60k+ Debt, feeling a little lost. Is a DMP right?

debtfreehusky

Hi all, hopping on here for some advice, more than anything 

I have over 60k of debt, and it's getting to a situation now where I'm struggling to pay everything and afford a decent day-to-day living without the weight of stress bogging me down.

It's my own making and I've been a bit of a fool. Rewind back a year and both myself and my Wife were working in the same company earning 18k per year extra between us and then redundancy hit us. Over time I was hoping I'd be able to manage my debts but it has just gotten to a stage of no matter how I try I end up using more on my credit cards as any savings we had are now gone.

Typically between us my Wife paid the rent (council), tax and food, I did everything else and we just spread the cost of any extras between us which is no longer manageable.

I don't really have any assets other than a camera for my only hobby which is worth around £2000 and my car is on Hire Purchase.

We had been talking together and I had been so obsessed with trying not to miss any payments so I can keep a good credit rating I was contemplating selling my camera to buy an extra month or two breathing space. My wife pointed out this wouldn't solve anything and we would just be in the same position a couple of months down the line and I would be bored out of my mind haha, and then she said I should just say sod it to my credit rating and look at a DMP.

I've got no problem setting up and breaking down payments for my creditors as I can work everything out easy enough, I just have some questions for everyone here that you probably hear from similar situations.

• I'm feeling this is probably the best course of action to reclaim a little control?
  
• I've read on other posts the best way to start is to cancel all payments and just wait until you get a default notice before arranging to pay, is that right?
• How do I know that I've got a default notice, am I sent a letter that specifically says it's a default notice?
  
• What happens if creditors refuse my payment offer? (I plan on working out what I owe to whom, what I have left over to pay my debts, then offer a percentage reflective to debt totals)
  
• Is there any risk of baliffs coming round and demanding payment or taking goods?  Not even sure if this is a thing anymore?
  
• Is there anything in my SOA that looks low/high? I've never really tracked things like clothing spends etc before.  My mobile is slightly higher as I've still got a year left on a contract that I pay for my daughter who has moved out.

I've put my SOA below, and have split bills as slightly over a 50% split as I earn slightly more than my partner.  None of these debts are joint and we don't have a joint bank account.

[tt][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 

Number of cars owned.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 3019

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

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

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

Total monthly income.................... 3019[/b][b]

Monthly Expense Details[/b]

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

Secured/HP loan repayments.............. 430

Rent.................................... 425

Management charge (leasehold property).. 0

Council tax............................. 100

Electricity............................. 60

Gas..................................... 30

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

Water rates............................. 20

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

Mobile phone............................ 144.07

TV Licence.............................. 0

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

Internet Services....................... 35

Groceries etc. ......................... 200

Clothing................................ 33

Petrol/diesel........................... 180

Road tax................................ 16.62

Car Insurance........................... 51.66

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

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

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

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

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

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

Pet insurance/vet bills................. 117

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

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

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

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

Presents (birthday, christmas etc)...... 25

Haircuts................................ 10

Entertainment........................... 35

Holiday................................. 40

Emergency fund.......................... 50[b]

Total monthly expenses.................. 2052.35[/b]

[b]

Assets[/b]

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

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

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

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

Other assets............................ 2000[b]

Total Assets............................ 2000[/b]

[b]

Secured & HP Debts[/b]

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

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

Hire Purchase (HP) debt ...... 16740....(430)......0[b]

Total secured & HP debts...... 16740.....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Vanquish.......................272.......11........0

118............................312.......42........0

Zopa...........................404.......22........0

Very...........................3771......66........0

Shawbrook......................21513.....724.......0

Fluid..........................7560......268.......0

Pulse..........................4997......162.......0

Jaja...........................3043......144.......0

Virgin.........................2735......82........0

Tesco..........................1631......43........0

Capital One....................535.......28........0[b]

Total unsecured debts..........46773.....1592......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,019

Expenses (including HP & secured debts). 2,052.35

Available for debt repayments........... 966.65

Monthly UNsecured debt repayments....... 1,592[b]

Amount short for making debt repayments. -625.35[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 2,000

Total HP & Secured debt................. -16,740

Total Unsecured debt.................... -46,773[b]

Net Assets.............................. -61,513[/b]

[i][/i][/tt]

Thanks so much in advance for any responses here, open to any insights and thoughts. I really appreciate your time!!!

RAS

You need contents insurance. You simply can't afford a major issue that costs a lot.

Also include parking, as you will pay for some. And medical and dental, even if only a heck up or filling and a couple of prescriptions. Food is a bit high but....

Unless you have issues with emission zones, I'd at least check whether you can return the car once half is paid off, and get something cheaper. If you keep it, it has to be a considered decision not to reduce your debt.

I'd also suggest that you look at making affordability claims, certainly for anything taken out since redundancy. Shawbrook I assume was a consolidation loan?

Do you owe anything to the bank where you have your current account, or to any other company in the same banking group? If so, you need a new basic account (no credit check).

And you need an account into which you pay that £950 over the next few months to build up an emergency fund. As a council tenant, that's not as big an issue as for private renters, but you've already been made redundant once so won't have as much protection now.

elsien

How much for your mobile phone??
That also seems to be just shy of 400 quid a month for food for two people and over £200 a month on pet insurance? 

Are those  figures reflective of true position. 

Also, is your wife fully on board with money saving Because it’s not going to a lot of use if you’re cutting back and she’s still spending if the debts you have accrued have come from the both of you even if they’re just in your name.

Brie

Does your wife have any income?  If not, why not?  Not working and not eligible for any benefits?  I know there are situations where this makes complete sense but an brief explanation might help particularly in light of elsien's comments.

RAS

Brie said:

Does your wife have any income?  If not, why not?  Not working and not eligible for any benefits?  I know there are situations where this makes complete sense but an brief explanation might help particularly in light of elsien's comments.

The OP says he's only listing his debt and income, plus slightly more than half the household costs. So wife earns slightly less and pays slightly less.

debtfreehusky

RAS said:

You need contents insurance. You simply can't afford a major issue that costs a lot.

Also include parking, as you will pay for some. And medical and dental, even if only a heck up or filling and a couple of prescriptions. Food is a bit high but....

Unless you have issues with emission zones, I'd at least check whether you can return the car once half is paid off, and get something cheaper. If you keep it, it has to be a considered decision not to reduce your debt.

I'd also suggest that you look at making affordability claims, certainly for anything taken out since redundancy. Shawbrook I assume was a consolidation loan?

Do you owe anything to the bank where you have your current account, or to any other company in the same banking group? If so, you need a new basic account (no credit check).

And you need an account into which you pay that £950 over the next few months to build up an emergency fund. As a council tenant, that's not as big an issue as for private renters, but you've already been made redundant once so won't have as much protection now.

Thanks Ras, hadn't even thought about content insurance at all, good point.

No issues with emission zones, I'm more than happy to return the car if possible for something cheaper, it was through Oodle Car Finance, so will look into that.

There's been nothing new opened since the redundancy and yes the Shawbrook was consolidation.

I owe nothing to my bank and have no overdraft there.

elsien said:

How much for your mobile phone??
That also seems to be just shy of 400 quid a month for food for two people and over £200 a month on pet insurance? 

Are those  figures reflective of true position. 

Also, is your wife fully on board with money saving Because it’s not going to a lot of use if you’re cutting back and she’s still spending if the debts you have accrued have come from the both of you even if they’re just in your name.

Yeah It's high, there's £80 for mine and the rest is the contract I got for my daughter at the time, both finished mid next year.

On the pet insurance I didn't think of splitting that.  We have two dogs both German Shepard who is 7 with an exsisting condition, she costs £117 with PetPlan which I pay, and a 11 year old Husky which is £38 per month and my Wife pays.  So in reality my share of that would be £80

In relation to the £400 a month that's our current spend which fluctuates up and down which covers all groceries including dog food.  If that seems excessively high I can always take a closer look at that.

Yes shes fully on board and has already looked at cutting back anything not needed.

Brie said:

Does your wife have any income?  If not, why not?  Not working and not eligible for any benefits?  I know there are situations where this makes complete sense but an brief explanation might help particularly in light of elsien's comments.

Yes she works as well earning about £750 per month less than myself, no benefits.  She has her car that she pays off and her own debts.

ManyWays

Affordability complaints to Shawbrook and Newday (Fluid & Pulse cards) look like a good idea. 

katsu

If your wife has her own debts and you have a consolidation loan, I would suggest you take a closer look at your spending on say Christmas and other things to ensure you get an accurate SOA going forward where you think about what you spend money on normally. 

Your mobile bills are super high but at least it's only a little longer. As soon as they finish look for the best SIM only deal.

debtfreehusky

katsu said:

If your wife has her own debts and you have a consolidation loan, I would suggest you take a closer look at your spending on say Christmas and other things to ensure you get an accurate SOA going forward where you think about what you spend money on normally. 

Your mobile bills are super high but at least it's only a little longer. As soon as they finish look for the best SIM only deal.

Thanks Katsu, yeah we're sitting down and going through everything with a fine-tooth comb to get an accurate view on our SOAs.  With all our daughters bar one grown up and moved out we'll be able to keep Christmas at a real minimum.

Thankfully all my contracts are done and dusted next year and I can just go Sim-Only and that will drastically drop that saving another £120 per month!

I've already opened a separate account specifically for things like Holiday Fund/Car Maintenance/Emergency Fund. Which i'll hopefully never need to use and can go toward f&f settlements when/if they eventually come through! 

RAS

I'd suggest two accounts.

You need to have money put aside monthly towards cars, holiday, presents, etc.  Also some insurances can be cheaper paid annually. Whatever doesn't get used one year can be rolled into the second account.

You also need to build your emergency/fighting fund. This is for the cooker that fails, the family emergency, redundancy etc. And if in time you get decent discount offers on debts, you may have a little money with which you can take advantage.

debtfreehusky

RAS said:

I'd suggest two accounts.

You need to have money put aside monthly towards cars, holiday, presents, etc.  Also some insurances can be cheaper paid annually. Whatever doesn't get used one year can be rolled into the second account.

You also need to build your emergency/fighting fund. This is for the cooker that fails, the family emergency, redundancy etc. And if in time you get decent discount offers on debts, you may have a little money with which you can take advantage.

Thanks RAS! 

Yeah this year I actually paid my car insurance as an annual payment as it was around £90 cheaper than opting for monthly payments!

I've got my Barclays account which I have no debt with so will be keeping that and have just signed up to a Monzo account where I'm going to create Pots for things like Holiday, Presents etc!