I have a plan - so everything is fine

Starfish75789

First of many posts….Currently I’m 49k in unsecured debt. I’ve posted SOA and had some support and so I’m going for a DMP. 

This was back towards the end of June/July so thought I would post what’s happened and where I am. 

So my SOA compared to today…..isn’t it strange that in my head I was thinking I was paying £1400 minimum payments per month and I thought I would have that spare when I stopped paying.
In my head i still hadn’t linked that I couldn’t afford the payments hence the DMP.  By the time I actually put down birthday, Xmas, MOT, servicing, clothing, kids activities….its surprising how this added up and looking at what I put in my original.Yes I did underestimate it.

So today I’ve managed to put 1k as emergency fund. I’ve not got any money saved for my debts. But I’m planning to and I have some money away for bills coming. I’ll be putting away my first payment for my debts this month.

Oh yes and to make my day HMRC sent me a letter advising that I underpaid tax last year. So will taking it from my pay next year £700 to add the the list. 

State of debts
I have several with my DMP completion estimate at 14 years.

Amex - sent me default notice in post on 5th August, received the same letter again dated 30th of August. Passed my debt to NCO. Not heard anything since. Checked credit report and allowance has been put to zero however no default registered.

Santandar CC and loan - nothing but letters advising I’ve missed payments. 

Sainsburys CC and loan - again nothing but letters advising missed payment

HSBC - received default notice in the post on 27th August. Credit report not showing anything just 4 missed payments. 

Monzo - a few emails asking for payment. 

I’m using the following apps  (not sure. If allowed to post apps, please remove it not)

credit karma
experian
clearscore
YNAB - this I wish I’d had years ago.

Sarahwithlove

I went and found your other posts. I would suggest posting copies on here for everyone to see. 

You previously mentioned that you and partner have separate finances. How have you built the debts? Are any from them or kids? Do they have any? Debts have a impact on both of you and I think if you haven't already you need to have an honest conversation about it. It's much easier if you tackle this as a couple and look at how you can make savings. 

Starfish75789

Sure. I think i need to redo the SOA on what I have had now, I’ll have a go at that tomorrow and post it here.  Yes glad to say we’ve had the conversation and discussed both our finances and plan the way forward.

My debts have been built over the years. Started off with adding bits, shopping trying to build up points etc. then realised I couldn’t afford the monthly payments and took out consolidation loan. Similar then happened so took out another loan to pay off the first loans and then cards. As things then progressed and the minimum payments were taking their tole I used my card more. Last straw was taking out another loan to try to remove the credit cards but life happens and as I hadn’t saved I just used the card again. My debts have been building up for years and should have tackled them earlier but I didn’t.
 

So this for me is a reset…
Cost savings identified so far -
Lease car ends next year in June - £300  per month plus insurance saving below
Saving for insurance - annual payment June - £50 per month
Subscriptions already cancelled - £35 per month

Starfish75789

Updated based on both wages

[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.................... 0[b]

Monthly Income Details[/b]

Monthly income after tax................ 3060

Partners monthly income after tax....... 1250

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

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

Total monthly income.................... 4310[/b][b]

Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 457.3

Rent.................................... 527.74

Management charge (leasehold property).. 0

Council tax............................. 185

Electricity............................. 100

Gas..................................... 40

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

Water rates............................. 54.19

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

Mobile phone............................ 115.3

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

Satellite/Cable TV...................... 48

Internet Services....................... 18

Groceries etc. ......................... 548

Clothing................................ 50

Petrol/diesel........................... 240

Road tax................................ 15.75

Car Insurance........................... 155.76

Car maintenance (including MOT)......... 30

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

Other travel............................ 68

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

Other child related expenses............ 100

Medical (prescriptions, dentist etc).... 45

Pet insurance/vet bills................. 23.35

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

Contents insurance...................... 9.62

Life assurance ......................... 60

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

Presents (birthday, christmas etc)...... 150

Haircuts................................ 20

Entertainment........................... 44.95

Holiday................................. 50

Emergency fund.......................... 100

Ring doorbell........................... 4

Kids - School lunch..................... 120

Kids - School Travel..................... 74

Kids - School Trips..................... 50

Kids - Sports Clubs........................... 62

Kids - Entertainment......................... 9

Phone insurance............................. 3

Shopping Delivery Pass.................. 6[b]

Total monthly expenses.................. 3598.96[/b]

[b]

Assets[/b]

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

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

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

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

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

Total Assets............................ 0[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 0........(0)........0

Hire Purchase (HP) debt ...... 9458.19..(154.2)....0<

Car Lease - Ends May 2025..........2122.33..(303.1)....0[b]

Total secured & HP debts...... 11580.52..-.........-   [/b]

[b]Unsecured Debts[/b] Proposed DMP Payments as currently not paying...

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

Sainsburys Loan................15761.....90.22.....0

Sainsburys CC..................7949......45.59.....0

Santander Loan.................7191......39.71.....0

Spouse Debts...................350.......350.......0

HMRC...........................626.2.....55........0

Monzo - Flex account...........2856......16.38.....0

Amex CC........................3736.56...21.43.....0

HSBC CC........................6169.48...35.39.....0

Santandar CC...................5562......31.11.....0[b]

foxgloves

Hello Starfish,
Your use of consolidation loans sounds very much like ours back in the Spendy Years. We took out 3 in total - each of course were designed to get rid of our debts by lowering the monthly payment to just one. Of course it didn't work. We'd even borrow a bit more than we needed each time so we could buy something else, & we carried on spending on our cards too. That was years ago. We saw the light, discovered budgeting.....& that I was actually good at it.....& have now been debt-free for several years. I can tell you from experience that paying off the last debt & every month's future wages being your own, is something I'll never forget. Learning to budget has been empowering.
Two things jumped out at me from your SOA - firstly that your grocery spend is quite high. Do you meal plan each week? I'm thinking you could aim for £450 to give yourself an extra £100 tp chuck at your debts. Also presents. £150 per month isn't really sustainable when you have a lot of debt. Do you have loads of people to buy for? If so, it would be worth perhaps just giving presents to children while you get your debts paid. The practicalities of it is that every pound you can save is an extra pound to throw at your debts & all those pounds add up. Don't be tempted to buy anything else on credit. The money which comes into your bank.account each month is your money. There isn't any more. Learning & living with this basic reality was a huge key to my partner & I becoming debt-free.
Good luck with it & stay focused on the goal.
F 

joedenise

This SOA doesn't seem to ring to true!  It says you have 2 children but don't receive benefits - do you not get Child Benefit?  

Also says you don't have a car but spend £240/month on petrol; £15.75 on tax; £155.76 on insurance and £30 per month on car maintenance.

Also you say you are saving £50 per month for holidays; £100 emergency fund.  Where is what you have saved so far?  You then say you have £0.00 in Assets.

Starfish75789

No I don’t claim child benefit as I normally get a bonus at the end of they year which puts me over the threshold and I always end up owing HMRC

The one car is leased up until the end of May. The other car is PCH so I don’t own this either and can return at the end of the 2027 or pay a balloon payment. 

Also this is my plan from now, I’ve saved 1k emergency fund and im trying to catchup with unplanned savings. What I mean by that is the above SOA is based over 12 months. In reality Ive not put anything away for Xmas yet so I’m trying to catchup up. 

I’ve included the dogs in the groceries as well as washing cleaning items. There will be some weeks where I have got this to £70 but then when I need washing ,cleaning things it goes over. So average it is about this. My plan is that is the most, anything less goes towards paying debt off.

I’ve spend so much time going through my budget, there are still some things I could remove but I can stick to the above is what is important.

In May we will use only the one car so saving there on the lease, insurance and maybe fuel. But should be around £350 extra starting next year to go towards it. 

As I’m starting DMP and waiting for defaults I’ll just keep building up the pots and hopefully will be able to pay this off a lot sooner. 

Starfish75789

Since my last update
Debts -
None have defaulted yet...still waiting. Im not sure if breathing space has made a difference but I believe some of my creditors have held interest and charges because of this. Amex for example hasn't charged me anything for 4/5 months.
HSBC have sent me a letter this morning advising they are passing it to Moorcroft.
Amex - Not heard anything from NCO Europe. Not even introduced themselves.
Others - Nothing more than please pay us letters and can they help.

Budget
Ive put my first payment away into a separate account and will start to build a pot whilst I'm waiting for defaults and whoever the debt is with to catchup with me.
Ive been able to stick to the above budget quite fine. Im putting money away for future costs such as MOT, servicing the car.

Im definitely trying to spend less than what I've budgeted and any excess I'll be putting towards paying of the debts. It's a learning curve but i'm enjoying it at the moment. 

Sarahwithlove

Yes breathing space generally delays the defaults. 

Starfish75789

Well wasn't expecting snow this morning....interesting. Clear the car and have snowball fight before school. Was a good start to the day

Since my last update
Debts -
HSBC  has defaulted on my credit reports - Moorcroft are chasing me on this so ive sent an SOA with an offer of payment. Will wait for their response.

Amex - NCO finally sent me a letter - offering 50% if paid in one payment. This has actually kept me up at night.
Ive been scrambling through my budget seeing if I can raise these funds - was even at one point contemplating using my emergency fund, Xmas money.....then I see the words so many times on the forums "Don't rush into anything". So I haven't done anything. 
I think the reason it kept me awake is because it hasn't been sold on. I wondered if I don't make this payment is the next step for the LBA as ive seen from others amex seem to move quite quickly on this.
Also haven't sent any offer of payment yet as they are still not showing as defaulted on any Credit report....Hope I'm doing the right thing.  

Others - Still nothing.

Clearscore so there system had an update and as soon as it updated everything is closed and defaulted - I don't trust this now, or is more up to date than Equifax. Ive checked Equifax and only HSBC has the default so no idea where they are getting there info from. 

Budgeting
Keep going through this daily - im totally behind on everything that I know is in the future and playing catchup. All essentials I'm fine with, but it's things like car service due in March which ive only put £60 away, well that isn't doing anything.....It did make me laugh when I looked at this, as last year I didn't bother and knew i had a credit card to put it on. It's quite a mind shift when you start adding all these things up. So many light bulb moments. 
Even more annoying when I realised that if I did this earlier then I wouldn't have needed the cc and wouldn't be in this mess....anyway. 

I think I'm becoming a bit obsessed with it all - it's the first thing im looking at in the morning and also last thing at night. Was contemplating using Stepchange to take the stress of all the waiting from me....Ill see how I get on

Starfish75789

New week - feel a bit better this week.
Had a weekend to calm down a bit and get things back into perspective, so I'm continuing down the self managed route.

I see so many comments from people who have followed the same path and it looks so easy....which I know some of you out there if you read this will say it is but will see.

XMAS

Ive been planning ahead for xmas this week - ive put the money I have away and will try to stick to that budget. Well I say try but there is no option this year, we have to else it impacts other things (Bit of a different mind set to last year)
Been talking to family about it and we are going to do a secret Santa - so all put into a pot and then we get name of someone. This way we don't have to buy for everyone but also makes it a bit of fun. Any money left over then gets put back into the pot and we will get random gifts or games to share on the day.

Debts

Amex - Refused there offer as can't afford it and sent an offer at 40% - will see what happens here
Ive now received default notices in the post for all debts apart from Monzo.
Still only HSBC which has defaulted on credit references - im hoping that by middle of December i should all be sorted. Would be nice to go into xmas not having letters chasing me all the time.