Debt Help

[Jasoncmor]

Thank you to everyone for your replies and suggestions, it really is much appreciated.
Declaring myself bankrupt will be the absolute last thing I'd do, I had considered an IVA, however I have been in contact with Step Change as many of you have suggested, who recommended a Debt Management Plan, and they are helping me with setting up a DMP , it's going to take some time but hopefully this will be a step in the right direction, and I can get back on top of my finances once and for all.
I believe all my creditors have been spoken to and set up to receive a monthly payment from what I will be paying to Step Change, I just hope none of the creditors try to take me to court or similar.
This all begins on the 1st November.

can you not do overtime or get a second job to make extra income ?

I already work 6 days a week at my current job, and there isn't any more hours available for me, however I am hoping to improve my situation soon when things start heading in the right direction.

I appreciate your support! Hopefully you don't find yourself in a similar situation, whether its through no fault of your own, or not.

stop buying bidets and gucci belts for a start

Ironically, while I own a lot of "stuff", i don't really own anything expensive, but point taken!

You mentioned you do use a spreadsheet to show ingoings and outgoings already?
I wonder what that actually looks like? How much on there is an absolute neccesity vs wants?
After you have factored in mortgage/rent, electricity, gas, water, car payments, petrol, council tax, Basic food requirements (not fast food or eating out) etc what is left after your pay cheque?

I've been keeping one for many years just because I like to keep track of things. Never had any debt although I'm a very frugal person to a point where my parents have expressed worry over how "tight" I am thinking I have some kind of ADHD or autism some reason? I look at it more as not wanting to spend more than necessary on anything and will take the time to find what I want at the best price and doing research to make sure it's actually something I need rather than just fancy.

Weirdly, i go write these down every month, get mad at myself for being in the situation and struggling, then carry on working and doing the same thing over and over again, its been extremely stressful and depressing to be honest, however, I think i've sought help at the right time.
I get paid monthly, and after all bills are taken out, I have around £250 a month to spend on food, fuel and what ever I need, saying it like that sounds like a lot, but sadly it doesn't get very far.

@Jasoncmor

Are you able to give a breakdown of the figures for each credit card and the interest % on them as well as the loan?
Do you know what your credit score is?
Do you have any disposable income or anywhere where you could cut back?

Also reading what you have put in your latest post it kinda suggests you maybe fell foul of some predatory lending given you had a credit card bal, £2k loan, HP agreement and storecard debt then the bank offered you another credit card and a loan around the same size as the debt obligations you already had. I assume you weren't earning fancy money when you first started working so the fact they basically offered you the means to double your debt is a bit horrifying to be honest. It may be worth looking at raising a case with the ombudsman for predatory lending but i think we would need to get a better idea of the circumstances at the time.

I helped a friend raise 2 predatory/unaffordable lending ombudsman cases against WONGA and PeachyLoans as they got caught in the payday lending trap. They upheld 14/16 wonga loans and 21/27 Peachyloans as predatory if my memory serves me. They were removed from their credit file and the interest on the loans was instructed to be paid back to them but sadly Wonga went under and they got a fraction of what they were owed (thousands) but they did get the full payment from Peachyloans days before they went under.

I will definitely look into contacting the ombudsman regarding the products sold to me all those years ago, thanks for the suggestion!
1 card has just over 2k debt on it, but its a balance transfer so currently paying the minimum on that, the other 2, one has around 4.5k on it, the other just short of 2k, im pretty sure the interest rate is around 19.9% but I will have to double check, the loan is around 9.5k and that's approx 9% IIRC.
I get a credit score through my bank and i occasionally look at experian, last time I looked through lloyds, which was quite recent, it was around 560.

Thanks again everyone for you help, its truly appreciated!
Jason

 

[Feek]

I just hope none of the creditors try to take me to court or similar.

Providing you keep up your payments to Stepchange, you’ll be absolutely fine. Just don’t miss a payment.

 

[Penfold101]

No advice over what has always been written - just a note of praise for acknowledging the issue and moving to do something about it by asking for help. That's the hardest step with any problem and deserves respect.

 

[Zenduri]

Thank you to everyone for your replies and suggestions, it really is much appreciated.
Declaring myself bankrupt will be the absolute last thing I'd do, I had considered an IVA, however I have been in contact with Step Change as many of you have suggested, who recommended a Debt Management Plan, and they are helping me with setting up a DMP , it's going to take some time but hopefully this will be a step in the right direction, and I can get back on top of my finances once and for all.
I believe all my creditors have been spoken to and set up to receive a monthly payment from what I will be paying to Step Change, I just hope none of the creditors try to take me to court or similar.
This all begins on the 1st November.


Weirdly, i go write these down every month, get mad at myself for being in the situation and struggling, then carry on working and doing the same thing over and over again, its been extremely stressful and depressing to be honest, however, I think i've sought help at the right time.
I get paid monthly, and after all bills are taken out, I have around £250 a month to spend on food, fuel and what ever I need, saying it like that sounds like a lot, but sadly it doesn't get very far.


I will definitely look into contacting the ombudsman regarding the products sold to me all those years ago, thanks for the suggestion!
1 card has just over 2k debt on it, but its a balance transfer so currently paying the minimum on that, the other 2, one has around 4.5k on it, the other just short of 2k, im pretty sure the interest rate is around 19.9% but I will have to double check, the loan is around 9.5k and that's approx 9% IIRC.
I get a credit score through my bank and i occasionally look at experian, last time I looked through lloyds, which was quite recent, it was around 560.

Thanks again everyone for you help, its truly appreciated!
Jason

Its good that you are getting somewhere with step change. In the grand scheme of things a DMP is prob the less of all the evils when it comes to paying off the debt and not nailing your credit file too hard. I would 100% keep a spreadsheet of the expenses and outgoings regardless of how bad it might feel to see it all going out but it helps you to keep track of whats going where. I check my bills off on my spreadsheet as they go out so i know its paid and accounted for. You could also project the spreadsheet forward to the point where some of the debts drop off so as you update it you can see yourself getting closer to the point where a certain debt is cleared and the disposable income goes up. Use it as a motivator to work towards it.

Regarding the ombudsman suggestion, its a bit of a hail mary approach and if you are in a DMP that all parties have agreed to then it might ruin that relationship with that lender so just be mindful of that. When i helped my friend with the predatory lending claim, they had just gotten out of the borrowing loop with payday loans and they went after them as a punitive act so it wasnt as if they could do anything in retaliation. After all this is over and they cant retaliate it might be worth yoloing some claims to see if you can reclaim something back.

Regarding the £250 a month you have left for food and fuel etc. How much is your grocery shopping per week and whats your cooking ability like? You are right £250 a month for things like that doesnt go far.

You've taken a positive step to turn things around so well done and keep it up. Rooting for you and the time you can post "Im debt free"

 

[Feek]

You could also project the spreadsheet forward to the point where some of the debts drop off so as you update it you can see yourself getting closer to the point where a certain debt is cleared and the disposable income goes up. Use it as a motivator to work towards it.

It doesn't work like that when you're in a DMP - The payments you make towards the plan are split between everyone you owe money to and it's all calculated so that they end at the same time. Your payment into the DMP doesn't gradually decrease, it stays the same and then stops when you clear them all at the same time.

Agreed about not rocking the boat with the ombudsman.

@Jasoncmor When you set up the DMP, you have to be realistic about how much money you leave yourself for food, fuel, etc. Don't try and pay too much into the DMP each month that you can't survive. If you do that, you'll get to a stage where you won't be able to afford the DMP and then it all falls apart.

They'd rather take less from you so that you can actually live and pay slightly less out to each creditor. It means the plan will take longer to pay off but the plan MUST be affordable.

Also, get everything you owe on the DMP, including the loan and the credit cards because then any interest will be frozen and you'll be saving that cost.

 

[Zenduri]

It doesn't work like that when you're in a DMP - The payments you make towards the plan are split between everyone you owe money to and it's all calculated so that they end at the same time. Your payment into the DMP doesn't gradually decrease, it stays the same and then stops when you clear them all at the same time.

Yeah im aware i was talking more about what i do/have done in the past but my wording was poor.

I 100% agree about getting all the debt under the DMP to freeze the interest especially the 19.9% on the credit cards which will be murder

 

[V F]

stop buying bidets and gucci belts for a start

 

[caff]

Thank you to everyone for your replies and suggestions, it really is much appreciated.

I don't have any advice beyond what has been stated before - it is the best advice.

But I wanted to say - much respect for trying - stick with it, focus on incoming vs. outgoings. Get the balance right if you can. If you can't and it looks desperate, don't be afraid to look for more help e.g. food banks or other charities.

 

[Haggisman]

@Jasoncmor When you set up the DMP, you have to be realistic about how much money you leave yourself for food, fuel, etc. Don't try and pay too much into the DMP each month that you can't survive. If you do that, you'll get to a stage where you won't be able to afford the DMP and then it all falls apart.

100% this. Don't fall into the trap of trying to pay it off as quickly as possible (tempting as that may be). If you leave yourself with nothing spare, then it just takes one unexpected bill/payment to have you looking at borrowing to cover it and ending up back in the debt spiral.

 

[subbytna]

I added a few "bills" to the amount I had left over when Stepchange asked about my budget. I kept the "bills" money and put it into the credit union account. At the time the CU only had accounts where they gave you a log book so it was actually a pain in the rear to go and withdraw it. However I viewed the CU payment as a "debt" I had to pay, even though it was savings. I did end up having to get a new fridge and was able to withdraw the money to buy a new fridge, whilst not breaching my repayment plan with Stepchange. Don't be shy in creating some "creative accounting" to engineer a few quid for emergencies for you. Good luck

 

[Jasoncmor]

Thanks again everyone for your support and advice, I really am greatful!

Providing you keep up your payments to Stepchange, you’ll be absolutely fine. Just don’t miss a payment.

Thank you for the reassurance!
All being well with the letters Step Change sent out to all my creditors, they will accept the offer and I can get started on dealing with this mess!

No advice over what has always been written - just a note of praise for acknowledging the issue and moving to do something about it by asking for help. That's the hardest step with any problem and deserves respect.

Thank you, I really appreciate it!
I've been stuck in this trap for too long, I guess I just felt it was time to actively do something about it.

Its good that you are getting somewhere with step change. In the grand scheme of things a DMP is prob the less of all the evils when it comes to paying off the debt and not nailing your credit file too hard. I would 100% keep a spreadsheet of the expenses and outgoings regardless of how bad it might feel to see it all going out but it helps you to keep track of whats going where. I check my bills off on my spreadsheet as they go out so i know its paid and accounted for. You could also project the spreadsheet forward to the point where some of the debts drop off so as you update it you can see yourself getting closer to the point where a certain debt is cleared and the disposable income goes up. Use it as a motivator to work towards it.

Regarding the ombudsman suggestion, its a bit of a hail mary approach and if you are in a DMP that all parties have agreed to then it might ruin that relationship with that lender so just be mindful of that. When i helped my friend with the predatory lending claim, they had just gotten out of the borrowing loop with payday loans and they went after them as a punitive act so it wasnt as if they could do anything in retaliation. After all this is over and they cant retaliate it might be worth yoloing some claims to see if you can reclaim something back.

Regarding the £250 a month you have left for food and fuel etc. How much is your grocery shopping per week and whats your cooking ability like? You are right £250 a month for things like that doesnt go far.

You've taken a positive step to turn things around so well done and keep it up. Rooting for you and the time you can post "Im debt free"

Thank you, I really appreciate your message!
I think you're right regarding the ombudsman suggestion, think its best to get things under control and maybe just forget about what happened and learn from my mistakes.
We spend roughly £60 a week on food for 2 of us, sometimes we buy extra bits to stick in the freezer, for example a big pack of chicken, portioned up and defrosted when needed, so some times it can be a bit less. My cooking skills are pretty good to be fair, I do need more inspiration though to try different ideas lol.
I will be continuing my spread sheets and watching where I can either cut back on and watch where money is going, if all my creditors accept the offer than SC has put forth, then its going to put me in a really good position.

I don't have any advice beyond what has been stated before - it is the best advice.

But I wanted to say - much respect for trying - stick with it, focus on incoming vs. outgoings. Get the balance right if you can. If you can't and it looks desperate, don't be afraid to look for more help e.g. food banks or other charities.

Thank you, I really appreciate it!

100% this. Don't fall into the trap of trying to pay it off as quickly as possible (tempting as that may be). If you leave yourself with nothing spare, then it just takes one unexpected bill/payment to have you looking at borrowing to cover it and ending up back in the debt spiral.

Thats always been my problem, ive been paying all my debts and never been able to save any money for a rainy day, but, if the DMP goes to plan, then its going to put me in a good position to get back on top of things and save also!

I added a few "bills" to the amount I had left over when Stepchange asked about my budget. I kept the "bills" money and put it into the credit union account. At the time the CU only had accounts where they gave you a log book so it was actually a pain in the rear to go and withdraw it. However I viewed the CU payment as a "debt" I had to pay, even though it was savings. I did end up having to get a new fridge and was able to withdraw the money to buy a new fridge, whilst not breaching my repayment plan with Stepchange. Don't be shy in creating some "creative accounting" to engineer a few quid for emergencies for you. Good luck

Good idea, thank you!