Statutory Legal Audit Plan (Debt solutions)

stu12345_2

do as fatbelly suggests , stop paying your credit cards and bank loans now, cancel direct debits, 
use that money to clear family debt and overdraft.

( do not contact a debt charity yet or start a repayment plan with debt charity yet  or offer any form of repayment plan to creditors ____important)
here is why in the MSE stickies

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

 and then save up that money that you are not giving to creditors to create a good  emergency fund in that time.
wait till your debts default, you will get reminder letters , demand letters etc, but that's automated and expected.

no creditor can legally pursue a debt that hasn't defaulted.
 your creditor may  use a debt agency in the meantime if they prefer it. as some creditors don't have the manpower to deal with delinquent accounts.

it's all procedure.

once they default as little as 3 to 6 months, you contact a debt charity like step change or you can run a debt management plan yourself.
( interest will stop once a debt defaults)

you list the creditors balances  to a  free debt charity like step change,  and prove your income to step change, but you never have to prove your expenses.

so up them to more flexible, presents, haircuts, food, leisure, savings, emergency fund, etc.

if step change work out you can repay your debts in under 6 years ,( which you can) they will advice a debt management plan for you as best solution 

you then repay stepchange a monthly amount, they give it to creditors prorata.

you can also write cca letters yourself to the debts that have been sold on after they defaulted to see if they are actually legit, eg the credit agreement actually exists.
( come back here for advice at that point)

and even down the line you will get discounts to settle your debt at a reduced price. , you can write to them or they write to you.
( come back for advice here by that point)

then you can enjoy life more whilst you repay your debts, with no interest and at a repayment rate that suits you and gives you a better life whilst repaying 

michaelyallop

I appreciate the input from you all. I will do a full and accurate SOA.  Hopefully this will be more helpful. 

Thank you once again for your input. I look forward to working with you lot again soon. 

RAS

Meantime, set up a basic bank account with a banking group to whom you owe nothing. If you need a debt management plan, that is going to be a life saver. If you don't, just use it as an emergency fund.

michaelyallop

So I’ve followed the advice and completed an accurate and up to date SOA and it will follow. 

So the advice I see from the forum and from here is to default on the large loan and credit cards and build up an emergency fund. Pay off the bank OD and then wait for the default letters. Am I correct in this? And I have a separate bank account to all of this too. 

And obviously, this will hit my credit score, for which it is doing extremely well very surprisingly to be honest. 853/1000, don’t know how. 

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........... 1

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

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 2650

Partners monthly income after tax....... 0

Benefits................................ 0

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

Total monthly income.................... 2650[/b][b]

Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 0

Rent.................................... 500

Management charge (leasehold property).. 0

Council tax............................. 102

Electricity............................. 80.85

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

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

Water rates............................. 24.66

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

Mobile phone............................ 26.1

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

Satellite/Cable TV...................... 35.97

Internet Services....................... 29

Groceries etc. ......................... 120

Clothing................................ 0

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

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).... 19.6

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

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

Contents insurance...................... 23

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

Other insurance......................... 0

Presents (birthday, christmas etc)...... 40

Haircuts................................ 0

Entertainment........................... 40

Holiday................................. 0

Emergency fund.......................... 40

(Unnamed monthly expense)............... 0

Sickness insurance...................... 59.76

RODAR (prof membership)................. 10

Unison ................................. 22.5

iCloud storage.......................... 8.99

Gym..................................... 25[b]

Total monthly expenses.................. 1507.43[/b]

[b]

Assets[/b]

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

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

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

Car(s).................................. 15250

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

Total Assets............................ 15250[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

MBNA...........................24256.....488.......7

Virgin CC 0% 9/25..............2427.07...40........0

Natwest CC (0% 8/25)...........1816......18.76.....0

Family.........................10500.....500.......0

Barclays.......................183.......22.87.....0

Klarna.........................318.95....24.55.....0

PayPal credit..................506.......18.63.....23

Payment assist.................839.6.....67........0

HSBC OD (free 08/24)...........839.6.....0.........0[b]

Total unsecured debts..........41686.22..1179.81...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,650

Expenses (including HP & secured debts). 1,507.43

Available for debt repayments........... 1,142.57

Monthly UNsecured debt repayments....... 1,179.81[b]

Amount short for making debt repayments. -37.24[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 15,250

Total HP & Secured debt................. -0

Total Unsecured debt.................... -41,686.22[b]

Net Assets.............................. -26,436.22[/b]

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

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

thanks again guys. 

stu12345_2

is your car owned outright, could you sell it for a cheaper model, but a reliable one at same time.

could you get to work on public transport at how much per month


do you have car breakdown cover, if not, why not.
why is road tax, car insurance,mot, servicing, repairs £0 ?

( even if you have already paid, tax and insurance upfront in one go, you still list it, divide by 12 obviously, )
 and repairs , mot , servicing is an average of what you expect to spend a year divided by 12 

cos the true cost of running a car is expensive,  not owning one can be wise at times.

your car holds a lot of value which could be used in clearing your debts.

when does the MBNA card deal at 7% end

what is the sickness insurance 

 as your family debt is higher than previous post, then this doesn't make things as simple as before, is your family loan an official drawn up one or a relaxed one, eg would they accept no payments for a while or reduced payments

you are living on a negative  budget, you must be paying min on cards, then dipping into them again, if you are in a negative budget.

stu12345_2

are you planning on moving home, do you rent private, how good does your credit report have to be when you rent private.

do you have any plans to buy a home in next 6 years.

do you think your job is stable for say next 4 years

Floss

I assume your car is a company one, or leased through your salary? 

michaelyallop

Car is part of the loan. It was a loan from a while ago. It’s the second car I bought this year due to the first breaking down, gearbox issues 4500 if I was to fix it. So purchased this instead. 

The car is all paid up front from the sale of my previous car yes. I didn’t think of sticking down 12th of everything. Thanks. 

I can’t take public transport due to the times I work. Shift work. 

No plans to buy a house in the next 6 years at present. 

Job is secure or will be if I move as it’s the kind of job that I can move around from place to place with. 

MBNA is a loan so is fixed at 7% 

I currently don’t get paid sickness, so if I’m off work won’t get paid. Hence the sickness insurance. 

I private rent. It’s a safe rent so I’m not worried about this place. 

My family debt is complicated. But 0% let’s say that.

stu12345_2

once you add in mot, repairs, servicing, insurance ,road tax , then you are more negative budget than you have put down.

most here would say a £15000 car is unessarily when you owe £41,000.
a cheaper car can do the job just as well.
consider down selling, it will clear your debts faster.
I do realise you will have to damage your credit score, it's part of getting out out of debt.
cos you can't afford anything at the moment, credit score can take a backseat

your car will have to last you, cos you won't get any decent car loan finance again for 6 years min 
but you really want to pay cash for a car.( cos if you have to get a loan,  then you can't afford a car)

thats the  Dave Ramsey thinking, Google his videos and him.( cash only for a car)


, keep up parents loan, but stop all other payments to creditors.even your big mbna loan,  stop all creditors payments.

as I said use that money to pay off overdraft too, whilst you build up a good emergency/ savings pot

then watch for defaults on your creditors. you can wait till they all default, then start a debt management plan ( not yet  with a debt charity, until.they all have defaulted)
but some may take a longer time to default.than others

remember, defaulted accounts stop interest, repair credit file faster, and that's when you start to communicate with them and offer repayment plan, cos at the default point , they can take more serious steps if you ignore creditor..

do not communicate  with creditors until they default, resist contacting them.( it will speed up the defaulting )

or   instead of using a free debt charity, if it's  easier then you can repay each one as they default by organising your own payments plan to each one( pro rata, of course) at your price you choose.

you will probably still be paying parents loan off at same time as the defaulted creditors.but you will be living better as you will have no overdraft, you have a good savings pot by then and the total monthly amounts you make will then be at a rate you fancy, so you are living again and not in a negative monthly budget

stu12345_2

on a side note about cars, once your debt free, based on your wages, you could probably pay cash for a nearly new car via saving up for a year.

paying off newish or new cars with loans have been our downfall, myself and wife had 2 cars, £12000 each on loans, we sold them, cleared finance and bought a £1000 car cash on eBay, it is still going strong after 2.5 yrs.

if it had a major fault, we would scrap it for £200 and buy another £1000 car.

I walk to work now, I realise having a newish car on credit and it's outgoings means your salary isn't your take home wage in reality.


thus I only take on jobs that I can walk to.i don't live in a village, but in a large town with job opportunities.

it's a lovely feeling having a 10 min walk to work.

(and we put claims in for dealer commission scandal, we had that many cars on dealer loans over last few years, the dealers have said to us we did pay overcharged commission, let's see what the national high court case outcome is in September, it could then result in a few grand back to us)

(do any of your previous cars have unfair dealer commission or were they always with bank or family loans)