Out of Control Debts\Charges

davery83

I need help, I only got paid 2 days ago (monthly pay of £825 after tax) and I'm already running out of money! My car broke down last friday and I have to replace it but it doesn't look like I have enough money to pay off what I owe let alone anything else!

I owe:

£12000 loan to halifax (£169.22 over 72 months)
£1600 to Capital one (around £180 per month because of charges!)
£1500 to Mint (pay min. £26 month)
£1000 overdraft with Halifax (not paying anything towards it)
£600 overdraft to First Direct (pay £20 month)
£250 to GE Capital bank (store card - ~£15 month)

With my debts alone I pay £410 thats before:

£177 rent
£15 broadband
£70 car insurance
£100 month travelling to work

Ok so that totals £772. I'm averaging around £100 a month in charges from halifax because I go over my overdraft and have to pay that off the next month. The only thing I really do socialising wise is play football for 2 teams - 6 aside is £3 once a week, 11 aside is £1 training, £2 match - so thats £24 month. Brings me round to having spent £800
I sell some old stuff on ebay to try to get some more cash in but it doesn't seem to get me anywhere, just enough to get by the next month.
I really don't know where I can cut down!
I can't transfer my c/c to 0% cards because I get turned down, and halifax wouldn't consolidate my debts into one big loan because I don't earn enough!

Some advice would be grateful!

ffs

Change to a Basic Bank Account as soon as possible, I was incurring bank charges of that order before I moved to the Co-Op and I've never looked back.

davery83

Can I have 2 basic accounts with the same bank though?
With halifax I have a basic account & one with an overdraft - I get paid into the overdraft one, I transfer all the money I need to pay off debts into the other one & use whats left in the overdraft to get by the month. This has worked ok until recently where it seems like I'm getting nowhere!

ffs

You need to open a basic account somewhere else. Stop using the Halifax account altogether. They will then withdraw your overdraft facility, and you then make repayment proposals (or you can pre-empt this and approach them first). They will hit you with charges and interest but eventually they will accept your proposal (provided the repayment term is within say two years). You will be better off within a few months.

Alternatively go to the CCCS and get everything sorted out through a DMP.

ms_london

Hello there. You have come to the right place.



Firstly, your outgoings such as rent, car insurance, travel need to be paid first. These are your basic living expenses. What is your current living situation? The £100 travel money, you have a car, is this money petrol? You have rent, but do you have any additional bills on top? How about food?



Income: £825



Outgoings: £362



£177 rent
£15 broadband
£70 car insurance
£100 month travelling to work



Surplus: £463



£12000 loan to Halifax - £169.22 - Whats the APR?
£1600 to Capital one - £180 – Whats the APR?
£1500 to Mint - £26 – Whats the APR?
£600 overdraft to First Direct - £20
£250 to GE Capital bank - £15

£1000 overdraft with Halifax.



After you have paid these minimum repayments, this leaves you with just £50 a month. But there is nothing in your budget for food & just general spending (we all need a bit!!).



I suggest that you cancel your DD’s, and contact ALL of your creditors, including Halifax, whom you have your OD with and are not paying anything at the moment. Tell them what you can afford, and ask if they can stop interest/charges and if you could agree a repayment programme with each of them. Firstly, after your initial outgoings, you need to decide a realistic budget for you to live on. Mine was £50 a week, this was for food/toiletries & basically anything else I needed to buy after bills/rent/debt.



If I were you, I would tackle the CC’s, OD’s & Store Card first (as GE Capital Bank will be charging you around 30% interest, and although your balance is small compared to the others it might encourage you once you have paid this off and have one less creditor to deal with.



If you say your budget is £200 a month, this leaves you with £263 to split between your creditors… Then as each of the creditors get paid off, you can snowball the rest of the money on the next creditor.


Can you find out what your APR’s are? You’ve mentioned selling on ebay, well done. Also, with your OD, you can agree with your bank to repay it and how they do it, is by reducing it by X amount each month, so gradually it comes down.

You can do it, so try not to panic, you just need to be honest with your creditors and say that you are having financial difficulties, they are more likely to help you if you are honest, rather than if you ignore them.

Get on the phone to them right now, and cancel those DD's.

You CAN tackle this.

Ms_London

davery83

Ok, a bit more info!
I live at home so rent includes food, but my parents don't know of the problems I have with money - they think I owe a bit on a c/c and thats it. I will look at the statement for APRs when I get home.
As I said I should have a bit spare, but because of the charges they repeat themselves. If I miss a payment one month, the charge carries over to the next month, I miss a payment on something else etc etc.
For example, this month alone, I have 2 x £38 charges for missed payments from halifax, one of those put me overdrawn by £37 in an account that doesn't have an overdraft facility - that cost me £28.00 for being overdrawn!
Then I have the £15 or so I'm paying in OD interest.

Re travel: It costs me ~£100 a month in petrol alone, but that was before my car died last friday. I am borrowing a work van for a couple of weeks so I still need money to get a replacement.

Re cancelling DDs: I take it you mean just the c/c dd's? I have already cancel them & pay them manually but I find that I can only pay the minimum. I try to budget everytime I get a payslip through & pay off what I can but as I said it seems to get nowhere.

I've read your story in another thread ms_london, just hoping with advice from this site I can get through like you did

ms_london

In order to stop the charges, you need to call your creditors NOW - all of them. Even your bank with the overdrafts, explain the situation & agree a repayment programme.

Is there anyway you could get to work without a car & just go by public transport, I appreciate this is not always possible (coming from a village in the middle of nowhere myself - before I moved to London).

If you can only pay the minimum then for the time being that is all you can pay, it takes a while to keep on top of that (believe me!!), then gradually, as one debt gets paid of this gives you more money to throw at the other debts. It does take a while, but at least if you know you are repaying your debts (albeit the minimum) at least you can sleep at night & stop worrying so much.

In time, your circumstances will change, perhaps get a payrise, or unexpected bonus, so as the time goes on you will have more money to again, throw at your debts.

I dont know what to suggest about the needing a new car im afraid, thats a tough one. Could your mum/dad put you on their insurance & borrow theirs for a while? Share lifts with a colleague?

Please, get on the phone to them now, and write down (or set up a spreadsheet) of all your monthly payments, when it is in black and white, its easier to stick to.

Could your parents let you off your rent for a couple of months? It depends how understanding they are and if they need the money as much as you do (my parents would have still wanted me to pay them rent.. but it was more cost effective for me to move to London anyway).

Good Luck. xx

Alfietinker

I'm not very good with my finances either, but I learnt a big lesson this week.

Like you, I've kept my debts from people, and things have got out of control. I was frightened to come clean, especially with my husband. This week, I had to tell him, and its really helped the situation, just knowing that I'm not on my own.

Could you not let your parents know? I'm sure they would still need some kind of rent, but perhaps, if they don't rely on the money, they could let you off for a couple of months? If only for you to get £3-400 for a car?

Really hope it all goes well

Avogirly

Good luck davery83. There are lots of fantastic people here, so don't lose heart. This is the biggest hurdle, once you've got through this you'll feel much better. My only piece of advice which helped me was to tell my family exactly what debt I was in. I hid it from them for a long while. After they knew I felt much better. I don't want financial help from them because I got myself into this mess and I'm dam well going to get myself out but once they knew and understood it was much easier.

Good luck xXx

System

Hi there

davery83 wrote:

Ok, a bit more info!
I live at home so rent includes food, but my parents don't know of the problems I have with money - they think I owe a bit on a c/c and thats it.

Only you'll know this, but do you think your parents would want to help in some way, ie - reduce your rent a bit? Read a quote somewhere recently (probably on here!) that said you can't afford to be proud when you're in debt. I think that's true. If you've a good relationship with your parents, telling them would mean you'd have that extra moral support when you need it.

As I said I should have a bit spare, but because of the charges they repeat themselves. If I miss a payment one month, the charge carries over to the next month, I miss a payment on something else etc etc.
For example, this month alone, I have 2 x £38 charges for missed payments from halifax, one of those put me overdrawn by £37 in an account that doesn't have an overdraft facility - that cost me £28.00 for being overdrawn!

Ouch. We've all done that now and then, I suppose. Why is this happening though? Is it because you're simply not keeping a close eye on your bank a/c? Do you keep your own record of ALL bank and cash expenditure? It may be of great use in your situation if you're being charged alot.

Or is the problem due to regular Direct Debits or Standing Orders coming out of the a/c late in the month, when most of your wages have been spent? If that sounds familiar, arrange to have ALL your DDs and S/Os taken out a day or two after you get paid.

You may also find https://www.bankchargeshell.co.uk an interesting read as apparently overdraft charges are usually refunded by the bank if you play it right. (Get more info on that though)

Re travel: It costs me ~£100 a month in petrol alone

Presume that's for the cost of getting from Home to Work? Is there any way of getting a lift in and paying something for petrol?

mrbadexample

How about asking for a payrise? Explain your situation, say that you need more to live on. The worst that can happen is that they say no, and you're no worse off. If they value you as an employee, they may help.

Try to think of something you can do for the company. It'll sound better if you go in and say "I need x amount more money, but for this I am prepared to do xxxxxx on top of my current duties". This is much more positive, as you're not asking for something for nothing, and you probably have a greater chance of success.