Where to begin/realistic expectations

chinaski11

Thanks smudge, I’ll amend that. 

So I’ve gathered my interest rates (the ones I can). For the loans, am I putting down what I owe including the interest on estimated to pay? Or how much I borrowed minus what I’ve paid off? 

I.e the Abound loan for example. 

I borrowed £10,000 to be paid off over 60 months. I have £8,500 left to pay from the initial loan. However, once I’ve made the remaining 43 payments I’ll have paid £11,350. 

So do I put £8,500 as my debt or the ‘real’ debt that I’ll owe/have paid once my agreement finished (£11,350)? 

chinaski11

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

Monthly Income Details[/b]

Monthly income after tax................ 2035

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

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

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

Total monthly income.................... 2035[/b][b]

Monthly Expense Details[/b]

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

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

Rent.................................... 450

Management charge (leasehold property).. 0

Council tax............................. 55

Electricity............................. 25

Gas..................................... 25

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

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

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

Mobile phone............................ 15

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

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

Internet Services....................... 10

Groceries etc. ......................... 160

Clothing................................ 20

Petrol/diesel........................... 100

Road tax................................ 2

Car Insurance........................... 90

Car maintenance (including MOT)......... 12

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

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

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

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

Medical (prescriptions, dentist etc).... 7

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

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

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

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

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

Presents (birthday, christmas etc)...... 20

Haircuts................................ 0

Entertainment........................... 100

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

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

Total monthly expenses.................. 1111[/b]

[b]

Assets[/b]

Cash.................................... 200

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

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

Car(s).................................. 1000

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

Total Assets............................ 1200[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

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

Abound (Loan)..................11220.....256.......16.13

118 money (Loan)...............1254......38........39.9

Barclaycard (CC)...............4590......96........28

Monzo OD.......................950.......25........39

Halifax OD.....................1000......30........33

LloydsOD Main account..........500.......9.........0

Capital One (CC)...............190.......10........0

Halifax (CC)...................980.......19........11.94

Vanquis (CC)...................1200......70.76.....30

Aqua (CC)......................1900......80........40[b]

Total unsecured debts..........23784.....633.76....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,035

Expenses (including HP & secured debts). 1,111

Available for debt repayments........... 924

Monthly UNsecured debt repayments....... 633.76[b]

Amount left after debt repayments....... 290.24[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 1,200

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

Total Unsecured debt.................... -23,784[b]

Net Assets.............................. -22,584[/b]

[i][/i][/tt]

chinaski11

Ok I think that’s correct with everything amended. 

Many thanks! 

Grumpelstiltskin

Well  according to that SOA you have  £924 available for debt repayments and the repayments are £633 so you should be able to pay the debts and have money left over.

You need to go through your bank statements and see where your money is being spent.

chinaski11

Thanks Grumple 

I think most of it goes on extraneous costs that could/should be cut down (extra bits of food, coffee, a book etc.) 

in previous months I usually have about £156  (however I’ll be on a secondment till March so I’ve got that extra boost from this month). 

So I’ve got £291 spare up until March and then £156 thereafter. 

Assuming I put away £50 a month for emergencies and manage to not spend anything besides groceries and entertainment that would leave £241 (then £106) towards extra repayments (so an extra £1200 or so a year knocked off). 

Realistically, that seems like really slow progress and leaves no room for much left in the way of quality of life. 

So I guess, going back to managing expectations, do you think there’s any scope at all for me to negotiate with creditors I.e having interest frozen or negotiating a DMP? Or is it very much a case of hunker down for the long haul? 

Thanks! 

Grumpelstiltskin

The way to get interest frozen is to stop paying the debs and let them default.

Without defaults your creditors are not going to negotiate.

Are you sure your overdraft is 0% interest?
 Overdrafts tend to be very expensive, a couple of months could clear that and you could then easily clear the Capital One credit card the next month, that would be 2 debts gone in just a few months

chinaski11

Okidokes, that makes sense. Thanks mate. Is there any guidance on here as to what that process looks like/ pros and cons. Risks etc. I’d imagine if I stopped paying and then my debts default, when I got to the (virtual) negotiating table to try and get the interest frozen, they would say that I have ‘X’ spare each month ad there is no reason why they should default? Then I would be back to square one? 

Sorry yes there is interest on the Lloyds OD I just couldn’t find it on my online banking. It amounts to £9 a month on a £400 OD (there is £100) interest free. That’s the account that my wage pays in to each month so the amount is abit skewed. 

Cheers!

Grumpelstiltskin

What we tell people who can't afford to pay their debts is to stop  paying and let them default.

When a debt defaults it disappears from your credit report after 6 years ( if you live in England or Wales ) 5 years ( if you live in Scotland )  even if you never pay another penny towards it.

If you start making reduced payments to a debt before it defaults your credit report is marked Arrangement to Pay and that doesn't disappear until 6 years after the final payment. So if it takes 5 years to pay off it stays on your credit report for 11  years.

Your problem is your SOA shows you have enough money to pay your debts in full so not paying because you can't afford to pay is not going to work.

You do need to seriously look at every penny you spend and work out exactly why you feel you can't afford to pay.

chinaski11

That makes sense, thanks Grumple! I did think that was going to be my problem. I’m gonna sit down and crunch the numbers and see how I can manage realistically paying off more each month and getting it reduced. 

Thanks for the advice! One more thing, if I apply for breathing space to have the interest reduced for 60 days, am I likely to get any letter through from either the insolvency agency or StepChange? Something to the effect of ‘your application for breathing space has been approved/ends on ‘x’ date etc’? 

I haven’t worked up the courage to tell my partner yet and want to wait until I have abit of a solution in place before doing so. And, if I’m getting post through about the breathing space I’d rather wait until I’ve made the plan. 

Finally, am I right in understanding that under the breathing space terms I’ll make my minimum payments minus any interest they would normally charge? I.e my Barclaycard payment is £90; £50 in minimum payments and £40 in interest. Would I just pay the £50 for the 2 months of breathing space or would I still pay the £90 and just have the Jay sum removed from my balance? 

Cheers!

ManyWays

If you do not make the normal minimum payment to a debt (including interest) in a breathing space, then your credit record will be marked as in arrears or a missed payment.

Take your Barclaycard example, if you do not want your credit record harmed, you need to pay the £90. If you do, then you will find this should reduce your balance by 90 as no interest will have been added. So you are "better off" even though you have made the same payments.

You may feel this is cumbersome or not helpful, but this is not what breathing space was meant for.

It was intended for cases where you could not make at least some of the minimum payments and so it gave you 60 days protections from creditors while you choose how to set up a debt solution.