Advice on my debts

sparkster86

Hi all,

Where to start!

I am living alone in a rented property (HA) and I need some help regarding my debts as I cannot continue living as I am with the cost of living and taking more and more credit.

Current debt stands at around 14k which is a mixture of credit cards, loans, catalogues, phone contracts etc.

I have 3 credit cards currently still active out of which I have been clearing the balance off every month but I can no longer afford the repayments as they are now all maxed out.

I work full time. I have reached out to Stepchange and they recommended a 12 month token payment plan which I am in the process of setting up with them.

Please tell me it gets easier as I am getting constantly chased by creditors and seem to have less and less to live off each month.

Thanks

Brie

Has StepChange talked to you about stopping making any payments so that you default on the debts? This is the normal practice before setting up a payment plan (aka DMP = debt management plan).

Why have they suggested a 12 month plan? Do they think that your financial situation will improve? There is little point in making token payments if you won't be able to return to full payments in 12 months. This just prolongs your acceptance of the debts and keeps them on your credit file longer than might be necessary.

Have a read of this - Debt solutions - what is your best option?

And yes things do get easier - there are a number of strategies that we can help you with should you wish that. To do that the best first thing is to file in and post here a copy of your statement of accounts (SOA see the link below). StepChange would have done something like this so you should have all the info to hand or be able to get them to give you a copy.

ManyWays

Do you own a car or have one on finance? If you do, how much is it worth?

sparkster86

https://forums.moneysavingexpert.com/discussion/comment/81897661#Comment_81897661

I have a car on finance paying £262.14 per month and I have around 8.1k left to pay

sparkster86

After filling in my income and expenditure online it suggested that as I only have a very small amount left over each month.

Brie

Do you need the car (seriously, most of us might struggle but could still get to work, shops, etc)? Where are you in the repayment? What would happen if you handed the car back? If you need a car and can hand the car back without a penalty and might even have some money as a result what could you get for £1k or similar?

MEM62

@sparkster86

Step One - Stop and breathe.

Step Two - Stop borrowing. You are only digging the hole deeper.

Step Three - Fill in the SoA and post so that the knowledgeable guys on here can give you some meaningful feedback.

If you cannot afford to pay the cards then stop and work on a plan.

sourcrates

I`m guessing the 8k car is the reason a DRO has not been suggested to you, even without the car you likely would not qualify because the £262 car payment would give you too much disposable income, catch 22.

Token payments just keep the debts ticking over, they are not a solution, so you`re going to have to look at other ways of ditching the debt, can you increase your income/lower your spending, is the car a necessity?

14k of debt is not the worst we have seen, how old are the card/catalogue accounts, 6 years or older? if so you might want to try CCA requests, if you can make one or two of them unenforceable, well every little helps doesn't it.

Just keep foremost in your mind, these are all non priority, unsecured debts, if you can`t afford to pay them, then don`t, the world won`t end by taking action to get yourself into a better position financially.

sparkster86

https://forums.moneysavingexpert.com/discussion/comment/81897960#Comment_81897960

Hi,

I believe so. I think the card/catalogue accounts are all within the last 6 years but I will look into it to double check.

Thanks

sparkster86

https://forums.moneysavingexpert.com/discussion/comment/81897756#Comment_81897756

Hi,

Yes I need the car to get to work. I cannot hand back as I am not halfway through the payments. I don't have any spare cash to get another car anyway and if I sold it I would have negative equity.

Thanks

sparkster86

SOA

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0[b]

Monthly Income Details[/b]
Monthly income after tax................ 2273
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 2273[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 262
Rent.................................... 558.79
Management charge (leasehold property).. 0
Council tax............................. 127
Electricity............................. 35
Gas..................................... 40
Oil..................................... 0
Water rates............................. 32
Telephone (land line)................... 0
Mobile phone............................ 15
TV Licence.............................. 14.54
Satellite/Cable TV...................... 12.99
Internet Services....................... 29.78
Groceries etc. ......................... 350
Clothing................................ 16.67
Petrol/diesel........................... 250
Road tax................................ 17.06
Car Insurance........................... 131
Car maintenance (including MOT)......... 16.66
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15.33
Pet insurance/vet bills................. 103.96
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 25
Entertainment........................... 75
Holiday................................. 0
Emergency fund.......................... 25
Laundry................................. 40[b]
Total monthly expenses.................. 2232.78[/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
Hire Purchase (HP) debt ...... 0........(262)......0[b]
Total secured & HP debts...... 0.........-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
EE Mobile......................848.......0.........0
Payday Loan....................141.1.....0.........0
Payday Loan....................3191.1....0.........0
Studio Catalogue...............587.2.....0.........0
Vodafone Mobile................255.......0.........0
Credit Card....................288.12....0.........0
Credit Card....................3005.4....0.........0
Three Mobile...................32.9......0.........0
Credit Card....................500.......0.........0
Grattan Catalogue..............24.3......0.........0
Mobile Phone...................576.5.....0.........0
Family Friend..................600.......0.........0
Vodafone Mobile................392.......0.........0
Payday Loan....................1425.3....0.........0
Credit Card....................1533.4....0.........0[b]
Total unsecured debts..........13400.32..0.........- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 2,273
Expenses (including HP & secured debts). 2,232.78
Available for debt repayments........... 40.22
Monthly UNsecured debt repayments....... 0[b]
Amount left after debt repayments....... 40.22[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -13,400.32[b]
Net Assets.............................. -13,400.32[/b]

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