Newbie, please help? (SOA inc)

Empeey88

Hello everyone, 

I want to take control of my finances and sort myself out. I am currently in quite a bit of debt and unable to pay my monthly minimum payments. I have been lurking on the forum for a few weeks and have decided to stop payments this month on my *unsecured* debts (credit cards/loans/store card) so I can wait for them to default before starting a DMP. 

I hope to be able to manage my own DMP as I have been with StepChange before and feel so embarrassed that I have got myself into this again. I am hoping that these forums and using a more realistic budget will provide life long lessons!

Anyway, here is my SOA:

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 2

Number of children in household......... 1

Number of cars owned.................... 2

Monthly Income Details

Monthly income after tax................ 2400

Partners monthly income after tax....... 1946.41

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

Other income............................ 102.4

Total monthly income.................... 4448.81

Monthly Expense Details

Mortgage................................ 1299

Secured/HP loan repayments.............. 294.29999999999995

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

Management charge (leasehold property).. 0

Council tax............................. 220.46

Electricity............................. 200

Gas..................................... 0

Oil..................................... 86.99

Water rates............................. 81.03

Telephone (land line)................... 62.76

Mobile phone............................ 199.65

TV Licence.............................. 15.33

Satellite/Cable TV...................... 58

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

Groceries etc. ......................... 400

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

Petrol/diesel........................... 0

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

Car Insurance........................... 55.24

Car maintenance (including MOT)......... 0

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

Other travel............................ 17.28

Childcare/nursery....................... 150

Other child related expenses............ 75

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

Pet insurance/vet bills................. 46.44

Buildings insurance..................... 25.93

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

Life assurance ......................... 23.24

Other insurance......................... 24.84

Presents (birthday, christmas etc)...... 60

Haircuts................................ 50

Entertainment........................... 51.95

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

Emergency fund.......................... 20

Nationwide account fee.................. 18

Professional (NMC + RCN)................ 26.4

Doggy Day Care.......................... 50

Dog groom............................... 40

Dog food................................ 90

Xmas Savings............................ 100

Savings................................. 100

Total monthly expenses.................. 3991.84

Assets

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

House value (Gross)..................... 340000

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

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

Other assets............................ 0

Total Assets............................ 340000

Secured & HP Debts

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

Mortgage...................... 252107...(1299).....4.58

Hire Purchase (HP) debt ...... 4415.55..(294.3)....0

Total secured & HP debts...... 256522.5..........

Unsecured Debts

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

Virgin Credit Card.............7834.14...236.8.....24.9

Santander Credit Card..........6447.52...76.67.....21.6

Tesco Credit Card..............7579.7....267.......22.47

Next Store Card................1521.31...77........24.9

PayPal.........................894.81....26.08.....23.9

Plata Loan.....................5015.22...161.7.....29.7

Santander Loan.................4970.89...134.......12.9

Admiral Loan...................7500......125.4.....24.6 - This is hubbys loan 

Pulse Credit Card..............938.......50........21.6 - This is hubbys card

Tymit Credit Card..............536.......39.46.....0

Summary of Monthly Income, expense and surplus
Total monthly income: £4448.81
Expenses (incl. HP & secured debts): £3991.84
Available for debt repayments: £456.97 (minus husbands payments = £208.49)
Unsecured debt repayments: £1194.11
Surplus (shortfall if negative) £-737.14
Personal Balance Sheet Summary
Assets: £340,000
Secured & HP Debt £-256,522.55
Unsecured Debt £-43,237.59
Net Assets £40,239.86

In essence, I have £208.49 to offer my creditors a month... a far cry from the £1018.71 I have been paying (using more credit to make the payments might I add). 

I think I have set out a reasonable budget but happy to answer queries. Hubby is keen to self manage his loan and credit card so I have therefore taken away his monthly payments and his spare £74.07 he has a month from that 'Available for Debt Repayments' number. 

I will be saving the £208.97/month whilst waiting for the defaults to be applied.
I am a nurse and can do additional shifts, so anything I earn from this will also go into my pot as I hope to be able to build up to be able to offer full and final payments?

So my question now is, what do I do once the accounts have defaulted? 

Thank you so much for getting this far in my post! 
Jen

Empeey88

PS. I spoke with Virgin / Santander and Tesco credit cards and they have given me a 30 day breathing space. I have cancelled all of my direct debits / reoccurring card payments and I have also changed my bank over to Monzo which I hope will help with my budgeting by separating out my money. 

Santander Loan wanted me to send them a budget planner before they would apply 30 days breathing space. 

Do I ignore these requests for the time being?

RAS

To be blunt, you need to seriously look at the cars, the all phones and satellite TV. You simply can't afford those things. And you need to go through your bank and card statements with a fine toothcomb. For the last 6 months, allocate every one of your and hubbie's spends to a budget line.

You are a nurse, possibly shifts? Do you never use the canteen or shop for snacks? Or grab a carry out or Greggs after leaving late?  Does hubby never go out for a drink or buy a snack?  Do neither of you ever park a car and have to pay?

There's nothing in your budget for discretionary spends, so you need to look closely at what's drifting out of your accounts.

Grumpelstiltskin

Water rates £81? are you on a meter?

Nationwide account fee? Can you get rid of this.

Haircuts, can you reduce this?

Entertainment, can you reduce this?

|You must realize how much the dog is costing you, any chance of reducing this?

fatbelly

That all looks pretty good. You will be starting with a long-term debt management plan, but other strategies should kick in later.

Well done on the new bank account and the nonpayment of unsecured debts. No need to talk to anyone yet. As you have found out, all it does is delay the process.

A few random thoughts:

Mobile phone spend is a bit frightening.

Do you run an EV? Still needs something for maintenance. Is it on HP?

Likewise i'd get some contents insurance if not already in the building insurance, and read the policy so you know what you can claim for.

EssexHebridean

Empeey88 said:

Hello everyone, 

I want to take control of my finances and sort myself out. I am currently in quite a bit of debt and unable to pay my monthly minimum payments. I have been lurking on the forum for a few weeks and have decided to stop payments this month on my *unsecured* debts (credit cards/loans/store card) so I can wait for them to default before starting a DMP. 

I hope to be able to manage my own DMP as I have been with StepChange before and feel so embarrassed that I have got myself into this again. I am hoping that these forums and using a more realistic budget will provide life long lessons!

Anyway, here is my SOA:

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 2

Number of children in household......... 1

Number of cars owned.................... 2

Monthly Income Details

Monthly income after tax................ 2400

Partners monthly income after tax....... 1946.41

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

Other income............................ 102.4

Total monthly income.................... 4448.81

Monthly Expense Details

Mortgage................................ 1299

Secured/HP loan repayments.............. 294.29999999999995

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

Management charge (leasehold property).. 0

Council tax............................. 220.46 Do you pay this over 10 months, or 12? If 10, then you may find switching to 12 easier for budgeting - but if not, then make sure the two upcoming "free" months are accounted for and the money ringfenced into your emergency fund or fighting fund pots. 

Electricity............................. 200 This is very high allowing that you presumably use oil for heat and hot water - have you been over your use to see if there are any cutbacks you can make and have you checked you are on the best tariff for your needs?

Gas..................................... 0

Oil..................................... 86.99

Water rates............................. 81.03 Also really high - very probably worth you looking at changing to metered, particularly if your supplier offers the option of switching back if it doesn't work out better for you.

Telephone (land line)................... 62.76 Again - very high even allowing for it including internet which I assume it does? Diarise a month ahead of when your contract is up, and shop around! 

Mobile phone............................ 199.65 Just ouch! Another one to make a diary note ahead of the end of the contracts and look at ditching and switching. Allowing you will have the phones, you will then be looking at a cost of about £10 per month maximum per person - so a substantial saving. 

TV Licence.............................. 15.33

Satellite/Cable TV...................... 58

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

Groceries etc. ......................... 400

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

Petrol/diesel........................... 0 How does this end up at zero allowing you're running two cars? I assume an EV - which might also explain the high electric bill - if so I suspect you need a change of tariff!

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

Car Insurance........................... 55.24

Car maintenance (including MOT)......... 0 Again - should there be something here? Even if maintenance is included in an initial contract, it might be a good idea to start budgeting now for future expenses once that deal finishes.

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

Other travel............................ 17.28

Childcare/nursery....................... 150

Other child related expenses............ 75

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

Pet insurance/vet bills................. 46.44

Buildings insurance..................... 25.93

Contents insurance...................... 0 Presumably this is in with buildings cover?

Life assurance ......................... 23.24

Other insurance......................... 24.84

Presents (birthday, christmas etc)...... 60 This is quite a lot allowing that you have debts as well. If you are absolutely confident that it will cover all your birthday presents for the year and the whole cost of everything for christmas, food and all, then that is a bit more reasonable, but you really must make sure this money is set aside and does cover the lot. 

Haircuts................................ 50 This is also quite high. Can you reduce the frequency of visits, change styles to be more low maintenance, or explore possibilities for local colleges running hairdressing courses and have a cheap salon where the students get supervised experience?

Entertainment........................... 51.95 This is very precise which is good in one way, but also makes me think that it might be for just a single  entertainment and so might not cover all your spending in a month. Worth thinking through.  

Holiday................................. 0 You never go away at all? Not even a weekend visiting friends or family? 

Emergency fund.......................... 20 You ideally need to budget more than this - I assume this is starting from a zero point as you aren't showing any cash assets? 

Nationwide account fee.................. 18 What benefits do you get from this and is it value for money? 

Professional (NMC + RCN)................ 26.4

Doggy Day Care.......................... 50

Dog groom............................... 40

Dog food................................ 90

Xmas Savings............................ 100 OK - this ought to be reconsidered. I typed the bit about the presents budget above before seeing this.  Nearly £2l a month is a lot for any family to be spending on presents and Christmas - but for a family in debt, that is a massive sum.  THis is a great time of year to develop an awareness of this though as you have 11 months to be able to re-draw expectations ahead of next christmas and a streamlined budget. 

Savings................................. 100

Total monthly expenses.................. 3991.84 

Assets

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

House value (Gross)..................... 340000

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

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

Other assets............................ 0

Total Assets............................ 340000

Secured & HP Debts

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

Mortgage...................... 252107...(1299).....4.58

Hire Purchase (HP) debt ...... 4415.55..(294.3)....0

Total secured & HP debts...... 256522.5..........

Unsecured Debts

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

Virgin Credit Card.............7834.14...236.8.....24.9

Santander Credit Card..........6447.52...76.67.....21.6

Tesco Credit Card..............7579.7....267.......22.47

Next Store Card................1521.31...77........24.9

PayPal.........................894.81....26.08.....23.9

Plata Loan.....................5015.22...161.7.....29.7

Santander Loan.................4970.89...134.......12.9

Admiral Loan...................7500......125.4.....24.6 - This is hubbys loan 

Pulse Credit Card..............938.......50........21.6 - This is hubbys card

Tymit Credit Card..............536.......39.46.....0

Summary of Monthly Income, expense and surplus
Total monthly income: £4448.81
Expenses (incl. HP & secured debts): £3991.84
Available for debt repayments: £456.97 (minus husbands payments = £208.49)
Unsecured debt repayments: £1194.11
Surplus (shortfall if negative) £-737.14
Personal Balance Sheet Summary
Assets: £340,000
Secured & HP Debt £-256,522.55
Unsecured Debt £-43,237.59
Net Assets £40,239.86

In essence, I have £208.49 to offer my creditors a month... a far cry from the £1018.71 I have been paying (using more credit to make the payments might I add). 

I think I have set out a reasonable budget but happy to answer queries. Hubby is keen to self manage his loan and credit card so I have therefore taken away his monthly payments and his spare £74.07 he has a month from that 'Available for Debt Repayments' number. 

I will be saving the £208.97/month whilst waiting for the defaults to be applied.
I am a nurse and can do additional shifts, so anything I earn from this will also go into my pot as I hope to be able to build up to be able to offer full and final payments?

So my question now is, what do I do once the accounts have defaulted? 

Thank you so much for getting this far in my post! 
Jen

First things first, let's take a look at that SOA. Comments are as usual in bold above. 

There are plenty of savings there to be had which is really helpful, and that you have stopped payments to the unsecured debts and know what your starting surplus should be at this stage means you can keep a tally to ensure that you do actually have that amount spare. As you make savings, change deals to drive costs down etc, ensure that you update the SOA to be able to see what your new end of month surplus should be - then you need to ensure that money is definitely in the account at the end of the month. For now, sweep it across to an interest paying savings account which will hold your new emergency fund. 

You are certainly in a good place to be able to tackle this, and this time, to also change the behaviour patterns to stop the situation occurring again in the future, which is even better! 

EssexHebridean

On a different note, I'd be cautious with speaking with creditors - there is a chance they will put AP (arrangement to pay) markers on your credit files, which is not what you want! Often best just not to make payments, and sit tight and wait for defaults to come in as you've said. 

Brie

There's £260 into savings each month but nothing about savings in your assets.  Presumably this is a figure picked out and not a current reality.  But think about it £260 a month is over £3k - enough to clear more than half your Plata loan which has the highest interest rate.  

Nearly £350 a month on phones and broadband.  Ditch the phone contracts when you can and go for sim only - so what if it's not the latest iPhone?  Check too what other deals you can get - maybe if you lump in your mobile with your broadband?  Do you need the landline?  And do you need the tv licence?  Not everyone does - no live tv and no iPlayer then no licence required.

I am not going to suggest you get rid of your dog but can you do the grooming yourselves?  Maybe get a pro once every 4 months and do the other trims or mani pedis yourself.  

Get rid of your Next card so you're not tempted to have a peak at the sales or whatever.  (there's a great thread on buying from charity shops on Old Style Money Saving - lots of posh stuff, new, with tags for almost nothing).  Paypal too is too tempting to many.  Have 1 card you pay off in full monthly and pay down the rest and dump them or at least decrease the limit on them.  

Oh and well done for taking that step towards getting this solved.  Glad to see too that you and hubby are talking about it as that can also be a big barrier to succeeding if issues with finance aren't shared.