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Struggling and getting in to more debt
GarrusVakarian
Posts: 6 Forumite
Hello,
I'm looking for advice on my debt problems, number of years just ignoring and not prioritising debt and its built up to a point where I cannot manage it any more. I've been listening and reading advice but I'm unsure of what actions to take. Trying to earn more money to pay it down but struggling to find something, here is my SOA
I'm looking for advice on my debt problems, number of years just ignoring and not prioritising debt and its built up to a point where I cannot manage it any more. I've been listening and reading advice but I'm unsure of what actions to take. Trying to earn more money to pay it down but struggling to find something, here is my SOA
[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.................... 0[b]
Monthly Income Details[/b]
Monthly income after tax................ 2230
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 2230[/b][b]
Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 775
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 57
Internet Services....................... 0
Groceries etc. ......................... 700
Clothing................................ 0
Petrol/diesel........................... 120
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................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 17
Presents (birthday, christmas etc)...... 50
Haircuts................................ 25
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 100[b]
Total monthly expenses.................. 1869[/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
MBNA Loan......................13991.....364.5.....0
Tesco Bank CC..................2554......50........0
PayPal.........................1267.65...50........0
Lloyds Bank Overdraft..........2500......60........0
VERY...........................93........7.99......0
Natwest CC.....................6747......70.5......0
Barclaycard CC.................1330.12...52.35.....0[b]
Total unsecured debts..........28482.77..655.34....- [/b]
[b]
Monthly Budget Summary[/b]
Total monthly income.................... 2,230
Expenses (including HP & secured debts). 1,869
Available for debt repayments........... 361
Monthly UNsecured debt repayments....... 655.34[b]
Amount short for making debt repayments. -294.34[/b]
[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -28,482.77[b]
Net Assets.............................. -28,482.77[/b]
[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
Advice I've been seeing is that I should contact my creditors and ask for a reduced payment plan or to just let them default and then do it but I'm a bit afraid of the outcome of this. I'm in England and I've been through the StepChange website, that suggests an IVA but again a bit afraid of the outcome of that.
Thank you in advance.
Advice I've been seeing is that I should contact my creditors and ask for a reduced payment plan or to just let them default and then do it but I'm a bit afraid of the outcome of this. I'm in England and I've been through the StepChange website, that suggests an IVA but again a bit afraid of the outcome of that.
Thank you in advance.
0
Comments
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BTW on my SOA above, I have a company car so don't pay insurance etc. just required to pay for the fuel. My partner has a car in her name.0
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A few pointsGarrusVakarian said:Hello,
I'm looking for advice on my debt problems, number of years just ignoring and not prioritising debt and its built up to a point where I cannot manage it any more. I've been listening and reading advice but I'm unsure of what actions to take. Trying to earn more money to pay it down but struggling to find something, here is my SOA[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]Household Information[/b]Number of adults in household........... 2Number of children in household......... 2Number of cars owned.................... 0[b]Monthly Income Details[/b]Monthly income after tax................ 2230Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 2230[/b][b]Monthly Expense Details[/b]Mortgage................................ 0Secured/HP loan repayments.............. 0Rent.................................... 775Management charge (leasehold property).. 0Council tax............................. 0Electricity............................. 0Gas..................................... 0Oil..................................... 0Water rates............................. 0Telephone (land line)................... 0Mobile phone............................ 25TV Licence.............................. 0Satellite/Cable TV...................... 57Internet Services....................... 0Groceries etc. ......................... 700Clothing................................ 0Petrol/diesel........................... 120Road tax................................ 0Car Insurance........................... 0Car maintenance (including MOT)......... 0Car parking............................. 0Other travel............................ 0Childcare/nursery....................... 0Other child related expenses............ 0Medical (prescriptions, dentist etc).... 0Pet insurance/vet bills................. 0Buildings insurance..................... 0Contents insurance...................... 0Life assurance ......................... 0Other insurance......................... 17Presents (birthday, christmas etc)...... 50Haircuts................................ 25Entertainment........................... 0Holiday................................. 0Emergency fund.......................... 100[b]Total monthly expenses.................. 1869[/b][b]
Does your partner not work or are you not counting her income for some reason? Is this because she is a Turian?
You have two children but no benefit, based on your income you would be eligible for Child Benefit, which should help a little.
You are spending £57 a month on TV services, are these purely streaming because if they are not then you need a TV license. I am presuming that this also includes your broadband? There should be some saving possible here, to at least under £30 pm.
Groceries you could probably save some from, batch cooking, switching to cheaper brands etc. though how much would depend on the age of your children.
Not that I would suggest people take on more costs, but you should really look at life assurance as you have children.
How much is in your emergency fund at the moment?
Can you add the terms and how long the 0% interest deals are for please? Eg. if one is 18 months and the other is 2 months then it makes sense to factor in those future changes in interest rate.GarrusVakarian said:Assets[/b]Cash.................................... 0House value (Gross)..................... 0Shares and bonds........................ 0Car(s).................................. 0Other assets............................ 0[b]Total Assets............................ 0[/b][b]No Secured nor Hire Purchase Debts[/b][b]Unsecured Debts[/b]Description....................Debt......Monthly...APRMBNA Loan......................13991.....364.5.....0Tesco Bank CC..................2554......50........0PayPal.........................1267.65...50........0Lloyds Bank Overdraft..........2500......60........0VERY...........................93........7.99......0Natwest CC.....................6747......70.5......0Barclaycard CC.................1330.12...52.35.....0[b]Total unsecured debts..........28482.77..655.34....- [/b]
Have you managed to stem the spending that accumulated the debt? The debt is not horrific and you could get past break even with a few changes, but equally with only a small additional amount it would take a long time to clear.GarrusVakarian said:Monthly Budget Summary[/b]Total monthly income.................... 2,230Expenses (including HP & secured debts). 1,869Available for debt repayments........... 361Monthly UNsecured debt repayments....... 655.34[b]Amount short for making debt repayments. -294.34[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 0Total HP & Secured debt................. -0Total Unsecured debt.................... -28,482.77[b]Net Assets.............................. -28,482.77[/b]
According to your SOA you are not paying any interest so reduced payment plans and/or defaults straight away might make things harder in the short term. IVAs have implications, but again they are not the end of the world.GarrusVakarian said:Advice I've been seeing is that I should contact my creditors and ask for a reduced payment plan or to just let them default and then do it but I'm a bit afraid of the outcome of this. I'm in England and I've been through the StepChange website, that suggests an IVA but again a bit afraid of the outcome of that.
Are you a social renter, renting privately? Does your job depend on not having defaults, or not allow people with IVAs (work in financial services usually, though can include other cash handling jobs etc.).
Does your income account for the BIK tax on the car? Is it fully net?GarrusVakarian said:BTW on my SOA above, I have a company car so don't pay insurance etc. just required to pay for the fuel. My partner has a car in her name.0 -
I assume you and your partner have separate finances? Does she/he pay council tax, utilities etc?
£700 is high for groceries for 4 people and although you say £100 for emergencies you obviously do not save this as there is nothing in cash. As you do not have a lot left over though I think you will need to default and explore a DMP. An IVA is an option but I am not sure that is best for you. They are quite inflexible but you do not have assets to protect so that is often suggested. Personally I would rather go for a DMP and if you pay off £300 a month once the interest charges stop it would repay the debt in about 8 years possibly less if your income improves or you manage to get F and Fs. Your credit rating will be shot for the next 6 years which may be an issue if you rent so not to be taken lightly but without increasing your income, getting your partner to shoulder more of the expenses or reducing outgoings I cannot see another solution for you.
You have not put interest rates but I am guessing that overdraft is 40%. You do not have enough to even service the loan. Was that a debt consolidation loan?I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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Hi,GarrusVakarian said:Hello,
I'm looking for advice on my debt problems,
Advice I've been seeing is that I should contact my creditors and ask for a reduced payment plan or to just let them default and then do it but I'm a bit afraid of the outcome of this.
I'm in England and I've been through the StepChange website, that suggests an IVA but again a bit afraid of the outcome of that.
Thank you in advance.
What "outcome" are you afraid of?
You appear to have been reading good advice, you`re £300 a month short on your debt re-payments, so you need to take steps to reduce your outgoings, and increase your income if that`s at all possible.
Defaulting, and entering debt management is a well worn path to repaying unaffordable debt, token payments are OK as a short term solution, an IVA is a more formal approach, but as your not a homeowner, or hold significant assets, an IVA would not be suitable for you.
Your a possible candidate for a DRO, or even bankruptcy if the shoe fits, it would depend on how formally you want to deal with this and what timeframe you have in mind to clear it all.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter1 -
Thanks for the quick reply I really appreciate it, I've added answers above.MattMattMattUK said:
A few pointsGarrusVakarian said:Hello,
I'm looking for advice on my debt problems, number of years just ignoring and not prioritising debt and its built up to a point where I cannot manage it any more. I've been listening and reading advice but I'm unsure of what actions to take. Trying to earn more money to pay it down but struggling to find something, here is my SOA[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]Household Information[/b]Number of adults in household........... 2Number of children in household......... 2Number of cars owned.................... 0[b]Monthly Income Details[/b]Monthly income after tax................ 2230Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 2230[/b][b]Monthly Expense Details[/b]Mortgage................................ 0Secured/HP loan repayments.............. 0Rent.................................... 775Management charge (leasehold property).. 0Council tax............................. 0Electricity............................. 0Gas..................................... 0Oil..................................... 0Water rates............................. 0Telephone (land line)................... 0Mobile phone............................ 25TV Licence.............................. 0Satellite/Cable TV...................... 57Internet Services....................... 0Groceries etc. ......................... 700Clothing................................ 0Petrol/diesel........................... 120Road tax................................ 0Car Insurance........................... 0Car maintenance (including MOT)......... 0Car parking............................. 0Other travel............................ 0Childcare/nursery....................... 0Other child related expenses............ 0Medical (prescriptions, dentist etc).... 0Pet insurance/vet bills................. 0Buildings insurance..................... 0Contents insurance...................... 0Life assurance ......................... 0Other insurance......................... 17Presents (birthday, christmas etc)...... 50Haircuts................................ 25Entertainment........................... 0Holiday................................. 0Emergency fund.......................... 100[b]Total monthly expenses.................. 1869[/b][b]
Does your partner not work or are you not counting her income for some reason? Is this because she is a Turian?
She needs some calibrations.
No she has income but hers is tied up with all other bills (council tax, electricity etc.) so she has no spare money at all so just left that out. I will add it in though as i can imagine it affects advice.
You have two children but no benefit, based on your income you would be eligible for Child Benefit, which should help a little.
I will check this out.
You are spending £57 a month on TV services, are these purely streaming because if they are not then you need a TV license. I am presuming that this also includes your broadband? There should be some saving possible here, to at least under £30 pm.
Partner pays TV license - This is for TV and Broadband although that expires in September so will need to renegotiate but happy to come down in package
Groceries you could probably save some from, batch cooking, switching to cheaper brands etc. though how much would depend on the age of your children.
I'm trying to cut this down now, we tend to do the main shop at Asda but looking to switch to Aldi now, my children are 15 and 2 (big gap)
Not that I would suggest people take on more costs, but you should really look at life assurance as you have children.
Noted.
How much is in your emergency fund at the moment?
None, i added that in because advice from StepChange to add to a small pot for emergencies. I don't currently do this.
Can you add the terms and how long the 0% interest deals are for please? Eg. if one is 18 months and the other is 2 months then it makes sense to factor in those future changes in interest rate.GarrusVakarian said:Assets[/b]Cash.................................... 0House value (Gross)..................... 0Shares and bonds........................ 0Car(s).................................. 0Other assets............................ 0[b]Total Assets............................ 0[/b][b]No Secured nor Hire Purchase Debts[/b][b]Unsecured Debts[/b]Description....................Debt......Monthly...APRMBNA Loan......................13991.....364.5.....0Tesco Bank CC..................2554......50........0PayPal.........................1267.65...50........0Lloyds Bank Overdraft..........2500......60........0VERY...........................93........7.99......0Natwest CC.....................6747......70.5......0Barclaycard CC.................1330.12...52.35.....0[b]Total unsecured debts..........28482.77..655.34....- [/b]
Yes i will do this, I didn't do it because i'm at work so cannot login to find the APR. They are all accumulating interest however, except from the Natwest CC which is on a balance transfer offer until next year (Feb 2025)
Have you managed to stem the spending that accumulated the debt? The debt is not horrific and you could get past break even with a few changes, but equally with only a small additional amount it would take a long time to clear.GarrusVakarian said:Monthly Budget Summary[/b]Total monthly income.................... 2,230Expenses (including HP & secured debts). 1,869Available for debt repayments........... 361Monthly UNsecured debt repayments....... 655.34[b]Amount short for making debt repayments. -294.34[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 0Total HP & Secured debt................. -0Total Unsecured debt.................... -28,482.77[b]Net Assets.............................. -28,482.77[/b]
I'm trying to, just mainly pointless spending (Takeouts etc.) i've removed all apps for anything that i don't need to spend money on.
According to your SOA you are not paying any interest so reduced payment plans and/or defaults straight away might make things harder in the short term. IVAs have implications, but again they are not the end of the world.GarrusVakarian said:Advice I've been seeing is that I should contact my creditors and ask for a reduced payment plan or to just let them default and then do it but I'm a bit afraid of the outcome of this. I'm in England and I've been through the StepChange website, that suggests an IVA but again a bit afraid of the outcome of that.
Are you a social renter, renting privately? Does your job depend on not having defaults, or not allow people with IVAs (work in financial services usually, though can include other cash handling jobs etc.).
Private Renter and i'm 99% sure my job wouldn't be affected but i can confirm. I don't work in finance.
Does your income account for the BIK tax on the car? Is it fully net?GarrusVakarian said:BTW on my SOA above, I have a company car so don't pay insurance etc. just required to pay for the fuel. My partner has a car in her name.
My income is minus the deductible for the car although its an electric car, it only costs around £11 per month at the minute, I know that will change in the near future.0 -
Yes that is correct, my partner covers that with her income.enthusiasticsaver said:I assume you and your partner have separate finances? Does she/he pay council tax, utilities etc?
£700 is high for groceries for 4 people and although you say £100 for emergencies you obviously do not save this as there is nothing in cash. As you do not have a lot left over though I think you will need to default and explore a DMP. An IVA is an option but I am not sure that is best for you. They are quite inflexible but you do not have assets to protect so that is often suggested. Personally I would rather go for a DMP and if you pay off £300 a month once the interest charges stop it would repay the debt in about 8 years possibly less if your income improves or you manage to get F and Fs. Your credit rating will be shot for the next 6 years which may be an issue if you rent so not to be taken lightly but without increasing your income, getting your partner to shoulder more of the expenses or reducing outgoings I cannot see another solution for you.
You have not put interest rates but I am guessing that overdraft is 40%. You do not have enough to even service the loan. Was that a debt consolidation loan?
I'm trying to reduce the £700, swapping from Asda to Aldi although finding the prices aren't much different. But yes, I don't have any money saved I added that from advice doing a budget with StepChange.
I'm struggling to find the APR from my accounts just looking on the apps, trying to find some documents now.0 -
If you are able to do a second SOA with her income and costs, it means people can get a fuller picture. The interest rates are also key to the debts, though as Sourcrates says one of an IVA/DRO/bankruptcy etc. is likely to be a reasonable option. Do you know approximately how much her car is worth as that can impact those.
Are all the debts in your name or are some in her name? If the above debts are in your name is she debt free? Just to confirm you say partner, are you married?
Who do you have your current account with? It would be wise to open a new current account with a banking group that you do not owe money to, then get your income paid into there instead.
If your partner is not then make sure you put in a claim for Child Benefit. It is not huge but it would be worth £2,200 a year to you which would be helpful. It could also be backdated three months which would be around £550 which would help your emergency fund.
https://www.gov.uk/child-benefit
Some of it will involve dropping brands, other things such as using less meat in meals, making sure you reduce things such as ready meals, packaged snack foods etc. as they are usually the most expensive items in people's grocery shop.GarrusVakarian said:I'm trying to reduce the £700, swapping from Asda to Aldi although finding the prices aren't much different. But yes, I don't have any money saved I added that from advice doing a budget with StepChange.
They will be in the statements but might not be easily visible in the app. Take your time, when you have all the info together people will be here and able to assist.GarrusVakarian said:I'm struggling to find the APR from my accounts just looking on the apps, trying to find some documents now.0 -
Just having debt collectors chasing me, I'm quite anxious already. I understand that its my fault and I need to step up to it. Also, having been using credit for so long, not having a bit of a backup in case of an emergency but I'm totally overstating it. I know I need to do something as its making me miserable.sourcrates said:
Hi,GarrusVakarian said:Hello,
I'm looking for advice on my debt problems,
Advice I've been seeing is that I should contact my creditors and ask for a reduced payment plan or to just let them default and then do it but I'm a bit afraid of the outcome of this.
I'm in England and I've been through the StepChange website, that suggests an IVA but again a bit afraid of the outcome of that.
Thank you in advance.
What "outcome" are you afraid of?
You appear to have been reading good advice, you`re £300 a month short on your debt re-payments, so you need to take steps to reduce your outgoings, and increase your income if that`s at all possible.
Defaulting, and entering debt management is a well worn path to repaying unaffordable debt, token payments are OK as a short term solution, an IVA is a more formal approach, but as your not a homeowner, or hold significant assets, an IVA would not be suitable for you.
Your a possible candidate for a DRO, or even bankruptcy if the shoe fits, it would depend on how formally you want to deal with this and what timeframe you have in mind to clear it all.
I'd like to pay it as soon as possible but I don't mind it taking a number of years if I can afford to life.
0 -
Her car is worth around £7000 but thats on a HP.MattMattMattUK said:If you are able to do a second SOA with her income and costs, it means people can get a fuller picture. The interest rates are also key to the debts, though as Sourcrates says one of an IVA/DRO/bankruptcy etc. is likely to be a reasonable option. Do you know approximately how much her car is worth as that can impact those.
Are all the debts in your name or are some in her name? If the above debts are in your name is she debt free? Just to confirm you say partner, are you married?
Who do you have your current account with? It would be wise to open a new current account with a banking group that you do not owe money to, then get your income paid into there instead.
If your partner is not then make sure you put in a claim for Child Benefit. It is not huge but it would be worth £2,200 a year to you which would be helpful. It could also be backdated three months which would be around £550 which would help your emergency fund.
Some of it will involve dropping brands, other things such as using less meat in meals, making sure you reduce things such as ready meals, packaged snack foods etc. as they are usually the most expensive items in people's grocery shop.GarrusVakarian said:I'm trying to reduce the £700, swapping from Asda to Aldi although finding the prices aren't much different. But yes, I don't have any money saved I added that from advice doing a budget with StepChange.
They will be in the statements but might not be easily visible in the app. Take your time, when you have all the info together people will be here and able to assist.GarrusVakarian said:I'm struggling to find the APR from my accounts just looking on the apps, trying to find some documents now.
All of these debts are in my name, she has no debt apart from the HP of her car.
My current account is with Lloyds. I have a Monzo account which I was using at some point to try and budget better, would you get one with another bank?
I will try to reply later with the full details. Thank you all for advice so far.0
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