Help required with large Persistent Credit Card Debt. Have had a recent first Default.

sourcrates

Yes, the £1250 overdraft just becomes another non priority debt to service.

You can open any new basic bank account online, but make certain its with a bank you do not already have debt with.

The trick then is to learn to live within your means, so you have no need of overdrafts going forward.

Rob5342

theville32 said:

- If so, any perfernces between a bricks and mortar bank and a digital bank like First Direct?

The main thing is that it's not a banking group that you owe money to, so you can avoid the right of set off. I always recommend Monzo and Starling as they have lots of great budgeting features that can help you keep on top of everything. 

RAS

Before you halt those DDs to creditors, you need to make sure that your next UC payment is going into your new bank account, preferably went in at midnight.

And only move over essential DDs when you know that's going to happen. If you are getting UC fortnightly and pay rent monthly, you need to time this very carefully.

If necessary halt stuff like utilities and make a manual payment as soon as possible. Then catch up over time.

As before, you need to talk to business debtline about the Business Credit Card and the bounce back loan. Suspect they've seen a lot of them. Stepchange and national debtline only deal with consumer credit.

theville32

I am working my way through the SOA budget. I wondered whether there was anywhere to put business expenses, as these are to the tune of £1000k+? I am sorting this out soon as have just handed my notice in for my rental space.

Or, is this just for personal expenses, which seems wrong in a way? Thanks

theville32

Also, would I add any Credit Cards my wife has? She has a couple of Balance Transfers she is paying off as well.

ManyWays

You have a choice - you either do a SOA just for you, with all your debts and just your income and the part of the bills and other shared expenses you pay (if you do this, it helps to explan which expenses you are sharing with your partner) or you do a combined SOA with both your incomes and both of your debts

Business expenses - if these are monthly, you really only need to put in your after tax monthly drawing from the business (which will be lower because of all the expenses). It may help if you add a note saying how much this may vary from month to month

theville32

ManyWays said:

You have a choice - you either do a SOA just for you, with all your debts and just your income and the part of the bills and other shared expenses you pay (if you do this, it helps to explan which expenses you are sharing with your partner) or you do a combined SOA with both your incomes and both of your debts

Business expenses - if these are monthly, you really only need to put in your after tax monthly drawing from the business (which will be lower because of all the expenses). It may help if you add a note saying how much this may vary from month to month

Hi ManyWays, thanks for you reply. Which option would be most beneficial for you guys to see? Obviously I am trying to stand on my own two feet and cover my own bills. However, recent circumstances have meant that I have not been able to cover my share of the rent etc.

Also, can I ask which version of the SOA the discussio board prefers to see, LemonFool or MSE? Thanks!

theville32

With regards to urgency, I think I have my first payment Plan payment going out to Halifax tomorrow (1 of 5). This is for £111.00. I was hoping to work out whether I should cancel the Standing Order and let this go unpaid, which will probably lead to a Default on this account? I have nmissed paying the last 6-9 months of their minimum payments. Still trying to complete this SOA which I am working on now and should have finished shortly. Thanks everyone for your help.

theville32

Here is the SOA results for both my wife and I. If required, I can do one for just myself as well. Please note, the UC payment has dropped this month as my wife just started a new full-time job. It may drop further next month as HMRC works everything out. Any issues or questions please let me know! Thanks again everyone.

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.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 0
Partners monthly income after tax....... 2843
Benefits................................ 1500
Other income............................ 0[b]
Total monthly income.................... 4343[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1450
Management charge (leasehold property).. 0
Council tax............................. 205
Electricity............................. 50
Gas..................................... 55
Oil..................................... 0
Water rates............................. 52
Telephone (land line)................... 0
Mobile phone............................ 34
TV Licence.............................. 15
Satellite/Cable TV...................... 0
Internet Services....................... 30
Groceries etc. ......................... 500
Clothing................................ 30
Petrol/diesel........................... 120
Road tax................................ 6
Car Insurance........................... 100
Car maintenance (including MOT)......... 350
Car parking............................. 50
Other travel............................ 132
Childcare/nursery....................... 0
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 12
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 62
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 20
Holiday................................. 25
Emergency fund.......................... 0
Misc work Expenses p/mth................ 500
Work Utilities.......................... 70
Work rent............................... 890[b]
Total monthly expenses.................. 4883[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 4500
Other assets............................ 0[b]
Total Assets............................ 4500[/b]
[b]
No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
MBNA Credit Card ..............11960.....0.........0
Halfax Credit card.............3500......111.......25
Lloyds Credit Card.............920.......28........28
Natwest CC (wife)..............4005......41........0
Tesco Bank CC (wife)...........3032......29........0
Universal Credit Loan..........1416......94........0
Pers bank overdraft............900.......10........35
Pers barclaycard...............2940......23........16
Nationwide Credit Car..........1650......45........10[b]
Total unsecured debts..........30323.....381.......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 4,343
Expenses (including HP & secured debts). 4,883
Available for debt repayments........... -540
Monthly UNsecured debt repayments....... 381[b]
Amount short for making debt repayments. -921[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 4,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -30,323[b]
Net Assets.............................. -25,823[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using Firefox browser.[/i][/font]

Smudgeismydog

Well done on producing your SOA

You’ve mentioned you have given notice on the business premises as you’ve decided to wind the business up. What are your plans now re; working?
As your SOA has highlighted, your current expenses are higher than your household income, before any debt payment.

Yes, I appreciate the business rental will drop off, but you’ve also noted the UC is likely to reduce once your wife’s new income works its way through