DMP or Bankruptcy new daily overdraft fee
Options
Ebonydeluxe
Posts: 99 Forumite
Evening all,
The new daily bank overdraft charges have just pushed me over the edge that I was precarious hanging on to. What once cost around £60 a month is going to now cost £144+. And due to the daily charges is causing me an even bigger cash flow problem.
I called StepChange today and the debt remedy tool recommended a DMP, with the alternative of bankruptcy. My situation is so dire I cannot afford to pay my children’s school meals on time and I’m not entitled to free school meals. I use my credit cards once I have made the minimum payment. This means I am never clearing the debt and just creating more debt.
I think I am at risk of redundancy and have recently been diagnosed with a heart condition. The relevance of the heart condition is that it means it will be highly unlikely I will be able to get a mortgage as it will be hard and costly to obtain life insurance. Getting a mortgage would be my main reason for wanting to preserve a good credit rating, but since that is unlikely, I am questioning whether bankruptcy is the better option.
SOA - Now included showing I have even less available because some of the minimum payment assumptions were wrong. I know people will look at the two cars, but without going into too much detail, it involves my ex and my misjudgement. All debts are in my name and there is nothing I can do about it. Debt on HP cars is more than their worth.
Statement of Affairs and Personal Balance Sheet[/b]
Household Information
Number of adults in household........... 1
Number of children in household......... 5
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1268
Partners monthly income after tax....... 0
Benefits................................ 1364
Other income............................ 0
Total monthly income.................... 2632
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 456
Rent.................................... 22
Management charge (leasehold property).. 0
Council tax............................. 18
Electricity............................. 44
Gas..................................... 40
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 0
Mobile phone............................ 46
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 27
Groceries etc. ......................... 370
Clothing................................ 50
Petrol/diesel........................... 120
Road tax................................ 56
Car Insurance........................... 188
Car maintenance (including MOT)......... 45
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 429
Other child related expenses............ 116
Medical (prescriptions, dentist etc).... 8.6
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 188
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 70
Holiday................................. 0
Emergency fund.......................... 40
Total monthly expenses.................. 2396.6
Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 8633.....(176)......19.9<
HP.............................11242....(280)......20
Total secured & HP debts...... 19875.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Aqua...........................450.......15.63.....29
Argos..........................1900......95........29
Argos..........................743.......38........29
Very...........................1430......72........39.99
Very...........................3301......150.......39.99
Vanquis........................250.......16........29
Tesco..........................223.......25........29
Next ..........................2872......144.......0
M&S loan.......................3547......322.......0
M&S............................2150......65........26
Lloyds overdraft...............3200......144.......0
Lloyds cc......................4250......140.......24
DWP............................2000......30........0
Debenhams......................651.......27........29
Barclays oveirdraft............1600......60........0
Barclaycard....................6798......170.......27
Total unsecured debts..........35365.....1513.63...-
Monthly Budget Summary
Total monthly income.................... 2,632
Expenses (including HP & secured debts). 2,396.6
Available for debt repayments........... 235.4
Monthly UNsecured debt repayments....... 1,513.63
Amount short for making debt repayments. -1,278.23
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -19,875
Total Unsecured debt.................... -35,365
Net Assets.............................. -55,240
There is nothing in the SOA which can be re-budgeted. I have compared my energy supply, broadband, etc. The mobile phone cost is for three phone contracts, my two daughters and mine. I will be able to reduce my mobile bill in Feb next year by about £10 or so.
DMP would allow me to keep car, required for work and getting around with five children. Plan says it will last around 6 years, providing creditors freeze interest. My concern is if they don’t.
Bankruptcy would allow fresh start, restrict me from being stupid with credit, but I understand I could be asked to pay any surplus for 36 months.
Either way I need to act sooner rather than later.
I haven’t missed any payments yet but that is because I am servicing the debt with debt.
Thanks in advance.
The new daily bank overdraft charges have just pushed me over the edge that I was precarious hanging on to. What once cost around £60 a month is going to now cost £144+. And due to the daily charges is causing me an even bigger cash flow problem.
I called StepChange today and the debt remedy tool recommended a DMP, with the alternative of bankruptcy. My situation is so dire I cannot afford to pay my children’s school meals on time and I’m not entitled to free school meals. I use my credit cards once I have made the minimum payment. This means I am never clearing the debt and just creating more debt.
I think I am at risk of redundancy and have recently been diagnosed with a heart condition. The relevance of the heart condition is that it means it will be highly unlikely I will be able to get a mortgage as it will be hard and costly to obtain life insurance. Getting a mortgage would be my main reason for wanting to preserve a good credit rating, but since that is unlikely, I am questioning whether bankruptcy is the better option.
SOA - Now included showing I have even less available because some of the minimum payment assumptions were wrong. I know people will look at the two cars, but without going into too much detail, it involves my ex and my misjudgement. All debts are in my name and there is nothing I can do about it. Debt on HP cars is more than their worth.
Statement of Affairs and Personal Balance Sheet[/b]
Household Information
Number of adults in household........... 1
Number of children in household......... 5
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1268
Partners monthly income after tax....... 0
Benefits................................ 1364
Other income............................ 0
Total monthly income.................... 2632
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 456
Rent.................................... 22
Management charge (leasehold property).. 0
Council tax............................. 18
Electricity............................. 44
Gas..................................... 40
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 0
Mobile phone............................ 46
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 27
Groceries etc. ......................... 370
Clothing................................ 50
Petrol/diesel........................... 120
Road tax................................ 56
Car Insurance........................... 188
Car maintenance (including MOT)......... 45
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 429
Other child related expenses............ 116
Medical (prescriptions, dentist etc).... 8.6
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 188
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 70
Holiday................................. 0
Emergency fund.......................... 40
Total monthly expenses.................. 2396.6
Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 8633.....(176)......19.9<
HP.............................11242....(280)......20
Total secured & HP debts...... 19875.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Aqua...........................450.......15.63.....29
Argos..........................1900......95........29
Argos..........................743.......38........29
Very...........................1430......72........39.99
Very...........................3301......150.......39.99
Vanquis........................250.......16........29
Tesco..........................223.......25........29
Next ..........................2872......144.......0
M&S loan.......................3547......322.......0
M&S............................2150......65........26
Lloyds overdraft...............3200......144.......0
Lloyds cc......................4250......140.......24
DWP............................2000......30........0
Debenhams......................651.......27........29
Barclays oveirdraft............1600......60........0
Barclaycard....................6798......170.......27
Total unsecured debts..........35365.....1513.63...-
Monthly Budget Summary
Total monthly income.................... 2,632
Expenses (including HP & secured debts). 2,396.6
Available for debt repayments........... 235.4
Monthly UNsecured debt repayments....... 1,513.63
Amount short for making debt repayments. -1,278.23
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -19,875
Total Unsecured debt.................... -35,365
Net Assets.............................. -55,240
There is nothing in the SOA which can be re-budgeted. I have compared my energy supply, broadband, etc. The mobile phone cost is for three phone contracts, my two daughters and mine. I will be able to reduce my mobile bill in Feb next year by about £10 or so.
DMP would allow me to keep car, required for work and getting around with five children. Plan says it will last around 6 years, providing creditors freeze interest. My concern is if they don’t.
Bankruptcy would allow fresh start, restrict me from being stupid with credit, but I understand I could be asked to pay any surplus for 36 months.
Either way I need to act sooner rather than later.
I haven’t missed any payments yet but that is because I am servicing the debt with debt.
Thanks in advance.
:naughty
Hoping to be debt free for life!
Hoping to be debt free for life!0
Comments
-
Any advice pls:naughtyHoping to be debt free for life!0
-
Stop paying the debt [except for priority debts which don't include credit cards], write to your lenders or enter a DMP with Stepchange to start with. If you need to go bankrupt further down the line, it's always an option.
Open new basic bank account and get your salary/benefits etc paid into that.
Once you have some breathing space, you can plan better...Shampoo? No thanks, I'll have real poo...0 -
Tad excessive when you have £400 plus a month.
Unless your credit history is in tatters with defaults etc then ignore the above.
You need to post a full SOA as in all likelihood you can cut your expenses down and have maybe £600 spare a month.
You would be debt free in a few years, as when you pay off debts that’s more per month on other debts. If you have a good credit history it’s worth keeping hold of as defaults and then ccjs can ruin it for up to 12 years in total plus they may add in collection fees.
Complete the SOA and then people can assist0 -
Their total debt is 30k plus, and each month amounts to 1600. They have 400 spare.
I'm all for them cutting down and servicing them without defaulting on anything but if they have already spoken to Stepchange and been advised a DMP or bankruptcy, I'm not sure how much they can cut down and not default.Shampoo? No thanks, I'll have real poo...0 -
Their total debt is 30k plus, and each month amounts to 1600. They have 400 spare.
I'm all for them cutting down and servicing them without defaulting on anything but if they have already spoken to Stepchange and been advised a DMP or bankruptcy, I'm not sure how much they can cut down and not default.
Hi Taff,
Typically, anything less than the contractural payment, even under the umbrella of a dmp via stepchange will likely result in a default. This isn’t a wholly bad thing.0 -
Tad excessive when you have £400 plus a month.
Unless your credit history is in tatters with defaults etc then ignore the above.
You need to post a full SOA as in all likelihood you can cut your expenses down and have maybe £600 spare a month.
You would be debt free in a few years, as when you pay off debts that’s more per month on other debts. If you have a good credit history it’s worth keeping hold of as defaults and then ccjs can ruin it for up to 12 years in total plus they may add in collection fees.
Complete the SOA and then people can assist
Defaults and ccjs are present for 6 years on a credit file - where did 12 come from?? And besides, if a creditor can display a commitment to a debt management plan either self managed or via a (non fee) debt counciling service there is little point in a creditor going after a ccj0 -
12 years came from 6 years default and at its absolute worse they then apply for a ccj just before the 6 year mark and then it’s another 6 years. Less in Scotland.0
-
12 years came from 6 years default and at its absolute worse they then apply for a ccj just before the 6 year mark and then it’s another 6 years. Less in Scotland.
I think it’s pretty emotive to sudgest people consider the what if senario on a pretty exteem basis as you’ve outlined, I think on first read of it could compound some people’s fears not allay them
The fact is, creditors, regardless of size or debt being considered are duty bound to act fairly to customers and especially those who approach them with financial concerns
As a minimum this means a period of breathing space while that person addresses their affairs. Ccj’s, debt collectors and collection charges are way off the agdenda for as long as the individual works with a debt service such as stepchange or pay plan or otherwise responds faithfully and in good time if dealing with creditors on their own
Yes, peoples credit record will be tarnished, however myself and others on this board can attest to the fact that this needn’t cause issues and in fact defaults should be encouraged so as to get the clock ticking and them off your file
I don’t think fearmongering, when people on these pages are possibly at their lowest point is helpful or supportive0 -
Thank you for your replies. I just need to clear up one thing. I don’t have £400 spare a month. I have £400 left to pay towards debts of £1600. No amount of budgeting is going to get anywhere close to being able to meet my monthly payments.
I think I will do as taff says and start the DMP and consider bankruptcy later down the line if the DMP is unsuccessful.:naughtyHoping to be debt free for life!0 -
Ebonydeluxe wrote: »Thank you for your replies. I just need to clear up one thing. I don’t have £400 spare a month. I have £400 left to pay towards debts of £1600. No amount of budgeting is going to get anywhere close to being able to meet my monthly payments.
I think I will do as taff says and start the DMP and consider bankruptcy later down the line if the DMP is unsuccessful.
The reason why we ask for a full SOA for things like this is because there are experts here who can tell the difference between £400 surplus before debt on paper, and £400 surplus in reality.
The latter would result you getting an IPA in BR. The former, that forgets non recurring but common spending, exceptional items that must be factored into an annual budget and plain old underreporting of spending can make a massive difference.
Please post your MSE SOA so it can be looked at properly. Entering a DMP or BR have their own impacts and going on a DMP only to go BR later just wastes time and effort if BR was the best option to begin with.
In debt and looking for help? Look here for the MSE Debt Help Guide.
Also, If you need any free and impartial debt advice, the National Debtline, Stepchange, and the CAB can help.0
This discussion has been closed.
Categories
- All Categories
- 343.3K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 248K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards