So confused with conflicting advice …

abs1985

Hello,

Apologies, this may turn into a long post but I’m receiving so much conflicting advice that I don’t know which way to proceed!!

I am currently in around £8,500 of unsecured debt. Half of which is on a dmp with Payplan which I have been paying at £190 a month for a few years now. Originally the dmp was with stepchange but I switched some time ago. Some of these debts date back to 2017 and I only have 21 months left to pay on the plan.

The rest of the debt is new.. I have two open credit cards which are ok, just paying minimums at the moment. And I also owe PayPal for Pay In 3 which I’m up to date with. Then there’s two high interest “payday” style loans which I stupidly had one of topped up a few weeks ago even though I couldn’t afford it. It seemed like a quick fix at the time.
These are both on 30 or 60 day holds at the moment but no missed payments yet.

Unfortunately due to childcare issues I had to drop contracted hours at work and buying my first car on finance last year at the grand old age of 40 has proven more costly than I anticipated. This has resulted in the high interest borrowing and credit cards sneaking back in to cover the cost of everyday life. I’m a single parent of 3 with no financial support from the other parent (this is not an option). I work as much as I can but there’s only so much I can do and now the repayments on my new debts, coupled with the dmp means I’m back to “robbing Peter to pay Paul”. And after being in debt most of my adult life I know how fast it escalates.

I’ve sought advice. National Debtline advised an IVA yet Stepchange (who handles the National Debtline’s IVAs) have said that looking at my budget it wouldn’t be suitable. It’s hard to do an accurate budget as my wages do fluctuate but they reckon I have £85 per month to pay my debts. Which is nowhere near what I’m currently paying for them all including the dmp. Payplan said they can add the new debts to my plan but I don’t know if that’s the best option?

I’m getting so much conflicting information and I’m wondering whether to attempt to manage a dmp myself and try and set up reduced payments/final settlements. But I don’t know how hard that is to do? Especially with the newer debts. I want to get out of debt, and not have it hanging over me forever but I don’t know the best way to do it. Some of the debts are tiny now (£20-£40) so maybe I could try and settle those and chip away at the big ones?? I don’t really want to drop the dmp but realistically I can’t go on like I am much longer.

I rent my home and have no savings or assets. I claim all benefits I’m entitled to. I also had a DRO back in around 2010 after my marriage broke down (if that’s relevant)

If you made it this far - thank you!! What advice would people give me in my situation? Thanks in advance for any support!!

fatbelly

Definitely not an IVA. What were they thinking?

Possibly another DRO. They have improved a lot since 2010. No fee, 50k debt, car worth up to 4k, need <£75 surplus. The difference between 85 and 75 is only a couple of quid per week. Easily lost somewhere.

You know what I'm going to suggest - that you give us a statement of affairs

https://lemonfool.co.uk/financecalculators/soa.php

abs1985

Hi, thank you for your reply. I think I’ve done this correctly! My car is worth a bit more than 4k but I guess it doesn’t count as an asset as it’s on finance.

[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......... 3
Number of cars owned.................... [b]

Monthly Income Details[/b]
Monthly income after tax................ 1300
Partners monthly income after tax....... 0
Benefits................................ 1495
Other income............................ 0[b]
Total monthly income.................... 2795[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 199
Rent.................................... 850
Management charge (leasehold property).. 0
Council tax............................. 128
Electricity............................. 90
Gas..................................... 75
Oil..................................... 0
Water rates............................. 56
Telephone (land line)................... 0
Mobile phone............................ 150
TV Licence.............................. 15
Satellite/Cable TV...................... 0
Internet Services....................... 32
Groceries etc. ......................... 500
Clothing................................ 60
Petrol/diesel........................... 80
Road tax................................ 17
Car Insurance........................... 111
Car maintenance (including MOT)......... 40
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 25
Buildings insurance..................... 0
Contents insurance...................... 7
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 70
Haircuts................................ 0
Entertainment........................... 50
Holiday................................. 30
Emergency fund.......................... 30
Appliance Rental........................ 60[b]
Total monthly expenses.................. 2705[/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 ...... 9752.18..(199)......20.9[b]
Total secured & HP debts...... 9752.18...-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Credit card ...................902.01....0.........0
Short term loan ...............2044.71...0.........49
Short term loan................1500......0.........0
Credit card....................184.63....0.........0
Buy now pay later .............59.53.....0.........0
Bank loan......................1068.75...0.........0
Credit card....................40.26.....0.........0
Next catalogue ................374.89....0.........0
Credit card....................96.53.....0.........0
Lowell - other ................137.42....0.........0
Credit card ...................303.54....0.........0
Catalogue .....................83.42.....0.........0
Short term loan ...............824.95....0.........0
Credit card ...................1024.23...0.........0
Short term loan................179.43....0.........0
Credit card ...................21.39.....0.........0
PayPal (BNPL)..................180.......0.........0[b]
Total unsecured debts..........9025.69...0.........- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 2,795
Expenses (including HP & secured debts). 2,705
Available for debt repayments........... 90
Monthly UNsecured debt repayments....... 0[b]
Amount left after debt repayments....... 90[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 0
Total HP & Secured debt................. -9,752.18
Total Unsecured debt.................... -9,025.69[b]
Net Assets.............................. -18,777.87[/b]

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

Grumpelstiltskin

OK your debts, we need to know who exactly your creditors are ie. not just credit card but Lloyds etc.

Also the debts that are not on your DMP any more other than the short term loan interest rates?

ManyWays

how much is your car worth? It may well be too much for a DRO, but in a few years a DRO may be possible. So dumping the new debts into the DMP may be a good way to get through until then

how old are your children - because 500 for groceries looks low
the clothing amount looks too low as well, especially as you have no other child costs in there - school uniform?
is petrol at £80 a month accurate, using current high prices?

what is the appliance rental?

Can we see the names of the lenders, are the short term loans payday loans?

abs1985

Ok so here’s the full list of debts:

In DMP:

Cabot financial (Aqua card) £21.39

Creditspring £179.43

Lantern (ONMO credit card) £1024.23

Lendable (Zable credit card) £824.95

Link Financial (Frasers catalogue) £83.42

Link Financial (BIP credit card) £303.54

Lowell (Capital one) £129.61

Lowell (Capital one) £91.04

Next Retail £374.89

PRA Group (Tesco credit card) £40.26

PRA Group (NatWest loan) £1068.75

Zilch (BNPL) £59.53

Out of DMP:

Capital One £179.63 APR 34.08%

Vanquis £902.01 (the app is down at the moment but APR is around 40% I think)

Salad Money loan £2044.71 Fixed Interest p/a 47.79%

Lendable Loan £1117.41 APR 48.8% (this was on my budget at 1500 but this is the up to date balance)

Paypal (Pay in 3) £161.50 outstanding

abs1985

My children are 17, 9 and 7. I realistically do probably spend more than that on groceries but recently I’ve been putting it on credit cards/using loan monies so it’s hard to get an accurate estimate.

I buy a lot of second hand clothes, I have been getting grocery aid school uniform grants for the last 2 years which has helped out but occasionally I do have to buy during the year so maybe should have factored that in.

As for the car - I did an auto trader valuation this morning and they’ve estimated the value privately 5.5-5.6k and dealer 3.9-4.1k

Petrol is fairly accurate. My commute is quite short so unless we go on any trips I don’t often spend more than 80-90

The appliance rental is a washer/dryer and cooker

ManyWays

Could you value the car using Parkers please, because that is what is needed for a DRO decision: https://www.parkers.co.uk/car-valuation/

How much are you paying the DMP a month?

abs1985

Your PARKERS valuation for:Ford C-MAX 1.0 EcoBoost Zetec (05/15-) 5d 2017/17

Private Price£1,855 - £2,730

Dealer Price£3,110 - £3,585

I’m currently paying £190 pm to the dmp

RAS

https://forums.moneysavingexpert.com/discussion/comment/81982458#Comment_81982458

Good. When exactly did you last enter a DRO?

The one other thing is the phones. You only have one teenage and both of you need to be moving to cheaper deals. I assume that you are buying these as part of the deal?

Obviously you need to handle the current situation, and hope things like the car insurance and phones reduce over time. But my on-going concern is that your eldest completes school, you lose their CB and all the associated benefits. At which point finances can get a lot tighter. You need to stabilise now and then plan for the future.

abs1985

https://forums.moneysavingexpert.com/discussion/comment/81982542#Comment_81982542

Yes, the phones are both to buy the devices, I also have extras on the plan. An Apple watch plan which I could cancel as the watch is paid for, there’s a console on there which was a Christmas present which should be done in December. I also got my tv through them too after renting one for years. So that cost should definitely reduce, and I hope the car insurance comes down a bit after the first year..

As for the DRO I honestly have no idea. I want to say between 2008 - 2010, if I still have any paperwork it is well buried by now. My husband and I separated in 2009 and I know it was around that time. Sorry I can’t give an exact answer to that.