Debt Help

Anon_09

Evening all,

Was looking for some advice on my current situation… I had 14 different credit/lenders which have since been sold to 6 recovery companies (Lowell, PRA group etc.)

I had previously let them get to missed payments on the basis of eventually letting them all default which has happened since October/November 2025. Since then various recovery companies have been in touch and I have personally contacted them to arrange token £1 payments to ‘keep them at bay’.

I am now looking to start improving my credit file and debt situation and was wondering if anyone had any thoughts on the best way forward?

it’s currently a self-management plan but I have heard some advice that moving to StepChange would be a better or more viable option?

Current debt: £50k

I’ve not been in touch or had any communications on reductions, is this possible without paying a full final settlement?

Long term goal: Move house around 2027/2028

Many thanks!

Anon_09

SOA -

[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......... 2
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 2686
Partners monthly income after tax....... 700
Benefits................................ 173
Other income............................ 0[b]
Total monthly income.................... 3559[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 740
Secured/HP loan repayments.............. 440
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 189
Electricity............................. 53
Gas..................................... 53
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 14.95
Satellite/Cable TV...................... 0
Internet Services....................... 25.89
Groceries etc. ......................... 500
Clothing................................ 50
Petrol/diesel........................... 150
Road tax................................ 20
Car Insurance........................... 44.89
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 65
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 3.5
Contents insurance...................... 5
Life assurance ......................... 12.39
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 16
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 250[b]
Total monthly expenses.................. 2922.62[/b]
[b]

Assets[/b]
Cash.................................... 1600
House value (Gross)..................... 300000
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0[b]
Total Assets............................ 304100[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 165000...(740)......3.89
Secured Debt.................. 60000....(80).......0
Hire Purchase (HP) debt ...... 0........(360)......0[b]
Total secured & HP debts...... 225000....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR[b]
Total unsecured debts..........0.........0.........- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 3,559
Expenses (including HP & secured debts). 2,922.62
Available for debt repayments........... 636.38
Monthly UNsecured debt repayments....... 0[b]
Amount left after debt repayments....... 636.38[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 304,100
Total HP & Secured debt................. -225,000
Total Unsecured debt.................... -0[b]
Net Assets.............................. 79,100[/b]

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

fatbelly

you've put zero for unsecured debt but from your text you have 50k across multiple creditors and are paying each £1 per month. You are right not to let this continue.

Do not worry about improving your credit file. if all have defaulted then there's nothing you can do. The entries will drop off at the 6-year point.

As for a debt strategy your choices seem to be between a dmp, IVA or some sort of hybrid. A dmp would take over 7 years, an IVA 6 years. A hybrid approach could see you debt free sooner

On your figures, you should have been saving money on the side while making token payments. Try to set up a dmp for less than the maximum you can afford, and save on the side for full & finals. In the meantime try affordability complaints and (while you still can) cca requests.

RAS

You need to list your unsecured debt

Provider, type, current value, official APR

and possibly year taken out and current owner/assigned collector.

We'll assume you're only paying £1 towards each.

Stateofart

£500 for groceries is high.

£250 emergency - you are in an emergency and can't afford this right now.

£200 on entertainment is frivolous as well

You seem under insured for building and contents

ohdearhowdidthathappen

Is the HP for a car? That’s a big amount, I’d try and get rid of that. Do you run 2 cars - 1 owned outright worth £2.5k? Is so, just use that one and save £360 a month.

Food and entertainment both need to be cut right back, you could save £100 on each.

Your partner’s income is very low. Even if your kids are young and childcare is high, they could work evenings and weekends when you’re home. Easily bring in an extra £300pm

All those things add up to over £800 which you could chuck at the debt.

ArtyJ931

I don't think £500 a month for groceries for 4 people is high at all given the recent huge increase in food prices. (even before that) so I wouldn't personally agree with that point.

Utility costs seem quite low. child related costs at 0 seems also low as are car maintenance costs. May be worth going over your previous expenditure to work out what you spend and get an accurate SOA.

100% that HP car cost is very high if you can get rid and get a cheapish runaround it would be worthwhile. (given that even a 10 yo second hand car now is 5-6k, you'd need potentially to look for a much older one with good service history and low mileage but you'd still need to save a significant amount unfortunately. but still worth exploring.)

tigergambit

If all debts have defaulted then they can't reinstate interest and charges. For the time being it's a cheap loan.

You need to make a plan and stick to it. Consider this: if you don't need to move house for two years then 24 x £636 saved in an ISA would give you a settlement pot of around £15,500, or just over 30% of your debts.

You might not be able to clear all the debt with this via Full and Final settlement offers, but you could clear most of it.

Whatever you decide, think carefully regarding your longer term goals.

MasterG83

Hi, what is the secured debt £80k please? was that a consolidation?

Sunbakedscobble

I Loved my managed DMP. Best phone call I ever made. I used payplan. Majority on here go for the self managed route, but I was not disciplined enough for that and made myself in more debt. I have 1 payment left then that is it. I started with 34 k of debt. Good luck

enthusiasticsaver

I don’t think you should continue with the token scheme and the ship has sailed on protecting your credit record. The defaults will drop off 6 years after defaults. I would suggest a DMP either self managed or with Stepchange. You could try for F and Fs as they have all been sold on which would reduce amount owed. It will be sorted but will take time.