Self managed DMP

Anubis1311

Hi, to cut through the preamble my debts have been spiralling for a while now and ive been using credit to pay debt. Time to cut loose. So i've read quite a bit on this forum and am pretty sure the a self managed DMP is the way forward. I created a SOA which i've posted below. Quick question... it's asking for my partners income which is around £1000 a month as she works part time. The SOA is assuming that this is part of my available income. However she has bills and debts of her own and so that amount of income is simply not available to me. She basically pays an amount towards the household bills. For clarity i have pasted a copy of the SOA with this information below as well.

Does this look about right?

[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......... 1

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

Monthly Income Details[/b]

Monthly income after tax................ 2100

Partners monthly income after tax....... 1100

Benefits................................ 102.4

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

Total monthly income.................... 3302.4[/b][b]

Monthly Expense Details[/b]

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

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

Rent.................................... 520

Management charge (leasehold property).. 0

Council tax............................. 105

Electricity............................. 120

Gas..................................... 80

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

Water rates............................. 35

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

Mobile phone............................ 48

TV Licence.............................. 13

Satellite/Cable TV...................... 20

Internet Services....................... 28

Groceries etc. ......................... 320

Clothing................................ 35

Petrol/diesel........................... 80

Road tax................................ 11.84

Car Insurance........................... 35

Car maintenance (including MOT)......... 10

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

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

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

Other child related expenses............ 30

Medical (prescriptions, dentist etc).... 10

Pet insurance/vet bills................. 45

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

Contents insurance...................... 30

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

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

Presents (birthday, christmas etc)...... 20

Haircuts................................ 25

Entertainment........................... 25

Holiday................................. 25

Emergency fund.......................... 50

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

Toiletries.............................. 10

Children's ISA.......................... 40

Meals at work........................... 60

Child Maintenance....................... 150[b]

Total monthly expenses.................. 1980.84[/b]

[b]

Assets[/b]

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

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

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

Car(s).................................. 6000

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

Total Assets............................ 6000[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

Updraft........................6256......222.......16.9

Updraft........................6434......201.......17.9

Updraft........................7528......216.......19.9

Very...........................1000......50........44.9

Lloyds Overdraft...............2000......50........14.9

Starling Overdraft.............2479......35........3.25

Lloyds Credit Card.............1320......65........34.2

Barclaycard....................2268......22........21.7

Virgin Money...................1161......35........24.9

Vanquis........................2381......54.28.....59.2

Zopa...........................2414......54.27.....13.4

Fluid..........................2870......90........38.9

Paypal.........................413.......15........29.2

Drafty.........................1200......100.......96.2

Novona.........................318.......13........0

Novona ........................6049......204.......19.9

Castle community bank..........2000......57........0[b]

Total unsecured debts..........48091.....1483.55...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,302.4

Expenses (including HP & secured debts). 1,980.84

Available for debt repayments........... 1,321.56

Monthly UNsecured debt repayments....... 1,483.55[b]

Amount short for making debt repayments. -161.99[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 6,000

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

Total Unsecured debt.................... -48,091[b]

Net Assets.............................. -42,091[/b]

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

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


SOA with correct contribution from partner

[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......... 1

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

Monthly Income Details[/b]

Monthly income after tax................ 2100

Partners monthly income after tax....... 390

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

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

Total monthly income.................... 2490[/b][b]

Monthly Expense Details[/b]

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

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

Rent.................................... 520

Management charge (leasehold property).. 0

Council tax............................. 105

Electricity............................. 120

Gas..................................... 80

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

Water rates............................. 35

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

Mobile phone............................ 48

TV Licence.............................. 13

Satellite/Cable TV...................... 20

Internet Services....................... 28

Groceries etc. ......................... 320

Clothing................................ 35

Petrol/diesel........................... 80

Road tax................................ 11.84

Car Insurance........................... 35

Car maintenance (including MOT)......... 10

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

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

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

Other child related expenses............ 30

Medical (prescriptions, dentist etc).... 10

Pet insurance/vet bills................. 45

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

Contents insurance...................... 30

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

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

Presents (birthday, christmas etc)...... 20

Haircuts................................ 25

Entertainment........................... 25

Holiday................................. 25

Emergency fund.......................... 50

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

Toiletries.............................. 10

Children's ISA.......................... 40

Meals at work........................... 60

Child Maintenance....................... 150[b]

Total monthly expenses.................. 1980.84[/b]

[b]

Assets[/b]

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

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

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

Car(s).................................. 6000

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

Total Assets............................ 6000[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

Updraft........................6256......222.......16.9

Updraft........................6434......201.......17.9

Updraft........................7528......216.......19.9

Very...........................1000......50........44.9

Lloyds Overdraft...............2000......50........14.9

Starling Overdraft.............2479......35........3.25

Lloyds Credit Card.............1320......65........34.2

Barclaycard....................2268......22........21.7

Virgin Money...................1161......35........24.9

Vanquis........................2381......54.28.....59.2

Zopa...........................2414......54.27.....13.4

Fluid..........................2870......90........38.9

Paypal.........................413.......15........29.2

Drafty.........................1200......100.......96.2

Novona.........................318.......13........13.9

Novona ........................6049......204.......19.9

Castle community bank..........2000......57........26.19[b]

Total unsecured debts..........48091.....1483.55...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,490

Expenses (including HP & secured debts). 1,980.84

Available for debt repayments........... 509.16

Monthly UNsecured debt repayments....... 1,483.55[b]

Amount short for making debt repayments. -974.39[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 6,000

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

Total Unsecured debt.................... -48,091[b]

Net Assets.............................. -42,091[/b]

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

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

RAS

There is no hard and fast rule about this, and in a self managed DMP you don't need to justify your expenses.

Stepchange might assume that you pay for about 2/3rd of household outgoings based on salaries but would include your partner's debts as well. So I doubt there'd be much difference in the outcome.

This looks very much like an aspirational SOA rather on one based on what you have obviously been spending given the amount of debt you have accrued? You need to understand how and why you've got that much debt and work out strategies to change that or your aspirational SOA will come to nowt. We don't need the explanation, but you both need to get there.

You need your partner fully on board. There is no point trying to manage your debt based on an SOA to which your partner is not fully committed. Are they happy to cut out the sort of expenditure that lead to your debt? Or are they going to try and compensate by taking on more debt themselves?

It's time for both of you to get out the last few month's statements, check your credit records and take a long hard look at where the money has been going.

And whilst that SOA is aspirational, I'm concerned that some elements are far too low. You need enough for an MOT, new tyres and an oil change, for example. OK, you might not need them this year, so you could roll forward to next year and if there's money left in the motoring kitty the following year, move that to the emergency fund.

Unless you've got very good workplace benefits, you need some basic term life insurance, both of you.

Do you and your partner have any joint accounts?

You are going to need a new basic bank account with someone to whom you owe nothing. That'll have no overdraft and does not need a hard credit  check. 

And you'll need to talk to your credit union early on. Some are very difficult to deal with when you stop paying.

fatbelly

It looks like you are banking with Lloyds and Starling. As you are in significant debt with both they will be going into the dmp.

You therefore need a clean new account to receive your income and to make the dmp payments from. One not connected to any of your debts.

A basic account would be fine

Anubis1311

Thanks for the replies. I have a basic Revolut account which I intend on using for my current account. I will amend my wages to go into that account. 

@RAS when you say aspirational? What do you mean? The values were taken from my ‘spending insights’ within my banking app so are fairly accurate. Some of it is an absolute guess however such as motoring expenses as you say. 

Are you saying I am significantly underestimating how much I spend? 

Anubis1311

Also and apologies for the ignorance, but how does a credit union differ from a credit card? Do I not simply not pay until the balance defaults like my other debts? 

RAS

Glad some some items are based on your banking app, but do suspect that for those that aren't, you are underestimating. What have you been buying with all your credit cards and loans? 

So you you need to look at everything you have spent using accounts other than those linked to your banking app.

And taking that example of motoring, you may not have spent much this last few months, but actually that makes it more likely that the oil change, new tyres and windscreen wipers will be needed over the next year, not less likely. Can you afford that without credit? You need to have that money stashed somewhere safe in case.

The issue with credit unions is that the rules applying to "normal" consumer credit banks don't all apply. They are more likely to go straight for a CCJ than transferring to other debt collection. And if you've taken the credit union debt out very recently, some have been known to issue a marker on Hunter. They shouldn't really and have usually been rebuked and had to rescind, but it makes life very difficult for some months. 

So making an arrangement to repay something to them may be wise. Or just hope you can negotiate if they issue a letter before action? 

sourcrates

Yes credit unions can be difficult if you start missing payments.

Although they are FCA regulated, they don`t tend to follow the debt collection practices that mainstream lenders do.

Mainstream lenders will in some cases, manage your bad debt themselves, others will assign the debt to a debt collector to manage, whilst some will just wash their hands of the debt and sell it to a 3rd party, legal action at this stage is rare.

Some credit unions on the other hand tend to take a blanket approach, and will not use the services of a debt collection agency, and will instead go straight to legal action if a debt defaults.

To avoid this happening you should talk to them at the earliest opportunity, as they should not be adverse to a payment arrangement, it may be prudent for them to accept low level payments from you rather than to achieve nothing. 

Anubis1311

So a chunk of my debt came from when my daughter died. We both took almost a year off and lived off credit cards and SSP. When we went back to work I took out a loan to consolidate. A year later we had a beautiful rainbow baby however he was born with Cystic Fibrosis. My wife took the full year off to look after him while we worked out how to manage his condition. She basically got paid 3 months full pay, 6 months half pay and 3 months 0 pay. Again we had to live off the plastic once more. When she went back to work I did exactly the same and consolidated the debt. From that moment really I was having to borrow a hundred pounds at the end of each month, each month thinking the next would be different. 2 years later and a few more consolidation loans under my belt I’ve decided enough is enough. I’m pretty much have enough to pay the debt but not enough to live. That needs to change. 

Anubis1311

Another question, do I have to add all my accounts to the DMP? I basically worked out what % each company contributed to my total debt. I then used that % to work out what I would pay them. My Barclaycard is on 0% interest actually ends up getting more money using that method. Feels like I could just sit that one on 0% and let it run down. I’ve never used it other than for the balance transfer. Also if the credit Union is so difficult, the amount I would be offering is only £20 or so short of what I pay them anyway. Should I just leave that debt to run?

sourcrates

I would prioritise the credit union debt, simply to avoid them taking further action, I guess you can do without the hassle of court to deal with.
If you self manage, you can run things how you see fit, and in what way works best for you.

A constant cycle of borrow/consolidate is something we nearly all have experience of on this board, we have all thought it was the right thing to do at some point or another, and the fact that we kept having to repeat the process didn`t appear to deter us one bit, its only when you stop and think and get other opinions that you realise what a merry-go-round you have been on.

You can do this, it will take time and effort, but it can be done.

Anubis1311

Thank you. My only hesitation is the sheer number of defaulted accounts I’ll have. I can pretty much kiss goodbye to ever getting a mortgage with 20 defaults on my credit report. Is there a maximum number of defaults you can have if applying for a mortgage down the road?