Advice on my debts please

RAS

If anyone complains, it's deducted at source and you can't change it. 

sa11aver

Hi - many thanks for all the advice re the Salary Sacrifice loan. Feeling terrified but getting my head around all of this.
I have done the SOE below.  As the Salary Finance comes straight from pay, it is reflected in the monthly income after tax amount rather than a separate entry.

Any helpful thoughts welcome 

[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................ 3268

Partners monthly income after tax....... 819

Benefits................................ 116

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

Total monthly income.................... 4203[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 1209

Secured/HP loan repayments.............. 77

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

Management charge (leasehold property).. 175

Council tax............................. 300

Electricity............................. 243

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

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

Water rates............................. 69

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

Mobile phone............................ 122

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

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

Internet Services....................... 40

Groceries etc. ......................... 550

Clothing................................ 60

Petrol/diesel........................... 85

Road tax................................ 11

Car Insurance........................... 39

Car maintenance (including MOT)......... 20

Car parking............................. 99

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

Childcare/nursery....................... 101

Other child related expenses............ 46

Medical (prescriptions, dentist etc).... 17

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

Buildings insurance..................... 27

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

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

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

Presents (birthday, christmas etc)...... 50

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

Entertainment........................... 60

Holiday................................. 50

Emergency fund.......................... 100

(Unnamed monthly expense)............... 0[b]

Total monthly expenses.................. 3615[/b]

[b]

Assets[/b]

Cash.................................... 400

House value (Gross)..................... 495000

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

Car(s).................................. 1

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

Total Assets............................ 495401[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 233502...(1209).....4.99

Hire Purchase (HP) debt ...... 3264.....(77).......0[b]

Total secured & HP debts...... 236766....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Nationwide loan................5680......219.......6.8

Tesco Loan.....................6759......563.......10.1

Capital One ...................8983......263.......24.9

Salary Finance **..............0.........0.........0

Virgin money...................1416......47........24.9

Barclays overdraft ............2500......68........35

Lloyds overdraft...............4500......74........33

MBNA...........................14994.....432.......28.9[b]

Total unsecured debts..........44832.....1666......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 4,203

Expenses (including HP & secured debts). 3,615

Available for debt repayments........... 588

Monthly UNsecured debt repayments....... 1,666[b]

Amount short for making debt repayments. -1,078[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 495,401

Total HP & Secured debt................. -236,766

Total Unsecured debt.................... -44,832[b]

Net Assets.............................. 213,803[/b]

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

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

sa11aver

Ok so I think I’ve finally admitted to myself that we can’t go on like this.  There’s always a fleeting thought that maybe I can save this but it’s just delaying the inevitable.

So setting out the steps I think I need to take - mainly so I get it straight in my head but if anyone spots anything I’m doing wrong please let me know 

1.  Open new basic bank account not associated with any debts.  

2.  Update phone number and contact preferences with existing debt companies.
3.  Stop paying unsecured debts and ignore all calls and emails but open all snail mail and file.
4.  Save like crazy into emergency fund,
5.  In time wait for defaults - identifiable by default markers on credit file.
6.  Wait to be contacted for ways to pay and proportion out payments willing to make between all the debts.
7.  In time explore settlement offers.

I’m fairly clear on steps 1-5 but think I might need to ask for people’s help when it gets to defaults and deciphering what to do. 

Wish me luck - and thank you 

kimwp

It does seem that you don't have much of a choice regarding defaulting - there are savings you can make, but it won't add to more than £2-300 unless you go bare-bones and that might not even cover the minimums.

Step 1- make sure you manually move your bills and salary over IE don't use the switching service (to prevent the direct debits for your debts moving to the new account)

Step 6- once your debts have defaulted, you contact them to find out where to send payments too. Do token payments until you have saved enough into your emergency fund.

Ask any questions you need to. It might be helpful to start a diary in the diary section.

ManyWays

To add to your list, look at affordability complaints against all the expensive credit cards. And also I think SF - the complaint goes to SF, not to your employer who doesn't have to know anything about it. 

sa11aver

Thank you - adding affordability complaints to the list.  Good shout.

I do have another question:
if the debts default and they come off after 6 years - does that still happen even if the debts aren’t paid off yet by that date? What is the status of them after 6 years if there is still a balance?

many thanks 

fatbelly

Yes, the whole entry drops off the report 6 years after it is defaulted or settled, whichever happens sooner.

The status remains the same - the money is still owed.

kimwp

sa11aver said:

Thank you - adding affordability complaints to the list.  Good shout.

I do have another question:
if the debts default and they come off after 6 years - does that still happen even if the debts aren’t paid off yet by that date? What is the status of them after 6 years if there is still a balance?

many thanks 

I think the defaults come off, but the debt is still not settled (or they could pursue for the debt, but it's not marked on your credit history). I'm not an expert though.

I think the six years after it is settled that fatbelly mentioned is if you have an arrangement to pay (rather than a default)

RAS

fatbelly said:

Yes, the whole entry drops off the report 6 years after it is defaulted or settled, whichever happens sooner.

The status remains the same - the money is still owed.

By year 3 or 4 your will start to get settlement offers from debt buyers who've paid 15-30% of the book value and would like a prompt payment of 30-50% to make a quick profit. 

It's wise therefore to have a decent emergency fund with a bit of leeway you can use to take advantage of the discount offers.

Rather than just waiting, read up on Debt Camel on affordability claims. That might get the interest written off for some of your debts. They may even stop reporting on your credit record.