
Tesco CC.......................4200......112.......16.9
Halifax credit card............4000......40........0
Barclaycard 3..................8500......250.......21.9
Consolidation loan 2...........14000.....210.......14.9
Consolidation loan.............21000.....420.......12.9
HSBC...........................1800......75........0
Aqua...........................5000......188.......33[b]
Total unsecured debts..........87400.....2270......- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 6,484
Expenses (including HP & secured debts). 2,732
Available for debt repayments........... 3,752
Monthly UNsecured debt repayments....... 2,270
Amount left after debt repayments....... 1,482

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 325,002
Total HP & Secured debt................. -87,000
Total Unsecured debt.................... -87,400[b]
Net Assets.............................. 150,602[/b]

TheAble

Given that on paper you appear to be covering your debts comfortably enough (for all that they are high) it's possible that a DMP wouldn't necessarily be appropriate to your circumstances. Others are much more knowledgeable in this area though so I'd wait to get a few more opinions.

Your debts aside, your SOA doesn't look particularly outlandish to me, barring one or two areas where you might make some tweaks (the usual problem spots such as mobile phones, satellite tv etc). It might just be one of those situations where you rein in your belts and really tackle the debts head on. You do have a very good income on the plus side.

elsien

According to that statement of affairs you have £1400 left over after the debt repayments. Is that actually the case? If not do you know where it's going?

ChillyP

https://forums.moneysavingexpert.com/discussion/comment/80028252#Comment_80028252

Hi, We know that a lot of that money is wasted on 'stuff' - shopping, things for the house etc We have scrutinised our bank statements and the amount of crap that we waste money on is truly shocking

NeverendingDMP

Why not set yourself a challenge. It's 8/9 months till the end of the year depending on how payday falls. In that time practice living to that budget and perhaps aim for paying 3k a month of the debts. More if you can really push it and have a frugal month. have a go at a snowball calculator/check out any penalities on the loans and see if you can get rid of one debt or two by year end. An extra 700 a month toward debts would have your dad paid off by autumn then maybe the Tesco by new year.

It's deciding what order you want to try And pay them off. Family, high interest first, or quicker wins to motivate you. And if you take action now whilst you still have spare cash yep hopefully you can aim to avoid a dmp

Jus check the apr on aqua though. They sometimes list it as a simple interest rate and the apr can be higher. Hopefully yours isn't the higher version :)

ChillyP

https://forums.moneysavingexpert.com/discussion/comment/80028345#Comment_80028345

Yes we definitely want to hit it hard for the next few months to see what difference we can make

fatbelly

Hi Chilly. Got your message.

I haven't much to add as I agree with the usual posters here - who do a very good job of teasing out the essentials.

There are lots of good points - you have a small mortgage relative to the value (shame about the secured debt - consolidation loan or is that a car?), you have a good emergency fund and hopefully cars are not on their last legs.

Where it says 'cars' it doesn't mean 'number of', it means 'value of'. Also for the road tax and maintenance you need to take the annual figure and divide by 12.

So there are a few numbers that look like they should be higher and a few that could be lower with a bit of work (mobile phones, food). They probably balance out.

Taking the soa as a whole, it doesn't look like a dmp situation. That means that your credit file should not be a disaster. You need to concentrate on (a) lowering interest and (b) overpaying in a structured way. These should help

(a)

https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/

and (b)

https://www.lemonfool.co.uk/financecalculators/snowball-calculator.php

I wouldn't overpay the dad loan as it's interst free. Snowballing starts with the highest interest debts.

If you have a 3-year plan and get the family (incl Dad) on board with that - I'm not saying it would be all gone but it would look a lot healthier.

LunaLater

Your SOA shows an income far larger than your outgoings, but the size and number of debts shows the opposite, that you've been spending far more then you earn.

What's driving the difference, and gas that situation stopped?

If not you need to redo your SOA to show reality, not how you'd like things to be.

kimwp

LunaLater said:

Your SOA shows an income far larger than your outgoings, but the size and number of debts shows the opposite, that you've been spending far more then you earn.

What's driving the difference, and gas that situation stopped?

If not you need to redo your SOA to show reality, not how you'd like things to be.

Or try to live to that SOA for a bit and repost/reassess where you've found areas difficult to keep to.

outoftheviciouscircle

I haven't got a lot to add as there are people far more expert than me here.

I'm in your situation, high amount of debt, good income. A month ago I wouldn't have been able to tell you how I was adding to my debt every month instead of paying it down. I started budgeting the beginning of April using an app and made sure I stuck to it and didn't spend a penny I didn't actually have. On the 30th April I had £115.02 left over to pay off my debt. It can be done if everyone is onboard and committed.

Good Luck!!

ChillyP

Hi, Just thought I would update everyone on how we are getting on. After a shaky start we have managed to clear 6K since May. It's been a challenge but it's now becoming a way of life. I have picked up some additional work and we are massively overhauled our spending habits - one cheap takeaway a week and no costa coffees etc!

Trying to clear another 6k before December