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

Karonher

The obvious areas to cut would be groceries - that is high for 3 people. Car costs are high, especially when there is a high amount of other travel expenses included. £6,792.00  a year is a lot even for 2 cars especially when they are only  worth £4,500.00, plus another £1584.00 travel. If you can sort  those areas, then deduct the work expenses that will stop soon,  you will be in budget.

ManyWays

£500 a month for groceries is NOT a lot for 2 adults and one child. If you can reduce it, fine, but its a mistake to trim it so far that you snap and order a takeaway instead. 

the car maintenece is high, but perhapy you have an MOT coming up soon and you are expecting problems and have nothing put aside for this? What would you say is typical amount you spend in a year?

It would help to see a new SOA in January with your parners new work income and lower UC> 

theville32

Smudgeismydog said:

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 

Hi Smudgeismydog, thanks for the comment. 

I hope everyone had a Merry Christmas and Happy New Years!

Right now my priority is to get sort out my Studio, which means I will be selling a bit of photographic equipment that is no longer required. This will provide a little bit of income over the next 2-3 months...maybe 1-2k?

After I have moved out of the Studio, I aim to do a bit of freelance work again, working in a supportive role for commercial photographers. This is a little unknown though and something I will not be able to explore properly until the Studio move is completed. I last worked in a freelance capacity like this before Covid hit and had a regular client. So the hope would be to pick up 1 or 2 regulars that I can work for again. Thanks.

theville32

Karonher said:

The obvious areas to cut would be groceries - that is high for 3 people. Car costs are high, especially when there is a high amount of other travel expenses included. £6,792.00  a year is a lot even for 2 cars especially when they are only  worth £4,500.00, plus another £1584.00 travel. If you can sort  those areas, then deduct the work expenses that will stop soon,  you will be in budget.

Hi Karonher, thanks for your thoughts and good spot on the high car costs. I have relooked at the expenses and realised I made a mistake with the 'Car Maintainance'. I have also checked Groceries and have been reassured that this is correct. I will repost the revised SOA below. Thanks!

theville32

SOA v2 (revised):

[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......... 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............................ 35
TV Licence.............................. 15
Satellite/Cable TV...................... 0
Internet Services....................... 30
Groceries etc. ......................... 500
Clothing................................ 30
Petrol/diesel........................... 120
Road tax................................ 22
Car Insurance........................... 100
Car maintenance (including MOT)......... 45
Car parking............................. 10
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)...... 40
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.................. 4545[/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). 4,545
Available for debt repayments........... -202
Monthly UNsecured debt repayments....... 381[b]
Amount short for making debt repayments. -583[/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][/i][/tt]

theville32

Hello everyone, I hope the last revised SOA paints a more accurate picture on our expenses. It would be great to hear from people what action is recommended as far as the credit card debt goes? Any help greatly appreciated. Thanks again!

theville32

With regards to context, if the general consensus on the forum is that I should stop paying all of my personal credit cards - please let me know. Please note that this approach is extremly scary for me and will be the biggest step I have made to do with trying to sort my CC debt out. So I will require a lot of reassurance from as many people as possible that this is the best option going forward. I hope thats ok?

If stopping all credit card payments is agreed, then the next opportunity to do this would be the day after the 19th January. This is when I receive my next UC payment, although sometimes they can be a day or two late. I have my 2nd 'Halifax payment plan' payment coming out on the 23rd January, so it would be good to cancel Standing Orders and DD's before the 23rd if possible. 

As always, any help and guidance greatly appreciated and thanks again everyone for all your time and help with this very stressful matter.

ManyWays

Available for debt repayments........... -202
On that SOA you and your partner need to stop making ANY payments to your unsecured debts.

Have you spoken to Business debtline?
Have you considered getting a PAYE job?
 
Misc work Expenses p/mth................ 500
what is this and will it only happen when you actually get a self-employed income? 

RhiBi

@theville32 I am a few months he’d of you having stopped paying non essential debt in November 2025.  I can understand your feelings but just want to say that the sleepless nights I had of paying the debt, spendings hours of each day trying to work out how and when to pay and moving money around in different accounts have gone.  I have a plan in place to let debts default me then will be asking for advice from the many very knowledgeable people on here for next steps.

i hope that gives you some reassurance.

theville32

ManyWays said:

Available for debt repayments........... -202
On that SOA you and your partner need to stop making ANY payments to your unsecured debts.

Have you spoken to Business debtline?
Have you considered getting a PAYE job?
 
Misc work Expenses p/mth................ 500
what is this and will it only happen when you actually get a self-employed income? 

Hi ManyWays, thanks for your message. We have tried to keep our finances seperate, so while my wife has a couple of credit cards herself - I am confident she will be able to pay them off over time. She is also able to get new Balance Transfer cards when one expires, so can chip away at clearing that debt. The last thing I want is for my bad debt to affect hers so I wanted to avoid her defaulting on any Credit Cards. I hope that makes sense.

I have not spoken to Business Debtline yet, as I was trying to have a little break from the Stress of it all over Christmas. I planned to call them on Monday, although did not really know what to ask them to be honest. Any ideas there, as I am paying both my Commercial Barclaycard minimum payment and monthly loan payment?

With regards to the 'Misc work expenses p/mth' figure of £500. This is for work related subscriptions, email, web, photo equipment insurance etc. Some of this will stop/be reduced once I move out of the Studio - which will help. Any additional questions please let me know. Thanks!