At the beginning of my journey

Jakdaniels94

Hi all,

Stupidity and impulsiveness in my 20’s have left me with £30k debt. Now that I am wiser (and older.) I know I need to face up and deal with my issues to lead a happy and debt free life.

Currently going through a DMP however as expected my debt free date is over 20 years 😔 

Below is my SOA and any advice would be appreciated as to whether I should add things/change amounts etc. 

My rent at £775 is very low for the average in our area and if we have to move I would lose my disposable income however save on travel. 

I am considering all my options such a bankruptcy.

Thanks 

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household - 2 (This is what I pay. Partners finances are separate.)

Number of children in household - 0

Number of cars owned - 0

Monthly Income Details

Monthly income after tax - £1767 

(My wages)

Partners monthly income after tax - 0

Benefits - 0

Other income - £0

Total monthly income - £1767

Monthly Expense Details

Mortgage - 0

Secured/HP loan repayments - 0

Rent - £325 (my half. Total rent is £775 which is incredibly low for area.)

Management charge (leasehold property) - 0

Laundry - £50

Council tax - £172 

Electricity £35

Gas - £35

Oil - £0

Water rates - £31

Telephone (land line)- £0

Mobile phone - £57

TV Licence - £0

Satellite/Cable TV - £0

Internet Services £29.69 (WiFi) 

Groceries etc - £310

Clothing £30.00 (I usually buy as and when needed.)

Petrol/diesel - £0 

Road tax - £0

Car Insurance -  £0 

Car maintenance (including MOT) £0

Car parking -  £0

Other travel - £232 (monthly season ticket for work + £40 for additional travel.) 

Childcare/nursery £0

Other child related expenses £0

Medical (prescriptions, dentist etc) - £25 (I have been diagnosed with dental issues and will require frequent hygiene and dental appointments. May need to increase?)

Pet insurance/vet bills - £0

Buildings insurance - £0

Contents insurance - £0

Life assurance - £0

Other insurance £0

Presents (birthday, christmas etc) - £25

Haircuts £30 (x2 per month.) 

Entertainment - £50

Holiday - £50

Emergency fund - £25 

Savings - £30 (directly out my wages into company scheme) 

Total monthly expenses -  £1,511.69

Unsecured Debts

Nationwide (overdraft) - £2,315.88

Capital One (Credit card) - £1,920.42

Aqua (Credit card) - £7,393.64

Zopa (Loan) - £9,201.55

Plata (Loan) - £4,415.68

Lendable (Loan) - £5,754.50

Total unsecured debts - £31,001.67

Monthly Budget Summary

Total monthly income - £1767 

Expenses (including HP & secured debts) - £1,511.69

Available for debt repayments - £255.31

Amount left after debt repayments - £0.00

Karonher

Good luck with paying this off. There are a few things that stick out - 

Groceries - that is a lot for just 2 people - is that just your half or the full amount?
What is the £50 for laundry? If its the launderette thats a lot. I am sure it would be cheaper to get a washing machine. If its paying someone to do it, it would be best to stop.
Could you cut back on haircuts? If you are having 2 a month then thats more than most people.

If you cut back on a few things you would have an extra £300 a month to repay the debts - including the £255 excess you already have. I'm not sure what the position is with bankruptcy and going on holiday.

Could your partner help by paying a little extra to allow you to save to make full and final offers?

Brie

Well done on stopping to have a look at this.  Hopefully there will be some advice here about how to best proceed.

How much are you paying each of your unsecured debts and what's the interest?

If the total amount of debt was below £30k a debt relief order might be an option for you....something to think about!

Rob5342

How do you split things with your partner? You mention your half of the rent but then say council tax is £172 which presumably is the total amount. Likewise the water and internet seem more like total amounts, and £57 for mobile is very high, is that one contract?

Do you mean you are looking at a DMP or are actually on one? Why does it come out as 20 years? Form the figures above it would be just over 10.

One other question, does your partner know about the debts?

fatbelly

I can't see any reason not to go bankrupt. You have too much debt for a DRO (and maybe too much surplus income).

Any debt payment is going to take a long time.

You appear to have no assets.

Bankruptcy will cost £680. You may well get an income payment agreement that will last 36 months but that will get you debt free faster than other strategies.

sourcrates

A 20 year DMP is just not workable, best way out is bankruptcy to my eyes.

Debt management is great for smaller debts, to complete in anything up to 6 years, but if its going to take longer than that, a more radical solution will be called for.

fatbelly

Just spotted you are in some sort of Save as you Earn scheme. How much do you have saved?

The Official Receiver will try to access this. It is not protected like a pension.

Stateofart

Mobile phone is high.  I've got an iPhone X and it's £16 a month with a 100gb of data.

EssexHebridean

Hi OP - what has changed between the beginning of the year - when you said that your DMP was going to take 8 years, and now, when that timescale has increased to 20 years?
 
Also - you were debt free back in 2018 - and £31k is a fair bit of debt to have built up in just a 5 year period. Do you have a clear picture of what has caused this, and have you taken steps to ensure that even if you used a debt solution now, the situation wouldn't arise again in the future?

There are certainly savings to be made on the SOA - but there are also things missing from there (Contents insurance is a stand-out for me - you must have this!) so I'm cautious of whether what is shown in there is a budget that you actually stick to. Easy wins for me would be :
changing mobile provider to SIM only as soon as you are able (that would cut your monthly cost down to around £10 so a massive saving),
changing internet provider - or getting sufficient data on a mobile deal that you could simply use your phone's data for your internet requirements.
A water meter would cut that bill massively assuming that the figure you show is half of the total monthly.
Losing that laundry cost - if you are able to get a washing machine installed then great - that would be an fast saving even if you needed a washer-dryer. If you aren't able to get a washing machine, then ensure that you team up with your partner on loads at the laundrette, only ever do full loads there, and cut costs that way.
Groceries - hopefully that figure is the full one to feed both of you for a month? If so then you can probably make a £50 or so saving there relatively easily, and a bigger one by changing your habits a fair bit. If that is half of your monthly figure though then that is a huge spend for a household of two! 
Reduce haircuts to once monthly - if this necessitates a less high-maintenance style, then ask your stylist for their recommendations on that. Your level of debt really doesn't allow for a high-maintenance lifestyle I'm afraid!

On the face of it I'd agree that fatbelly & sourcrates advice re bankruptcy seems solid - however, there does seem to be more going on in that SOA than we are seeing, and combined with the discrepancies over the time periods of the debt and the DMP period, I'm wondering whether there are still other options available to you.