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50k plus in debt, trying to assess options out of it!

Options
sendhelp
sendhelp Posts: 3 Newbie
First Post
in Debt-free wannabe
Hello all, 

I'm beginning to realise that I'm in way to deep. I can't borrow my way out of this anymore (not that that's ever worked for me anyway) so I'm here looking for help and a way out of this. I've spoken with a debt help agency who've suggested a couple of options (I'm in Scotland so may be different to England) including a protected trust deed or a debt management plan.

I'm 25, don't own my own home and my rent come straight out of my pay as it's provided by my employer. My goal here is to get myself out of this so I can buy a home for my family, I don't want to stay in this job forever but as soon as I leave I'll be unable to afford market rate rent. So, I'm very much stuck.

I know I've screwed up enormously, but I hope I'm still young enough to get myself out of this and provide a home for my family in the future. Any and all help and advise is enormously appreciated. 

[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......... 3
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 3100
Partners monthly income after tax....... 700
Benefits................................ 170
Other income............................ 0[b]
Total monthly income.................... 3970[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 250
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 80
Gas..................................... 80
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 100
TV Licence.............................. 30
Satellite/Cable TV...................... 50
Internet Services....................... 50
Groceries etc. ......................... 300
Clothing................................ 150
Petrol/diesel........................... 400
Road tax................................ 50
Car Insurance........................... 230
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 150
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 20
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 50
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 20
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 2130[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0[b]
Total Assets............................ 7000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 7500.....(250)......0[b]
Total secured & HP debts...... 7500......-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
My community finance...........29500.....662.......0
RBS Loan.......................5500......405.......0
Updraft........................12000.....400.......0
Creation.......................2400......150.......24.9
Vanquis (CC)...................900.......45........13.2
Jaja (CC)......................850.......80........39.4
Paypal.........................1500......53........25.9[b]
Total unsecured debts..........52650.....1795......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 3,970
Expenses (including HP & secured debts). 2,130
Available for debt repayments........... 1,840
Monthly UNsecured debt repayments....... 1,795[b]
Amount left after debt repayments....... 45[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 7,000
Total HP & Secured debt................. -7,500
Total Unsecured debt.................... -52,650[b]
Net Assets.............................. -53,150[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
«1

Comments

  • RAS
    RAS Posts: 35,543 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    OK, you appear to be just about solvent. But there are a lot of rounded figures in there, so it looks like good guesses rather than spending an evening or two going through the last 6.months statements. You really do need to do that.

    One issue is that you have a very large debt to a credit union? They tend to be less co-operative than standard consumer credit companies.

    Will post specific comments in line.
    If you've have not made a mistake, you've made nothing
  • Mark_d
    Mark_d Posts: 2,401 Forumite
    1,000 Posts First Anniversary Name Dropper
    Sounds like you've got some things working in your favour - with your family's accommodation provided by your employer.
    Cars are expensive to own (insurance, tax, MOT, servicing, fuel).  Do you need two cars?  My partner and I used to have just my car but I sold that due to cost - now we're using public transport for everything.
    Your monthly take-home pay is more than mine.  Good on you.  This will likely be the key to your success.
    My mobile, with Lebara, costs £4.50 per month.  If you can save money here that will help.
    You spend a lot on TV licences.  How many properties do you have?
    I don't have saetlliite/cable TV but I do have 132Mb broadbandd with EE for £33.  I'm looking to cut this cost down to around £20 once I'm out of contract.
    Do you need life assurance?  If anything happened to me my partner would get 4x salary from my employer, plus my pension fund, plus my savings/investments/everything I own.  That's plenty enough!
    If I were you I'd look to cut down on luxuries, consolidate debt to a low rate loan, and than pput as much money as I can into paying off the loan.
  • RAS
    RAS Posts: 35,543 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    sendhelp said:
    [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......... 3
    Number of cars owned.................... 2[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 3100
    Partners monthly income after tax....... 700 Any chance they can increase this?
    Benefits................................ 170
    Other income............................ 0[b]
    Total monthly income.................... 3970[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 0
    Secured/HP loan repayments.............. 250
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 0
    Electricity............................. 80
    Gas..................................... 80
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 0
    Mobile phone............................ 100 this is very high, are you still in contract and when does that end?
    TV Licence.............................. 30 - this is £14.12 per month 
    Satellite/Cable TV...................... 50 - can you cut or forego this as you have a TV licence
    Internet Services....................... 50
    Groceries etc. ......................... 300 - this is very good? Is it really accurate?
    Clothing................................ 150 - kids are expensive, are there any charity shops for bargains? 
    Petrol/diesel........................... 400 - massive
    Road tax................................ 50
    Car Insurance........................... 230 - also massive
    Car maintenance (including MOT)......... 20 - this isn't enough for an MOT, tyres and a small repair on one car.
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 150 - are you getting any free hours?
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0 - you need something in here with your size family. Can you access NHS dental care?
    Pet insurance/vet bills................. 20
    Buildings insurance..................... 0
    Contents insurance...................... 0 - you NEED this for a family your size
    Life assurance ......................... 50
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 20
    Entertainment........................... 50
    Holiday................................. 0
    Emergency fund.......................... 0[b] you need this.
    Total monthly expenses.................. 2130[/b]
    [b]

    Assets[/b]
    Cash.................................... 0 - you need an emergency fund. Given your job situation you need accommodation funding if you lose your job. I appreciate you know this but starting to build it is important. 
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 7000
    Other assets............................ 0[b]
    Total Assets............................ 7000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 0........(0)........0
    Hire Purchase (HP) debt ...... 7500.....(250)......0[b]
    Total secured & HP debts...... 7500......-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    My community finance...........29500.....662.......0 what is the APR on this (split it into chunks if you have different rates on different loans)
    RBS Loan.......................5500......405.......0 what's the rate and when does it end?
    Updraft........................12000.....400.......0 what's the APR?
    Creation.......................2400......150.......24.9
    Vanquis (CC)...................900.......45........13.2
    Jaja (CC)......................850.......80........39.4 - if you can sell a few bits, or just target any spare pennies, hit this in the short-term.
    Paypal.........................1500......53........25.9[b]
    Total unsecured debts..........52650.....1795......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 3,970
    Expenses (including HP & secured debts). 2,130
    Available for debt repayments........... 1,840
    Monthly UNsecured debt repayments....... 1,795[b]
    Amount left after debt repayments....... 45[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 7,000
    Total HP & Secured debt................. -7,500
    Total Unsecured debt.................... -52,650[b]
    Net Assets.............................. -53,150[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
    Thank, this is more comprehensive than many we see. There may be some special circumstances that affect your budget.

    One of the very noticeable things is that your transport costs are very high. Is that because you live a long way from work? Or are you actually doing a lot of work mileage and not claiming?

    Is your partner fully aware of the debt situation? Do they have any debt themselves? Are you both aware that any debt solution make getting a mortgage any time in the next six years unlikely?

    I think you need to revisit this SOA because you have some low and some very high costs. Until you do that, it's difficult to know if you really need a DMP. Do you want to try and sort this without a debt solution, or would you prefer to bit the bullet. That has to be a joint decision based on the full facts.
    If you've have not made a mistake, you've made nothing
  • Floss
    Floss Posts: 9,002 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    edited 5 September 2024 at 3:35PM
    Car insurance seems very high at £2,760 a year for cars worth £7k - although you said there are 2 cars, is one the HP? 
    TV licence is £15 (I've just renewed mine)
    Do you all NEED £150 of clothes every month? 
    £100 on mobiles? When are they out of contract?
    Your Internet/ satellite tv / entertainment of £150 - this could be reduced. Can you share anyone else's Disney+ / Amazon / Netflix? I pay £30 for superfast fibre broadband, £5 for Netflix and my kids share their Amazon and Disney+ with me.
    2021 Decluttering Awards: ⭐⭐🥇🥇🥇🥇🥇🥇 2022 Decluttering Awards: 🥇
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  • sendhelp
    sendhelp Posts: 3 Newbie
    First Post
    RAS said:
    sendhelp said:
    [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......... 3
    Number of cars owned.................... 2[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 3100
    Partners monthly income after tax....... 700 Any chance they can increase this?
    Benefits................................ 170
    Other income............................ 0[b]
    Total monthly income.................... 3970[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 0
    Secured/HP loan repayments.............. 250
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 0
    Electricity............................. 80
    Gas..................................... 80
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 0
    Mobile phone............................ 100 this is very high, are you still in contract and when does that end?
    TV Licence.............................. 30 - this is £14.12 per month 
    Satellite/Cable TV...................... 50 - can you cut or forego this as you have a TV licence
    Internet Services....................... 50
    Groceries etc. ......................... 300 - this is very good? Is it really accurate?
    Clothing................................ 150 - kids are expensive, are there any charity shops for bargains? 
    Petrol/diesel........................... 400 - massive
    Road tax................................ 50
    Car Insurance........................... 230 - also massive
    Car maintenance (including MOT)......... 20 - this isn't enough for an MOT, tyres and a small repair on one car.
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 150 - are you getting any free hours?
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0 - you need something in here with your size family. Can you access NHS dental care?
    Pet insurance/vet bills................. 20
    Buildings insurance..................... 0
    Contents insurance...................... 0 - you NEED this for a family your size
    Life assurance ......................... 50
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 20
    Entertainment........................... 50
    Holiday................................. 0
    Emergency fund.......................... 0[b] you need this.
    Total monthly expenses.................. 2130[/b]
    [b]

    Assets[/b]
    Cash.................................... 0 - you need an emergency fund. Given your job situation you need accommodation funding if you lose your job. I appreciate you know this but starting to build it is important. 
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 7000
    Other assets............................ 0[b]
    Total Assets............................ 7000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 0........(0)........0
    Hire Purchase (HP) debt ...... 7500.....(250)......0[b]
    Total secured & HP debts...... 7500......-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    My community finance...........29500.....662.......0 what is the APR on this (split it into chunks if you have different rates on different loans)
    RBS Loan.......................5500......405.......0 what's the rate and when does it end?
    Updraft........................12000.....400.......0 what's the APR?
    Creation.......................2400......150.......24.9
    Vanquis (CC)...................900.......45........13.2
    Jaja (CC)......................850.......80........39.4 - if you can sell a few bits, or just target any spare pennies, hit this in the short-term.
    Paypal.........................1500......53........25.9[b]
    Total unsecured debts..........52650.....1795......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 3,970
    Expenses (including HP & secured debts). 2,130
    Available for debt repayments........... 1,840
    Monthly UNsecured debt repayments....... 1,795[b]
    Amount left after debt repayments....... 45[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 7,000
    Total HP & Secured debt................. -7,500
    Total Unsecured debt.................... -52,650[b]
    Net Assets.............................. -53,150[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
    Thank, this is more comprehensive than many we see. There may be some special circumstances that affect your budget.

    One of the very noticeable things is that your transport costs are very high. Is that because you live a long way from work? Or are you actually doing a lot of work mileage and not claiming?

    Is your partner fully aware of the debt situation? Do they have any debt themselves? Are you both aware that any debt solution make getting a mortgage any time in the next six years unlikely?

    I think you need to revisit this SOA because you have some low and some very high costs. Until you do that, it's difficult to know if you really need a DMP. Do you want to try and sort this without a debt solution, or would you prefer to bit the bullet. That has to be a joint decision based on the full facts.
    Car insurance is high because I've had accidents previously - none of which were my fault. Also my partner is on a medical licence because of poor health a few years ago so that makes our insurance costs much higher unfortunately.

    Fuel cost is high but will go down, partner was working as a courier but is now on maternity so I'm expecting that to drop a fair bit. I'm going to start cycling into work to minimise fuel costs (about 15km each way).

    Clothing costs are just an average of the year, taking into account school uniforms etc. So most months will be considerably less but some more. I don't spend any money on myself on this front other than a few quid here or there for a second hand pair of jeans off vinted. 

    I'm looking at ways to reduce outgoings for phones etc. but I'm mid contract so there's nothing I can do there in the short term. 

    The costs are rounded up so are actually a few £ less here or there so it's not exact but I am very much aware of the exact figures. Partner is aware also, we've been through it all together a number of times. Just trying to weigh it all up really...
  • sendhelp
    sendhelp Posts: 3 Newbie
    First Post
    Mark_d said:
    Sounds like you've got some things working in your favour - with your family's accommodation provided by your employer.
    Cars are expensive to own (insurance, tax, MOT, servicing, fuel).  Do you need two cars?  My partner and I used to have just my car but I sold that due to cost - now we're using public transport for everything.
    Your monthly take-home pay is more than mine.  Good on you.  This will likely be the key to your success.
    My mobile, with Lebara, costs £4.50 per month.  If you can save money here that will help.
    You spend a lot on TV licences.  How many properties do you have?
    I don't have saetlliite/cable TV but I do have 132Mb broadbandd with EE for £33.  I'm looking to cut this cost down to around £20 once I'm out of contract.
    Do you need life assurance?  If anything happened to me my partner would get 4x salary from my employer, plus my pension fund, plus my savings/investments/everything I own.  That's plenty enough!
    If I were you I'd look to cut down on luxuries, consolidate debt to a low rate loan, and than pput as much money as I can into paying off the loan.
    So I live fairly rural and the partner needs a car to take the kids to school and I need one to get to work when the weathers a bit rubbish (as happens often in scotland). The rest of the time I'm going to save on fuel by cycling into work as it's only a 30km round trip and I could do with losing the weight...

    Kinda stuck with phones for now as they're all on contract, but I'll be getting away from expensive contacts as soon as I'm able to. Same with internet. 

    Good point on the life insurance, I got sucked into the idea that I needed it but I reckon it's something I could do without.

    I think I'm putting too much on luxuries as you've said, I need to take this seriously and wipe out my costs as much as I can on that front. I've taken debt consolidation loans in the past, but with my current level of debt another isn't an option unfortunately hence why I'm drawn towards some kind of debt wiping solution like a trust deed etc. but at the same time I'm not sure I want that on my file if there's a chance I can do things properly. 
  • RAS
    RAS Posts: 35,543 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 5 September 2024 at 5:29PM
    OK, fairly rural explains a lot. At least it's not a 100 mile round trip if you forget something vital at the ironmongers.

    I'd suggest that you consider trying to get a handle on the spending and review next summer (rather than in spring when you've had least benefit from the cycling).

    You do need to look at the clothing costs. Are you buying new for the kids? And given your location, buying on-line? Or the dreaded just a bit when you're in the supermarket?

    Any charity shops in towns you go to? Uniform exchange? Hand me downs between kids? Unfortunately my sibling was as tall as me so that rarely worked, but I wore a lot of hand me downs from cousins.

    And audit the kid's clothes, so that stuff isn't bought unless needed, and if a deal turns up, is bought just in advance of need. It wouldn't harm to do the same for yourself and your wife.

    Check what your pension benefits are. And maybe go for a low level term insurance with your wife as beneficiary. More importantly take out term insurance covering her for the next decade if possible. As if anything happened, you could be scuppered.

    And look out in case there is anything you can sell to get shot of Jaja?
    If you've have not made a mistake, you've made nothing
  • Martico
    Martico Posts: 1,169 Forumite
    1,000 Posts Third Anniversary Name Dropper
    Yes, as you are well aware, debt consolidation is not the answer, as it just moves the debt from one place to another
  • fatbelly
    fatbelly Posts: 22,933 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    A protected trust deed is the Scottish equivalent of an IVA, with payments being made for four years. With 50k of debt and £1800 surplus I can't see how that would be an advantage to you.

    It's a similar calculation with Scottish bankruptcy which also results in payments over 4 years

    I think you are going to have to 'bite the bullet', default, save an emergency fund and do a combination of dmp and full&final settlement.

    The debt that worries me is the big one. Who are the actual lenders behind that and what is the apr? It's crazy they are lending such large sums for debt consolidation, and I don't think the apr is going to be that good. 


  • ManyWays
    ManyWays Posts: 1,309 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    £300 on groceries is very low as this includes everything you normally buy at a supermarket eg nappies, deodorant, washing powder, toilet rolls, J cloths. 
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