Help with where to start with this mess

I think with the start of 2024 - i need to finally acknowledge things are not ok and seek help with where to start clearing this mess. 

Below is SOA;

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

Monthly Income Details[/b]
Monthly income after tax................ 1800
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 1800[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 60
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 14
Telephone (land line)................... 0
Mobile phone............................ 11
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 27
Groceries etc. ......................... 250
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 40
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 12
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 100[b]
Total monthly expenses.................. 934[/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
Paypal.........................2500......90........0
Barclays.......................3210......93........0
Virgin money...................485.......30........0
Mbna...........................3500......120.......0
Updraft........................3700......129.......0
JN bank loan...................7400......224.......0
Halifax cc.....................6000......150.......0
Halifax loan...................3000......211.......0[b]
Total unsecured debts..........29795.....1047......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 1,800
Expenses (including HP & secured debts). 934
Available for debt repayments........... 866
Monthly UNsecured debt repayments....... 1,047[b]
Amount short for making debt repayments. -181[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -29,795[b]
Net Assets.............................. -29,795[/b]

[i]Created using the SOA calculator at www.stoozing.com. 
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

------

A few notes;

Only current unsecured debts im now paying are Barclays / Paypal / Virgin Money.

The rest have all defaulted or have been served notice of arrears at least. There are 2 that are chasing more than anything currently which are the JN Bank loan and the Updraft one.

Jn bank i think have contacted Westcot or 2f and i've received letters / email from them but also another email from JN bank which was a subsequent notice of sum in arrears (currently at £1344.18) 

Then the one who is attempting to contact most often is for Updraft. Although i am confused with this as i have had CRS and a company called AJJB Law (these guys are already talking about legal action etc.. well "Pending legal action") both attempting to contact me at the same time regarding this. 

I'm not sure where to start.. do i contact the 2 above who are chasing me and sort something with them first? Do i just stop paying everything and start saving to eventually offer final offers to creditors?

I also currently house share - with my ex but i am looking to move back to parents temporarily.. maybe for this year so i can focus on getting myself out of this hole. If i do this then my expenses would lower quite a bit..

Any guidance or help would be appreciated.

«13

Comments

  • katsu
    katsu Posts: 4,942
    First Anniversary Name Dropper First Post Mortgage-free Glee!
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    Step 1 I think is to be realistic about your current money. If you are only paying 3 debts, where do the other 500 ish pounds a month go? 

    Are you sure the SOA reflects your current spending?

    (And look, you can solve this. Martin always says there's a solution for every situation so... you are in the right place to get help. You can do this! ).
    Debt at highest: £8k. Debt Free 31/12/2009. Original MFD May 2036, MF Dec 2018.
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 4,127
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    Your SOA can't be correct. You need to go back through the last 6 months bank statements and see where your money is going.

    You also need to include the interest rates on your debts.

    A small note £50 a month on clothes? Doesn't look like you can afford that.
    If you go down to the woods today you better not go alone.
  • EssexHebridean
    EssexHebridean Posts: 20,876
    Name Dropper First Anniversary Photogenic First Post
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    Tracker90 said:
    I think with the start of 2024 - i need to finally acknowledge things are not ok and seek help with where to start clearing this mess. 

    Below is SOA;

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

    Monthly Income Details[/b]
    Monthly income after tax................ 1800
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 1800[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 300
    Management charge (leasehold property).. 0
    Council tax............................. 60
    Electricity............................. 30 These both (gas & electric) seem quite low even allowing for you paying 50% of the bills as I assume you do - be sure that meter readings are being either sent by smart meters of provided manually - and that the billing is based on those readings. 
    Gas..................................... 30
    Oil..................................... 0
    Water rates............................. 14
    Telephone (land line)................... 0
    Mobile phone............................ 11
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 27 If this is 50% of the bill then it's pretty high - but I'm guessing as you live with your ex there may be little you can do about that right now. 
    Groceries etc. ......................... 250 This is just you I presume? If so you can probably reduce it a little - and realistically anything you can save will help. Cooking from scratch - not buying pre-prepared food - the "downshift challenge" where you switch out branded goods for own brand and own brand for discount branded, and meal planning and shopping from a list can all help here. 
    Clothing................................ 50 Not right now - reduce this to £5 "socks and pants" essentials money only and make full use of the clothes you already have. 
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0 If you don't drive, then how do you travel? It's fairly unusual for someone with no car to never get a bus or a taxi, or use a train to visit friend or family, for example. 
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 40
    Buildings insurance..................... 0
    Contents insurance...................... 0 Hopefully this is just an oversight, but if you don't have this, then it's one to stop what you are doing and sort out immediately. 
    Life assurance ......................... 0
    Other insurance......................... 12
    Presents (birthday, christmas etc)...... 0 You never buy any presents for anyone at all? 
    Haircuts................................ 10
    Entertainment........................... 0 Never a pub visit or a coffee with friends? A cheeky takeaway? No entertainment at all?
    Holiday................................. 0 You never go anywhere at all? Not even visiting family or friends for a weekend? Days out from home when you have time off work?
    Emergency fund.......................... 100 It's great that you are saving this, but you're showing no cash assetts, so is this something you DO actually save, or is it something you would ideally like to save? [b]
    Total monthly expenses.................. 934[/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
    Paypal.........................2500......90........0
    Barclays.......................3210......93........0
    Virgin money...................485.......30........0
    Mbna...........................3500......120.......0
    Updraft........................3700......129.......0
    JN bank loan...................7400......224.......0
    Halifax cc.....................6000......150.......0
    Halifax loan...................3000......211.......0[b]
    Total unsecured debts..........29795.....1047......-  If I understand you correctly you're actually only paying out £213 a month here as you have stopped all the others and are letting them default?  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 1,800
    Expenses (including HP & secured debts). 934
    Available for debt repayments........... 866
    Monthly UNsecured debt repayments....... 1,047[b]
    Amount short for making debt repayments. -181 If my understanding above is correct, this is not now a shortfall but instead is a pretty healthy surplus figure?[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -29,795[b]
    Net Assets.............................. -29,795[/b]

    [i]Created using the SOA calculator at www.stoozing.com. 
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

    ------

    A few notes;

    Only current unsecured debts im now paying are Barclays / Paypal / Virgin Money. What is the reason for continuing to pay those rather than letting them default too?

    The rest have all defaulted or have been served notice of arrears at least. There are 2 that are chasing more than anything currently which are the JN Bank loan and the Updraft one.

    Jn bank i think have contacted Westcot or 2f and i've received letters / email from them but also another email from JN bank which was a subsequent notice of sum in arrears (currently at £1344.18) 

    Then the one who is attempting to contact most often is for Updraft. Although i am confused with this as i have had CRS and a company called AJJB Law (these guys are already talking about legal action etc.. well "Pending legal action") both attempting to contact me at the same time regarding this. 

    I'm not sure where to start.. do i contact the 2 above who are chasing me and sort something with them first? Do i just stop paying everything and start saving to eventually offer final offers to creditors?

    I also currently house share - with my ex but i am looking to move back to parents temporarily.. maybe for this year so i can focus on getting myself out of this hole. If i do this then my expenses would lower quite a bit..

    Any guidance or help would be appreciated.

    Well done for acknowledging the issue AND being proactive and doing an SOA as a starting point! Comments are in bold above. 

    I agree with the responder above who says that the SOA doesn't quite seem to add up at the moment - allowing that stopping making payments to the majority of the debts has freed up a big chunk of your income, where has that been going of not on debts? You're showing no cash assets so the £100 to the emergency fund looks as though it could be aspirational, and there are things missing like contents insurance which you absolutely must have. 

    I think the first thing you need to do is to work out where your existing surplus goes, and then ask yourself what the benefit is in continuing to pay three of the debts when there are already going to be defaults on your file - would it not make more sense to stop those too, let them default, and then at least the interest stops? One alternative could be to simply use this month's surplus to clear Virgin money and just get that gone altogether as it's pretty small compared to all the others, then make sure that the remaining surplus for this month, plus all of it for future months gets used to build first an emergency fund, and then a "fighting fund" for future F&F offers, as you have said. You will want to continue to budget for monthly payments to the EF too - but that amount can be lowered from the £100 you've currently got set. 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • fatbelly
    fatbelly Posts: 20,234
    Name Dropper First Anniversary First Post Cashback Cashier
    Forumite
    edited 10 January at 9:41AM
    Ok. There may be some room to reduce some sections a little, like food and clothing.

    On the flip side you have nothing for travel costs

    But you are a long way off meeting the contractual payments and have already defaulted.

    A DMP will see you debt-free in under 3 years.

    Kim's thread is going to be useful here

    https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps/p1
  • KxMx
    KxMx Posts: 10,555
    First Post Name Dropper First Anniversary Photogenic
    Forumite
    The SOA mentions pet insurance/vet bills, so I don't think £250 is that high for feeding a single person + one or more pets. 
    I'm a single person pet less household, and budget £170 pm for food. 
  • EssexHebridean
    EssexHebridean Posts: 20,876
    Name Dropper First Anniversary Photogenic First Post
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    KxMx said:
    The SOA mentions pet insurance/vet bills, so I don't think £250 is that high for feeding a single person + one or more pets. 
    I'm a single person pet less household, and budget £170 pm for food. 
    Fair point - without knowing what the pets are and what/how much they eat though, it's tricky to be sure. I'm always in favour of people reviewing what they do for grocery spending anyway - indeed we're currently in a position of doing that ourselves in spite of our only debt being our mortgage and our budget (for a couple, albeit without any pets) being slightly lower than the OP currently has set. 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • Tracker90
    Tracker90 Posts: 10
    First Post
    Forumite
    Hi Everyone, I wanted to say I really appreciate the responses received and I’ve taken note. I agree regarding SOA - it’s something I put together late last night but I’ll go through it thoroughly tonight and update - apologies for this. I think just accepting my situation and reaching out for help is a big step for me as it is embarrassing to let the financial side get to this point. I have probably paid a ridiculous amount in interest over time also. I’ll add a few notes which may affect my income as I’m trying to work some extra hours consistently at work. 
  • EssexHebridean
    EssexHebridean Posts: 20,876
    Name Dropper First Anniversary Photogenic First Post
    Forumite
    Almost everyone responding to you here with help has been in a position of letting their finances get away from them and ending up in debt at some stage - it's how most of us ended up here in the first place! Absolutely nothing to be embarrassed about - feel proud of the fact that you're taking steps now to sort things out, that is more than the majority of people worrying about debt will do this week! 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • Tracker90
    Tracker90 Posts: 10
    First Post
    Forumite
    Ok I went back through things and this is what I have now. Basically only unsecured debt I still am paying is Barclays / PayPal / Virgin Money. Should I just cancel the DD’s for these now and wait for them to default? Or should I at least just pay off the £485 for Virgin money at the end of this month just to have one less thing to deal with? One note though, if I miss a payment with paypal they’ll charge £12 each time, should I not care about this?

    Further notes;

    - I plan to move back to my parents temporarily while I sort this. This would save me a lot of money in bills as I’m sure they’d help me get out of this situation. Probably as early as March.

    - my groceries are based on my receipts over last few months. Usually £40/50 a week. This also includes the £25 a month I spend on my dogs food. 

    - contents insurance expired in December and didn’t renew. Not sure there is a point yet until I move back to parents?

    - as I’m moving I will also be able to generate some funds by selling items I’m not taking. Should any funds generated be put into an EF?

    - I do travel to work via bus or a lift from a colleague. My bus tickets are paid by work though. 

    - I’ve added what average I spent on holiday / entertainment / presents in 2023.. this was an oversight, apologies for that.

    - I haven’t started an EF yet but would like to start asap

    - Soon, I will also be receiving a small inheritance, I think around £5000-6000. And I have some collectible trading cards I can sell and generate around £3000 I believe. What would be the best thing to do with this money once all debts are defaulted? Offer a settlement with some of them?

    - what should I do about AJJB law as they are mentioning legal action in emails? They are overseeing Updraft (also made a mistake on how much I owe, it’s £500 less at £3200)

    - what should I do as others default?

    - i bank with Halifax (I receive wage here weekly) but my bills are paid from a Barclays current account where myself and my ex transfer the money to cover bills. As I owe money to Halifax, with the CC defaulted, should I change where my wage is paid into?

    - last note, I can increase my take home pay to between £470 - £490 a week by working some extra available hours I could do 

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

    Monthly Income Details[/b]
    Monthly income after tax................ 1800
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 1800[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 300
    Management charge (leasehold property).. 0
    Council tax............................. 60
    Electricity............................. 30
    Gas..................................... 30
    Oil..................................... 0
    Water rates............................. 14
    Telephone (land line)................... 0
    Mobile phone............................ 11
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 27
    Groceries etc. ......................... 250
    Clothing................................ 20
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 40
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 12
    Presents (birthday, christmas etc)...... 25
    Haircuts................................ 10
    Entertainment........................... 20
    Holiday................................. 80
    Emergency fund.......................... 100[b]
    Total monthly expenses.................. 1029[/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
    Barclays.......................3200......90........0
    PayPal credit..................2400......90........0
    Virgin money...................485.......30........0
    Jn bank........................7400......224.......0
    Halifax cc.....................6000......150.......0
    Halifax loan...................3000......211.......0
    Updraft........................3200......129.......0
    Mbna...........................3500......120.......0[b]
    Total unsecured debts..........29185.....1044......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 1,800
    Expenses (including HP & secured debts). 1,029
    Available for debt repayments........... 771
    Monthly UNsecured debt repayments....... 1,044[b]
    Amount short for making debt repayments. -273[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -29,185[b]
    Net Assets.............................. -29,185[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]


  • fatbelly
    fatbelly Posts: 20,234
    Name Dropper First Anniversary First Post Cashback Cashier
    Forumite
    edited 11 January at 4:44AM
    Follow the guidance here

    https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps/p1

    Use the figures that you have now

    When your surplus income increases, throw that into your fighting fund along with your inheritance and any other monies you can generate.

    As for ajjb, threats mean nothing but if you get a formal preaction letter with reply form and 30-day limit, you do have to respond (ask if it happens). You may ultimately have to dip in to your fighting fund on that one, but let's kick it down the road as much as we can.

    After around six months all the debts should have defaulted and you can start to make f&f offers from your fund

    If you want to get rid of Virgin, that's up to you. 
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