Facing up to my debt. What’s my best way forward?

Cherubneddy70

I’m so ashamed of my debt and have been burying my head in the sand but need to face reality. 

I have about £30k of debt. I earn £47k per year ( single parent  working full time with a small amount of Universal Credit.) Debt is made up of credit cards, loan, store card and overdraft.

My monthly income is around £3000 including my UC and child benefit. My debt repayments are £1200 per month.

I don’t own any assets. I’m meeting minimum repayments currently but I’m having to put essentials such as food shopping, school meals on credit cards so my debt is rising and I will be missing payments soon. Help.

sourcrates

Hello,

As I said earlier, fill this in with your income/expenditure/debts etc etc, and it will give us an idea of the best way forward.

Once completed, click on "format for MSE" and post it on this thread.

SOA Calculator (stoozing.com)

Thanks.

fatbelly

I've subscribed so I can have a closer look.

Bankruptcy may well be the way forward (I saw you posted there earlier) but if we can see a bit more detail, we'll be able to help more. 

You have a couple of days now before businesses open up again - we may be suggesting a few things for you to do on Tuesday!

Cherubneddy70

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

Household Information[/b]

Number of adults in household........... 1

Number of children in household......... 2

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 2800

Partners monthly income after tax....... 0

Benefits................................ 230

Other income............................ 180[b]

Total monthly income.................... 3210[/b][b]

Monthly Expense Details[/b]

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

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

Rent.................................... 825

Management charge (leasehold property).. 0

Council tax............................. 180

Electricity............................. 100

Gas..................................... 200

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

Water rates............................. 40

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

Mobile phone............................ 60

TV Licence.............................. 15

Satellite/Cable TV...................... 40

Internet Services....................... 25

Groceries etc. ......................... 480

Clothing................................ 50

Petrol/diesel........................... 70

Road tax................................ 15

Car Insurance........................... 30

Car maintenance (including MOT)......... 20

Car parking............................. 30

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

Childcare/nursery....................... 0

Other child related expenses............ 80

Medical (prescriptions, dentist etc).... 70

Pet insurance/vet bills................. 10

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

Contents insurance...................... 20

Life assurance ......................... 0

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

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

Haircuts................................ 20

Entertainment........................... 75

Holiday................................. 75

Emergency fund.......................... 50[b]

Total monthly expenses.................. 2630[/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]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

Credit cards...................20000.....550.......0

Overdraft......................3000......100.......0

Bank loan .....................8300......230.......0

Store card.....................3000......150.......0[b]

Total unsecured debts..........34300.....1030......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,210

Expenses (including HP & secured debts). 2,630

Available for debt repayments........... 580

Monthly UNsecured debt repayments....... 1,030[b]

Amount short for making debt repayments. -450[/b]

[b]Personal Balance Sheet Summary[/b]

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

Total HP & Secured debt................. -0

Total Unsecured debt.................... -34,300[b]

Net Assets.............................. -34,300[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

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

Floss

What is the APR on each of the credit cards, bank loan, overdraft & store card? They won't all be 0% 

TheAble

As Floss points out it would be useful to see a breakdown of the debts along with interest rates.

Looking at your outgoings I would imagine you can reduce these probably by a few hundred month with a little effort but even then it may only bring you up to the point of meeting your minimums. I think you'd probably need interest to be frozen to realistically have a shot at making inroads into the balances.

Cherubneddy70

I didn’t have the interest rates to hand at the time but thought the above would at least give an indication of my SOA. 

Just realised my car lease payment of £242 per month isn’t in the above either. I’ll add it all in when I can. 

I’d be interested to hear how I can reduce my outgoings by a few hundred though, any advice welcome. There are some savings I can see but frankly they would make v little difference to the overall situation.

HampshireH

Every small saving thrown and debt can make a difference in the long term.

Just a few possible suggestions where savings may possibly be made 

£480 on groceries sounds very high for 1 adult and 2 children. Could you swap your shop and meal plan more/make bigger portions to freeze (even just one a meal will make a difference)

£60 mobile when does your contract end, could you go SIM only? You can get unlimited calls and minutes with good data for £10. Could you reduce this?

£180 council tax do you claim single person discount?

£200 gas - are you paying a debt here? This seems really high especially now into warmer months. We are a 3 person household and our gas for April was about £70 (no heating & just using it to hear hot water) and never hit £200 just for gas per month across winter.

Appreciate house type will potentially cause gas to be higher.

There are some savings I can see but frankly they would make v little difference to the overall situation.

TheAble

Yes, mobile SIM only can in fact be had as cheaply as a fiver. Myself and all the kids on this, it does the job.

Satellite TV is a tricky area. It may be that you're genuinely getting value from this, but it's something to ask yourself if you genuinely need or if you could potentially do without.

fatbelly

I wondered at first if you might qualify for a DRO, but you don't

The detail shows too much debt, too much surplus income.

So I think the choice is going to be between a debt management plan that lasts 5-6 years, or bankruptcy with an income payment order for 3 years.

Before you take the plunge for bankruptcy (which I think you're going to incline to) just check that it doesn't impact on your job, and that the car arrangement isn't affected.

Your soa reads as if you are running a car that you do not own. That's fine, but the car expenses won't be allowed.

Holiday/entertainment might be a bit high but all other regards the soa looks fine for bankruptcy.

fatbelly

Cherubneddy70 said:

I didn’t have the interest rates to hand at the time but thought the above would at least give an indication of my SOA. 

Just realised my car lease payment of £242 per month isn’t in the above either. I’ll add it all in when I can. 

I’d be interested to hear how I can reduce my outgoings by a few hundred though, any advice welcome. There are some savings I can see but frankly they would make v little difference to the overall situation.

Unlikely a lease payment would be allowed in bankruptcy either.