In quite a bit of debt, advice needed!

Jvoke · 27 June 2024 at 3:51PM

stu12345_2 said:

if interest is frozen you could repay it all in 3 years approx DMP and even faster if you got your rent, gas , electric under control, your rent is more than 30% of your pay which is never advised.

is your water every 3 months?

Yeah rent is quite high but pretty normal for my area unfortunately. Rent has gone insane recently it seems.

It feels like we are good with our usage, I feel I am pretty conservative with electricity/gas/water, do they look high to you?

Like I said I've been away from the country for a few years so still adjusting to the budget and cost needed here.

How did you get 3 years by the way? I got 4 with interest completely frozen.
Without a DMP, I could potentially save way more money and then aim for settlements in the future which would mean less paid back overall as well right?

I went to Stepchange and they didn't seem interested in me at all...

stu12345_2 · 27 June 2024 at 4:12PM

settlements can take years and some only offer 5% off. maybe between 3 and 4 years dmp I mean to repay it all

I always think, up wages, reduced rent or reduced interest are key takeaways to being debt free

.interest is always the killer in debts imo, never the amount borrowed.

I live in a very touristy area and my water is £13 a month, gas is now down to £25 summer and electricity is always around £62 every month

Floss · 27 June 2024 at 4:54PM

@Jvoke could I ask what the £200 for entertainment is? If you could half that it would give you a little flex.

Jvoke · 27 June 2024 at 5:10PM

Floss said:

@Jvoke could I ask what the £200 for entertainment is? If you could half that it would give you a little flex.

Just an estimate of a bit of money to use for stuff like days out with the little one, some of my hobbies and their related costs, the odd takeaway etc.

Like I said me and my wife live really basic lives at the moment, we don't really have any joy apart from looking after our child. All of my money is gone each month on priority payments, debts and groceries.

This SOA is what I would aim for. Currently we don't have £200 per month on entertainment, it's what I would put forward for a DMP so we don't go insane over the 3-4 years of repaying this...

Jvoke · 27 June 2024 at 5:14PM

stu12345_2 said:

settlements can take years and some only offer 5% off. maybe between 3 and 4 years dmp I mean to repay it all

I always think, up wages, reduced rent or reduced interest are key takeaways to being debt free

.interest is always the killer in debts imo, never the amount borrowed.

I live in a very touristy area and my water is £13 a month, gas is now down to £25 summer and electricity is always around £62 every month

I was under the assumption that the main advice here was not to DMP but to aim to default then DMP/Token pay after aiming for a settlement figure?

If I DMP now, it could be a year before I get defaulted (Defaults are inevitable on a DMP right?) which would then mean my credit is screwed for longer. Even worse I could be stuck on repayment markers and then they decided to default in 4 years time, meaning I'm credit screwed for 10 years...

Superhoopza · 27 June 2024 at 5:52PM

Jvoke said:

Here is my SOA, I clicked formatted for MSE but it pasted weirdly with the format tags displayed so I just formatted it myself.

I put childcare costs in to groceries as my little ones main expenses at the moment are food, formula, nappies and wet wipes, all of which we buy at the supermarket.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 3800
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3800

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1450
Management charge (leasehold property).. 0
Council tax............................. 178
Electricity............................. 150
Gas..................................... 50
Oil..................................... 0
Water rates............................. 100
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 69
Groceries etc. ......................... 600
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).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 15
Other insurance......................... 0
Presents (birthday, christmas etc)...... 45
Haircuts................................ 20
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 3002

Assets
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
Loan...........................8200......189.......22.3
Loan...........................15950.....580.......17.2
Loan...........................1600......335.......14.5
Variable credit card...........5400......570.......26
Credit card....................3950......180.......29.6
Credit card....................3950......200.......31.1
Total unsecured debts..........39050.....2054

Monthly Budget Summary
Total monthly income.................... 3,800
Expenses (including HP & secured debts). 3,002
Available for debt repayments........... 798
Monthly UNsecured debt repayments....... 2,054
Amount short for making debt repayments. -1,256

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -39,050
Net Assets.............................. -39,050

Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.

Ok after posting the SOA it shows that even once the November loan goes, you still couldn't afford monthly repayments, which change the goal posts completely.

RAS · 27 June 2024 at 6:11PM

The whole thing is that in England and Wales, DMP is a flexible informal arrangement. Obviously the debt charities have their own formulas and agreements with a lot of creditors, but that doesn't mean that those are the only options nor are the ones some of us on MSE suggest based on years of seeing what trips people up. And making a debt management plan could mean taking stock and working out how to pay off you debt whilst paying least interest or token payments for a couple of years before some factor in your life allows you to start paying it down.

Looking at what you have for groceries and entertainment, and knowing that you need to get through the next few months, I assume the figure you quote are aspirational rather than actual. You can certainly live on much less that £600 per month even with a small baby.

I'd be tempted to do as you suggested and try to negotiate a payment holiday without AP markers on one or two accounts. If that comes to the end, try another pairing?

Meantime, do look round the house and see if there is anything you can sell, even if you've only recently returned to the UK? Do you or your wife have any skill that might be saleable outside your normal work? Translation services, catering, gardening? You are not going to be doing DoorDash or taxi work, but do you know anyone who'd like an additional staff member for an evening or two a week?

Obviously the way the tax system works, any income your wife earned would be tax and NI free.

And do things like checking charity shops for clothes and kids stuff, if you absolutely need it. Learn when the local shops discount goods, often at the end of the day, but other times it might be morning.

If you are doing a debt management plan with CAPITAL letters because you know your income cannot cover your consumer debt long-term, many here would suggest that you stop paying altogether until the creditors issue defaults. That allows you to build an emergency fund and also ensures your credit record is damaged for the shortest period of time.

You just need to wrangle your way through the next few months.

stu12345_2 · 27 June 2024 at 6:54PM

it be great if we could stop paying anything for say 2 yrs and then ask creditors for a 50% discount, whilst we had saved up in last 2 years

that's isn't going to happen, they will default you in 3 months, 6 months, min and then expect payment arrangements for a few years, it be hard to save up large amounts of money at same time as repaying them a reasonable monthly amount to be able to take advantage of any offers 3 or 4 years down the line.

you can't simplify let them default, then offer them £1 a month whilst you put £800 in a biscuit tin per month or bank, then write to them couple of yrs or 3 down the line, I have £20000, can i get £50% off.

to pay £1 a month for 6 months or even a year, they will won't proof you are pennyless.eg no job etc on benefits or only work a few hours a week etc

Jvoke · 27 June 2024 at 8:03PM

stu12345_2 said:

it be great if we could stop paying anything for say 2 yrs and then ask creditors for a 50% discount, whilst we had saved up in last 2 years

that's isn't going to happen, they will default you in 3 months, 6 months, min and then expect payment arrangements for a few years, it be hard to save up large amounts of money at same time as repaying them a reasonable monthly amount to be able to take advantage of any offers 3 or 4 years down the line.

you can't simplify let them default, then offer them £1 a month whilst you put £800 in a biscuit tin per month or bank, then write to them couple of yrs or 3 down the line, I have £20000, can i get £50% off.

to pay £1 a month for 6 months or even a year, they will won't proof you are pennyless.eg no job etc on benefits or only work a few hours a week etc

I understand your point and not expecting it to go on for years.
However judging by a lot of peoples experience on here, some defaults don't even kick in even after a year.

And what is stopping me doing like you said putting away a decent amount each month? They are unsecured loans at the end of the day right? They can't force the money out of me unless with a CCJ which wouldn't happen for a long time. If I kept an eye on it and it looked like it was going the CCJ route I could then jump in and start offering a somewhat decent repayment structure or token payment.

But even then they can't CCJ until I am defaulted right?

Morally it's probably not the right thing to do but it just makes me feel like it's the most logical approach with the least amount of credit score/report damage while also potentially paying back the least amount of money with settlement figures as the debt degrades in value the longer it's on these token payments/dmps.

Am I being naive or have misjudged the way it works out? All of this is quite new to me so I might just have the wrong end of the stick.

Jvoke · 27 June 2024 at 8:07PM

Superhoopza said:

Jvoke said:

Here is my SOA, I clicked formatted for MSE but it pasted weirdly with the format tags displayed so I just formatted it myself.

I put childcare costs in to groceries as my little ones main expenses at the moment are food, formula, nappies and wet wipes, all of which we buy at the supermarket.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 3800
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3800

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1450
Management charge (leasehold property).. 0
Council tax............................. 178
Electricity............................. 150
Gas..................................... 50
Oil..................................... 0
Water rates............................. 100
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 69
Groceries etc. ......................... 600
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).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 15
Other insurance......................... 0
Presents (birthday, christmas etc)...... 45
Haircuts................................ 20
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 3002

Assets
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
Loan...........................8200......189.......22.3
Loan...........................15950.....580.......17.2
Loan...........................1600......335.......14.5
Variable credit card...........5400......570.......26
Credit card....................3950......180.......29.6
Credit card....................3950......200.......31.1
Total unsecured debts..........39050.....2054

Monthly Budget Summary
Total monthly income.................... 3,800
Expenses (including HP & secured debts). 3,002
Available for debt repayments........... 798
Monthly UNsecured debt repayments....... 2,054
Amount short for making debt repayments. -1,256

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -39,050
Net Assets.............................. -39,050

Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.

Ok after posting the SOA it shows that even once the November loan goes, you still couldn't afford monthly repayments, which change the goal posts completely.

Potentially yes, this is more my ideal spend with a DMP in place. Currently I've got £0 per month for entertainment due to it all going on debt for example.

I really can't estimate my current budget because my current budget is just: pay bills, pay rent, pay debt, scrape enough money for groceries (sometimes dipping in to credit card) for the month. It's unsustainable really right?

In quite a bit of debt, advice needed!

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