Dealing with debt

Lonewolf81

Thank you. Sorted building insurance 👍.  All debt is credit cards. However not been eligible to switch to a 0% yet. I'm permanently increasing my hours January so hopefully when they see I'm paying extra back I'll be more eligible. I've set a standing order to pay into a savings account. I pay £30 per year tax for car. MOT is £45. 
I am very grateful for your brilliant advice. I have an all or nothing personality so I tend to splurge or be very frugal. Part of my depression. 
I have been shocked into seeing my finances though. I am very committed to getting out of it. Closed all accounts such as very, next, studio, any temptation. 
I wasn't going to save anything. Basically put anything spare toward my debts. However, I see now that is a huge mistake as things happen and I don't want to be forced into using credit cards to cover it. 
Great advice. Thank you so much for your help

Floss

Saving is key - I was in your position last year, started my DMP & set up an emergency fund which has since paid for a new washer-dryer, roof repair and a plumbing repair. Two years ago it would all have gone on plastic.

tigergambit

@Lonewolf81
I would be tempted to speak to MBNA and ask them to freeze interest whilst you pay their debt off. They seem to be the most receptive CC company for those in difficulty.

Lonewolf81

I didn't realise I could do that @tigergambit. Thanks I'll give them a call. They can only say No

tigergambit

Lonewolf81 said:

I didn't realise I could do that @tigergambit. Thanks I'll give them a call. They can only say No

Exactly - you have nothing to lose. My experience with them was that 3 months into a DMP alone of my creditors they accepted a Full & Final of 30% on 8k.

Might depend on who answers the phone, but roll the dice.

EssexHebridean

Lonewolf81 said:

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary Amount(£)

Total monthly income 2,339

Monthly expenses (incl. HP & secured loans) 1,200.75

Available for debt repayments 1,138.25

UNsecured debt repayments 307

Amount left after debt repayments 831.25 This is a great surplus - but - do you actually have this amount free each month? If not, then your budget currently has holes in it I'm afraid! 

Personal Balance Sheet Summary Amount(£)

Total Assets (things you own) 195,950

Total Secured & HP Debt -98,300

Total Unsecured Debt -24,950

Net Assets 72,700

Household Information

Number of adults in household 1

Number of children in household 2

Number of cars owned 1

Income, Expense, Debt & Asset Details

Income Amount(£)

Monthly income after tax 1860

Partners monthly income 0

Benefits 159

Other income 320

Total monthly income 2339

Expenses Amount(£)

Mortgage 495.9

Secured/HP loan payments 0

Rent 0

Management charge (leasehold property) 0

Council tax 106 Single person discount here hopefully?

Electricity 92 This feels quite high for a household that presumlably uses gas for heating and hot water?

Gas 60

Oil 0

Water Rates 45

Telephone (land line) 0

Mobile phone 9.9

TV Licence 13.45

Satellite/Cable TV 0

Internet services 27

Groceries etc. 200 Are you certain this is correct? It's a fairly low spend for a family of 3 so well done if so.

Clothing 5

Petrol/diesel 51.5

Road tax 3 Hopefully you're not paying this by monthly DD? If so, then you need to stop and pay upfront - monthly payments for road tax carry a premium I believe! 

Car Insurance 32

Car maintenance (including MOT) 5 I fear that there is not so much as a chance that this is realistic unless your MoT costs, servicing and the majority of depreciation is covered by some sort of finance deal/leasing arrangement? Otherwise you are a long way short on budgeting for this.

Car Parking 0

Other travel 0

Childcare/nursery 0

Other child related expenses 0 Nothing at all here? that's fairly unusual as usually there are kids clubs, pocket money etc to take into account.

Medical (prescriptions, dentists, opticians etc.) 0

Pet Insurance/Vet bills 0

Buildings Insurance 0 I believe you have sorted this now...

Contents Insurance 0 ...hopefully the policy you got also combines contents cover too? If not, then that's the next one to sort as a priority. Again. not one to gamble on, you only have to lose once and life will get very 

Life Assurance 0

Other Insurance 0

Presents (birthday, christmas etc.) 20

Haircuts 10

Entertainment 0

Holiday 25 Are you actually saving this? Nothing shown under cash assets? Even if you are, does it actually cover the costs of any holiday you might plan to take as that is a very small amount. 

Emergency Fund 0 You need to budget something here

Total monthly expenses 1200.75

Secured & HP Debt Description Debt(£) Monthly(£) APR(%)

Mortgage 98300 (495.9) 4.2

Secured & HP Debt totals 98300 - -

Unsecured Debt Description Debt(£) Monthly(£) APR(%)

MBNA 9300 93 27.9

Halifax 8000 80 25.9

Sainsburys 7650 134 0

Unsecured Debt totals 24950 307 -

Asset Description Value (£)

Cash 0

House Value (Gross) 195000

Shares and bonds 0

Car(s) 950

Other assets (e.g. endowments, jewellery etc) 0

Total Assets 195950

Comments on the results

You have sufficient monthly income to meet your expenses and your minimum monthly debt repayments with £831.25 left over. You can use this to pay off your debts more quickly or to build/top-up an emergency fund. Whatever your results show, it always pays to seek advice or comments from others. Why not post your SOA details on our Debt Management discussion board or on your preferred discussion forum elsewhere. Thankyou for using the SOA Calculator at www.LemonFool.co.uk

For the future, when you create the SOA there is a "format for MSE" option given - you then copy and paste the text of the SOA directly into a post on the thread. 

For now though, comments in bold above.

I think you need to go through the budget and make it watertight, but even once you have done that you will have a healthy surplus to throw at the debt. I'd also suggest checking on something like the MSE Credit Club whether you may be eligible for any 0% balance transfer cards which would help you to clear things off faster.

With your level of surplus too, going forwards you need to budget to pay things like insurances upfront them budget for the remainder of the year to set aside money for the following year's premiums. You can save a good chunk this way on most insurances.