Debt battle - step one done

pink7* · 28 July at 9:47AM

Hi, so I've started feeling quite overwhelmed recently struggling to keep up with payments of debt and cost of living. This tied in with a change of job and having to take a pay cut hasn't helped.
I've buried my head in the sand long enough and have to make a change
Soa is attached, I'm hoping to contact my credit card companies to ask for a reduced payment plan in the hope this will give me a bit of space whilst also looking at my general spending on mostly unnecessary stuff as I haven't really got anything to show for my spending!
Credit cards have become my backup for day to day spending which is what I have to get out of.

How likely are Barclaycard and marks and spencer to agree to a reduced monthly payment?

Thanks in advance

Household Information[/b]

Number of adults in household........... 3

Number of children in household......... 0

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

Monthly Income Details[/b]

Monthly income after tax................ 1669

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

Benefits................................ 0

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

Total monthly income.................... 1669[/b][b]

Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 266.5

Rent.................................... 180

Management charge (leasehold property).. 0

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

Electricity............................. 0

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

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

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

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

Mobile phone............................ 50

TV Licence.............................. 0

Satellite/Cable TV...................... 24

Internet Services....................... 36

Groceries etc. ......................... 50

Clothing................................ 20

Petrol/diesel........................... 100

Road tax................................ 14.43

Car Insurance........................... 62

Car maintenance (including MOT)......... 5

Car parking............................. 10

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

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

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 0

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

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

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

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

Presents (birthday, christmas etc)...... 20

Haircuts................................ 5

Entertainment........................... 27

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

Emergency fund.......................... 0[b]

Total monthly expenses.................. 869.93[/b]

[b]

Assets

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

House value (Gross)..................... 0

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

Car(s).................................. 13000

Other assets............................ 0[b]

Total Assets............................ 13000[/b]

[b]

Secured & HP Debts

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

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

Hire Purchase (HP) debt ...... 11727.8..(266.5)....0[b]

Total secured & HP debts...... 11727.8...-.........- [/b]

Unsecured Debts[/b]

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

Barclaycard....................3914.89...200.......0

Marks and spencers.............2193.24...60........0

Next...........................1350.73...50........0

Simply be .....................60........6.........0

Loan...........................6300.22...220.......0[b]

Total unsecured debts..........13819.08..536.......- [/b]

Monthly Budget Summary[/b]

Total monthly income.................... 1,669

Expenses (including HP & secured debts). 869.93

Available for debt repayments........... 799.07

Monthly UNsecured debt repayments....... 536[b]

Amount left after debt repayments....... 263.07[/b]

Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 13,000

Total HP & Secured debt................. -11,727.8

Total Unsecured debt.................... -13,819.08[b]

Net Assets.............................. -12,546.88[/b]

CliveOfIndia · 28 July at 10:20AM

pink7* said:

Hi, so I've started feeling quite overwhelmed recently struggling to keep up with payments of debt and cost of living. This tied in with a change of job and having to take a pay cut hasn't helped.
I've buried my head in the sand long enough and have to make a change
Soa is attached, I'm hoping to contact my credit card companies to ask for a reduced payment plan in the hope this will give me a bit of space whilst also looking at my general spending on mostly unnecessary stuff as I haven't really got anything to show for my spending!
Credit cards have become my backup for day to day spending which is what I have to get out of.

How likely are Barclaycard and marks and spencer to agree to a reduced monthly payment?

Thanks in advance

Household Information[/b]
Number of adults in household........... 3
Number of children in household......... 0
Number of cars owned.................... 1[b]

Monthly Income Details[/b]
Monthly income after tax................ 1669
Partners monthly income after tax....... 0 Can your partner (and the other adult) get a part-time job to help out?
Benefits................................ 0 Have you checked to see if you're entitled to any benefits?
Other income............................ 0[b]
Total monthly income.................... 1669[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 266.5
Rent.................................... 180
Management charge (leasehold property).. 0
Council tax............................. 0 Is this correct?
Electricity............................. 0 You must surely pay something here?
Gas..................................... 0 As above - unless you're all-electric
Oil..................................... 0
Water rates............................. 0 Is this correct? (I realise it may be included in council tax depending on where you live)
Telephone (land line)................... 0
Mobile phone............................ 50 This looks very high, you can probably reduce this assuming you're not stuck in a contract.
TV Licence.............................. 0 Do you have a licence, or do you genuinely not require one?
Satellite/Cable TV...................... 24
Internet Services....................... 36
Groceries etc. ......................... 50
Clothing................................ 20
Petrol/diesel........................... 100
Road tax................................ 14.43
Car Insurance........................... 62
Car maintenance (including MOT)......... 5 This seems very low, it barely covers an annual MOT, repairs & routine maintenance are almost inevitable costs.
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 Covered by the rent, presumably?
Contents insurance...................... 0 You need contents cover
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 5
Entertainment........................... 27
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 869.93[/b]
[b]

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 13000
Other assets............................ 0[b]
Total Assets............................ 13000[/b]
[b]

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 11727.8..(266.5)....0[b]
Total secured & HP debts...... 11727.8...-.........- [/b]

Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Barclaycard....................3914.89...200.......0
Marks and spencers.............2193.24...60........0
Next...........................1350.73...50........0
Simply be .....................60........6.........0
Loan...........................6300.22...220.......0[b]
Total unsecured debts..........13819.08..536.......- [/b]

Monthly Budget Summary[/b]
Total monthly income.................... 1,669
Expenses (including HP & secured debts). 869.93
Available for debt repayments........... 799.07
Monthly UNsecured debt repayments....... 536[b]
Amount left after debt repayments....... 263.07[/b]

Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 13,000
Total HP & Secured debt................. -11,727.8
Total Unsecured debt.................... -13,819.08[b]
Net Assets.............................. -12,546.88[/b]

I've added a few thoughts in bold above. Your credit/store cards show as 0% APR - I suspect this is incorrect? If so, you could look at shifting some of them to a 0% balance transfer card (admittedly these are getting harder to come by these days). Even if you can't shift to 0% cards, prioritise the card repayments - pay as much as possible to the one with the highest APR, then pay the minimum + £5 to the others.

Your routine expenses don't look too outrageous, but there appear to be some gaps in the SOA which I've highlighted. You need to check these - without an accurate SOA you can't really get a realistic idea of where the money is going.

I'm sure others will be along with lots of helpful suggestions, but hopefully this will give you a start.

sourcrates · 28 July at 11:14AM

Credit card companies in general, will make short term payment arrangements with you, and these will be recorded as such on your credit file, the good old "AP" marker (arrangement to pay).

However, if your financial issues are going to last any longer than 6 months, they will simply refer you to the debt charities, as they don`t want to deal with long term debt arrangements, that`s not what they do.

So going down the creditor route is a little pointless, you may as well default, then go via stepchange and enter debt management if that is indeed the best way forward for you.

enthusiasticsaver · 28 July at 11:55AM

I don’t think that soa is correct as it shows you should easily be able to cover your outgoings with money spare. Do the other 2 adults in your household have separate finances? What about bills as nothing is showing there and £50 looks very low for groceries even if you just buy for yourself. The car maintenance looks low.

You are right in that using credit to live off is a slippery slope and if you find that after paying all essential bills you cannot afford to live without using cards then defaulting and entering a DMP might be better. Reduced payments will show on your credit file as AP markers so whether you go for that option or a longer term solution like a DMP depends on how you see your income changing in the short term.

First though you need to fill in the gaps of the soa to cover what you pay towards bills and other things. Can you check bank statements over the last 3 months to get a more accurate figure? The interest rates would be helpful too. Cards like Next are usually very expensive. What about overdrafts? Can you still get 0% deals?

Themoneyshot · 28 July at 1:55PM

That SOA only makes sense if you are living at home with your parents paying a token £180 towards bills. If that's the case you should be able to be saving a significant amount per month towards you future, not struggling month to month.

If you've had the car long enough, hand it back and cancel the finance. If not sell it and settle. Buy a banger. Keep your head down, live within your means and pay your debts off within two years. Then start saving and learn from the experience.

I could be wrong. It does happen occasionally.

pink7* · 28 July at 2:48PM

Thanks for all of the above .
To clarify I am at home with parents neither of which are employed due to disability.
After paying my credit cards, loan, car payments and other direct debits I have around 200 left each month.
The car is on hp and I've only had it 1 year so handing back or clearing the finance isn't an option and I need a car for work.
I'm struggling to find any 0% or balance transfer options that will accept me too.

I think this is a wake up call to my spending habits on complete rubbish to be honest!

RAS · 28 July at 5:32PM

pink7* said:
After paying my credit cards, loan, car payments and other direct debits I have around 200 left each month.
The car is on hp and I've only had it 1 year so handing back or clearing the finance isn't an option and I need a car for work.
I'm struggling to find any 0% or balance transfer options that will accept me too.

So if you have £263 left over each month, you put £200 into clearing your debt and the rest into filling the gaps in your SOA until you're half way through the car debt, and sell it.

You really do need the rates on those debts.

Meantime, go round, find everything that you bought and don't use and go on vinted or do a car boot to earn some cash to bump start your paying of the debt.

Can you get a couple of nights a week bar work that'll give you some "social" life and help clear the debt?

enthusiasticsaver · 28 July at 5:51PM

OK that makes more sense if you are living at home with parents. You need the interest rates to decide how to tackle those debts and put the cards away or cut them up. Remove them from apps so you are not tempted to spend on them. I would focus your attention on the most expensive debt first.

Debt battle - step one done

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