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  • FIRST POST
    • Anniee88
    • By Anniee88 5th Jan 18, 4:51 PM
    • 81Posts
    • 158Thanks
    Anniee88
    Feeling slightly better
    • #1
    • 5th Jan 18, 4:51 PM
    Feeling slightly better 5th Jan 18 at 4:51 PM
    Hello everyone,

    I have a sort of self managed DMP but after reading into everything and falling behind on a few payments to some creditors, one being defaulted soon and another two advised Iíll be defaulted anyway in a few months as I cannot set up a proper repayment plan for my overdrafts I have decided to send off the letter templates regarding token payment and sending my I&E. My Ďarrange to payí is going to take 5-6 years at least to pay off and then itíll stay on for 6 years after so Iíd rather they all defaulted me sooner rather than later so I can see a date that it will drop off my file.

    I hope to build a small emergency fund and save some money whilst paying token payments. My total debt is around £13,000.

    My income changes depending how many unsociable hours I work and if I can get an over time shift in so I want to try and save every penny I can to offer full and finals in a few years.

    Does this sound ok?
Page 1
  • National Debtline
    • #2
    • 5th Jan 18, 6:18 PM
    • #2
    • 5th Jan 18, 6:18 PM
    Hi Anniee88,


    It is hard to say without seeing your full SOA, so I would suggest you post that so other people can help you too.


    I can understand you wanting the debts to default so that they don't stay on your credit file any longer than necessary, but I cannot say I necessarily agree with the proposal of token payments with the goal to save money for full and final. Whilst I understand the logic and wouldn't completely rule it out as an option, it is not the accepted process. If you have a monthly surplus that should be offered to the debts to clear them that way. If your income fluctuates then we would advise you trying to do an average to be as consistent as possible.


    With regard to the overdrafts, you need to make sure that you no longer bank with these banks and they should default if/when they call the balance of the overdraft in, in full. Unfortunately, we cannot say when that'll be. Best of luck,


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • fatbelly
    • By fatbelly 5th Jan 18, 7:28 PM
    • 12,359 Posts
    • 9,398 Thanks
    fatbelly
    • #3
    • 5th Jan 18, 7:28 PM
    • #3
    • 5th Jan 18, 7:28 PM
    Hello everyone,

    I have a sort of self managed DMP but after reading into everything and falling behind on a few payments to some creditors, one being defaulted soon and another two advised Iíll be defaulted anyway in a few months as I cannot set up a proper repayment plan for my overdrafts I have decided to send off the letter templates regarding token payment and sending my I&E. My Ďarrange to payí is going to take 5-6 years at least to pay off and then itíll stay on for 6 years after so Iíd rather they all defaulted me sooner rather than later so I can see a date that it will drop off my file.

    I hope to build a small emergency fund and save some money whilst paying token payments. My total debt is around £13,000.

    My income changes depending how many unsociable hours I work and if I can get an over time shift in so I want to try and save every penny I can to offer full and finals in a few years.

    Does this sound ok?
    Originally posted by Anniee88
    Your strategy sounds pretty good for someone on a fluctuating income provided you will end up with a plan to clear your debts in a 'reasonable period' of 3-5 years. Failing that you may be better looking at bankruptcy or (possibly) a debt relief order.

    I assume that you will be producing a financial statement based on your basic income. If that falls out to have enough surplus for exactly £1 per month to each creditor, fine, but if it produces more than that, they will ask for a pro-rata distribution of your surplus. If your surplus is negative, the creditors may not accept your plan. Court claims are always a possibility but usually what happens is that the debt gets passed to a debt buyer (who will usually be more receptive to a full & final settlement deal).

    So what I think I'm saying is to take great care with your financial statement if you are going with that strategy. Good luck.
    • January2015
    • By January2015 5th Jan 18, 9:24 PM
    • 2,095 Posts
    • 5,188 Thanks
    January2015
    • #4
    • 5th Jan 18, 9:24 PM
    • #4
    • 5th Jan 18, 9:24 PM
    Hi

    Impossible to say without seeing your SOA, but I just wondered whether you would be a candidate for a debt relief order (DRO)
    DFW Nerd No. 1484 LBM 07/01/15 Debt was £95k I'm driving it down
    £1k emergency fund (member #84) £1k/£1k
    [COLOR=Blue][SIZE=2]
    • Anniee88
    • By Anniee88 6th Jan 18, 8:01 AM
    • 81 Posts
    • 158 Thanks
    Anniee88
    • #5
    • 6th Jan 18, 8:01 AM
    • #5
    • 6th Jan 18, 8:01 AM
    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 1400
    Partners monthly income after tax....... 0
    Benefits................................ 137
    Other income............................ 0
    Total monthly income.................... 1537


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 652
    Management charge (leasehold property).. 0
    Council tax............................. 89
    Electricity............................. 38
    Gas..................................... 30
    Oil..................................... 0
    Water rates............................. 54
    Telephone (land line)................... 0
    Mobile phone............................ 40
    TV Licence.............................. 12
    Satellite/Cable TV...................... 0
    Internet Services....................... 29
    Groceries etc. ......................... 200
    Clothing................................ 20
    Petrol/diesel........................... 80
    Road tax................................ 2
    Car Insurance........................... 25
    Car maintenance (including MOT)......... 10
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 5
    Life assurance ......................... 5
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 37
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 1328



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 900
    Other assets............................ 0
    Total Assets............................ 900


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Co op overdraft................1470......60........20
    Santander overdraft ...........1999......100.......0
    Argos .........................500.......20........30
    Santander......................200.......200...... .22
    Barclaycard cc.................4000......50........3
    MBNA credit card ..............3500......94........0
    Next...........................1998......100...... .22
    Total unsecured debts..........13667.....624.......-



    Monthly Budget Summary

    Total monthly income.................... 1,537
    Expenses (including HP & secured debts). 1,328
    Available for debt repayments........... 209
    Monthly UNsecured debt repayments....... 624
    Amount short for making debt repayments. -415


    Personal Balance Sheet Summary
    Total assets (things you own)........... 900
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -13,667
    Net Assets.............................. -12,767
    Last edited by Anniee88; 06-01-2018 at 8:28 AM.
    • Anniee88
    • By Anniee88 6th Jan 18, 8:09 AM
    • 81 Posts
    • 158 Thanks
    Anniee88
    • #6
    • 6th Jan 18, 8:09 AM
    • #6
    • 6th Jan 18, 8:09 AM
    I haven!!!8217;t included my husbands income because he is a student and has his own debt that only lasts another year then he!!!8217;ll be debt feee so I want him to pay he full amount of that (£200) plus he uses at least £200 Petrol and pays for half of the groceries, another £200 alongside his own mobile and car ins ect. When he is able to work we have that money as spare but again not guaranteed but something I could save when we do get it for full and finals.

    I forgot that Santander is my last loan payment next month, I!!!8217;ve always made sure i can pay that one as it had a means to an end if that make sense. So I!!!8217;ve got £200 left between 6 of them. Do I offer them £36 each? And Argos can have £20 which is the minimum anyway. I haven!!!8217;t include any money for presents ect as I!!!8217;m not sure they will accept that as part of my I&E or should I and pay them less? I have no idea what is best to do.

    I don!!!8217;t think I am a DRO candidate as when my husband finishes uni in December 2018 ish, hell hopefully move on to a job that earns 27,000 as starting salary and I am planning to increase my hours by 6 a week which is around £5000 pre tax increase so things are going to get better/easier, just not yet.
    Last edited by Anniee88; 06-01-2018 at 8:12 AM.
    • fatbelly
    • By fatbelly 6th Jan 18, 9:23 AM
    • 12,359 Posts
    • 9,398 Thanks
    fatbelly
    • #7
    • 6th Jan 18, 9:23 AM
    • #7
    • 6th Jan 18, 9:23 AM
    If you were offering £200 as a debt management plan, you'd split it on a pro-rata basis so for example co-op would get 1470/13667 x 200 = £21.51.

    However, I don't think they can expect you to live on as little as you say you do. Add £200 to your housekeeping and offer them £1 each for now. Then save on the side as you initially said you would.
    • Anniee88
    • By Anniee88 6th Jan 18, 9:53 AM
    • 81 Posts
    • 158 Thanks
    Anniee88
    • #8
    • 6th Jan 18, 9:53 AM
    • #8
    • 6th Jan 18, 9:53 AM
    If you were offering £200 as a debt management plan, you'd split it on a pro-rata basis so for example co-op would get 1470/13667 x 200 = £21.51.

    However, I don't think they can expect you to live on as little as you say you do. Add £200 to your housekeeping and offer them £1 each for now. Then save on the side as you initially said you would.
    Originally posted by fatbelly
    Thanks very much for your advice. This is what I thought was the best to do for now, I really do want to pay it all off as soon as I can but I have struggled to commit to the big amounts they want. Hopefully next year we can really make a big dent. Iíve got a letter template on my computer to send to them offering my token payments so Iíll aim to do that this weekend.
    • January2015
    • By January2015 6th Jan 18, 10:07 AM
    • 2,095 Posts
    • 5,188 Thanks
    January2015
    • #9
    • 6th Jan 18, 10:07 AM
    • #9
    • 6th Jan 18, 10:07 AM
    Hi

    I think you have struggled to commit to the debt repayments because you SOA expenditure is so tight. You're grocery budget is low, you have no budgets for haircuts and christmas/birthday presents, and no budget for an emergency fund. That may a budget you would like to be able to achieve, but realistically you are finding it hard to do that and that's because things like haircuts, birthdays, christmas and sometimes unexpected emergency expenses do crop up. It is important to put in figures in your budget to cover these things.

    Best of luck with clearing your debts
    DFW Nerd No. 1484 LBM 07/01/15 Debt was £95k I'm driving it down
    £1k emergency fund (member #84) £1k/£1k
    [COLOR=Blue][SIZE=2]
    • fatbelly
    • By fatbelly 6th Jan 18, 12:35 PM
    • 12,359 Posts
    • 9,398 Thanks
    fatbelly
    Hi

    I think you have struggled to commit to the debt repayments because you SOA expenditure is so tight. You're grocery budget is low, you have no budgets for haircuts and christmas/birthday presents, and no budget for an emergency fund. That may a budget you would like to be able to achieve, but realistically you are finding it hard to do that and that's because things like haircuts, birthdays, christmas and sometimes unexpected emergency expenses do crop up. It is important to put in figures in your budget to cover these things.

    Best of luck with clearing your debts
    Originally posted by January2015
    In addition to the above I though the car maintenance figure was too low by at least a factor of 2 and £20 a month for clothes for 2 adults 2 children also too low. I work on a minimum of £3 per person per week.
    • January2015
    • By January2015 6th Jan 18, 5:39 PM
    • 2,095 Posts
    • 5,188 Thanks
    January2015
    In addition to the above I though the car maintenance figure was too low by at least a factor of 2 and £20 a month for clothes for 2 adults 2 children also too low. I work on a minimum of £3 per person per week.
    Originally posted by fatbelly
    I totally agree. I think the OP needs to look at calculating a realistic budget. I do think that once they have a realistic budget there is a possibility they could consider a DRO.

    Although they thought they had a couple of hundred a month for debt payments, once they sort out a true budget that is soon going to eat up that money and I suspect they will struggle to have £50 a month left for debts.

    Of course, it does depend on what assets they own though.
    DFW Nerd No. 1484 LBM 07/01/15 Debt was £95k I'm driving it down
    £1k emergency fund (member #84) £1k/£1k
    [COLOR=Blue][SIZE=2]
    • Anniee88
    • By Anniee88 6th Jan 18, 6:05 PM
    • 81 Posts
    • 158 Thanks
    Anniee88
    I totally agree. I think the OP needs to look at calculating a realistic budget. I do think that once they have a realistic budget there is a possibility they could consider a DRO.

    Although they thought they had a couple of hundred a month for debt payments, once they sort out a true budget that is soon going to eat up that money and I suspect they will struggle to have £50 a month left for debts.

    Of course, it does depend on what assets they own though.
    Originally posted by January2015
    My husband pays for the up keep of his car and I didnít include birthdays ect as I didnít want to put this to my creditors incase they say itís not necessary. Some months I might earn £1-200 more so I usually use these months to pay for stuff we need or save for birthdays. Same for my husband if he can get some shifts he usually uses the money to buy clothes the girls need or a day out ect. So we do have some leeway and havenít put anything on credit for over 6 months now so feel we are moving in the right direction, I just need a bit of breathing space. Thanks for your ideas though
    • fatbelly
    • By fatbelly 6th Jan 18, 7:44 PM
    • 12,359 Posts
    • 9,398 Thanks
    fatbelly
    I totally agree. I think the OP needs to look at calculating a realistic budget. I do think that once they have a realistic budget there is a possibility they could consider a DRO.
    Originally posted by January2015
    I agree. The possible problem is that there is likely to be an increase in income within 12 months. If the surplus goes over £50 there's a danger of losing the DRO and back to square one.
    • Karonher
    • By Karonher 6th Jan 18, 7:47 PM
    • 491 Posts
    • 2,126 Thanks
    Karonher
    When you say your husband pays half of the groceries does that mean £400 altogether?
    Getting ready for Christmas 2018

    Aiming to make £5,000 online in 2018.
  • National Debtline
    Hello again,


    I think that there is room to increase some of the figures on your budget, as it does look quite restrictive, however, I also worry it is not entirely accurate. You mentioned that your partner has his own debts - what are these? I think you would benefit from doing a joint budget plan, you may not necessarily send this to your debts, but it is important to make sure that you have enough money for the essentials (and that does include clothes, gifts, emergencies etc). At the moment I worry that your budget is not divided fairly between you and your husband and this is giving you a false economy on what you can afford.


    If he is a student and gets any kind of loan, maintenance, grant (that does not go directly to the course) then that is an income. I appreciate this income is unlikely to be paid every month (normally it is every 3 months), so divide what he gets by 3 and make sure you allocate it accordingly. Then list all of the expenses. The money remaining is the money available for all of the debts. If he also has credit debts then there is no reason why you can't tackle them all together, there is no reason why his credit debts should take priority over yours.


    By doing this, you be able to see your options more clearly. I believe you will have two clear options available. One is to do token payments for now and increase the payments in around 12-18 months (as you have said). Or, I suspect, you may actually be eligible for a DRO, especially if things are not due to improve for 12 - 15months. This is something to consider but you may need to act quickly if you want to go down this path as DRO's take time to set up. I would suggest ringing one of the free debt charities and let them go through the budget with you in more detail. Best of luck,


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
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