Pay Day Dillema

[no debt2014]

I have just got myself in a dreadful mess with pay day loans and in need siome advice. I know i should have known better, but I have just had a baby and there was a drastic cut in overtime at work and I suddently found myself borrowing money from these payday lenders. My partner also had to work part time so as to look after the baby

I will definately not have money to repay at the end of the month and i need help. I have read some of the posts from others and i have just opened a new account with Coop Bank.

I currently bank with Barclays bank and all my direct debits are coming from that account. Here is my balance of affairs.


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household............................ 2
Number of children in household.......................... 1
Number of cars owned........................................ 1

Monthly Income Details
Monthly income after tax.................................... 2400
Partners monthly income after tax....................... 280
Benefits.......................................... ................. 0
Other income............................................ ........ 0
Total monthly income........................................ 2680

Monthly Expense Details
Mortgage.......................................... ............... 0
Secured/HP loan repayments.............................. 284
Rent.............................................. ................. 580
Management charge (leasehold property)............. 0
Council tax............................................... ....... 150
Electricity....................................... .................. 60
Gas............................................... ................. 55
Oil............................................... ................... 0
Water rates............................................. ........ 40
Telephone (land line)........................................ 30
Mobile phone............................................. ...... 45
TV Licence........................................... ............ 12
Satellite/Cable TV............................................ 40
Internet Services.......................................... .... 0
Groceries etc. .................................................. 250
Clothing.......................................... ................ 50
Petrol/diesel............................................ ........ 400
Road tax............................................... .......... 20
Car Insurance......................................... ......... 140
Car maintenance (including MOT)........................ 34
Car parking........................................... ........... 33
Other travel............................................ ......... 30
Childcare/nursery........................................... ... 50
Other child related expenses............................... 0
Medical (prescriptions, dentist etc)....................... 0
Pet insurance/vet bills........................................ 0
Buildings insurance......................................... ... 0
Contents insurance......................................... ... 0
Life assurance .................................................. 0
Other insurance......................................... ....... 15
Presents (birthday, christmas etc)....................... 20
Haircuts.......................................... ................ 20
Entertainment..................................... ..............30
Holiday........................................... ................. 0
Emergency fund.............................................. .. 20
Total monthly expenses.................................... 2408

Assets
Cash.............................................. ................. 0
House value (Gross).......................................... 0
Shares and bonds............................................. 0
Car(s)............................................ .................3000
Total Assets............................................ ........ 3000

Secured & HP Debts
Description..................................Debt. .....Monthly...APR
Mortgage..................................... 0...........(0)........0
Hire Purchase (HP) Card debt ....... 10000......(257).....0
Hire Purchase (TV)........................320.........(27)...... .0
Total secured & HP debts.............. 10320.....(384)......0

Unsecured Debts
Description..................................Debt. .....Monthly...APR
Quick Quid - Pay Day...................1800......0.........0
Payday Uk - Pay Day....................940.......0.........0
Wonga - Pay Day........................1060......0.........0
Wage Express -Pay Day................300........0.........0
HFC Credit Card...........................305........8....... ..0
Barclays Loan..............................760.......150... ....0
Barclays Credit Card.....................4880......120......0
HSBC Credit Card.........................3366......88........0
Capital One................................1150......60... .....0
Total unsecured debts..................14561.....426......0

Monthly Budget Summary
Total monthly income.............................. 2,680
Expenses (including HP & secured debts).... 2,408

Available for debt repayments................... 272

Monthly Unsecured debt repayments......... 426
Amount short for making debt repayments...154

Personal Balance Sheet Summary
Total assets (things you own)................ 3,000
Total HP & Secured debt...................... -10,320
Total Unsecured debt.......................... -14,561
Net Assets......................................... -21,881

[labman]

Re: Pay Day Dillema

Hi,

Thanks for providing such a comprehensive Asset, Income and Expenditure sheet. It is impossible without talking to you to be totally sure of the best way forward for you and your circumstances, but looking at your IE sheet, I would be of the opinion that a Debt Management Plan (DMP) would be a sensible way forward for you. There are some good free organisations who would arrange one of these for you, or you could do a self managed one which would give you a bit more control over your finances. Do you have any arrears on any of your debts?

Just at a quick glance, your motoring expenses seem quite high. It would not surprise me if they exceeded the trigger figures for a Common Financial Statement. Is there a reason why they are so high?

There is a thread on here which I can't find about self managed DMP's, hopefully someone will post the link! Alternatively you could go with one of the free DMP providers who would do much of the work for you.

If you have a think what you would like to do and post up again, then people will be able to point you towards an organisation suitable for your needs. As I said, hopefully someone will post up a link to the thread I can't find about self managed DMP's in order to help you make up your mind.

If you decide you want to go the DMP route, you need to ensure that whoever does it gets all interest and charges frozen on all your debts, and you would have to face that your credit history would be destroyed for 6 years. Given this would be the case, you would also want to ensure that all creditors formally default you and register the default with a CRA as soon as possible. What you do not want is an arrangement to pay (AP) marker on your credit file - it's far better to be defaulted for reasons I'll explain if you want.

Have a read of the self managed thread when someone posts it up, and decide if this is a route you'd think of taking or not. Once you've done that, post back up.

As for the Pay Day loans, cancel the direct debits and write to them asking them to provide a written copy of your agreement and to freeze interest and charges (they almost certainly won't).

[Guest]

Re: Pay Day Dillema

HI
Yes bloody pay day loans.
Your I and e is not so bad,( i have sen a lot worse).
First thing to do is issolate all your income, i think you said you have done that by opening a new account and ensuring none of the creditors have any knowledge of where it is.
Personally i would give Payplan a ring.

YOu have about 15k of debts from what i see and about £259 disposable incme, i have seen them accept a lot worse than this for a DMP, although they will; try and talk you into an IVA. This i entirely your descision, personally i prefer the DMP as it gives you more control if your situation changes over time, however as they will point out the IVA has the advantage that it insolates you from creditor contact once it is set up. They will give you all the info, talk it over and make up your own mind.

They will ask what you use the car for, its make and model idstance from work etc, then they will calculate how much fuel you need, in my experiance it has always been ample.

Peter

[labman]

Re: Pay Day Dillema

I've seen a DMP accepted recently on a debt of well over 100K! I agree with Peter that a DMP is the right solution as I said. Personally I would look at all options before deciding on one particular provider and weigh up the pros and cons of each. Payplan are good, as are CCCS - they are usually considered the main two, but by no means the only free DMP providers, and not always the best.

The most important things to ensure were in my first post - freeze interest and charges, default you asap and report it to the CRA's.

I have no doubt whatsoever that your situation would be accepted. I'm also sure, and you should be congratulated on the fact that you've addressed it early enough to not be a massive problem.

[Guest]

Re: Pay Day Dillema

Hi
Yes jut to emphasis, if you are looking for a DMP stay clear of the one that charge a fee, there are hundreds of them out there and they will tell you all sorts in order to get your account, they will just reduce the amount you repay your creditors by their fee.

Most creditors wont consider freezing interest untill they see your finantial details from an accredited DMP company or sometimes from your own home made one, but i have found that they demand more proof of income if you go down that route.

I would recomend that you start your DMP through one of the free agencies, they will send out all the letters and get the thing up and running for you.

Peter

[labman]

Re: Pay Day Dillema

Hi
Most creditors wont consider freezing interest untill they see your finantial details from an accredited DMP company or sometimes from your own home made one, but i have found that they demand more proof of income if you go down that route.
Peter

You can quite happily do your own now if you use CASHflow:

CASHflow - Login

This gives your own IE form the same backing as a Common Financial Statement, and if it is not accepted, the Money Advice Trust will actually intervence on your behalf to get the creditor to accept your proposal. It is extremely good, and I have yet to see anyone do one of these and not have their proposals accepted immediately.

[Celestine]

Re: Pay Day Dillema

Legal Beagles recommends those entering a DMP ONLY to use a free service such as PayPlan.

NEVER use a fee charging DMP company. Please....it's just money down the drain and we have even had cases where DMP companies have kept their clients monies and left them further indebted.

The only downside of Pay Plan etc is that they won't go the extra mile to get you a good arrangement, nor will they deal effectively with those fun times when the creditors misbehave. (Trust me, the fee charging ones won't either).

If you have found the motivation to seek advice on a site like LB, then you probably have the motivation to sort this out yourself and have proper control of your debts. Cashflow is an excellent tool for assisting you in this process.

Keep us posted x

[Guest]

Re: Pay Day Dillema

Legal Beagles recommends those entering a DMP ONLY to use a free service such as PayPlan.

NEVER use a fee charging DMP company. Please....it's just money down the drain and we have even had cases where DMP companies have kept their clients monies and left them further indebted.

The only downside of Pay Plan etc is that they won't go the extra mile to get you a good arrangement, nor will they deal effectively with those fun times when the creditors misbehave. (Trust me, the fee charging ones won't either).

If you have found the motivation to seek advice on a site like LB, then you probably have the motivation to sort this out yourself and have proper control of your debts. Cashflow is an excellent tool for assisting you in this process.

Keep us posted x

Hmm
Suppose it is personal preferece. For myself i would rather just send the check for 250 quid a month to the free dmp, if the creditors try to contact i can redirect them to the company.

There are guidlines in place now that say ccreditors are not supposed to bypass intermediaries, i think it gves you a bit of a buffer, also i find the online acces to the providers excellent, you can keep all your correspondance, records of payments creditor details in one place, it may be that the OP is the sort of person that can keep all these records and info neetly filed and correlated, I like the idea of someone doing it for me.

I dont think anyone can garantee that creditors will agree to freeze interest or even enter a plan there is nothing that says the must, only guidlines.
Usually however they do.

Peter

[labman]

Re: Pay Day Dillema

Apologies - please delete. Misread above post!

[Guest]

Re: Pay Day Dillema

Apologies - please delete. Misread above post!

Ok hate fee paying DMPs myself

Vultures

Peter

[labman]

Re: Pay Day Dillema

Yep - sorry, thought you were promoting them for a minute. Better you don't read what I'd written! lol

The thing people often forget is that no DMP is ever legally binding to either side, it is an informal arrangement, but one which works extremely well.

[Guest]

Re: Pay Day Dillema

Yep - sorry, thought you were promoting them for a minute. Better you don't read what I'd written! lol

The thing people often forget is that no DMP is ever legally binding to either side, it is an informal arrangement, but one which works extremely well.

BI

Yes i have organised a number of these, the problem i have found is with the amount of paperwork, particularily if there are a lot of creditors, keeping all the replies and records of who has accepted and so on in date order.

That is why we now tend to advise that people at least start with one of the free services, after you have given them all your initial info they do it all for you, there is no binfing contract, once it is set up you can do whatever you want, but i think it is an easy way to get started.
More impoprtantly sometimes it gets them off your back because once you get a case number you can just say that a DMP is in progress, give them the number and they "have" to give you 28 days breathing space.

Peter

[labman]

Re: Pay Day Dillema

Obviously you will know, if you are involved in setting up DMP's, that you have to hold a CCL. You will also know that the most likely category for obtaining this will be Category E2.

What you may not realise is that if you come under this category, you do not have to register with the ICO. This means that not only can you hold data physically as you always could, but you can lawfully hold it electronically which eases the burden of filing enormously without having to be registered.

You can still volunteer to register with the ICO, but they ill encourage you not to. There are far more important, non compulsory things, that you should have in place such as Public Indemnity Insurance and Trustees Liability Insurance.

Anyone doing DMP's for someone else without a CCL is committing a criminal offence.

[Guest]

Re: Pay Day Dillema

I hope not or we are all in trouble.

Many on this forum has been invoved in setting up a DMP at one time or another, in as much as we have advised how to go aboujt getiing one up and running.

I am of course aware that to run a DMP for someone else you need a credit lisence, but i Dont think any of us do that.

At the Credit Union we are helping people set these up all the time more and more often unfortunately,

Peter

[no debt2014]

Re: Pay Day Dillema

Hi,

Thanks for providing such a comprehensive Asset, Income and Expenditure sheet. It is impossible without talking to you to be totally sure of the best way forward for you and your circumstances, but looking at your IE sheet, I would be of the opinion that a Debt Management Plan (DMP) would be a sensible way forward for you. There are some good free organisations who would arrange one of these for you, or you could do a self managed one which would give you a bit more control over your finances. Do you have any arrears on any of your debts?

Just at a quick glance, your motoring expenses seem quite high. It would not surprise me if they exceeded the trigger figures for a Common Financial Statement. Is there a reason why they are so high?

There is a thread on here which I can't find about self managed DMP's, hopefully someone will post the link! Alternatively you could go with one of the free DMP providers who would do much of the work for you.

If you have a think what you would like to do and post up again, then people will be able to point you towards an organisation suitable for your needs. As I said, hopefully someone will post up a link to the thread I can't find about self managed DMP's in order to help you make up your mind.

If you decide you want to go the DMP route, you need to ensure that whoever does it gets all interest and charges frozen on all your debts, and you would have to face that your credit history would be destroyed for 6 years. Given this would be the case, you would also want to ensure that all creditors formally default you and register the default with a CRA as soon as possible. What you do not want is an arrangement to pay (AP) marker on your credit file - it's far better to be defaulted for reasons I'll explain if you want.

Have a read of the self managed thread when someone posts it up, and decide if this is a route you'd think of taking or not. Once you've done that, post back up.

As for the Pay Day loans, cancel the direct debits and write to them asking them to provide a written copy of your agreement and to freeze interest and charges (they almost certainly won't).

No Debt2014
My Reply
Thanks for the advice, i am prepared to go for the DMA route and would definately do anything possible to get out of this mess. I understand the risks involved in terms of the credit history. I have managed to maintain all my payments so far and this would be the first time my credit record gets tainted unfortunately, but I have not choice now.

There is a few things i would like to know.

1. Can you explain to me about getting the default notice and how to go about it.
2. I have done a bit of overtime over the christmas period and am likely to get an extra £800 for that. I was thinking of spliting that between the two Pay Day loan companies and offering to pay the rest in instalments. Is that a good idea?
3. My driving expenses are quite high because i work about 80miles from home (80 miles to and from home), calculated at about £14 for 10 litres of petrol for the journey for a six day shift, if i do overtime on the sixth day. It could be less if i dont do overtime.
4. Will the DMP consider my overtime pay, sometimes i dont get it, hence i did not include it in the balance sheet. But i am willing to use my overtime pay to settle some of the debt. Please help.