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  • FIRST POST
    • ElleWoods
    • By ElleWoods 21st Aug 17, 4:41 PM
    • 367Posts
    • 635Thanks
    ElleWoods
    In loads of debt and unsure where to start
    • #1
    • 21st Aug 17, 4:41 PM
    In loads of debt and unsure where to start 21st Aug 17 at 4:41 PM
    I'm in a lot of debt, I feel really panicky about it and I'm not sure what to do. I had a major wake-up call a few weeks ago when I did my tax return and it made me face up to the fact that my business is hardly bringing in any income. From that I decided to write down all my debts and realised I've got over 11.5k in loans, credit cards and car finance, which made me feel utterly sick to my stomach. I still feel sick now and I've been struggling to sleep for worry. I also suffer from anxiety and compulsive OCD-type behaviours linked to stress, so I need to get this sorted. The only thing I have to show for the debt is my car - the rest has built up over the past 4 or 5 years and went on a combination of business courses/training, holidays, everyday spending and god knows what else. I'm totally ashamed but I take full responsibility for it - the debt is my fault and I need to deal with it so that I can become debt-free as soon as possible and have peace of mind again.

    For background, my job contract ended just over a year ago and I struggled to find another job, so I started a business. I don't want to say exactly what I do because it's a bit of a giveaway and I want to stay anon due to the debt, but it's low paid, seasonal and very ad hoc work so the income isn't regular. I'm currently re-evaluating what to do because I'm not sure whether to start a new business (something like cleaning to bring in regular money) or just look for work. I've been job searching because I think I'd be much better off financially with a regular income as an employee. I'm a single mum to a pre-teen so ideally I'm looking for something part time and/or term time only if possible because I'm worried about what I'd do with my child in the school holidays. That said, I'll consider anything and have recently applied for two part time roles and a full time one, so fingers crossed.

    I've done a SOA and I'll post that shortly, once I've formulated it for MSE. For now, the details on the individual debts and their interest rates, payments and end dates are as follows:

    Tesco CC - £2982.05
    0% until June 2020. To pay it off by then I'd need to pay £91 per month. Currently paying £30 per month (just over the min payment).

    Barclaycard CC - £3370.54
    0% until Oct 2019. To pay it off by then I'd need to pay £135 per month. Currently paying £80 per month (just over the min payment).

    Car loan - £2195.64
    5.2%. Paying set amount of £122 per month & it'll be paid off in 18 months.

    First Direct loan - £2880.90
    4.7%. Paying set amount of £131 per month and it'll be paid off in June 2019.

    HSBC O/D - £129.72 overdrawn
    19.90%. This is an old account which I use as my business account (I'm allowed to do that as a sole trader). Just want to get this paid off ASAP.

    First Direct - £3.29 overdrawn.
    0% for first £250 overdrawn, then 15.90% from £250-£500 overdrawn. I know it's only a few pounds overdrawn at the moment but when my rent comes out next week I'll be up to my overdraft limit of £500. This happens every month. This is my main current account.

    Total: £11,562.14 in debt

    I'm ready to get this sorted, so I'd love some advice please. Thanks everyone.

    -------------------

    Edited to add SOA to this post. I've already started a spending diary and I'm looking into cancelling my TV service and moving to internet only. Any other advice would be more than welcome but this is how things currently stand.

    Household Information[/b]
    Number of adults in household........... 1
    Number of children in household......... 1
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 50
    Partners monthly income after tax....... 0
    Benefits................................ 1139.72
    Other income............................ 200
    Total monthly income.................... 1389.72


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 122
    Rent.................................... 500
    Management charge (leasehold property).. 0
    Council tax............................. 11
    Electricity............................. 45
    Gas..................................... 25.09
    Oil..................................... 0
    Water rates............................. 36.4
    Telephone (land line)................... 0
    Mobile phone............................ 7.5
    TV Licence.............................. 12.12
    Satellite/Cable TV...................... 42
    Internet Services....................... 0
    Groceries etc. ......................... 250
    Clothing................................ 20
    Petrol/diesel........................... 25
    Road tax................................ 20
    Car Insurance........................... 26.79
    Car maintenance (including MOT)......... 15
    Car parking............................. 5
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 80
    Medical (prescriptions, dentist etc).... 35
    Pet insurance/vet bills................. 6
    Buildings insurance..................... 0
    Contents insurance...................... 5.5
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 21
    Haircuts................................ 15
    Entertainment........................... 20
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 1345.4



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 3900
    Other assets............................ 0
    Total Assets............................ 3900



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 0........(0)........0
    Hire Purchase (HP) debt ...... 2195.64..(122)......5.2
    Total secured & HP debts...... 2195.64...-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    First Direct Loan..............2880.9....131.......4.7
    Tesco Credit Card..............2982.05...30........0
    Barclaycard....................3370.54...80....... .0
    HSBC O/D.......................129.72....0.........19.9
    First Direct O/D...............3.29......0.........0
    Total unsecured debts..........9366.5....241.......-



    Monthly Budget Summary

    Total monthly income.................... 1,389.72
    Expenses (including HP & secured debts). 1,345.4
    Available for debt repayments........... 44.32
    Monthly UNsecured debt repayments....... 241
    Amount short for making debt repayments. -196.68


    Personal Balance Sheet Summary
    Total assets (things you own)........... 3,900
    Total HP & Secured debt................. -2,195.64
    Total Unsecured debt.................... -9,366.5
    Net Assets.............................. -7,662.14


    Created using the SOA calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.
    Last edited by ElleWoods; 21-08-2017 at 7:02 PM. Reason: Edited to add SOA to first post.
Page 2
    • ElleWoods
    • By ElleWoods 8th Sep 17, 5:08 PM
    • 367 Posts
    • 635 Thanks
    ElleWoods
    Since first posting I've mainly shopped at Aldi and saved money by doing a big shop once per fortnight, with milk/bread/fruit/veg top ups at the local supermarket in between, which has reduced the bill. I've also been meal planning and sticking to it!

    I already use Top Cashback/Quidco and have done for years, so whenever I make an online purchase I check them both first. In fact I'm waiting for £25 to clear with TCB right now.

    The cat stays! I'll check out Poundstretcher for cat food though. I've never thought of going there and there's one a couple of miles away.
    • Mnd
    • By Mnd 8th Sep 17, 7:20 PM
    • 236 Posts
    • 264 Thanks
    Mnd
    It has been suggested that you either get rid of the car or the bus fares, you can't afford both tbh
    • ElleWoods
    • By ElleWoods 8th Sep 17, 10:36 PM
    • 367 Posts
    • 635 Thanks
    ElleWoods
    It has been suggested that you either get rid of the car or the bus fares, you can't afford both tbh
    Originally posted by Mnd
    The bus fare isn't for me, it's for my child to get to school in the mornings (he walks home). As I said in an earlier post, he doesn't want me to drive him to school because it's 'embarrassing' and tbh he needs to build up his confidence, independence and road sense, so the bus/walking it is. I've considered getting rid of the car but then I couldn't get to my clients when I have them, so I'd have to give up my business and sign on JSA as I'd literally have no earned income.
    • strongboes
    • By strongboes 8th Sep 17, 11:12 PM
    • 83 Posts
    • 58 Thanks
    strongboes
    The bus fare isn't for me, it's for my child to get to school in the mornings (he walks home). As I said in an earlier post, he doesn't want me to drive him to school because it's 'embarrassing' and tbh he needs to build up his confidence, independence and road sense, so the bus/walking it is. I've considered getting rid of the car but then I couldn't get to my clients when I have them, so I'd have to give up my business and sign on JSA as I'd literally have no earned income.
    Originally posted by ElleWoods
    I'm not sure why no one has said this to you. You need to forget about your business, seriously you could earn that in one day in any job. With the car you say you need for it you are wasting a considerable amount of money.

    Use the car for a proper job, or get rid of it until you can afford one.
    • zippygeorgeandben
    • By zippygeorgeandben 8th Sep 17, 11:18 PM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    You can't lose the cat! I'd rather have no food in than lose my cat!
    Supporting you all the way
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • ElleWoods
    • By ElleWoods 8th Sep 17, 11:36 PM
    • 367 Posts
    • 635 Thanks
    ElleWoods
    I'm not sure why no one has said this to you. You need to forget about your business, seriously you could earn that in one day in any job. With the car you say you need for it you are wasting a considerable amount of money.

    Use the car for a proper job, or get rid of it until you can afford one.
    Originally posted by strongboes
    I'm applying for jobs but in the meantime I'm trying to keep my business going to at least bring in something, even if it's a pittance. Or should I just give it up and sign on? I don't know what to do for the best, it's all really overwhelming.
    • ElleWoods
    • By ElleWoods 8th Sep 17, 11:38 PM
    • 367 Posts
    • 635 Thanks
    ElleWoods
    You can't lose the cat! I'd rather have no food in than lose my cat!
    Supporting you all the way
    Originally posted by zippygeorgeandben
    Thank you.
    • strongboes
    • By strongboes 8th Sep 17, 11:55 PM
    • 83 Posts
    • 58 Thanks
    strongboes
    I'm applying for jobs but in the meantime I'm trying to keep my business going to at least bring in something, even if it's a pittance. Or should I just give it up and sign on? I don't know what to do for the best, it's all really overwhelming.
    Originally posted by ElleWoods
    Some business ideas work, some don't, chalk this one up as a failure and move on with your life, immediately!

    You are more employable for simply giving it a go, so take your experience with you.

    I have no idea how much you get for signing on, but I can only assume its far more than £50 per month.

    If the debt is making you as anxious as you state in first post then also get rid of your car, if it doesn't impact on potential jobs. If you really don't want to then you must accept it will hamper you with your debt repayments.
    • nicmalauren
    • By nicmalauren 9th Sep 17, 5:59 PM
    • 37 Posts
    • 21 Thanks
    nicmalauren
    Good for you for facing up to your debt and tackling this head on!

    Financially, you would definitely be better off closing your business and going on Job Seekers Allowance. You say your business brings in £50 profit per month? JSA is £73 per week. You'd be up an extra £200 each month, and the advisors at your local jobcentre will help you with any other benefits you may be entitled to.
    "The future belongs to those who believe in the beauty of their dreams."
    • Prometheus2
    • By Prometheus2 11th Sep 17, 1:12 PM
    • 4 Posts
    • 20 Thanks
    Prometheus2
    Hi Ellie
    Been a while since having seen your post I’d like to say that I’ve been here and the most important thing is your wellbeing and not to let things take over you. Always keep positive as things are never quite as bad as they seem so long as you’re willing to be flexible there will be light at the end of the tunnel. Promise!!

    Any mentioning of losing the cat can go fly with the pixies!!

    Had a look at the your SOA that you kindly provided and there’s a few choices that may seem painful to begin with but ones that I’ve had to take so they are not as bad as they seem.
    First easy ones is the £42 on the TV and the licence of £12.02. Yes if you’re willing not to watch The BBC then doing this will give you an additional £52.02 a month.

    Now comes the harder one which would be to sell the car in doing this you would save £122 in HP , £25 in petrol , £20 in road tax , £26.79 insurance and £5 parking . Saving you £198.9 totalling up to an additional £250.81.

    I understand that you use the car to drive to your clients which you could get public transport to get you there granted it’s not as convenient but even so it would not eat that much into you £250.81 saved. That said if by the looks of it your business is not going well and congratulations you are a braver person than me for trying it!! Then wind it up and go onto JSA as Lauren says its £75 a week plus would shouldn’t have to pay your council tax or be it at a highly reduced rate. Also I would check with the Child tax credits or whatever it’s called as you might be eligible for an increase. Furthermore a check on the CSA calculator wouldn’t go a miss to make sure your x partner is paying the correct amount.

    Lastly in terms of the debt might be worth seeing if there’s a loan u can take for £9500 over maybe 5 years at a fixed term which would reduce your monthly payments down to around £220 or alternatively contact the vendors themselves and tell them you can’t afford to keep paying could you come to an agreed figure. In most cases they will as the last thing believe it or not they want u to do is stop paying.

    I found that a simple cash flow on a spreadsheet helped me lots as I could at least tell where I would be at the end of the month with the goal of keeping a positive even if it was only a few pounds!

    Also kids are very resilient mine where shocked that I had to take them home on the train or bus cause I had no car but I said that it will be way more fun and why not let someone else do the driving which now they don’t seem to mind.


    Thing is I was left in over 15K in debt while having to suffer the humiliation of betrayal and did go through some very dark times. However I drew a line across the sand and like I said honestly it’s not the end of the world speaking from experience that keeping positive is the only demand.
    • Mnd
    • By Mnd 12th Sep 17, 1:29 PM
    • 236 Posts
    • 264 Thanks
    Mnd
    It's not only watching bbc that you need the licence for, it's needed if you watch itv or anything really, I think it's needed if you have equipment available to watch television. It even applies to I player
    • anna_1977
    • By anna_1977 12th Sep 17, 1:41 PM
    • 598 Posts
    • 839 Thanks
    anna_1977
    Hi, just a quick observation - does your son not get free travel or free school lunches as you don't have a regular income. Schools also provide uniform grants for families that are struggling. Definitely worth considering.

    Well done on all the changes so far. When it comes to changing BB do shop about and do TopCasgBack. I recently moved mine to BT for £28 a month BUT I got £110 cashback and a £150 BT reward card so works out as only a few pence a month (12 mth contract)

    Good luck
    • Andyjflet
    • By Andyjflet 12th Sep 17, 3:29 PM
    • 47 Posts
    • 27 Thanks
    Andyjflet
    What agreement is your car loan an PCP or HP agreement ?
    M&S Loan £10000 £7401
    Barclays Overdraft £2500
    Leeds Mortgage £70300 £69002
    • ElleWoods
    • By ElleWoods 19th Sep 17, 2:58 PM
    • 367 Posts
    • 635 Thanks
    ElleWoods
    Good for you for facing up to your debt and tackling this head on!

    Financially, you would definitely be better off closing your business and going on Job Seekers Allowance. You say your business brings in £50 profit per month? JSA is £73 per week. You'd be up an extra £200 each month, and the advisors at your local jobcentre will help you with any other benefits you may be entitled to.
    Originally posted by nicmalauren
    Thank you. I've got a few job applications in the pipeline and it's a juggling act between giving up my business and just applying for JSA, or waiting to see if one of my job applications is successful. I was going to give myself until the end of October to get a job but I'm not sure I can survive that long (financially). I may have to bite the bullet and claim JSA sooner than that, which I hate having to do. I was on JSA for a few months at the start of this year but it was the most demoralising, depressing time of my life so I came off it to start my business. Just not sure I can go through all that again mentally (I've suffered mental health issues in the past).
    • ElleWoods
    • By ElleWoods 19th Sep 17, 3:07 PM
    • 367 Posts
    • 635 Thanks
    ElleWoods
    Hi Ellie
    Been a while since having seen your post Iíd like to say that Iíve been here and the most important thing is your wellbeing and not to let things take over you. Always keep positive as things are never quite as bad as they seem so long as youíre willing to be flexible there will be light at the end of the tunnel. Promise!!

    Any mentioning of losing the cat can go fly with the pixies!!

    Had a look at the your SOA that you kindly provided and thereís a few choices that may seem painful to begin with but ones that Iíve had to take so they are not as bad as they seem.
    First easy ones is the £42 on the TV and the licence of £12.02. Yes if youíre willing not to watch The BBC then doing this will give you an additional £52.02 a month.

    Now comes the harder one which would be to sell the car in doing this you would save £122 in HP , £25 in petrol , £20 in road tax , £26.79 insurance and £5 parking . Saving you £198.9 totalling up to an additional £250.81.

    I understand that you use the car to drive to your clients which you could get public transport to get you there granted itís not as convenient but even so it would not eat that much into you £250.81 saved. That said if by the looks of it your business is not going well and congratulations you are a braver person than me for trying it!! Then wind it up and go onto JSA as Lauren says its £75 a week plus would shouldnít have to pay your council tax or be it at a highly reduced rate. Also I would check with the Child tax credits or whatever itís called as you might be eligible for an increase. Furthermore a check on the CSA calculator wouldnít go a miss to make sure your x partner is paying the correct amount.

    Lastly in terms of the debt might be worth seeing if thereís a loan u can take for £9500 over maybe 5 years at a fixed term which would reduce your monthly payments down to around £220 or alternatively contact the vendors themselves and tell them you canít afford to keep paying could you come to an agreed figure. In most cases they will as the last thing believe it or not they want u to do is stop paying.

    I found that a simple cash flow on a spreadsheet helped me lots as I could at least tell where I would be at the end of the month with the goal of keeping a positive even if it was only a few pounds!

    Also kids are very resilient mine where shocked that I had to take them home on the train or bus cause I had no car but I said that it will be way more fun and why not let someone else do the driving which now they donít seem to mind.


    Thing is I was left in over 15K in debt while having to suffer the humiliation of betrayal and did go through some very dark times. However I drew a line across the sand and like I said honestly itís not the end of the world speaking from experience that keeping positive is the only demand.
    Originally posted by Prometheus2
    Thanks Prometheus, sorry to hear you've had a tough time too. I can't sell the car as it's on a HP agreement so the best I could do would be to hand it back to the loan company. I only have 16 months left to pay on it so I'd rather hang on in there if at all possible. I'm currently receiving everything I'm entitled to with regard to tax credits, housing benefit and child maintenance - the only way I can increase my income is by increasing my income! I was on Jobseeker's Allowance for a few months at the start of the year and I hated every second of it and found it completely demoralising, so would rather not go down that route. I was going to give myself until the end of Oct to secure a job but it's looking like I might not make it that far, so I may have to claim JSA sooner rather than later.

    There's no way I'd get a loan with my lack of income so I just need to keep making the repayments on the debt I currently have for now. I can see that it will all be paid off in approx. 3 years, so I just need to keep at it and the debts will be paid off eventually.
    • ElleWoods
    • By ElleWoods 19th Sep 17, 3:11 PM
    • 367 Posts
    • 635 Thanks
    ElleWoods
    Hi, just a quick observation - does your son not get free travel or free school lunches as you don't have a regular income. Schools also provide uniform grants for families that are struggling. Definitely worth considering.

    Well done on all the changes so far. When it comes to changing BB do shop about and do TopCasgBack. I recently moved mine to BT for £28 a month BUT I got £110 cashback and a £150 BT reward card so works out as only a few pence a month (12 mth contract)

    Good luck
    Originally posted by anna_1977
    Thanks Anna. Kids here aren't given free travel and I don't qualify for free school meals because I get working tax credits. If I give up my business and go onto Jobseeker's Allowance I'll then be entitled to FSM, which would help. Not sure how it works in secondary school though because at the moment I give cash for lunch. Need to look into it.

    I've given Virgin Media 30 days notice of cancellation so I'm looking at BB deals now - will check out BT, thanks for the heads up.
    • ElleWoods
    • By ElleWoods 19th Sep 17, 3:12 PM
    • 367 Posts
    • 635 Thanks
    ElleWoods
    What agreement is your car loan an PCP or HP agreement ?
    Originally posted by Andyjflet
    It's HP, so I can't actually sell it - the best I could do would be to hand it back. However I've only got 16 months left to pay so I'd rather plough on if I can. It'll also allow me to apply for jobs further afield, as opposed to just those on a bus route!
    • EssexHebridean
    • By EssexHebridean 19th Sep 17, 5:01 PM
    • 8,133 Posts
    • 42,875 Thanks
    EssexHebridean
    Do you have data on your mobile phone contract? Can you use that for your home internet by tethering to it i the short term rather than taking out a new BB contract? failing that I do know that Sky currently have a line rental & unlimited BB for £15 deal going on - might be worth a look as including Line Rental that's not a bad price. (Although I hasten to add I've not explored what else is out there before anyone jumps on me!)
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£632.77 (20/11/17)
    SOA Calculator for DFW newbies: Stoozing.com SOA Calculator
    • sile001
    • By sile001 19th Sep 17, 5:36 PM
    • 89 Posts
    • 83 Thanks
    sile001
    The very best of luck ElleWoods It is a struggle, but those little day by day things can help enormously.
    Debt-Free as of 12th September 2017

    £12,000 > £0

    • enthusiasticsaver
    • By enthusiasticsaver 20th Sep 17, 7:19 AM
    • 4,674 Posts
    • 8,840 Thanks
    enthusiasticsaver
    In the short term why not try doing surveys to boost your income. A lot of people seem to do well although it is time consuming for only small rewards but could keep you ticking over until you find a job. Check to see if you are eligible for any more benefits.
    4 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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