DMP or not to DMP.... that is the question.

shazzbat_2

Hi everyone
So like most on this forum I need some advice around debt and what to do with them. 
I work full time and am on a fairly good wage but instead of enjoying this, I was an fool a few years ago and spent more than I earnt, I did however have a very very good time

So I have completed a SOA off Lemonfool website and have a few questions. 

1. The creditors offer that is calculated, do I contact them and pay that or do I wait to default and then pay it, or do I default and never pay it. 

2. My car loan I intend to continue to pay as that is new this year and feel that will balance out the bad credit I am about to get when I default.

3. On of my credit cards is joint name, my husband is the second name. I intend to keep my debts and defaults separate to my husband, is that doable?

I am not sure I have completed this right as I wasn't sure what to put for my car. I own it (£7000) but paying it off monthly (£167). Any advice?

[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......... 0

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 2645

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

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

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

Total monthly income.................... 2645[/b][b]

Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 167

Rent.................................... 700

Management charge (leasehold property).. 0

Council tax............................. 115

Electricity............................. 50

Gas..................................... 50

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

Water rates............................. 30

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

Mobile phone............................ 45

TV Licence.............................. 7

Satellite/Cable TV...................... 47

Internet Services....................... 22.5

Groceries etc. ......................... 250

Clothing................................ 75

Petrol/diesel........................... 50

Road tax................................ 15.83

Car Insurance........................... 55

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

Car parking............................. 24

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

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

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

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

Pet insurance/vet bills................. 100

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

Contents insurance...................... 5

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

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

Presents (birthday, christmas etc)...... 0

Haircuts................................ 25

Entertainment........................... 200

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

Emergency fund.......................... 0

Subscriptions........................... 150

Licence fees............................ 24.99[b]

Total monthly expenses.................. 2233.32[/b]

[b]

Assets[/b]

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

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

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

Car(s).................................. 7000

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

Total Assets............................ 7000[/b]

[b]

Secured & HP Debts[/b]

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

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

Hire Purchase (HP) debt ...... 9500.....(167)......0[b]

Total secured & HP debts...... 9500......-.........-   [/b]

[b]Unsecured Debts[/b]

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

JD Williams....................826.28....40........0

Barclaycard ...................3330.2....100.......0

HSBC ..........................1999.82...50........0

Halifax CC.....................1003.89...40........0

Pulse Amazon...................1735.9....135.......0

Pulse Topshop..................1122.34...65........0

Virgin Money...................3180.69...100.......0

Capital one....................1225.91...60........0

Kaleidoscope...................632.82....40........0

Vanquis........................2562.6....100.......0[b]

Total unsecured debts..........17620.45..730.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,645

Expenses (including HP & secured debts). 2,233.32

Available for debt repayments........... 411.68

Monthly UNsecured debt repayments....... 730[b]

Amount short for making debt repayments. -318.32[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 7,000

Total HP & Secured debt................. -9,500

Total Unsecured debt.................... -17,620.45[b]

Net Assets.............................. -20,120.45[/b]

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

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

shazzbat_2

I forgot to add this bit when it calculates what to pay creditors. 

Debt Details & Offer to Creditors

Secured & HP Debt Description	Debt(£)	Monthly(£)
Mortgage	0	(0)
Hire Purchase (HP) Debt	9500	(167)
Secured & HP Debt totals	9500	-

Unsecured Debt Description	Debt(£)	Offer(£)
JD Williams	826.28	19.31
Barclaycard	3330.2	77.81
HSBC	1999.82	46.72
Halifax CC	1003.89	23.45
Pulse Amazon	1735.9	40.56
Pulse Topshop	1122.34	26.22
Virgin Money	3180.69	74.31
Capital one	1225.91	28.64
Kaleidoscope	632.82	14.79
Vanquis	2562.6	59.87
Unsecured Debt totals	17620.45	411.68

Brie

OK so let's see if I understand what you've put down.  I'm thinking that all the numbers are you only.  So that's your income and not your husband's?  And all the bills are 50% because we're just talking about you?  Are they based on actual bills?  They seem a bit too tidy to be real so you might want to update that when you get a chance.  Lots of us have bills higher than we think until we actually look at a few months worth of bank statements.

You want to wait for your creditors to default, so no payments to any except the car HP.  Not sure if that qualifies as an asset as you don't own it but others might know.  And it may be immaterial if you are going to continue to pay the HP.  And just be prepared to get a bit of hit back from the other creditors for that preferential treatment.

So on to the monthly expenses.....

Electricity............................. 50

Gas..................................... 50

Water rates............................. 30

As stated previously - a bit too tidy.  Make sure you have the right amounts.  Likewise TV licence (do you actually need it?)

Mobile phone............................ 45
how long til the contract is up?  can you buy the phone and get a cheap (under £10) sim only deal?

Satellite/Cable TV...................... 47

Internet Services....................... 22.5
if this is half then it's these are really big bills!!  Can you get a bundle on your next contract with your phone sim, broadband and trim down the sat services??

Clothing................................ 75
Time to start smart shopping at the chazzers or not shopping at all.  

Medical (prescriptions, dentist etc).... 0
are you covered through work?  else I can't see how someone can get through the year without a things to be paid.

Pet insurance/vet bills................. 100
Again is this half?  So £2400 a year??  

Presents (birthday, christmas etc)...... 0
So nothing for no one?

Entertainment........................... 200
Maybe cut back on this!!  Just for a few months at least!!

Holiday................................. 0
Or is this where you are spending your entertainment ££?

Emergency fund.......................... 0
you need one.  

Subscriptions........................... 150
For what?  Professional things possibly?  Otherwise we're talking a heck of a lot of magazines or whatever?

Licence fees............................ 24.99[b]
Again presumably something professional?  

more to follow.....

Brie

3. On of my credit cards is joint name, my husband is the second name. I intend to keep my debts and defaults separate to my husband, is that doable?

Do you mean that you have a credit card for which you have signed a credit agreement and you have allowed your husband to have a card on that account?  If so it's all your debt.  Doesn't matter who uses the card, it's you that "should" be paying.  Does he have a card in his name?  Because if you are defaulting and this is your only card then things can become tricky.  I know people who manage without credit cards at all but so many things need to be paid with them.  If he doesn't have a card maybe now's the time to get one.  If he does have his own credit card then you might need to get an "associate" card so you have a way to pay for petrol or parking or whatever.  

And presumably you have discuss all of this with your husband?  And that he really has no debts of his own??

Meanwhile, after all that bashing, well done for getting this process started.  It might be a rough ride for a couple of months but it's a going to be worth it in the long run.


fyi - I was going to ask why a DMP rather than a DRO but you wouldn't be able to keep the HP agreement running and I take it that's a necessity.  

fatbelly

Making a mark to answer later - site very unstable

1. You default first then start payments once defaulted.

2. If it is a car loan, you own the car and the debt is just another nonpriority debt. If it is hp, then you do not own the car and you may want to continue payments for now.

3. All credit cards are in one name only. Your husband may be a second card holder but has no liability for the debt

shazzbat_2

@Brie

Thank you for getting back to me about this. Yes, I agree it does look v tidy but this is my portion of our bills between me and my husband.

So on to the monthly expenses.....

Electricity............................. 50

Gas..................................... 50

Water rates............................. 30

As stated previously - a bit too tidy.  Make sure you have the right amounts.  Likewise TV licence (do you actually need it?) The gas and lecky are £197.89 per month so rounded it up to £100 each. Water is free for this year - but will then be approx £25 each - as this needs to be recalculated. We are putting the water money aside ready for the next time we have to pay.

Mobile phone............................ 45
how long til the contract is up?  can you buy the phone and get a cheap (under £10) sim only deal? Mobile phone is only £31.50 - I forgot I had changed this the other month already. 

Satellite/Cable TV...................... 47

Internet Services....................... 23
if this is half then it's these are really big bills!!  Can you get a bundle on your next contract with your phone sim, broadband and trim down the sat services?? This is a constant battle with my hubby, but I am winning slowly but its actually more like £54 ea a month for both. (Used to be £100+)

Clothing................................ 75
Time to start smart shopping at the chazzers or not shopping at all.  I don't actually spend that much but when I had this done with PP they suggested putting an amount in. 

Medical (prescriptions, dentist etc).... 0
are you covered through work?  else I can't see how someone can get through the year without a things to be paid. I have free prescriptions.

Pet insurance/vet bills................. 100
Again is this half?  So £2400 a year??  I have 3 cats, they have a £200 allowance a month for insurance, health club, food and litter and no I won't be getting rid of any of them :-). 

Presents (birthday, christmas etc)...... 0
So nothing for no one? Haha! exactly... No I hadn't thought of that and do have a lot of friends hitting significant numbers so lets say £30 a month. 

Entertainment........................... 200
Maybe cut back on this!!  Just for a few months at least!! That is cut back :-D :-D

Holiday................................. 0
Or is this where you are spending your entertainment ££? Again hadn't thought of that. £40

Emergency fund.......................... 0
you need one.  Yes, again hadn't thought of that £50

Subscriptions........................... 150
For what?  Professional things possibly?  Otherwise we're talking a heck of a lot of magazines or whatever? Although I don't pay for prescription I do have to pay for supplements, groups I attend and other personal stuff, but probably get this down to £100

Licence fees............................ 24.99[b]
Again presumably something professional? Yes I have a registration.

I might redo the SOA with these numbers and see how it looks.
Thanks

Brie

Well done for coming back with such humour.  I've been known to be a bit too blunt and the last thing I would want to do is scare you off!!!  Probably the second last thing would be to suggest you get rid of your cats.  If the ££ logged is for more than just insurance and for 3 cats rather than 1 stick insect or whatever then it makes much more sense.  

Looking forward to the new and improved SOA.....(& a picture of the cats?????)

RAS

Thanks for the responses. You need to revise your SOA so that you understand where your money is going.

But if you ever need to produce an SOA a creditor who won't co-operate with a payment, some of the pet budget can be allocated to clothes as far as they are concerned. 

DankVielen

shazzbat_2 said:

Hi everyone
So like most on this forum I need some advice around debt and what to do with them. 
I work full time and am on a fairly good wage but instead of enjoying this, I was an fool a few years ago and spent more than I earnt, I did however have a very very good time

So I have completed a SOA off Lemonfool website and have a few questions. 

1. The creditors offer that is calculated, do I contact them and pay that or do I wait to default and then pay it, or do I default and never pay it. 

2. My car loan I intend to continue to pay as that is new this year and feel that will balance out the bad credit I am about to get when I default.

3. On of my credit cards is joint name, my husband is the second name. I intend to keep my debts and defaults separate to my husband, is that doable?

I am not sure I have completed this right as I wasn't sure what to put for my car. I own it (£7000) but paying it off monthly (£167). Any advice?

Nanu Nanu

I will not address the SOA right now because there is one urgent thing and it is this.

Do NOT contact them, except to say that due to a massive change in your circumstances which you can't envisage changing in the foreseeable future, you will no longer be making any payments to the account.  

No need for further detail, LESS IS MORE. After that DO NOT ENGAGE

BEFORE that get a new £1 SIM and register a new similar email at a different online mail provider, then update your account via their portals, or drop them a line saying due to being a victim of prolific Scams and Spam you have changed your contact details and these are the new ones to be used from now on. Do not respond to any messages or calls or texts to the old number or email, set your phone to no answer calls from unknown callers, edit the contact to DO NOT CONTACT MBNA for MBNA etc.

Never make an offer, wait for them to come up with an offer, consider that they sell the debt for as little as 3p in the pound, they invented the debt from thin air on their computer and I am sure that you have paid plenty of interest over the years thank you very much, no matter how good a time you had.

Then just wait for the fluff to hit the fan, forget offers until they are at least 60% off. 

It makes sense to keep paying for the car because you will not be getting any new finance for 6 years at least.

If you have a mortgage then I gather they put you on default interest rate after any discount expires and you just roll with it, call it a cost of doing business.

Others here will offer you great ways to save and which new bank you can go to that is not affiliated with any of your creditors.

Then go off radar, no more credit, no more fun, use freecycle if you need anything or eBay/Gumtree if you are desperate. If there are no signs of spending (including social media) then you become high hanging out of reach fruit.

If they make an offer, I mean a real offer, ignore letters from debt collectors saying they have a discount if you call them, they are just trying to extend the 6 year statute bar cut off date. 

Expect the Debt Consolidator who buys your debt to appoint a debt manager (such as Capquest) and they to appoint a new debt collector every 3 to 6 months, each with their own set of automatically generated love letters asking for money in the nicest way possible.

Here we are talking about unsecured debt, the car is secured on the car, the mortgage is secured on the property, do not consider any offer to consolidate or to convert it to secured debt.  This is all part of the journey to being debt free and there are many people on here who will help you, we have all been where you are right now, you will get through it.

The SOA is for you, not for debt charity or for any creditor, you do not have to give any of them anything, DO NOT ENGAGE is the order of the day and for the years to come.  If one of them seriously seeks a CCJ you can come on here to verify if they really will, many misuse the .Gov MOJ forms to scare you into providing data, do not fall for that.  If there are forms they will come from a Court after they file not from a debt solicitor who is trying to get you to engage.