Debt solutions

redfordrose

@ManyWays I have now posted the SOA. 
The reason stepchange said they didn’t recommend the IVA was because the debt can be paid in a realistic time frame. Money wellness the reasons for not recommending the DMP don’t really make sense. It says 

You have a home or equity which will not be impacted by this solution

You cannot afford to continue to repay your contractual payments but can afford to make a contribution towards your debt 

You will be allowed to keep making repayments to your vehicle finance with this solution

You have debts that can be included in this solution. 

The total balance of the debts that can be included in this solutions meets the criteria to qualify

The assets you have told us about will not be effected by this solution

Those all seem like positives not negatives to me? So i don’t understand why they aren’t recommending it. 

The debt to family i don’t think it’s urgent but i imagine they would want it to start being repaid back or a plan to paying it back. 

I

RAS

redfordrose said:

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

Monthly Income Details[/b]

Monthly income after tax................ 2789

Partners monthly income after tax....... 681.52

Benefits................................ 184.38

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

Total monthly income.................... 3654.9[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 1077

Secured/HP loan repayments.............. 289

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

Management charge (leasehold property).. 0

Council tax............................. 143

Electricity............................. 75

Gas..................................... 75

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

Water rates............................. 38

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

Mobile phone............................ 86.73 - look out for cheaper deals when these finish

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

Satellite/Cable TV...................... 0

Internet Services....................... 27

Groceries etc. ......................... 563.33 - a little on the high side but not much

Clothing................................ 30 - too low with 2 kids, o eof whom seems to be teen or pre-teen

Petrol/diesel........................... 250

Road tax................................ 14

Car Insurance........................... 66.92

Car maintenance (including MOT)......... 20 probably too low, MOT, washer, wipers and new tires at least.

Car parking............................. 0 - never, ever? 

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

Childcare/nursery....................... 40

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 32.56

Pet insurance/vet bills................. 71.94

Buildings insurance..................... 10

Contents insurance...................... 6.61

Life assurance ......................... 22.55

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

Presents (birthday, christmas etc)...... 100 - this is on the high side

Haircuts................................ 10 - looks a bit low?

Entertainment........................... 0 - you need something, even if it's only an occasional coffee out, works do, granny's birthday meal etc

Holiday................................. 0 Never a day or weekend with rellies? You need to budget for that an either some days out or a cheap week away somewhere.

Emergency fund.......................... 30[b] - guessing this aspirational as there don't appear to be any savings at present. You've got a house, You need both money to mai tain and money for emergencies unless one of your is a skill DIYer.

Total monthly expenses.................. 3093.64[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 280000

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

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

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

Total Assets............................ 280000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 204142...(1077).....4.7

Hire Purchase (HP) debt ...... 9355.....(289)......11.9[b]

Total secured & HP debts...... 213497....-.........-   [/b]

[b]Unsecured Debts[/b]

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

HSBC Loan......................23334.....327.9.....9.9

M&S Credit card................921.......27.36.....0

Halifax Credit Card............5442......163.2.....0

Overdraft .....................2707......135.1.....0

Samsung........................377.......29.06.....0

HMRC...........................827.......69.7......0

argos..........................282.......14.48.....0

Paypal.........................492.......18.78.....31

Barclay Credit card............2848......85.44.....28.7[b]

Total unsecured debts..........37230.....871.02....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,654.9

Expenses (including HP & secured debts). 3,093.64

Available for debt repayments........... 561.26

Monthly UNsecured debt repayments....... 871.02[b]

Amount short for making debt repayments. -309.76[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 280,000

Total HP & Secured debt................. -213,497

Total Unsecured debt.................... -37,230[b]

Net Assets.............................. 29,273[/b]

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

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

Plainly the life of Riley is some place else. There's a couple of bits you could reduce but the allowances for life aren't sufficient, particularly with 2 children. You need to add his, hers, ours to the list of debts, please

My comments above.

One thing you both need to understand.

If you or hubbie sign up with a debt charity for a DMP tomorrow, your credit accounts will be marked as Arrangement to Pay. AP markers stay on your credit for 6 years after the debt is paid off. OK some creditors will issue defaults along the line but some don't bother. So a 6 year DMP could damage your credit record for 12 years.

If you take the advice recommended here, you stop paying sometime in the next couple of months and most of your creditors will issue defaults within a year or so. So your credit record starts improving in 6-7 years time as the defaults drop off. 

It's counter-intuititive but that's how it works. It does take some nerve but you can tell them to stop calls, texts and emails and only write. Important legal stuff like the default notice have to be mailed and you want to know when that happens. 

Meantime, you set up a savings account into which you put the money you aren't paying so you can deal with the cooker failure, the gutter cleaning etc.

But first, I'd suggest you clear that HMRC debt pronto and that you might think about sorting the joint overdraft. Although we need more information on the ownership of the debts.

redfordrose

@RAS The only debt i could be linked to is the overdraft as i am listed on the bank account as a joint one. All the rest are solely in my partners name and I have no tie to them. 
The HMRC debt is a child benefit high income charge, it will be cleared this year we would clear it sooner if we had the funds. 
Thats interesting to know about the DMP and exactly why i didn’t want to rush into anything. 
Things like this really scare me and I would definitely loose sleep over not paying and worry about bailiff’s etc

RAS

Let's put bailiffs to bed. 

Creditors can't take any legal action until the default is issued on the debt. 
Once they do, you will get some letters asking for payment from the creditor or they will assign or sell the debt, so you start paying a reduced amount.
Legal action costs money, accepting your payment costs nothing. And if they went for a CCJ, they'd end up with a similar or lower payment. 

There are a few more difficult creditors but you don't seem to have any on your list.

RAS

Who is the overdraft with?

nachocheese

RAS said:

Let's put bailiffs to bed. 

Creditors can't take any legal action until the default is issued on the debt. 
Once they do, you will get some letters asking for payment from the creditor or they will assign or sell the debt, so you start paying a reduced amount.
Legal action costs money, accepting your payment costs nothing. And if they went for a CCJ, they'd end up with a similar or lower payment. 

There are a few more difficult creditors but you don't seem to have any on your list.

Sorry to be jumping on somebody else's thread, but may I ask which ones are the more difficult creditors, please.

redfordrose

@RAS That’s good to know. Do we try and work out a smaller payment first with the debt companies or do we just stop and wait for creditors to contact us about a payment plan? Then set that up with them? It’s very confusing and overwhelming! 
Overdraft is with HSBC

EssexHebridean

Completely agree with the pet costs - they are as much part of your family as the kids are, after all! You do have to be careful with insurances for pets too as sometimes changing companies can leave you with worse cover for any ongoing conditions. 

The phones are a lumpy old cost - diarise now when those contracts end, and ensure that everyone knows there will not be shiny new phones then, so look after the ones you have! You'll be able to switch to SIM only deals then at around £10 a month - possibly even cheaper as deals do seem to be coming down. Once that happens, factor in popping aside a small amount each month to have ready for when handsets need replacing - and at that stage look at purchasing 2nd hand refurbed. 

You need to factor in savings for holiday (yes, even if you just go and stay with family and friends for a weekend here and there - that still costs money on travel, spending money etc)
You need to allow an amount for entertainment - it's not achievable to spend the next several years having no joy in your lives!
Check your budgeted figure for car maintenance - £20 a month is very optimistic, and especially for someone doing high mileage as you appear to be if that fuel spend is for a single car. Think about servicing and MoT test, but also tyres, wiper blades, screenwash and just general bits and bobs, plus include an amount for contingencies. 

Your presents spend probably needs to come down - but you also need to ensure that will cover all your spending for birthdays and christmas - so all food, any travel etc as well. It's good that you are starting this in February as that gives you time to manage expectations! 

Double check that you are being charged accurately for your gas & electric and that the amount you are paying covers your use. Check bills against meter readings, and also that you are being billed on actual readings, not estimates. 

redfordrose

@EssexHebrideanPartners is £22.81, mine is £20.77 both are sim only but i will look at lowering these! Mine used to be half the price but was unable to get that low again. Will look into them today actually. Our eldest daughters is £43.15 her contract is up in June so will switch to sim only for her too. 

I’ve definitely been very optimistic with the budgeting and if i’m honest unrealistic in terms of the vehicle maintenance, entertainment, household maintenance. 

Presents I was aiming for birthdays and christmas’ in that. Last year was the first year we let family know we wouldn’t be doing presents for adults, which didn’t go down well but for us it was the right thing to do and we will continue with this. 

We submit meter readings regularly and we are in credit with our gas and electric

EssexHebridean

have a look here : https://www.moneysavingexpert.com/cheap-mobile-finder/sim-only/
Martin said recently that prices for mobile deals have never been lower - I'm currently on a deal which gives me I think it's 30gb of data a month, unlimited texts and calls and I pay £9.90 - that's with a carrier using the EE signal. 

It's so easy to fall into the habit of just not updating budgets - in fairness I'd not properly updates ours in a good while since we moved house a couple of years ago, that fully sharpened the mind about what we were spending though! 

Yes - budget in that "presents" pot for christmas & birthdays - and include any celebrating you plan to do, including things like your chritmas dinner food. maybe a family chat about what you get most value from at christmas, and where everyone might be perfectly happy to cut back or economise. Have a look for free things to do to replace areas which might usually be expensive through habit too. 

Well done on the electric and gas - that is an area where folk often get caught out - particularly when they have smart meters and then think they can just ignore reading them ever...only to find out that something has gone wrong on a meter change and in fact their bills are way adrift! 

Household maintenance I set aside £60 a month for the general running costs - that includes insurances, chimney sweeping and some purchases like water filter cartridges and odds and ends like that - we budget separately for any larger jobs we are expecting to need to get done.