Out of my depth and seeking help!

Rebeccaanne

Hi Everyone

For the past few years I’ve had my financial head stuck firmly in the sand and pretended that I didn’t spend as much as I thought or that things aren’t that bad. Well this weekend I finally came up for air and realised I have a big problem.

Basically I’m not sure if I’m in debt crisis or just in a really bad situation financially.

I’ve always read that people in debt crisis are people who cannot meet the minimum monthly repayments on their debts and have to come to alternative arrangements with their creditors blah blah blah. I’ve never missed a loan or credit card repayment and have a reasonable(ish) credit rating. My big problem is that my debts have rose (from overspending each month) to the point where once I make the monthly repayments, I’m simply not left with enough to live off, therefore I end up over spending each month on overdrafts and credit cards and my debt increases and increases…. I’m stuck in viscous circle.

Four months ago I finished a fixed term contact job (that paid 18k plus car, car tax, insurance, petrol etc) and I’ve been unable to find another decent job since. I’m currently temping and the money is poor, with now having to run a car as well I’m currently around £400 a month worse off. This is making my situation even worse. I’m living back at home now and I only pay £100 a month board but still things are pretty bad. See my SOA below

Statement of Affairs and Personal Balance Sheet


Monthly income after tax................ 850
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 850
Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 100
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 40
Clothing................................ 50
Petrol/diesel........................... 120
Road tax................................ 17.5
Car Insurance........................... 24.32
Car maintenance (including MOT)......... 12.5
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 474.32

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

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly.. .APR
Egg Loan ......................4654.09...160.5.....8.9
Halifax Loan ..................8025.22...163.7.....10.95
Virgin Credit Card.............3092.28...61.85.....22.48
Barclay Card...................138.36....5.........14.9
Egg Card.......................1225.77...24.5......17. 9
Total unsecured debts..........17135.72..415.55....-

Monthly Budget Summary
Total monthly income.................... 850
Expenses (including secured debts)....... 474.32
Available for debt repayments........... 375.68
Monthly UNsecured debt repayments....... 415.55
Surplus(deficit if negative)............ -39.87

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -17,135.72
Net Assets.............................. -17,135.72

Obviously I've thought about transfering my cc debt onto a card with a lower APR but with the credit crunch and with my credit rating being just average and a recent change of jobs, it's easier said than done.Any advice you could offer would be greatly appreciated - I'm still slightly shocked a the final debt total being over 17k, I would have previously said 14k, Ooops!!! I really don’t know what to do and I’m just getting deeper and deeper into debt every month.

Thanks
:eek:

SerenaGoode

Hi Rebeccaanne,

Firstly, well done for asking for help and recognising the problem. If I give you any advice, let me start by saying I have a far worse debt problem than you, though I am now facing it and trying to deal with it.

Secondly I just want to point something out in your post: you say:

"I’ve always read that people in debt crisis are people who cannot meet the minimum monthly repayments on their debts... blah blah blah."

then

"My big problem is that my debts have rose (from overspending each month) to the point where once I make the monthly repayments, I’m simply not left with enough to live off, therefore I end up over spending each month on overdrafts and credit cards and my debt increases and increases…. I’m stuck in viscous circle. "

The point is that you seem to dismiss the debt problem because you can make the minimum payments. But you can only make them out of more credit. So in fact you cannot afford the minimum repayments. This means you have a problem. (This I know from my own experience).

As things stand your problem will get worse. However you have made a really good decision, which is to face up to the debt and talk about it.

Read this page if you haven't already done so:

http://www.moneysavingexpert.com/loans/debt-help-plan

There may be things you can do to save money, or to increase your income. There may be ways to shuffle your credit (without extending it) to reduce interest rates. Look at all this stuff now, and take it seriously and you can probably start to turn this around now rather than later.

Also if you post an SOA someone here may have further advice on how you can save money.

And welcome to the site...

RAS

Hi

A couple of things

We assume you re living at home???

Can you list the value, term and nuber of payments left on the loans?

And the maximum, APRs and current debt on each CC?

Do you have anything that you can sell on e-bay, amazon or take to a car boot sale?

Do you really really need the car or just want it?

amyandjon

hi there, could you get a rent break from family free up that 100 quid and pay it on a credit card ..... maybe ask for a year off.... and then in a year see how you are and pay them the lump sum of 1200..... try and balance transfer credit cards to 0% if you can or lifetime of balance card..... if you dont want a debt management plan get an soa uo lets have a look you will be surprised where you can cut the cost !! what about car share ?? etc etc xx

Bargainfinder_3

I second serena, my oh said to me that he didn't have a problem because he always met his payments, but his debt was going up and up; he meant he could afford the payments because he met them, but then he had to buy normal everyday living stuff on a credit card... that meant he couldn't afford them!

I guess first is stop spending. Try leaving your purse at home and having a no spend day, to make you realise where you spend money that you dont really need to.
Post a Statement of Affairs here, and let people see how they can help you cut down.

you're in the right place for non-judemental support, and I wish you all the best xx

SerenaGoode

Bargainfinder wrote: »

I second serena, my oh said to me that he didn't have a problem because he always met his payments, but his debt was going up and up; he meant he could afford the payments because he met them, but then he had to buy normal everyday living stuff on a credit card... that meant he couldn't afford them!

Hmm, you could easily be describing me over the last year or so there.

I've faced up to it now, but it took me way too long.

Rebeccaanne

Thanks for your advice guys. I've edited my previous post and added the SOA so any advice would be most welcome.

There's nothing I can do at the moment about the car expenses, I need it to get to work (no bus route) and since I'm also looking for a new job I don't want to limit where/when I could work if I got rid of the car.
Also even though I've moved back home, my mum and step dad are not in great shape financially either and paying £100 board is about the minimum I can get away with, so I can't really save any money there either.

Help.

shell_girl

Hi Rebecca,

At the moment I think you could possibly shave your clothes money down a bit. Have you got a lot of clothes/shoes/handbags? If so challenge yourself to make say £100 on ebay within a month by selling things you no longer wear / use (be ruthless!!). Add this to your months budget of £50 (sorry no new clothes this month!) and you've cleared your Barclaycard. Ok it's the smallest and probably isn't worying you that much, but it's one gone and then you can add what you were paying onto it to your payment to another card, and so on.

Could you spare an evening a week to do some bar work/ babysitting/ dog walking or anything similar? What about overtime at work? There are some great challenges on here (things like making an extra £10 per day for a month) that are really motivating and handy to get a chunk together to wipe off a debt.

Finally your mobile phone- how far into your contract are you? Could you downgrade your contract or negotiate better terms?

Good luck,

Shell