Debt Relief and Write Off

Nivek975319

Hi All,

So im a debt spiral and im concerned im heading for a debt crisis, in summary im spending substantially more that my income can afford, im losing sleep and becoming very concerend, im not sure how to solve the mess, id like to enter into discussions with my creditors over write off or part settlement/reduced payments.

Im self employed with two dependents, no savings, no assets and a very little equity in my property

What do i do

Grumpelstiltskin

OK You have come to the right place, first thing to do is read this thread.

In Debt and Wannabe Debt Free? First Steps! — MoneySavingExpert Forum
   
Fill  in a honest SOA format for MSE and copy and paste on to here.

When we see your full financial situation we can advise you the best way forward.

Nivek975319

Thanks for getting back to me

Nivek975319

[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................ 6000

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

Benefits................................ 165

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

Total monthly income.................... 6165[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 2250

Secured/HP loan repayments.............. 530

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 191

Electricity............................. 110

Gas..................................... 250

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

Water rates............................. 110

Telephone (land line)................... 35

Mobile phone............................ 60

TV Licence.............................. 15

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

Internet Services....................... 75

Groceries etc. ......................... 1000

Clothing................................ 100

Petrol/diesel........................... 150

Road tax................................ 15

Car Insurance........................... 60

Car maintenance (including MOT)......... 50

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

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

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 15

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

Buildings insurance..................... 42

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

Life assurance ......................... 120

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

Presents (birthday, christmas etc)...... 0

Haircuts................................ 30

Entertainment........................... 0

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

Emergency fund.......................... 50[b]

Total monthly expenses.................. 5258[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 360000

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

Car(s).................................. 0

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

Total Assets............................ 360000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 285000...(2250).....6

Hire Purchase (HP) debt ...... 19000....(530)......10[b]

Total secured & HP debts...... 304000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Credit Card....................4500......180.......25

Credit Card....................13000.....450.......29

Credit Card....................22000.....600.......29

Loan...........................11000.....335.......7

Loan...........................22000.....490.......18

Loan...........................16000.....401.......15[b]

Total unsecured debts..........88500.....2456......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 6,165

Expenses (including HP & secured debts). 5,258

Available for debt repayments........... 907

Monthly UNsecured debt repayments....... 2,456[b]

Amount short for making debt repayments. -1,549[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 360,000

Total HP & Secured debt................. -304,000

Total Unsecured debt.................... -88,500[b]

Net Assets.............................. -32,500[/b]

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

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

Grumpelstiltskin

How old are the children?

Some of your expenses are grossly high

Food £1000, Gas and Electric £360, Water £110, but you are showing no child expenses.

HP car? £19.000 but no value entered for car?

Floss

So you spend £1,000 on groceries but never ever buy any presents?

You need contents insurance.

£75 Internet & £60 mobile - when are you out of contract? I pay £30 for super fast fibre broadband plus £4.99 for Netflix, and £7 for 30gb of data for my phone.

Do you have a water meter?

Who owns the cars - is one a company / payroll lease vehicle?

fatbelly

That's a lot of income, a lot of expenses and a lot of debt!

I think you need to hit the situation from every angle: more income (if possible), cut expenses and default (yes) on the debts

It's worrying that you have no savings/emergency fund so in the short term, start one. Bank and save somewhere where you have no debts.

IVA pushers would rub their hands with glee if they got near you but you would probably end up paying more than your debts with them taking a healthy cut. With no other sensible insolvency option, your way out is going to be hard work, organisation and a combination of dmp/f&f

I doubt write-offs are going to be appropriate unless there are medical reasons

Floss

Can your partner work? 

stu12345_2

if you are asking for write offs a creditor needs to know 5 things.

do you work or on any long term dwp benefits 
do you rent or own your property
your age , eg how many years of employment you have before you retire
your likelyhood  of your wages increasing.
your health, eg do you have terminal illnesses 

they will be more open to a debt management plan where they will stop interest eventually and accept a reduced monthly amount

are you willing to do a dmp, your credit file will be be damaged, but you are not in a position to be worried about that, as number one priority is getting out of debt

Stateofart

Your grocery bill is obscene, you could half that and not even realise the impact.  Water is high - my guess is you are on rates so try and get a meter if you can.  Gas and elec are alos very high and you should be paying half.  Do you really need to spend £1200 a year on clothes?

Nivek975319

Thanks for the comments, i will review the budget and repost something more accurate and detailed