where / How to start?

[vec]

Hi All,

was hoping someone might be able to give me a little advice. It really feels like I am starting to sink in debt at the moment and I don't know what steps I need to take to start turning things round.

I have a good income (though my earnings have dropped by about 30% as bonuses are no longer paid) the problem I have is my bills each month are now more than my total monthly pay by £80 Every single bill in the house comes out of my wages. My partner also works (part time) so we are currently using her wages to cover the living costs / food / fuel etc but we are running out of money every month within a couple of weeks. The past two months the only way I have been able to afford to live is start cancelling DD then when my partner gets paid pay them bills out of her wages but its literally leaving us £150 - £200 to live on which I know seems a good amount but my commute to work is upwards of 500 miles per week so that's pretty much all our expandable income gone.

I have literally logged every single expenditure we have and done everything to reduce the payments, I have got rid of all luxury items such as SKY, have cancelled contract phones etc.

I have a lot of debt from credit cards / store cards / loans etc which is why my outgoings are so high. All the bills are being paid each month currently but I literally am at a point now where I need to say enough is enough and accept I am going to have to look at what options I have around debt management as we simply can not afford to live at the moment.

My partner is doing everything she can do trying to get as much overtime etc but we also have 2 young children as are restricted with child care etc as we are relying on family to mind the kids.

I have tried to engage in conversation with two of the companies I have credit cards with and both of them pretty much said tough one of them saying they cant even pass me through to the team that deals with payment plans until I default on at least 2 payments.

Sorry for the long post I just want to highlight that I am genuinely trying to get on top of this, I am not trying to get the debt taken away as I have spent the money so need to pay it back.

My question is, what's the first steps to take in a situation like this? it seems silly to have to let myself get into large amounts of arrears before being able to set up payment plans?

Thanks

Vec

[plum44]

Hi Vec
Realistically you are running out of options and I would recommend you go on the Stepchange website for advice.
I was in your position maxed out on cards and in 34k in debt. I went on a DMP in 2010 and have never looked back. I am now completely debt free and live within my means and without credit.
It can be done but you need to have your light bulb moment where you realise you need to make a drastic lifestyle change.
good luck

[Growurown]

Hello vec
I would second the advice from plum44. Go onto step changes website and go through their debt remedy tool. Put a realistic amount of money in for your bills and food etc. and don't scrimp too much otherwise your life will be misery. It sounds as though a debt management plan might be an option but you need to take professional advice.

[Bettingmad]

Not wanting to knock Stepchange in any way, if considering entering a DMP I would also speak with Payplan. The reason I say this as depending on income levels and expenditure one may be better than the other.
I have a reasonable income and I found I have a greater allowance with Payplan than when I went through the Stepchange plan. Yes I may remain on a DMP slightly longer however my 6yrs will be a lot more comfortable.
I would suggest compiling a SOA for people here as you will get better advice then and it may be that you won't need to go down the route of a DMP.
Link here and format results for MSE http://www.stoozing.com/msoc/soacalc.php
Have you made a claim for PPI?

Also read through the following if you haven't already done so

http://www.moneysavingexpert.com/loans/debt-help-plan

[Bettingmad]

With regard to getting into lot's of areas before going through to a payment plan, unfortunately by going onto a payment plan you will be building arrears regardless. Your credit rating will also be shot to pieces for 6 months.

I went through all the emotions you are finding yourself in, always made payments on time and didn't want to fall behind. Kept robbing Peter to pay Paul. I shousld have gone onto my DMP a year before I actually did and it was the most hoorendously stressful year of my life trying to manage an increasing debt and higher payments.

Now I couldn't give a hoot about my creditors as they only look to bleed you try. Freedom is gained when you stop worrying about what your creditors might think when you acknowledge you have a problem

Good luck with which ever way you go..

[Growurown]

Good suggestions Bettingmad. Step change might not be for everyone and it is a good idea to consider all your options. Like you I didn't want to have to manage on a really tight budget so I included costs for things I don't do such as smoking. I find the food budget on Step change really tight, so this helps out a lot.

The most important thing is that if you decide on a DMP Vec is to use one of the free providers and not a company who wants payments because they are taking money from you that could be going towards your debts.

[Bettingmad]

Originally Posted by Growurown

Good suggestions Bettingmad. Step change might not be for everyone and it is a good idea to consider all your options. Like you I didn't want to have to manage on a really tight budget so I included costs for things I don't do such as smoking. I find the food budget on Step change really tight, so this helps out a lot.

The most important thing is that if you decide on a DMP Vec is to use one of the free providers and not a company who wants payments because they are taking money from you that could be going towards your debts.

I remember that my food allowance was a lot less with the Stepchange remedy. The other bit of advice I would give is if you go dwn the route of a DMP don't be in a rush to start making full payment. Make a couple of token payments and use the savings for an emergency fund.

[mustmakealist]

If you have cc debts could you look at getting a 0% deal on any of them or on another cc? Just a thought.

[plum44]

You have to get yourself out of the 0% credit card cycle...the deal eventually runs out and then what?
I would seek help so that you can find a path to live without credit.

[chevalier]

If you post your SOA via the link above, we might be able to make some suggestions on cutting back. Other than that do you have anything you can sell to help you balance the books?
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