StepChange v Self-Managed... £85k+ Debt

Avante_2

Hi all,

I've been waiting patiently for defaults since Oct/Nov 25 when I realised my reliance on credit was not sustainable any longer.

I've ignored calls/texts and letters asking me to make contact. I've opened all letters and I'm starting to receive notices of default with deadlines (end of Feb), as such looks like defaults will start to be applied March onwards…

Due to a combination of factors, regrettably my emergency fund is lacking. It's a few hundred when it should be over £1k+ by now..

(Xmas, child's first birthday January, started nursery, partner has gone back to work part time which was unexpected).

I have revisited my SOA as I know I need to have figures to hand. Based on my revised SOA it looks like I have c.£600pm to service unsecured.

Queries:

• Credit offers is calculated pro rata, but this assumes all are defaulted, should I set up the pro-rata amount as and when each defaults OR should I set up a token payment until all are defaulted and then increase/decrease to pro rata amounts?
• Does my SOA look realistic? I am trying to be strict and stick to a realistic SOA, so as my income increases, I can start to offer settlements when I can nail the emergency fund and avoid lifestyle creep

Additional

• I was fortunate to receive a payrise this month, so my monthly disposable may increase further and speed up my emergency fund (so that in future I can offer lump sum settlements) I am set for another payrise in June and potential promotion, this could see a significant uplift in disposable income.
• My partner planned on returning full time, but is struggling emotionally leaving our child in nursery - this could increase or decrease childcare costs, it's wait and see…
• The £400 in emergency fund is in theory what I should have saved & more each month since Nov 25, I have no idea where this has gone assume on Xmas/Bday.
• The "secured debts" are credit union loans, I work in Finance and want to avoid CJJ if possible, so I treat these as secured.

[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......... 1
Number of cars owned.................... 0[b]

Monthly Income Details[/b]
Monthly income after tax................ 3813
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 3813[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 559.4
Rent.................................... 925
Management charge (leasehold property).. 0
Council tax............................. 149
Electricity............................. 244
Gas..................................... 0
Oil..................................... 0
Water rates............................. 69
Telephone (land line)................... 0
Mobile phone............................ 105
TV Licence.............................. 15
Satellite/Cable TV...................... 60
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 250
Other child related expenses............ 217
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 110
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 95
Holiday................................. 0
Emergency fund.......................... 400
Overdraft............................... 0[b]
Total monthly expenses.................. 3208.4[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 0[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Credit Union 1.................. 4428.....(170.4)....41<
Credit Union 2.................14773.9..(389)......20[b]
Total secured & HP debts...... 19201.9...-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR

Zopa Credit Card...............950.......0.........25
AO Finance.....................3945......197.......38
Novuna Finance.................1814......100.......0
Tesco Bank.....................8874......181.......0
118 Money......................4852......167.3.....34
Updraft........................9735......205.......23.9
Very...........................1785.74...85.7......0
Natwest Loan 2.................9076.31...301.......0
Natwest Loan 1.................9769......298.3.....0
Fluid Card.....................4471......181.......35
JAJA Card......................1005......271.......30
Barclaycard....................5222......268.......22[b]
Total unsecured debts..........61499.05..2255.3....- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 3,813
Expenses (including HP & secured debts). 3,208.4
Available for debt repayments........... 604.6
Monthly UNsecured debt repayments....... 2,255.3[b]
Amount short for making debt repayments. -1,650.7[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 0
Total HP & Secured debt................. -19,201.9
Total Unsecured debt.................... -61,499.05[b]
Net Assets.............................. -80,700.95[/b]

[i]Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

RhiBi

I’m not sure how much help I can be as I too stopped paying unsecured debts in November last year.

one thing that stands out to me is that you mentioned Christmas and birthdays in your SOA, but you’ve not allocated anything for those in your budget. If you were to use you disposable income to service debts, you need to put money aside for those things.The same with haircuts, clothes etc.

There’ll be far more knowledgeable people who will give you advice but I wanted to point those out to you.

Avante_2

https://forums.moneysavingexpert.com/discussion/comment/81896488#Comment_81896488

Good point! I will go back and revisit my SOA and factor in Gifts to cover Xmas/Birthdays.

thank you!

Smudgeismydog

There is no income listed for your partner, or child benefit, you mentioned she had gone back to work after having the baby. Is this because she pays certain bills eg groceries, as you have nothing listed for that either?

Couple of things stand out;

• Mobile phone at £105. How many phones does this cover? Are you paying off a handset? Are you still in contract?
• Satellite at £60 also looks steep. What does this cover?
• Water at £69 is high, are you on a meter?
• Pet insurance / vet bills at £110 is high

Is this SOA accurate or a little aspirational, as you note you have still had some unexpected costs, and your emergency fund isn’t where you wanted it to be?

As a couple you are adjusting to so much with a baby and your partner’s return to work, but you can do this. It will take time and discipline, but you have already confirmed you know you both need to change your mindsets, and I do think you are ready to make these changes.

Avante_2

https://forums.moneysavingexpert.com/discussion/comment/81896643#Comment_81896643

Hi Smudgeismydog,

Thank you for your reply & observations!

Partner Income & Child Benefit = Correct, she covers car payment & food. She also receives child benefit but because of my salary level, I have to pay 50% of this back. I do this via PAYE so it is taken out of my salary each month, rather than as one hit a year. I may cancel if my income increases but right now it works out that I pay 50% of it back a year, so still worthwhile. My partner can also work extra shifts but right now she is mentally not able to (detachment/attachment issues from our baby I think).

• Mobile phone at £105. How many phones does this cover? Are you paying off a handset? Are you still in contract?

I am paying for 2 phones and both in contract, hoping when these expire to switch to SIM only which will be significantly cheaper.

• Satellite at £60 also looks steep. What does this cover?

Satellite is Virgin Media, TV and Broadband. It was £89 and I negotiated it down to £60 locked in contract until Nov 2027 (I work from home and stable broadband is required, so for TV & internet I think £60 is OK?)

• Water at £69 is high, are you on a meter?

I also think this is too high, not on a meter and need to investigate this, it seems to keep increasing but no explanation.

• Pet insurance / vet bills at £110 is high

I have 2 elderly dogs which is why the insurance is high (both 8 and 9 with average life of 10 for their breed, they are on specialist diets due to allergies as well as allergy medications).

Is this SOA accurate or a little aspirational, as you note you have still had some unexpected costs, and your emergency fund isn’t where you wanted it to be?

Truthfully, I think the SOA is blue sky. I get paid tomorrow and my plan is to try my hardest to stick to this SOA and if I can't it's obviously incorrect.