DMP- Best way?

Lolly18

Hi all,

I’m currently sitting with debt at just over 38 grand 3 personal loans and 3 credit cards.

all are currently up to date with no missed payments. I’m really struggling day to day and can not afford to carry on. I’m borrowing more and more just to live.

i have spoken to step change and their recommended solution was a DMP, I haven’t entered this yet as I wanted to explore my options first.

iv read advice to other people on this forum regarding letting my debts default first and saving up an emergency fund. If I did this iv allowed a saving of £800 a month ( my total to debt is currently 1217 a  month, iv allowed an extra £417 into my day to day living cost and the rest towards the fund) untill I start my DMP which would give me a fair amount for a fund.

im a bit unsure about managing the DMP myself or going with stepchange when I start so any advice in this?

I am also concerned about bailiffs showing up at my house. At what point would this happen if it ever did?

also, step change also said that an IVA and bankruptcy were available to me. They didn’t recommend it but at the same time they didn’t not either. An advice on this would be great too.

thanks everyone 

fatbelly

Loans and credit cards are Consumer Credit Act debts. One of the advantages is that commercial bailiffs - the ones you see on telly and the ones paid by results CANNOT be used. Only the court bailiffs, and they are salaried employees who may well assist you rather than harass you.

In order to get to that stage there would have to be arrears, default, court claim, you ignore the court claim, ccj, you ignore the ccj, creditor pays for a warrant, bailiff writes, you ignore.

See, a lot of stages. Now forget about bailiffs.

With the sort of money you have available, you do not need an insolvency option.

Post a statement of affairs if you want more detailed help

Lolly18

Thanks for your reply. Current situation looks like this

Earnings per month between £2600 and £3000 so based on average of £2800

Living cost per month

£740  rent

£600 PM food shop for 4 people

£254 car finance (not included in DMP

£300 fuel

£150 electric

£160 council tax

£41 water 

£35 phone

£26 broadband 

£44 car insurance 

£22 union membership

Total £2372.

£428 spare income

Vanquis loan £13,189 monthly payment £337

Novuna loan - £9883 monthly payment £261

Lloyds bank loan £9743 monthly payment £433

Creation £890 monthly payment £41

Virgin CC £3980 monthly payment £140

Loyds cc £501 monthly payment £15

Barclay card £450 monthly payment £21

Total debt £38,185 total per month £1217

I borrow each month and I’m working all the hours god send to make it work

RAS

There's rather a lot missing from your Statement of Affairs. See www.lemonfool.co.uk.

And check out clothing, medical and dental, holiday, Christmas and birthdays, contents insurance, any kid's activities, any car maintenance depending on your car deal. Just off the top of my head.

Any second income? Child benefit?

Format the lemonfool SOA for MSE and repost it

Lolly18

Ahh sorry guys iv got mixed up, this is what iv just done for like a budget.

I’ll have a re think and come back. Thanks for that

Lolly18

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

Household Information[/b]

Number of adults in household........... 2

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

Number of cars owned.................... 2[b]

Monthly Income Details[/b]

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

Partners monthly income after tax....... 900

Benefits................................ 160

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

Total monthly income.................... 3860[/b][b]

Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 253

Rent.................................... 740

Management charge (leasehold property).. 0

Council tax............................. 160

Electricity............................. 150

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

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

Water rates............................. 41

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

Mobile phone............................ 35

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

Satellite/Cable TV...................... 0

Internet Services....................... 26

Groceries etc. ......................... 600

Clothing................................ 30

Petrol/diesel........................... 300

Road tax................................ 2.83

Car Insurance........................... 44

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

Car parking............................. 0

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

Childcare/nursery....................... 150

Other child related expenses............ 50

Medical (prescriptions, dentist etc).... 20

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

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

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

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

Other insurance......................... 70

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

Haircuts................................ 117

Entertainment........................... 100

Holiday................................. 100

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

Total monthly expenses.................. 3058.83[/b]

[b]

Assets[/b]

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

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

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

Car(s).................................. 9000

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

Total Assets............................ 9000[/b]

[b]

Secured & HP Debts[/b]

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

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

Hire Purchase (HP) debt ...... 15670....(253)......0[b]

Total secured & HP debts...... 15670.....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Lloyds bank loan...............9743......428.......17.69

Novuna loan....................9883......260.......20.9

Vanquis loan...................13189.....337.......29.8

Barclay card...................450.......21........38.49

Lloyds credit card.............501.......16.59.....34.55

Virgin credit card.............4030......140.......26.49[b]

Total unsecured debts..........37796.....1202.59...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,860

Expenses (including HP & secured debts). 3,058.83

Available for debt repayments........... 801.17

Monthly UNsecured debt repayments....... 1,202.59[b]

Amount short for making debt repayments. -401.42[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 9,000

Total HP & Secured debt................. -15,670

Total Unsecured debt.................... -37,796[b]

Net Assets.............................. -44,466[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

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

I know it seems like I haven’t allowed for things like presents, Christmas etc but this is a true reflection of my current situation. Me and my partner have separate finances also.

im hoping to get the ball rolling with my DMP and do a completely new budget where I won’t need to borrow money for the unexpected things and holidays, gifts, Christmas etc.

kimwp

Thanks  Lolly. I'm not sure what you mean by not allowing for presents, because you have a £50 per month entry for presents?

Also not clear what you mean by you and your partner having separate finances?

Lolly18

Hi kimwp 

that would be my partners saving of £50 for Christmas. 

We have separate finances as in I pay some things and they pay some things and that’s how we do it.

im now including their finances in this SOA. It’s all a mess.

in just want to get sorted and I dont know what to do.

should I do an SOA for my commitment only? 

kimwp

Lolly18 said:

Hi kimwp 

that would be my partners saving of £50 for Christmas. 

We have separate finances as in I pay some things and they pay some things and that’s how we do it.

im now including their finances in this SOA. It’s all a mess.

in just want to get sorted and I dont know what to do.

should I do an SOA for my commitment only? 

Hi Lolly, it does make things more complicated when finances are split, but it basically means seeing what the household spend is to see if there's any advice that can be given about high spend areas or areas that haven't been included. (Which you've done the SOA for) And your personal SOA to see the best solution for your situation. Because your finances are split, there may be advice about adjusting the split or questions about whether the debt assigned to you is fair (we've had people on here run up debts spending on their family's needs because their income is much less than their partner's, but they've still split everything 50:50)- like any questions, advice or comments, you can adopt/answer or ignore as you see fit.

On the presents point, are you saying you don't have any spend on presents/Christmas or just that you don't regularly put money aside for it? If you spend on it, you should put it in your SOA- divide the total annual spend by 12.

Lolly18

All the debt is mine, my partner has been helping me get on top of it and I now need to face it and get sorted.

i don’t regularly put away money for presents etc, either I would deal with it as it came or my partner would sort it out.

in my first budget I posted that is what I spend. I don’t save, and that is what I pay for. And that is what I have left for debt payments out of my own money. Some moths my partner will
give me money to help stay on top or my mum will.

i want to get away from that so I thought the best thing to do would be to include my commitments only and then look at how much I can put towards a DMP.

does that make any sense? And should I do it like that?

Grumpelstiltskin

Why not think about not paying any of the debts in April and at the end of the month you could with a following wind clear the 2 smallest credit cards?

Once they are clear make sure you close the accounts and destroy the cards and remove their details from any online accounts.

Then let the others default that could take some months and save as much as you can towards an emergency fund.

You will learn to live without access to credit but make sure your emergency fund is kept topped up.

 Do not speak to any of your creditors on the phone, block their numbers, you can ignore any threats you get by E Mail and the majority of the letters you get will contain empty threats.