Working hard but still in debt
Comments
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Debt is just maths - you can graft as hard as you like, but if you've got more going out than comes in, you'll get into debt. Equally, a layabout who earns more than they spend won't.
Therefore you've got to take the mathematical approach to getting out of debt: a statement of affairs (SoA) to see what's coming in and going out, what it's gong out on, and the interest rates associated with each loan. Cutting back on the spending (sky tv and mobile phones are good places to start) and snowballing the debts (ie paying off the most expensive ones first) and you'll get there - it won't necessarily be fast or easy, but it is a mathematical certainty.0 -
Gunther_Golf wrote: »
The consolidation loan took a lot of pressure off my shoulders and has been replaced with a much more healthy burden of responsibility.
I'm sure there are countless cases of folk consolidating debts then racking them back up. If you change your mindset and stay true to yourself then it can be a solution.
There is an exception to every rule of course.
I'm glad it worked well for you, but as you say, it takes discipline, and the nessessary will to change your habits.
Not everyone can do this, most do not "change there mindset".
One poster from a few weeks ago asking a similar question wasn't prepared to change there ways and was going to go for consolidation anyway, no doubt they will be back again in a couple of years with twice the debt !!
Usually the only winners in the consolidation buisness are the banks, but, as I said, I'm glad it worked out for you.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 -
Well done for doing so well at work! Post up a SOA like the other posters have said, it may help to identify if the minimum payments can be made or if you do actually need to find another route.
Usually, the easiest and quickest way to get out of debt/increase wealth, is to reduce outgoings and smash the leftover funds into your debt.
A couple of things from your post have jumped out at me, I have put them in bold below. This may be a case of projection but you sound the same as me when I earned good money.
1.> I blamed it on a silly decision I was guided to make (in your case 10+ years ago) in actual fact, I was still overspending. The initial silly decision loan from 11 years ago was paid off, it was all the new debt that was causing me trouble.
2.> I came from a modest background and my salary exceeded mine and my own families expectations. This lead me to spending much more than I really should have because hey - 'Im wealthy':j My family thought I was too!!
We were always skint growing up, never learned how to manage money because there never was any! However, even the bank thought i was wealthy and gave me a consolidation and new car loan that equaled my gross annual earnings.
BTW - that consolidation loan didnt really solve the problem. Like most others, I did get more debt, I carried on using credit to buy stuff I didnt need and couldnt actually afford (but had the credit available to do it) - that was the actual problem.
I wouldnt recommend a consolidation loan. Definately post an SOA. Commit to spending a less than you earn and using your good hard work to buy yourself some security and breathing space rather than stuff/nights out - I know, Im making assumptions here.StrugglingWithDebt87 wrote: »Hi,
I'm almost 30 and drowning in debt. At the age of 19 I took on car finance (at the advice of my father) which absorbed half of my £650 full time wages every month.
Since then I've been going through an endless struggle to keep up with debts which have now spiralled out of control.
I have an excellent job and am about to be promoted for the second time in 12 months. I earn a good salary but I'm still not able to keep up to date with payments.
Due to my occupation I'm unable to be declared bankrupt or go for an IVA and I just don't know what to do.
My credit rating is through the floor. The annoying thing is, if I were able to get a low interest loan, I could pay off the debt and easily keep up the payments, now that my salary is at such a good level.
My current debt total is around £25,000 across credit cards, overdrafts and payday loans.
The only good thing that being in debt has done for me is make me work hard enough to exceed mine and my families expectations (having come from a modest background and finishing education after college studies).
All I want to do is get debt free so I can buy my first home. Any advice would be so gratefully received.
Thank you0 -
Will do today and post. Thank you0
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This is fantastic. I've just had a look at the website and definitely think I can go some distance with attempting to reclaim from payday lenders.
Thanks!0 -
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 2460
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 100
Total monthly income.................... 2560
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 270
Rent.................................... 400
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. ......................... 150
Clothing................................ 70
Petrol/diesel........................... 30
Road tax................................ 11.5
Car Insurance........................... 60
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 48
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 40
Entertainment........................... 100
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 1429.5
Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 13000
Other assets............................ 0
Total Assets............................ 13000
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 10400....(270)......3.2
Total secured & HP debts...... 10400.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Aqua...........................5400......180.......40
Vanquis........................2500......180.......40
Natwest........................2500......50........20
Lending stream.................700.......200.......700
Quickquid .....................1700......97........0
Wonga..........................1000......396.......1900
Very account ..................7200......400.......37
New day........................700.......25........30
Very...........................200.......10........35
Capital one....................200.......10........35
Barclaycard....................1600......25........35
RBS ...........................600.......14........20
Total unsecured debts..........24300.....1587......-
Monthly Budget Summary
Total monthly income.................... 2,560
Expenses (including HP & secured debts). 1,429.5
Available for debt repayments........... 1,130.5
Monthly UNsecured debt repayments....... 1,587
Amount short for making debt repayments. -456.5
Personal Balance Sheet Summary
Total assets (things you own)........... 13,000
Total HP & Secured debt................. -10,400
Total Unsecured debt.................... -24,300
Net Assets.............................. -21,700
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, usin0 -
Well done
With over £1000 per month available to your debts, a dmp will see you debt-free in 2 years0 -
Thanks for your response.
How badly does a DMP affect my future of buying a house? I know I'm not going to be able to think about getting one until I'm debt free anyway, but how bad does a DMP look on my credit file, even once it's settled?
Also, I've read things about CCJ's being received even when you're in a DMP with companies, is this true?
Thanks0 -
A dmp does not directly produce a mark on your file but if the monthly payment is less than the contractual amount (and you are £450 per month short of doing this) then they may mark it with 'arrangement to pay' or, after 3-6 months, a default.
The credit file entry stays until six years after the account is defaulted or settled, whichever happens sooner.
Creditors can take court action as a dmp is not a formal solution like a DRO, IVA or bankruptcy, but this does not often happen.
Back in January I wroteYou could try a complaint about the payday loans
http://forums.moneysavingexpert.com/showpost.php?p=71872763&postcount=3
it's probably going to be a debt management plan for the rest as you've effectively ruled out IVA, bankruptcy and DRO. You will need a 'clean' bank account for your income that isn't connected to any of your debts.
Did you have a go at that as, if successful, it would change the picture and you might not need a dmp at all.0 -
Yes, that was a very useful thread so thank you.
I submitted complaints to all PDL companies. I've so far had a rejection from QuickQuid with a goodwill offer of £350, that one's been submitted to the FOS 2 weeks ago.
Wonga and Sunny's 8 week points are approaching this week so will refer those to the FOS if I haven't had anything reasonable back.
In total I'm looking at £13,000+ paid out in interest alone across these 3 lenders .... but having read a number of online forums about this, it looks like I have a road of 6+ months ahead of me for this as the FOS are stacked with complaints and it doesn't appear that many lenders make reasonable offers without involvement from the FOS.0
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