SOA advice needed by a newbie!

Carlypops

Hello all!!

I've been searching through all the posts and I've seen the fab advice you offer on here. Was wondering if you would be able to advise me too!!

Due to circumstances beyond our control, me & my OH have to set up home together. OH owes approx 19.5k on overdrafts, unsecured loans and credit cards. When we set up home together these debts will become a huge problem and we won't be able to make the current repayments. Hence me doing a SOA!! I receive DLA for my eldest child - should I be including this on any SOA I give to to creditors? I really don't want to - I've always saved this money and the small amount we do spend of it each month is on expenses incurred through his special needs and for therapeutic type activities. Are creditors allowed to include DLA or any other child related benefit as income?

OH's current account is badly overdrawn at the moment and his second account at the same branch has gone to collections. We have a meeting with the bank manager on Friday to discuss consolidation over a period of 7 years but we aren't expecting the outcome we want. Would it be advisable to get a basic current account set up at another branch and have his wages diverted into there??

I'm not going to be repaying any of OH's debt and I'm not responsible for incurring it either - all this was racked up during his bachelor days but obviously we will be sharing a home and the household income will take a bashing because of it. Will his debts have a negative effect on my credit score? Can I get myself financially disassociated from him before any problems occur?

Thanks in advance!!

immoral_angeluk

With the bank accounts he needs to get another account that isn't linked to any of his creditors and have his priority bills and income going into that.
As for the debt please don't consolidate. It'll just make things worse. Contact one of the free Debt advisor services like CAB or CCCS for proper advice. x

Gemmzie

I think you should include it but then also account for it going out in your outgoings. Just a couple of lines below the SOA to explain why will suffice.

DON'T CONSOLIDATE!!!!!

Yup, unrelated bank and a basic account is the best way.

You can financially disassociate yourself from him if you have no joint accounts, credit cards etc.

Carlypops

Thanks for the quick reply!! We are going to try and find him a basic current account tomorrow but the likelyhood of getting it in place and having februarys wages being paid into it are slim!!

I'm not keen on consolidation but I'm not sure what the alternatives are? I've worked out there will be about £300 a month available to repay his debts. Do you write to creditors with a copy of the SOA, ask them to freeze interest and make them a repayment offer? We're keen to avoid defaults and CCJ's xxx

Carlypops

Thanks Gemmzie - I don't want to hide any income but I don't see why creditors should take what technically belongs to my son either!! The note seems like a good plan. They can keep their grubby mitts off it hehe!!


Currently we have no joint accounts or liabilities, we don't even share an address at the moment! The only things our joint names will be on are the tenancy. I'll probably keep all the bills in my name.

Gemmzie

It's hard to advise without seeing your SOA.

If your partner can't make the minimum payments - then probably a DMP, which is where you divide up what he does have available to each of the creditors pro-rate.

A full list of his debts with the APRs and terms for loans would be really helpful

Carlypops

Income & Expenditure
OH net wages £1,518
My Wages (SMP) £500
Income from employment £2,018
Child benefit £135
Tax credits £172
income from benefits £307
total household income £2,325
Outgoings
Rent £700
Council tax £110
Water £35
Electric & Gas £80
TV & phone £20
contents insurance £20
Car insurance x 2 £70
Diesel £200 (based on £20 a month for me & £180 for OH as 50 mile commute daily)
Car tax x 2 £35
TV licence £12
my loan £84
my credit cards £60
my phone £35
OH phone £35
DS & DD savings £20
Total outgoings £1,516
Remaining money after bills £809
Other expenditure
Food shopping (inc nappies and formula) £400
Car servicing and MOT £55
Hair cuts & clothing £40
remaining income available to creditors £314


There you go! Just noticed I haven't included any Christmas or birthday savings...do creditors object to this?

I myself have a loan (approx £3110 remaining, should be paid off September 2011. The APR is 6.1%) and two credit cards (£1160 on Lloyds TSB, APR 14.9% and £2200 on Egg APR not known at the mo!) These I have left as they are on the SOA.

OH currently repays £560 on a Lloyds TSB loan, £130 on an Egg credit card and £100 on a Lloyds credit card. He also has 2 overdrawn accounts with them, account 1 is £1100 o/d and account 2 is £2700 o/d. I don't know the APRs or interest rates applicable to any of his finances at the moment. I have not included any of OH's debts on the SOA as it stands at the moment.

OH currently lives with his parents but this is no longer an option...until now his debts weren't a huge problem! I've always lived by myself with my son but now we have a daughter together. I think it's going to be difficult explaining to creditors about the change in living circumstances and getting them to understand why the repayments are no longer acheivable.

Help!!

moneywolf

what size is the loan that is costing 560 p month ? & what is owed on his cards ?

kyh

Lloyds put my account to collections 14 months ago and to be honest it was the best thng that happened to me, OH was bankrupt at time (business collapsed) and we had to learn very quickly how to scrimp and save - I am now back to a normal account with OD and loan consolidated by lloyds which now puts me in a better position to become debt free - I know that the advise is not to consolidate but for me at the time - not knowing this sanctuary of MSE was here I was stuck! This will seem bizarre when I have put lightbulb moment this month but until know we have been getting by and then I realsied my DH was debt free and I wasn't and I was still paying out over £400 a month on loans etc and he had none of those worries!

People on here are very helpful and you will get good advice!

Gemmzie

Thanks Carly and all the debts are his? So it would be just his DMP, so you almost need your own individual SOAs.

So you could take out your wages and the benefits so £807 and take out £807 worth of spending which he can explain in covering letters as being what you cover. I would start with the kids savings, Christmas, birthday, your car costs (insurance, tax, petrol), your phone, loans etc. And then see what figure you get. Then take a little bit off the rent, utilities etc. saying that's your contribution.
Hope that makes sense.

Carlypops

moneywolf wrote: »

what size is the loan that is costing 560 p month ? & what is owed on his cards ?

The balance on the loan is £8,821. It was originally a £14k loan taken out in June 2006 over 3 years.

Egg card £5377
Lloyds card £1400

:eek: