debt getting out of control

CliveOfIndia

Amol0507 said:

[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......... 1

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

Monthly Income Details[/b]

Monthly income after tax................ 1326.23

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

Benefits................................ 284.4

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

Total monthly income.................... 1610.63[/b][b]

Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 166.9

Rent.................................... 50  This seems quite low, is this correct?

Management charge (leasehold property).. 0

Council tax............................. 0

Electricity............................. 51

Gas..................................... 60

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

Water rates............................. 0

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

Mobile phone............................ 120  This is extremely high - if you're not tied into a contract, you can get SIM-only deals for around £10 per month.

TV Licence.............................. 0 Are you sure you don't need a licence?

Satellite/Cable TV...................... 34.8

Internet Services....................... 0

Groceries etc. ......................... 300  This could probably be reduced a bit

Clothing................................ 50  You may be able to reduce this.  Depends on the age of the child to some extent, but you shouldn't really need to be spending much at all on yourself.

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

Road tax................................ 0

Car Insurance........................... 68.31

Car maintenance (including MOT)......... 25

Car parking............................. 1  Is this correct?

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

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

Other child related expenses............ 30  What's this?

Medical (prescriptions, dentist etc).... 0

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

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

Contents insurance...................... 0  You probably should have this

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

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

Presents (birthday, christmas etc)...... 85  That's an awful lot, this could reduced significantly.

Haircuts................................ 20  Could this be reduced?

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

Holiday................................. 120  Could this be reduced?

Emergency fund.......................... 0[b]

Total monthly expenses.................. 1262.01[/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 ...... 2369.44..(166.9)....33.31[b]

Total secured & HP debts...... 2369.44...-.........-   [/b]

[b]Unsecured Debts[/b]

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

Credit card....................500.......20........30.51

Credit Card....................1000......30........29.3

Credit Card....................500.......30........48.9

Klarna.........................407.26....200.......0

Loan...........................941.23....70.94.....38.8

Loan...........................1392.02...60.75.....48.6

Loan...........................396.52....36.15.....41.47

Loan...........................555.4.....79.3......47.22

Credit Card....................700.......50........38.98

Credit Card....................200.......10........34.08

Credit Card....................850.......30........30.35[b]

Total unsecured debts..........7442.43...617.14....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 1,610.63

Expenses (including HP & secured debts). 1,262.01

Available for debt repayments........... 348.62

Monthly UNsecured debt repayments....... 617.14[b]

Amount short for making debt repayments. -268.52[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 0

Total HP & Secured debt................. -2,369.44

Total Unsecured debt.................... -7,442.43[b]

Net Assets.............................. -9,811.87[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

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

Some observations in bold above.  As always, no judgement intended, just some impartial observations to consider.

ManyWays

I dont think you can reduce 300 for groceries for an adult and a 16 year old, indeed if it includes toiletries and cleaning stuff it looks low too me.
Does she get pocket money? 
I think you should look at affordability complaints against lendable, 118118 and abound. See the Debt Camel website. And talk to StepChange about a debt Management Plan for all of the debts, it will get interest stopped on all those very expensive credit cards, when the car finance ends then you will be able to clear the debts much faster.
(A DIY version of a DMP is possible, but interest will be added for several months and you have a LOT of creditors to deal with, a DMP looks a simpler less stressful option. ) 

RAS

Is that holiday already booked? Any chance of cancelling? You couldn't really afford it before the car packed up, even less so now.

Regarding the car, given you have to have one for work, there is no option but to cancel all DDs other than the car and your existing bank this coming month. Once your income is moved across, also cancel DDs towards those bank accounts.

Open another easy access savings account and everything not in that month's budget goes into the savings account. The car could pack up or need repairs any time and so you need money there to cover your back.

Your daughter is now old enough to get some PT work. There really is no option on that. So she's funding her ents, phone etc.

Your are facing the benefits cliff in 2-2.5 years when she leaves secondary education. You can't claim for her but some how Thatcher's government decided that young people that age weren't entitled to help to move out but were to be funded by their parent, without help.

So that's the time span within which you need to get a handle on your debt. With the HP gone next year, you can tackle it more effectively but you need to get the car fund sorted first, or look for a job closer to home.

RAS

If you go straight into a DMP with Stepchange, or anyone else, you will damage your credit record for longer than necessary.

By avoiding or delaying defaults, you'll end up with Arrangement to Pay markers on your credit records.

A default stops interest and fees being charged and clears from your credit record after 6 years even if you never pay a penny.

AP markers stay on your credit record for 6 years after the debt is paid off. 

With AP markers, creditors may halt interest and fees for those on DMPs, but some re-instate them towards the end when the payment made matches the minimum payment.

And you'll find it difficult to take advantage of any full and final settlement offers, as Stepchange insist on distributing such sums equally to all creditors rather than to clear one or two debts at reduced cost.