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    • StrugglingWithDebt87
    • By StrugglingWithDebt87 5th Jan 17, 11:19 PM
    • 12Posts
    • 15Thanks
    StrugglingWithDebt87
    Working hard but still in debt
    • #1
    • 5th Jan 17, 11:19 PM
    Working hard but still in debt 5th Jan 17 at 11:19 PM
    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 you
Page 2
    • StrugglingWithDebt87
    • By StrugglingWithDebt87 11th Mar 17, 7:57 PM
    • 12 Posts
    • 15 Thanks
    StrugglingWithDebt87
    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.
    • moneyfacts
    • By moneyfacts 11th Mar 17, 8:37 PM
    • 67 Posts
    • 109 Thanks
    moneyfacts
    Have you thought about selling your £13000 car and buy one for £2k? That's a big part of your problem solved.

    Also you need to learn to budget and look after your money better, so you don't waste a penny more. Well done for realising you have a problem
    • StrugglingWithDebt87
    • By StrugglingWithDebt87 11th Mar 17, 8:59 PM
    • 12 Posts
    • 15 Thanks
    StrugglingWithDebt87
    Yes, I'm planning on selling it to clear the remaining HP debt and then get a cheaper car. That will also reduce my outgo by £270 per month as that's my current HP.

    I also need to write out a budget so I have something formal to follow.
    • allthe7s
    • By allthe7s 11th Mar 17, 9:11 PM
    • 71 Posts
    • 270 Thanks
    allthe7s
    Haircuts, entertainment, gifts and holiday fund all need to be drastically lowered. Car insurance is high for your age.

    Others will be along soon with more suggestions
    Next £615 £495 £436.23 Santander1 £297 £279 £261.95 Santander2 £84 £79 £75.11

    Savings Goal £163.67/£3000 by Dec 17
    • allthe7s
    • By allthe7s 11th Mar 17, 9:15 PM
    • 71 Posts
    • 270 Thanks
    allthe7s
    I really recommend doing the free trial month of ynab its a website and app budgetting tool. Im 3 weeks in to my free trial and can already say it has changed my (financial) life. I was so sceptical when others said this to me but it is so so true!
    Next £615 £495 £436.23 Santander1 £297 £279 £261.95 Santander2 £84 £79 £75.11

    Savings Goal £163.67/£3000 by Dec 17
    • StrugglingWithDebt87
    • By StrugglingWithDebt87 11th Mar 17, 9:18 PM
    • 12 Posts
    • 15 Thanks
    StrugglingWithDebt87
    Haircut is £40 every 12 weeks. I should probably have put £13pm to average out. I live in central Bristol and review my insurance every year so very unlikely to be able to save any money on that.

    Thanks for the budgeting app suggestion. I'll check it out
    • LabRatty
    • By LabRatty 11th Mar 17, 9:20 PM
    • 69 Posts
    • 98 Thanks
    LabRatty
    Hi,
    The advantage of a DMP is that your interest would be frozen and all your payments made would be reducing the existing debt rather than just a fraction of them.
    The disadvantage is that your credit file would be trashed for six years, until the defaults drop off, but you say that it's already hammered, so maybe this is not such a problem.
    If you went for a DMP and paid the debt down ASAP, you could use the remaining time before your defaults disappear to save a deposit for a home, so no time would be lost plus you would have huge motivation. Others can advise how to trigger defaults as early as possible so the clock is ticking on clearing up your credit history.
    All the best,
    LR
    Save In 2017 #109
    • moneyfacts
    • By moneyfacts 11th Mar 17, 11:03 PM
    • 67 Posts
    • 109 Thanks
    moneyfacts
    It sounds like you have progressed a lot, I wouldn't worry too much about credit scores as they soon repair and if you are forced to rent for an extra year, just use that time to save more of a deposit. For now, just obsessively clear that debt.
    • fatbelly
    • By fatbelly 12th Mar 17, 7:00 AM
    • 10,831 Posts
    • 8,093 Thanks
    fatbelly
    So with your debts

    Lending stream.................700.......200.......700
    Quickquid .....................1700......97........0
    Wonga..........................1000......396...... .1900

    go claims for

    QuickQuid - claim for £6,361.
    Wonga - claim for £5,375.
    Sunny - claim for approx £1,260.

    Does Sunny = Lending Stream?

    So there is a scenario where these get repaid. Taking these out of the soa would mean you can afford the contractual payments on the other debts.

    However, just about all your debt is high APR. I think I would bite the bullet, go for a dmp (maybe self-managed) and use any lump sums to try full & final settlements when they arrive. As the others have said, you would then start saving for a deposit, and on your income, a house purchase is realistic in a few years.
    • Fireflyaway
    • By Fireflyaway 12th Mar 17, 9:20 AM
    • 988 Posts
    • 970 Thanks
    Fireflyaway
    You have a great income so you could work out an arrangement with your creditors yourself. It might depend on how much you are willing to dent your credit history? I decided to pay minimum on most things and tackle the smallest stuff first. Check out Dave Ramsey snowball method. It kept me feeling positive and enthusiastic. The result was 2 accounts defaulted but to be honest my credit score has still improved over time. For me , the hit was worth the breathing space and it was the first time in years i didn't have to take out another payday loan just to pay the bills! You have plenty of time to buy a place, so why not pay off the debt then save hardcore to get a really juicy deposit whilst you wait for the credit file to repair?
    Also how far are you through the car finance? Could you hand the car back? Once I was 50% of the way through that's what I did. On paper my current car sounds rubbish (12 year old astra) but I swear its the most reliable car I ever had and I have no payments on it.
    • StrugglingWithDebt87
    • By StrugglingWithDebt87 12th Mar 17, 10:41 AM
    • 12 Posts
    • 15 Thanks
    StrugglingWithDebt87
    Thank you. I'll check out Dave Ramsey.

    The car finance - I have a balloon payment due at the end of April which is much lower than the car is worth. My boyfriend is going to buy the car for me (£9,800), so I can sell at the realistic value (£13,000), which means I'll have £3k - £1,500 to buy a new car + £1,500 towards debt repayments plus £270 more per month of my income which won't be going on car repayments.

    What's the benefit of self managing a DMP rather than going to step change? I've had mixed dealings with my creditors. Some extremely helpful - QQ and HSBC. Others - Very, Aqua not so. This puts me off. Although at the moment I'm getting 5+ calls a day so probably over sensitive.

    Fatbelly - lending stream is a different provider to sunny. I've only just taken on something with lending stream so don't think it's worth going down the affordability route .... although in hindsight I clearly can't afford it.

    What does a full and final settlement mean?
    • fatbelly
    • By fatbelly 13th Mar 17, 9:07 PM
    • 10,831 Posts
    • 8,093 Thanks
    fatbelly
    A full & final (F&F) settlement is where you offer a lump sum of less than 100% of the debt and the creditor agrees to accept this and not pursue the remaining amount.

    There is a factsheet here:

    https://www.nationaldebtline.org/EW/factsheets/Pages/fullandfinalsettlementoffers/lumpsumoffers.aspx

    The advantage of doing a self-managed dmp rather than using stepchange/payplan is that you can make F&F offers as it suits you.

    Regarding the telephone calls, you can and probably should request that everything is done in writing. There are some rules you can quote. But it may be easier to change your phone number.
    • Muppetmagic
    • By Muppetmagic 13th Mar 17, 9:23 PM
    • 1 Posts
    • 1 Thanks
    Muppetmagic
    Hi i spoke with a debt advisor who advised me of my options, I used a company called Faith Financial, they will take all your details, including ur income and ur debts and advise ur options, there are 5 main options for dealing with debt.

    1. Bankrupsy
    2. Informal Agreement
    3. Consolidation Loan
    4. Debt management ( up to £5000 of debt only)
    5. IVA

    I was at a lose end with no idea how I was going to clear my debt, there are lots of companies who offer free debt advise and can advise you the best options, that wot I have done and they are supporting me through the process of applying for an IVA, I owe about £22,000 with loans, overdrafts and credit cards
    • enthusiasticsaver
    • By enthusiasticsaver 14th Mar 17, 3:16 AM
    • 3,559 Posts
    • 6,224 Thanks
    enthusiasticsaver
    [font=courier new]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


    [i]Created using the SOA calculator at
    Reproduced on Moneysavingexpert with permission, usin
    Originally posted by StrugglingWithDebt87
    That soa can be reduced by not buying clothes, just wearing stuff you already have, getting rid of holidays until you are well on debt reduction path and reducing groceries to £100. The mobile phone bill, haircuts and gifts could also be halved at least.

    I would double check your figures on the car situation. Will you really get £13k in cash for it? Make sure that this is doable as cars are massive depreciating assets and £13k for a used car may not be that easy to realise. That must have been one expensive car to buy if it is still worth £13k 3 or 4 years later.
    Debt and mortgage free and saving for early retirement
    • enthusiasticsaver
    • By enthusiasticsaver 14th Mar 17, 4:06 AM
    • 3,559 Posts
    • 6,224 Thanks
    enthusiasticsaver
    Unless most of those lenders agree to stop charging interest or you get lump sums back from the PDLs (I am sceptical about that in the short term) a DMP may be the only option if you cannot go for bankruptcy. That way at least no interest is charged.

    No help to you now but this could all have been so different had you had some financial education in your late teens and credit became available. My daughters are your age and from their early teens I warned them of the evils of credit as I was a debt counsellor in the 90s and saw what effect the debt spiral had on people's lives. Consequently they shied away from credit cards, in fact we had to insist our younger daughter applied for one at 24 when she went to the states and we thought she needed a backup source of finance and said it was good for when she applied for a mortgage to show she could handle cards well. It makes me angry that PDL and sub prime lenders like Vanquis etc which charge extortionate rates are allowed to keep lending even when someone like yourself clearly could not afford it. The first mistake was made at 19 when you took out the first car loan but that was more than 10 years ago and you have spent the first 10 years of your working life battling debt with nothing to show for it. It is a credit to you that you have managed to build a good career in spite of this.

    My advice would be, bite the bullet and speak to stepchange. Get a basic bank account for your salary, essential bills which is really only rent in your case. Form a budget as to what you need to live off re clothing, entertainment, mobile phone bill, travel etc and then default on the unsecured loan payments. Not sure what to advise about the car as I am not sure if you are allowed to keep assets worth more than £1k unless essential for work. With your disposable income you would be debt free in around 2 years then have 4 minimum to build up a healthy deposit for a house at some point in the future. A DMP will affect your life but many have said it is the turning point.
    Debt and mortgage free and saving for early retirement
    • fatbelly
    • By fatbelly 14th Mar 17, 5:41 AM
    • 10,831 Posts
    • 8,093 Thanks
    fatbelly
    Hi i spoke with a debt advisor who advised me of my options, I used a company called Faith Financial, they will take all your details, including ur income and ur debts and advise ur options, there are 5 main options for dealing with debt.

    1. Bankrupsy
    2. Informal Agreement
    3. Consolidation Loan
    4. Debt management ( up to £5000 of debt only)
    5. IVA

    I was at a lose end with no idea how I was going to clear my debt, there are lots of companies who offer free debt advise and can advise you the best options, that wot I have done and they are supporting me through the process of applying for an IVA, I owe about £22,000 with loans, overdrafts and credit cards
    Originally posted by Muppetmagic
    Please start your own thread.

    That summary is incorrect. Faith Financial appear to make their money from IVA referrals and so it is no surprise that is where you ended up. I have looked at their website and much of the information there is wrong (bankruptcy) or just not there (Debt Relief Orders).

    If it's not too late for you, have a chat with an impartial organisation like National Debtline.
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