Please help my debt situation/spiral
kpbubbly
Posts: 6 Forumite
Hello everyone, my name is Kevin, 24, live and work in London.
I have gotten myself into a payday debt spiral since I was 18 and realised a while back how stupid it was for me to borrow from these but I am having alot of trouble trying to pay it back myself and only found out I am paying out more then I am earning until I do not have enough this month! so I am searching for any advice/help.
A few things about my situation:
Thank you in advance! :beer:
I have gotten myself into a payday debt spiral since I was 18 and realised a while back how stupid it was for me to borrow from these but I am having alot of trouble trying to pay it back myself and only found out I am paying out more then I am earning until I do not have enough this month! so I am searching for any advice/help.
A few things about my situation:
-
I am currently on a debt management repayment plan with all payday loans consisting of £1 payments and some at a higher rate to try and repay it back over time...
- I have a credit union loan of £4000, however in mid-november I am eligible to borrow up to £20,000 at 1% APR. This seems very promising for me, but I would need to PAY BACK the £4k loan i initially borrwed and get an extra £4k in my balance to borrow x5 the amount (maximum £20k)
- I am currently making minimum repayments to my credit cards and the car hire purchase will have £1500 left to pay back (5 more months). I cycle to work and drive to Norwich on the weekends to work with my girlfriend to earn another £45 but to be honest it just goes to seeing her and paying for the fuel.
Thank you in advance! :beer:
0
Comments
-
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 5
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1600
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 511.4
Rent.................................... 758
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 320
Clothing................................ 20
Petrol/diesel........................... 60
Road tax................................ 11
Car Insurance........................... 100
Car maintenance (including MOT)......... 10
Car parking............................. 10
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...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 15
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1895.4
Assets
Cash.................................... 30
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3500
Other assets............................ 0
Total Assets............................ 3530
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 3780.....(220)......26.8
Hire Purchase (HP) debt ...... 1552.....(291.4)....21
Total secured & HP debts...... 5332......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclay........................400.......11........21.9
Capital One....................200.......6.........34.9
Aqua...........................254.......10........44.9
Vodafone.......................1440......60........0
Satsuma........................1000......1.........0
PaydayUK.......................327.......48.5......0
Wonga..........................343.3.....50........0
MyJar..........................1086......1.........0
Safetynetcredit................848.......80........0
Luma...........................200.......4.........35.9
Total unsecured debts..........6098.3....271.5.....-
Monthly Budget Summary
Total monthly income.................... 1,600
Expenses (including HP & secured debts). 1,895.4
Available for debt repayments........... -295.4
Monthly UNsecured debt repayments....... 271.5
Amount short for making debt repayments. -566.9
Personal Balance Sheet Summary
Total assets (things you own)........... 3,530
Total HP & Secured debt................. -5,332
Total Unsecured debt.................... -6,098.3
Net Assets.............................. -7,900.30 -
Hi Kevin - well done for facing up to things and looking to get yourself sorted.
comments on your SOA in red as usual.Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 5 You need to explain what's going on here - 5 adults in the household and you showing as the only earner?
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1600 does this include the £45 you earn when you go to see your girlfriend?
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1600
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 511.4 Is this the car? Are you at a stage on this where you can hand it back?
Rent.................................... 758 Why does nobody else contribute to this?
Management charge (leasehold property).. 0
Council tax............................. 0 Why zero on so many of the bills? If you're sharing with friends does it work out fairly that you're paying the rent (which is reasonably high)
and they pay the remainder? Have you checked how much everything else totals to if this is the situation?
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 60 Are you out of contract? If so get shot of this immediately - it's extortionate!
TV Licence.............................. 0 You don't watch any TV at all? not even on catch-up? or does someone else pay this?
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 320 How many people is this for?
Clothing................................ 20
Petrol/diesel........................... 60
Road tax................................ 11
Car Insurance........................... 100 This reallyu is the nail on the coffin for the car. You don;t need it for getting to and from work - and at the moment it's costing you somewhere about £8,000 a year, not including any maintenance costs. In contrast, the £45 a week you earn while in Norwich (the only time you need the car, apparently) is earning you less than £2,500 a Year.
Car maintenance (including MOT)......... 10 This is incredibly unrealistic,
even allowing that the car is presumably not needing MoT tests yet?
Car parking............................. 10
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...................... 0 You need something in here - getthis sorted as a matter of urgency - if you live in some form of house share though it will need to be a bit of a specialist policy, possibly.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 You don't buy anything for your girlfriend, ever?
Haircuts................................ 15
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1895.4
Assets
Cash.................................... 30
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3500
Other assets............................ 0
Total Assets............................ 3530
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 3780.....(220)......26.8
Hire Purchase (HP) debt ...... 1552.....(291.4)....21
Total secured & HP debts...... 5332......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclay........................400.......11........21.9
Capital One....................200.......6.........34.9
Aqua...........................254.......10........44.9
Vodafone.......................1440......60........0
Satsuma........................1000......1.........0
PaydayUK.......................327.......48.5......0
Wonga..........................343.3.....50........0
MyJar..........................1086......1.........0
Safetynetcredit................848.......80........0
Luma...........................200.......4.........35.9
Total unsecured debts..........6098.3....271.5.....-
Monthly Budget Summary
Total monthly income.................... 1,600
Expenses (including HP & secured debts). 1,895.4
Available for debt repayments........... -295.4
Monthly UNsecured debt repayments....... 271.5
Amount short for making debt repayments. -566.9
Personal Balance Sheet Summary
Total assets (things you own)........... 3,530
Total HP & Secured debt................. -5,332
Total Unsecured debt.................... -6,098.3
Net Assets.............................. -7,900.3
OK - there is a lot of unanswered questions around the above which makes it difficult to clearly see the picture - but I will say this. Getting shot of that car is absolutely key to you starting to turn things around. On your income, and with your rent taking up pretty much half of that income anyway, what on EARTH possessed you to think that you could afford over £500 a month on buying a car? Check out the agreement that you're in- hopefully it will let you just hand the car back with no penalty, but read it carefully first to make sure.
I think you need to explain a bit more fully about your living arrangements so we can see what the situation is there - on the face of it if that grocery spend is just for you then there's another £200 + a month there that can be freed up but if it's for more adults then that may not be possible.
You've done the right thing getting interest frozen on the payday loans but you desperately need to get yourself into a position where you have a budget that balances inn order to start making headway on clearing things.🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00
Balance as at 31/12/23 = £112,000.00SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0 -
Forget the loan for the time being and follow the advice already posted.
Can your girlfriend not take a weekend off work to visit you rather than the other way round ?0 -
Don’t borrow any more money.
I’ll say that again……………
Don’t borrow any more money !!!
Consolidation loans are usually the next/last step to bankruptcy, they rarely work, and just increase your debt.
Can’t really tell much from the SOA as it makes no sense, but continuing with the DMP for now seems reasonable, explore other options to tackle the debt, don’t resort to further borrowing.
Edit.
Good pickup on the payday loan reclaiming by Fatbelly, further info here :
https://debtcamel.co.uk/payday-loan-refunds/I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
Actually if you've got 2.5k left to pay on the car hp, and it will then be worth 3.5k, I'd keep going with it for 5 months
But i'd stop paying the payday lenders and see what I could reclaim from them
http://forums.moneysavingexpert.com/showthread.php?t=52891500 -
The reason you are in debt is due to high rent and unaffordable car costs.
You have not elaborated on your living situation but I guess it is a shared house with bills included. If not as EH says you need to explain why only you out of 5 adults are paying rent. The groceries figure is way too high for one person.
The car though is completely unaffordable. If you can give it back at this point I would. Forget getting a loan to pay off the debt. It will make your situation much worse. You cannot afford the payday loans so stop paying them and check out template letters. Fat belly has given you the link. Is that Vodafone bill for your mobile? It again is unaffordable so I think defaulting on that too would not be the worst thing as presumably your credit rating is shot anyway.
You need to stop the trip to Norwich if that is the only reason you keep the car. Find cheaper ways to see your girlfriend.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0 -
The reclaim on the payday loans is a good point - you certainly look like someone who they REALLY shouldn't have been lending to - certainly recently!🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00
Balance as at 31/12/23 = £112,000.00SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0 -
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 5 You need to explain what's going on here - 5 adults in the household and you showing as the only earner?
Yes, I am living in a shared household.
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1600 does this include the £45 you earn when you go to see your girlfriend?
Yes, this includes the £45
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1600
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 511.4 Is this the car? Are you at a stage on this where you can hand it back?
I got this car 2 years back when I was debt free, living in my parents house and needed a car to commute 50miles there and back for my previous job. I moved to London 6 months ago which is why I still have the car but to be honest I believe it is best to just keep it as there is only 5 months left and once finished I could sell it for £3500? rather then hand it back now when there is only £1500 right?
Rent.................................... 758 Why does nobody else contribute to this?
I am a private tenant.
Management charge (leasehold property).. 0
Council tax............................. 0 Why zero on so many of the bills? If you're sharing with friends does it work out fairly that you're paying the rent (which is reasonably high)
and they pay the remainder? Have you checked how much everything else totals to if this is the situation?
Council tax and utility bills are included in the rental price.
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 60 Are you out of contract? If so get shot of this immediately - it's extortionate!
This is contract I took out a year ago. There is still one year left. This was before I was in debt.
TV Licence.............................. 0 You don't watch any TV at all? not even on catch-up? or does someone else pay this?
Nope
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 320 How many people is this for?
This is for me, I just estimated £10 a day for food, so around £2 breakfast, £3 lunch, £5 dinner/late dinner which I find low as I try to eat 3000 calories a day (gym)
Clothing................................ 20 (averaged over the year)
Petrol/diesel........................... 60
Road tax................................ 11
Car Insurance........................... 100 This reallyu is the nail on the coffin for the car. You don;t need it for getting to and from work - and at the moment it's costing you somewhere about £8,000 a year, not including any maintenance costs. In contrast, the £45 a week you earn while in Norwich (the only time you need the car, apparently) is earning you less than £2,500 a Year.
Yes I would like to get rid of the car to be honest but as there is only £1500 left to pay I think it will be best to carry on with this payment the next 5 months and then sell it at the market price £3500-£4000? I had this before I moved to London which is why I had it in the first place (commuting motorway 50 miles each way and was perfect) but I got offered a good job progression in London and went for it.
Car maintenance (including MOT)......... 10 This is incredibly unrealistic,
even allowing that the car is presumably not needing MoT tests yet?
Sorry I just seen MOT car maintenance I guess £50 a month?
Car parking............................. 10
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...................... 0 You need something in here - getthis sorted as a matter of urgency - if you live in some form of house share though it will need to be a bit of a specialist policy, possibly.
Thanks, I will research this tonight.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 You don't buy anything for your girlfriend, ever?
Haha haven't spent a birthday with her yet but yes it is coming up actually !
I would say £50, I've just arranged a gathering which she will prefer to be honest.
Haircuts................................ 15
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1895.4
Assets
Cash.................................... 30
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3500
Other assets............................ 0
Total Assets............................ 3530
Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 3780.....(220)......26.8
Hire Purchase (HP) debt ...... 1552.....(291.4)....21
Total secured & HP debts...... 5332......-.........-
Unsecured Debts
Description....................Debt......Monthly.. .APR
Barclay........................400.......11....... .21.9
Capital One....................200.......6.........34.9
Aqua...........................254.......10....... .44.9
Vodafone.......................1440......60....... .0
Satsuma........................1000......1........ .0
PaydayUK.......................327.......48.5..... .0
Wonga..........................343.3.....50....... .0
MyJar..........................1086......1........ .0
Safetynetcredit................848.......80....... .0
Luma...........................200.......4........ .35.9
Total unsecured debts..........6098.3....271.5.....-
Monthly Budget Summary
Total monthly income.................... 1,600
Expenses (including HP & secured debts). 1,895.4
Available for debt repayments........... -295.4
Monthly UNsecured debt repayments....... 271.5
Amount short for making debt repayments. -566.9
Personal Balance Sheet Summary
Total assets (things you own)........... 3,530
Total HP & Secured debt................. -5,332
Total Unsecured debt.................... -6,098.3
Net Assets.............................. -7,900.30 -
Thank you for the fatbelly option. I will read that tonight after work, I believe I shouldn't have been eligible for £1000 loans even after I was on a debt repayment plan on multiple payday loans. I was quite desperate at the time because I had a problem with my workplace when they offered me the job and had an issue with my working visa.
Has anyone had any experience in how this has worked out for them?0 -
At the current time, you're insolvent until that car loan is cleared.
After that? Look for ways to reduce your food bill, because £10 a day for a single person is ridiculously high and you can feed a family of 3 with that easily.
Do not look at further borrowing, and look at those PDLs as a matter of urgency.
Once you've paid the car off, either look to sell it, or budget around it. Do not resort to PDL companies ever again, try to build an emergency fund, and you'll be OK.
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
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