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In debt (£50k) and need some serious help - delicate position

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Hi all,

I’m in quite a bad position and I’m after some guidance if possible please to make sure i make the correct decisions here.

I’m not really looking to excuse my position but some useful context is that I have AuDHD, CPTSD and spending has been one of the things I have really struggled to control. I have had therapy and coaching over the last year and I have really got to a position that is much more manageable.

In the last 12 months we have also welcomed a daughter to our family and had a wedding. I could kind of see this coming but I didn’t know what to do or how to approach it all. 

I have one daughter, and a son with an ex (so have some child maintenance etc costs).

The problem I guess is that I am just going into a job that requires UK Security Clearance - I have declared all of this debt on my form and been fully transparent, but there is a risk I do not get the clearance which would have a significant impact on me. The SC is only 2 weeks in progress. I have advised them that I may enter a DMP. 

We are also looking to relocate in the immediate/short term and obviously I have the worry of referencing.

This means that my next steps are quite critical.

Is it the right thing to do to enter a DMP? Is there anything I am missing? Should we enter a DMP as a couple or should my wife stay out of it and manage her debts separately if she can? We have only just married so no debts are joint or in her name and we have no joint account.

Will me going into a DMP impact her? Thank you for all of your advice. The SoA is rough but broadly accurate.

My taxable pay each month is £4500 but I do have a salary sacrifice car and cycle scheme which I think is around a £1000 deduction in total with BIK etc before tax.

My car scheme ends in November and I am looking at removing this or getting a much cheaper car. 

SoA below


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


Monthly Income Details[/b]

Monthly income after tax................ 3200

Partners monthly income after tax....... 2000

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

Other income............................ 104.2[b]

Total monthly income.................... 5304.2[/b][b]


Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 0

Rent.................................... 1250

Management charge (leasehold property).. 0

Council tax............................. 168

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

Gas..................................... 70

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

Water rates............................. 100

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

Mobile phone............................ 50

TV Licence.............................. 14

Satellite/Cable TV...................... 30

Internet Services....................... 30

Groceries etc. ......................... 600

Clothing................................ 100

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

Road tax................................ 20

Car Insurance........................... 30

Car maintenance (including MOT)......... 50

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

Other travel............................ 100

Childcare/nursery....................... 700

Other child related expenses............ 210

Medical (prescriptions, dentist etc).... 40

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

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

Contents insurance...................... 10

Life assurance ......................... 10

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

Presents (birthday, christmas etc)...... 110

Haircuts................................ 100

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

Holiday................................. 150

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

Total monthly expenses.................. 4392[/b]

[b]


Assets[/b]

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

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

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

Car(s).................................. 800

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

Total Assets............................ 800[/b]

[b]

No Secured nor Hire Purchase Debts[/b]


[b]Unsecured Debts[/b]

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

Sainsbury’s CC.................5314......300.......35

Sainsbury’s Loan...............18000.....495.......11.7

Virgin Cc......................2593.37...100.......30[b]

Total unsecured debts..........25907.37..895.......-  [/b]


[b]

Monthly Budget Summary[/b]

Total monthly income.................... 5,304.2

Expenses (including HP & secured debts). 4,392

Available for debt repayments........... 912.2

Monthly UNsecured debt repayments....... 895[b]

Amount left after debt repayments....... 17.2[/b]


[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 800

Total HP & Secured debt................. -0

Total Unsecured debt.................... -25,907.37[b]

Net Assets.............................. -25,107.37[/b]


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

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

«1

Comments

  • birdsfoottrefoil
    birdsfoottrefoil Posts: 168 Forumite
    100 Posts First Anniversary Name Dropper
    Hi, your SOA is showing around 25k of debt but you state you have 50k as the title? 
    14.05.2014 Total unsecured debt £15,360.99
    20.06.2024 Total unsecured debt £15,087.29
    29.07.24 Total - £15,681
    12.09.24 - £16,187 oops…..
    Oct 24 - £18,325
    Nov 24 - £18,185
    Dec 24 - £18,131
    Jan 25 -£18,347
  • thealphan
    thealphan Posts: 6 Forumite
    First Post
    Hi, your SOA is showing around 25k of debt but you state you have 50k as the title? 
    Sorry! Yes I will update this ASAP.
  • thealphan
    thealphan Posts: 6 Forumite
    First Post
    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.................... 1[b]

    Monthly Income Details
    Monthly income after tax................ 3200
    Partners monthly income after tax....... 2000
    Benefits................................ 0
    Other income............................ 104.2
    Total monthly income.................... 5304.2

    Monthly Expense Details
    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 1250
    Management charge (leasehold property).. 0
    Council tax............................. 168
    Electricity............................. 200
    Gas..................................... 70
    Oil..................................... 0
    Water rates............................. 100
    Telephone (land line)................... 0
    Mobile phone............................ 50
    TV Licence.............................. 14
    Satellite/Cable TV...................... 30
    Internet Services....................... 30
    Groceries etc. ......................... 600
    Clothing................................ 100
    Petrol/diesel........................... 50
    Road tax................................ 20
    Car Insurance........................... 30
    Car maintenance (including MOT)......... 50
    Car parking............................. 0
    Other travel............................ 100
    Childcare/nursery....................... 700
    Other child related expenses............ 210
    Medical (prescriptions, dentist etc).... 40
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 10
    Life assurance ......................... 10
    Other insurance......................... 10
    Presents (birthday, christmas etc)...... 110
    Haircuts................................ 100
    Entertainment........................... 200
    Holiday................................. 150
    Emergency fund.......................... 0
    Total monthly expenses.................. 4402


    Assets
    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 700
    Other assets............................ 0
    Total Assets............................ 700

    No Secured nor Hire Purchase Debts

    Unsecured Debts
    Description....................Debt......Monthly...APR
    Sainsburys CC..................5314......200.......35
    Sainsburys Loan................18000.....495.......11.7
    Virgin CC......................2594......100.......30
    Klarna.........................500.......120.......0
    Paypal CC......................1100......100.......30
    First CC.......................2400......100.......25
    Barclays CC....................2400......150.......35
    Barclays OD....................500.......100.......0
    Amex ..........................6500......300.......50
    Monzo Flex.....................500.......100.......0
    Monzo OD.......................1500......100.......35
    Creation Consum................1000......120.......0
    Capital On Tap CC..............4500......300.......30[b]
    Total unsecured debts..........46808.....2285......-  [/b]

    Monthly Budget Summary
    Total monthly income.................... 5,304.2
    Expenses (including HP & secured debts). 4,402
    Available for debt repayments........... 902.2
    Monthly UNsecured debt repayments....... 2,285
    Amount short for making debt repayments. -1,382.8

    Personal Balance Sheet Summary
    Total assets (things you own)........... 700
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -46,808
    Net Assets.............................. -46,108
  • RAS
    RAS Posts: 35,628 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 7 July at 3:25PM
    As a newbie, you can't edit your previous post, you need 10 posts to do that. 

    At present, you may need to list the debts in the correct format, then the revised total debt and an indication of your monthly deficit.
    If you've have not made a mistake, you've made nothing
  • thealphan
    thealphan Posts: 6 Forumite
    First Post
    RAS said:
    As a newbie, you can't edit your previous post, you need 10 posts to do that. 

    At present, you may need to list the debts in the correct format, then the revised total debt and an indication of your monthly deficit.
    Sorry I’m a bit confused I thought I had done that?
  • RAS
    RAS Posts: 35,628 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Well, after I wrote post, I suspect. The system will allow a completely new post, not editing an old one, yet.

    Whatever, it's good. Keep your finances and your partner's debts and finances separate (no joint accounts) but since you are listing her income in your SOA, you need to at least total her debt and monthly payments.

    Your first task is to find a banking group to whom you owe nothing, and organise a new basic bank account, which requires no credit check. I'd suggest that beyond that you hold fire until your understand how the Security Clearance goes and then check how debt options are viewed (the insolvency options may not be viable, and you might need to check whether there's a preference for debt charity managed DMPs or you can go DIY).
    If you've have not made a mistake, you've made nothing
  • thealphan
    thealphan Posts: 6 Forumite
    First Post
    RAS said:
    Well, after I wrote post, I suspect. The system will allow a completely new post, not editing an old one, yet.

    Whatever, it's good. Keep your finances and your partner's debts and finances separate (no joint accounts) but since you are listing her income in your SOA, you need to at least total her debt and monthly payments.

    Your first task is to find a banking group to whom you owe nothing, and organise a new basic bank account, which requires no credit check. I'd suggest that beyond that you hold fire until your understand how the Security Clearance goes and then check how debt options are viewed (the insolvency options may not be viable, and you might need to check whether there's a preference for debt charity managed DMPs or you can go DIY).
    Ok! Thank you for your advice 
  • Andyjflet
    Andyjflet Posts: 700 Forumite
    Part of the Furniture 500 Posts Photogenic Name Dropper
    With regard to the Security Clearance, I had to jump through a few hoops when I got my job with a major bank, biggest issue was that during lockdown I got two other jobs, PO and Amazon, when I filled out the application I didnt mention these as it was 3 years later, and for short periods, anyway the bank thought I was hiding something and demanded references from those sites, was very traumatic, thought I was going to lose the opportunity and took a few weeks to get the PO to respond, but they eventually did. My point is dont hide anything, they will find out......

    Just as a side note, I didnt enter a DMP and had £65k worth of debt back in 2018, I followed the Dave Ramsey baby steps, I still listen to the podcasts now, cleared my debt, bought a house and now have savings and investments. It can be done, the baby steps are a simple format to follow. 
    Baby Step 6/7 . £16000 saved and invested. £47,000 deposit paid on new home DEBT FREE !!!
    Currently Negotiating with HMRC !
  • thealphan
    thealphan Posts: 6 Forumite
    First Post
    Andyjflet said:
    With regard to the Security Clearance, I had to jump through a few hoops when I got my job with a major bank, biggest issue was that during lockdown I got two other jobs, PO and Amazon, when I filled out the application I didnt mention these as it was 3 years later, and for short periods, anyway the bank thought I was hiding something and demanded references from those sites, was very traumatic, thought I was going to lose the opportunity and took a few weeks to get the PO to respond, but they eventually did. My point is dont hide anything, they will find out......

    Just as a side note, I didnt enter a DMP and had £65k worth of debt back in 2018, I followed the Dave Ramsey baby steps, I still listen to the podcasts now, cleared my debt, bought a house and now have savings and investments. It can be done, the baby steps are a simple format to follow. 
    Thank you for this. Yes of course I have disclosed all of my debt for SC 
  • VAP_Driver
    VAP_Driver Posts: 74 Forumite
    Part of the Furniture 10 Posts Photogenic Name Dropper
    A security clearance is basically just a risk assessment. In the case of financial position and history, the two big concerns are how much it leaves you open to blackmail, or to betray your confidences for money.

    By declaring all your debts, and managing them correctly, you have negated the blackmail option. The second is more difficult, a lot of it depends on how you accrued the debt itself. For example, someone who has built up the majority of their debts through gambling has an ongoing pressure point, whereas someone whose debts were due to time-limited, historic or one-off circumstances, such as having a baby, is a lower risk.

    Nobody can tell you if you’ll pass the process or not, it’s all down to individual circumstances, and to some extent, the person making the assessment. I did hold a security clearance once with an active CCJ and defaults, so it really is on a case by case basis.
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