Heading Towards a Problem

braken2000 · 16 April 2018 at 9:24AM

Hi Everyone,

Long time no post it would seem. However heading towards a problem and need some advice

.

Bit of background first:
I live with my partner and have become a student (mature) studying a healthcare course. This lasts two years and will be straight back in to work in approximately 18 months. My partner works and will be seeing a pay rise (hopefully) in November as he will move up a grade. I work bank hours so as and when I can get them, and when I can based on placement hours. We have survived since last September through what I can only describe as luck (occasional gift from a family member, selling things on eBay etc).

We have got to a point where we are living off credit cards which is ringing alarm bells in my head. I have historically had a DMP but got it all paid off and reserved the CC for emergencies, knowing we would use them, just not this soon in. We have approx £6k debt, and also a car loan in order to allow us to get to work/placement etc.

My thoughts, and indeed questions are these:
1. Obviously it is not sustainable to love off CC. We only have to make it for 18 months, and financial situation will positively change in 6 months also. Is it possible to get a really temporary DMP?
2. We are looking to hopefully save and get a mortgage in the next 6 years. Will doing anything like a DMP affect this? Obviously concerns about defaults going on. I know they can go on the file for a long term DMP, just not sure if it would happen with a short term one?
3. I am unable to get student finance which would have helped.
4. I am waiting for overpaid taxes to come through (£900 ish). HMRC have told me this could be up to October when I get any sight of this.

Does anyone have any ideas? I worked so hard to clear my debt last time and I do not want to end up in a similar position. However dropping off the course is not an option as it is a funded place which will not exist after this year (kind of like one shot and that is it).

I can provide a more clear Statement of what is owed etc if it helps. Not been on the forums in ages but know you guys are great at helping with the not so straight forward

Thanks

cms-help · 16 April 2018 at 10:20AM

If your creditors default you then that would be on your credit file for 6 years from the date of default regardless of whether you repay them in a year or 8 years. This may damage your mortgage chances.

The taxes that you are owed, what period did you pay them in? As soon as your P60s are available and filed from this financial year then you should be able to claim your tax refund.

Your best option would be to post an SOA.

braken2000 · 16 April 2018 at 10:35AM

Thank you cms-help

Not yet received P60s, hoping they will be soon.

That is what I was worried about in terms of defaults. Will get an SOA on here ASAP to help clarify matters. Just never sure what to do considering it is more of a temporary lack of income Vs. a permanent one.

cms-help · 16 April 2018 at 10:51AM

braken2000 wrote: »

Thank you cms-help

Not yet received P60s, hoping they will be soon.

That is what I was worried about in terms of defaults. Will get an SOA on here ASAP to help clarify matters. Just never sure what to do considering it is more of a temporary lack of income Vs. a permanent one.

As soon as you've got your P60s then you can ring and ask them to process a tax refund. I think I got mine in May last year. However, this is only going to help you short term so you still need to look at solutions moving forward. Do you know why you're not entitled to any student finance?

braken2000 · 16 April 2018 at 11:23AM

Not entitled due to a previous degree unfortunately. Tried with SFE but they are just not having it at all. The course is funded by HEE so no fees to worry about and I am fairly confident I will go straight into work next October when I finish and qualify so that is a positive

. Just to work out what to do between then and now :S.

Fingers crossed I can get this payment sorted for May sometime

.

cms-help · 16 April 2018 at 11:43AM

braken2000 wrote: »

Not entitled due to a previous degree unfortunately. Tried with SFE but they are just not having it at all. The course is funded by HEE so no fees to worry about and I am fairly confident I will go straight into work next October when I finish and qualify so that is a positive . Just to work out what to do between then and now :S.

Fingers crossed I can get this payment sorted for May sometime .

If you have time to post your SOA up then the folks on here usually have lots of good ideas about where savings could be made.

National_Debtline · 16 April 2018 at 12:15PM

Hi braken2000

It's good that you're recognising now that there could be an issue, it's best to deal with these things early on. Usually a DMP would only be set up if your debt issues were going to last longer than 12 months. That's not to stop you negotiating a reduced payment plan and freeze on interest yourself though. But bear in mind there will be an impact on your credit file.

Some creditors may choose to show on your credit file that there is an arrangement in place. But over the longer term others may register a default, and that would remain for 6 years. It's best to speak to a mortgage adviser about how that would impact on a mortgage application. The older a default, the less impact it tends to have.

As cms-help mentions, posting your SOA will be a help in offering you more advice. I hope it all goes well.

Susie
@natdebtline

Silver_Queen · 16 April 2018 at 1:07PM

This may not be the best option for you but I wonder if you've considered a professional studies loan? I'm not 100% sure you'd fit the criteria but worth mentioning. You can borrow between £300 and something like £10k, and the government pays the interest on the loan whilst your course is ongoing. Once you graduate you have to pay the interest yourself, though.

braken2000 · 16 April 2018 at 3:47PM

Right, so have done an SOA as much as I can. This might shed some light on the situation. I have to admit I am quite embarrased and did not realise it was this bad tbh. But hey ho, biting the bullet and all that!

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 150
Partners monthly income after tax....... 1400
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1550

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 475
Management charge (leasehold property).. 0
Council tax............................. 82
Electricity............................. 30
Gas..................................... 41
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 18.99
Mobile phone............................ 66.8
TV Licence.............................. 12.12
Satellite/Cable TV...................... 5
Internet Services....................... 4
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 250
Road tax................................ 31.52
Car Insurance........................... 130
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 28
Pet insurance/vet bills................. 32.38
Buildings insurance..................... 0
Contents insurance...................... 8.5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 18
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 10
Total monthly expenses.................. 1533.31

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 4000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Loan 1 (For Car)...............6500......281.......15
Credit Card 1..................429.......25........41.2
Credit Card 2..................1660......60........30.34
Loan from Family...............1000......30........0
Overdraft 1....................250.......0.........0
Catalogue 3....................425.......20........39.99
Catalogue 2....................108.......25........0
Catalogue 1....................165.......5.........33
Credit Card 6..................275.......12.5......54.9
Credit Card 5..................2054......80........39
Credit Card 4..................543.......25........34
Credit Card 3..................188.......10........30.34
Total unsecured debts..........13597.....573.5.....-

Monthly Budget Summary
Total monthly income.................... 1,550
Expenses (including HP & secured debts). 1,533.31
Available for debt repayments........... 16.69
Monthly UNsecured debt repayments....... 573.5
Amount short for making debt repayments. -556.81

Personal Balance Sheet Summary
Total assets (things you own)........... 4,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -13,597
Net Assets.............................. -9,597

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

braken2000 · 16 April 2018 at 3:49PM

I am not sure I would get a CDL SilverQueen as my credit rating is far from decent, consolidating all my debt would be the best option however, with me not earning at the moment it is very difficult to get a loan

cms-help · 16 April 2018 at 6:08PM

Obvious questions - you said you picked up bank shifts as and when so is your £150 the most you can earn in a month or the least? Are you drawing to a term end anytime soon (my husband finishes his degree early May) which will enable you to work full-time for a few months?

Your budget is tight without any of the debts so something drastic needs to happen one way or another.

Your mobile bill and car insurances are extortionate. Any reason why the car insurances are so high? Is your council tax spread over 10 or 12 months; if 10, switch it to 12? Are you entitled to any form of discount with you being a student (I have no idea how this works but might be worth enquiring)? I don't think you could shave enough of the bills etc to be able to meet all the repayments so what are the options for increasing income (for both of you), if any? Or it will be a case of defaulting and entering into a repayment plan and you are already aware of the consequences of this.

You need to try and batter a couple of those debts as the interest rates are horrendous.

Heading Towards a Problem

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