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What to do…
archer2016
Posts: 42 Forumite
I’m in approx 70k of debt.
I have been looking at a dmp and have mentioned this to my partner, however she is not keen. She thinks it may affect my position in regard to an opportunity with the company I work with.
The risk as far as I can see it is if I get credit checked however that won’t be pretty without a dmp if things stay as they are. Either way it’s a concern.
I have considered writing to some of the card providers (Barclaycard, virgin x 3, m&s, Llyods) and asking them to stop interest and also considering an affordability complaint on one of the loans. Both with Zopa. If the card companies agreed to take freeze interest and lower the minimum payments I could potentially limp along until the loans are up, approx 20 months 320 a month (Oct 26) and 650 a month (Dec 27) but am I right in saying this could be as damaging to my report long term as a dmp with an ap marker on there for the same period?
I’ve always been able to meet payments however only really by utilising credit available. However that’s not far off exhausted.
I could do a Soa if necessary although I know what’s crippling me. I’m bringing in 4k a month and paying out the same. My other outgoings are very little and so there are little other opportunities for savings imo. However some of my earnings are dividends and there is the potential for an adjustment at the end of each year which could mean additional payment. Should I still do an Soa?
I also lease a car which I need for work, this expires in a little over a year however I’ll need to extend or take out a new lease then which is another concern.
Appreciate any responses and advice, thank you.
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Comments
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Yes, an SOA is always useful.
Where has the money been spent, one off expenses, sustained overspend? Does your budget balance without the need for further debt?1 -
If you cant make the minimum payment as you can't get any more credit, then your credit record will be affected. Unless you can say something about your job and potential opportunity, it's hard for us to say anything about that.
Asking for lower than minimum payments on credit cards will affect your credit score , not as much as defaults would but arrangement to pay markers stay on there for longer, 6 years from when the debt is settled, where a default only shows for 6 years from the default date. So with a major debt problem paradoxically defaults are usually the better option.
But we will have more idea about possible options after seeing an SoA..
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Thank you.I would say sustained overspend for the most part. There have been somethings that have happened otherwise but the majority would have built up at a steady rate every year. A lack of discipline and planning.My salary has grown year on year however I’ve never addressed the issue in the correct way and things have got worse and worse.I will work through the SOA, and post it up.I guess I will be short on a budget as things stand.1
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Well done for considering that something needs to be sorted. Some people never get to that point.
Post an SOA and we'll see it there's ways that we can suggest to help.
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"Never retract, never explain, never apologise; get things done and let them howl.” Nellie McClung
⭐️🏅😇2 -
Well done on a really honest assessment of how you have got to where you are - that’s not easy.You say that you’ve been able to make the payments until now - but of course that’s not really the case is it, had you been paying all your priority bills and necessary discretionary spending each month before the debt payments went out, the money would have run out before those debt payments were all done. This is the difficulty for those who maintain a reasonably solid credit file for longer - often it means that thr situation is worsened before the lightbulb moment happens - had the impact on your file been more significant sooner then you would have been forced to put the brakes on a good few thousand pounds sooner.When you do the SOA, get yourself a years worth of bank and card statements together to make sure you really nail your expenditure. Also when thinking about grocery spending, really track down exactly what has been spent, rather than thinking “well we spend £70 a week when we do our main shop” and then forgetting about the two or three extra visits to the store spending £10 each time!🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her2 -
Thanks everyone, I have done the Soa there will perhaps be errors and it was a bit harrowing, appreciate any comments.
if I haven’t included anything obvious that’s cos my partner pays it - water, council tax etc, phone is paid for by work.Part of my income is dividends paid quarterly, I’ve divided this by 3 and added in,[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]Household Information[/b]Number of adults in household........... 2Number of children in household......... 1Number of cars owned.................... [b]Monthly Income Details[/b]Monthly income after tax................ 4056Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 4056[/b][b]Monthly Expense Details[/b]Mortgage................................ 802Secured/HP loan repayments.............. 0Rent.................................... 0Management charge (leasehold property).. 0Council tax............................. 0Electricity............................. 120Gas..................................... 80Oil..................................... 0Water rates............................. 0Telephone (land line)................... 0Mobile phone............................ 0TV Licence.............................. 0Satellite/Cable TV...................... 0Internet Services....................... 0Groceries etc. ......................... 250Clothing................................ 50Petrol/diesel........................... 150Road tax................................ 0Car Insurance........................... 35Car maintenance (including MOT)......... 35Car parking............................. 0Other travel............................ 0Childcare/nursery....................... 0Other child related expenses............ 175Medical (prescriptions, dentist etc).... 45Pet insurance/vet bills................. 120Buildings insurance..................... 16Contents insurance...................... 0Life assurance ......................... 51Other insurance......................... 0Presents (birthday, christmas etc)...... 100Haircuts................................ 20Entertainment........................... 400Holiday................................. 200Emergency fund.......................... 0[b]Total monthly expenses.................. 2649[/b][b]Assets[/b]Cash.................................... 0House value (Gross)..................... 265000Shares and bonds........................ 0Car(s).................................. 0Other assets............................ 0[b]Total Assets............................ 265000[/b][b]Secured & HP Debts[/b]Description....................Debt......Monthly...APRMortgage...................... 125000...(802)......0[b]Total secured & HP debts...... 125000....-.........- [/b][b]Unsecured Debts[/b]Description....................Debt......Monthly...APRLlyods card ...................8800......410.......29.31Barclaycard ...................12450.....350.......21.68Virgin 1.......................4150......130.......22Car lease......................280.......0.........0Zopa Loan 2....................22250.....650.......15.4Zopa Loan 1....................6300......320.......4.9M and S........................6500......170.......0Virgin 3.......................6500......200.......22Virgin 2.......................6600......200.......22[b]Total unsecured debts..........73830.....2430......- [/b][b]Monthly Budget Summary[/b]Total monthly income.................... 4,056Expenses (including HP & secured debts). 2,649Available for debt repayments........... 1,407Monthly UNsecured debt repayments....... 2,430[b]Amount short for making debt repayments. -1,023[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 265,000Total HP & Secured debt................. -125,000Total Unsecured debt.................... -73,830[b]Net Assets.............................. 66,170[/b][i]Created using the SOA calculator at www.LemonFool.co.uk.Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]1 -
Hi, it's difficult to respond in detail because it is not clear whether you partner is paying for things or whether they are simply missing from the family budget? Some of those items may be higher than needed, lower or just missing. Also is your partner earning £4k a year and contributing £2k to the household budget or £1500 and also accruing their own debt.archer2016 said:Thanks everyone, I have done the Soa there will perhaps be errors and it was a bit harrowing, appreciate any comments.
if I haven’t included anything obvious that’s cos my partner pays it - water, council tax etc, phone is paid for by work.Part of my income is dividends paid quarterly, I’ve divided this by 3 and added in,[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]Household Information[/b]Number of adults in household........... 2Number of children in household......... 1Number of cars owned.................... [b]Monthly Income Details[/b]Monthly income after tax................ 4056Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 4056[/b][b]Monthly Expense Details[/b]Mortgage................................ 802Secured/HP loan repayments.............. 0Rent.................................... 0Management charge (leasehold property).. 0Council tax............................. 0Electricity............................. 120Gas..................................... 80Oil..................................... 0Water rates............................. 0Telephone (land line)................... 0Mobile phone............................ 0TV Licence.............................. 0Satellite/Cable TV...................... 0Internet Services....................... 0Groceries etc. ......................... 250Clothing................................ 50Petrol/diesel........................... 150Road tax................................ 0Car Insurance........................... 35Car maintenance (including MOT)......... 35Car parking............................. 0Other travel............................ 0Childcare/nursery....................... 0Other child related expenses............ 175Medical (prescriptions, dentist etc).... 45Pet insurance/vet bills................. 120Buildings insurance..................... 16Contents insurance...................... 0Life assurance ......................... 51Other insurance......................... 0Presents (birthday, christmas etc)...... 100Haircuts................................ 20Entertainment........................... 400Holiday................................. 200Emergency fund.......................... 0[b]Total monthly expenses.................. 2649[/b][b]Assets[/b]Cash.................................... 0House value (Gross)..................... 265000Shares and bonds........................ 0Car(s).................................. 0Other assets............................ 0[b]Total Assets............................ 265000[/b][b]Secured & HP Debts[/b]Description....................Debt......Monthly...APRMortgage...................... 125000...(802)......0[b]Total secured & HP debts...... 125000....-.........- [/b][b]Unsecured Debts[/b]Description....................Debt......Monthly...APRLlyods card ...................8800......410.......29.31Barclaycard ...................12450.....350.......21.68Virgin 1.......................4150......130.......22Car lease......................280.......0.........0Zopa Loan 2....................22250.....650.......15.4Zopa Loan 1....................6300......320.......4.9M and S........................6500......170.......0Virgin 3.......................6500......200.......22Virgin 2.......................6600......200.......22[b]Total unsecured debts..........73830.....2430......- [/b][b]Monthly Budget Summary[/b]Total monthly income.................... 4,056Expenses (including HP & secured debts). 2,649Available for debt repayments........... 1,407Monthly UNsecured debt repayments....... 2,430[b]Amount short for making debt repayments. -1,023[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 265,000Total HP & Secured debt................. -125,000Total Unsecured debt.................... -73,830[b]Net Assets.............................. 66,170[/b][i]Created using the SOA calculator at www.LemonFool.co.uk.Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
Where are the lease costs of the car? And what are the other child related costs?
You need contents insurance. You need an emergency fund to cover things like replacement of white goods and another to cover house maintenance.
Your pet costs, holiday and entertainment budget are all very high. If your partner also has debts, your groceries could be reduced a bit, but if they are also buying groceries, then that needs reducing.
And you need to devise a plan to replace the car as you seem to do a decent amount of mileage.If you've have not made a mistake, you've made nothing0 -
A lot of those figures look very round, are they actuals from the last year's expenditures?0
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I can't see how to avoid a debt management plan. It would take around 50 months
An IVA would have no advantage as you actually have a good disposable income, just not enough to meet contractual payments.
1 -
Can we clarify here - the £70k debt - is that just purely yours, so you have been overspending on personal stuff, rather than this being a general "household" issue where essentially as a family you have been living beyond your means and using credit to make up the shortfall to cover everything? It makes a difference to the way you need to be tackling things. A £70k personal overspend debt would be considered quite unusual - and indeed usually when we see that level of debt there is more going on behind the scenes - so examples might be a gambling issue that's being kept hidden, for example. If that WAS the situation, then it needs tackling on a number of different levels, rather than with a household overspend > debt situation where budgeting comes first and tackling the debt follows directly on from that.
If it IS a household situation, then that also needs tackling in the same way it was accrued - so by the way the family lives changing, and the clearance of the debt being dealt with by you and your partner working together to deal with things. In that situation the SOA should detail the full household income and expenditure.🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her1
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