My options are bleak advice please

Rik178m

Hi all, first time posting. Could anyone advice me on what to do with my situation? I admit I am a classic burying my head in the sand and keep getting in debt or deeper but now I must change. A bit of background info....

Im 26 Living with parents (who are struggling too) and have a good stable job however overtime has now been cut. I get paid on the 1st of every month. I am high mileage as my work is 25miles away and my girlfriend lives 10miles away in the opposite direction and she doesn't drive. My car does 27mpg and I would loose roughly £3k if I sold it now as no one wants to buy big engined cars. On the budget planner I spend £90 more then I earn a month. I was just keeping my head above water untill august when I had about £1200 for tyres, brakes and car tax, now I haven't got a penny on the 9th for the rest of the month so I don't know how I'm going t get to work yet. So my state of affairs are as follows.......

Monthly income is £1700

Outgoings
Rent - £200pm
Loan 1 - £317pm
Loan 2 -£201pm
Card 1 - £57pm
Card 2 - £85pm
Overdraft 1 - £8pm
Overdraft 2 - £15pm (negotiating)
Gym - £45pm (Cancelling in Nov)
Mobile 1 - £70 but just changed to new contract so £25 (2months remaining)
Mobile 2 - £45pm (new)
Contact lenses - £22.50pm
Petrol - unsure exactly but £300pm
Car insurance - £78pm
Food at work and home - £100pm
and finally bits n bobs like magazines and going out with the gf - £150pm ish

Totalling - £1693.5pm

Loan 1 - Royal Bank Of Scotland, £13630 + 52 months remaining
Loan 2 - Alliance + Leceister, £5431.32 + 28 months remaining
Card 1 - Capital 1 - £1400 limit, £1220 used APR 30.59%
Card 2 - Mbna Virgin - £3400 limit, £3109 used APR 35%
Overdraft 1 - RBS account - £750 limit £750 used. using account
Overdraft 2 - Barclays - £1220 limit £1220 used temp payment on 3rd of £40 to stop charges then they will sort out a payment plan with me.

Spoke to RBS they suggested a new loan for £23000 at £557pm. I was accepted for the loan but haven't signed anything. I know borrowing more to get out of debt is a bad idea but it means I could keep my okish credit rating. I am seriously tempted with an IVA. I'm just paying interest on my cards so they aren't going anywhere. I'd like to get a mortgage before I'm 30 but that seems out the window now! I'm stuck and I need to know my options some if theres any questions please ask. Going to arrange an appointment at CAB asap.

Thanks in advance
Rik:eek:

milliemonster

Rik178m wrote: »

Hi all, first time posting. Could anyone advice me on what to do with my situation? I admit I am a classic burying my head in the sand and keep getting in debt or deeper but now I must change. A bit of background info....

Im 26 Living with parents (who are struggling too) and have a good stable job however overtime has now been cut. I get paid on the 1st of every month. I am high mileage as my work is 25miles away and my girlfriend lives 10miles away in the opposite direction and she doesn't drive. My car does 27mpg and I would loose roughly £3k if I sold it now as no one wants to buy big engined cars. On the budget planner I spend £90 more then I earn a month. I was just keeping my head above water untill august when I had about £1200 for tyres, brakes and car tax, now I haven't got a penny on the 9th for the rest of the month so I don't know how I'm going t get to work yet. So my state of affairs are as follows.......

Monthly income is £1700

Outgoings
Rent - £200pm
Loan 1 - £317pm
Loan 2 -£201pm
Card 1 - £57pm
Card 2 - £85pm
Overdraft 1 - £8pm
Overdraft 2 - £15pm (negotiating)
Gym - £45pm (Cancelling in Nov)
Mobile 1 - £70 but just changed to new contract so £25 (2months remaining)
Mobile 2 - £45pm (new)
Contact lenses - £22.50pm
Petrol - unsure exactly but £300pm
Car insurance - £78pm
Food at work and home - £100pm take sandwiches to work instead
and finally bits n bobs like magazines and going out with the gf - £150pm ish you have to reduce this

Totalling - £1693.5pm

Loan 1 - Royal Bank Of Scotland, £13630 + 52 months remaining
Loan 2 - Alliance + Leceister, £5431.32 + 28 months remaining
Card 1 - Capital 1 - £1400 limit, £1220 used %
Card 2 - Mbna Virgin - £3400 limit, £3109 used %
Overdraft 1 - RBS account - £750 limit £750 used. using account
Overdraft 2 - Barclays - £1220 limit £1220 used temp payment on 3rd of £40 to stop charges then they will sort out a payment plan with me.

Spoke to RBS they suggested a new loan for £23000 at £557pm. I was accepted for the loan but haven't signed anything. I know borrowing more to get out of debt is a bad idea but it means I could keep my okish credit rating. I am seriously tempted with an IVA. I'm just paying interest on my cards so they aren't going anywhere. I'd like to get a mortgage before I'm 30 but that seems out the window now! I'm stuck and I need to know my options some if theres any questions please ask. Going to arrange an appointment at CAB asap.

Thanks in advance
Rik:eek:

Hi Rik
I have added a couple of comments above, I understand your girlfriend lives 10 miles away but how about she gets a bus to yours sometimes instead?, also I think the biggest area you need to cut is your spending, £150 a month on going out, does your girlfriend contribute to this aswell?, try to find other things to do that don't cost much.

Don't get another loan, unless you address the areas where you are overspending and learn to budget you will just end up in the same position a few years down the line but with more debts.

You are actually in a very good position, you have a good income and very little actual bills with still living at home, you need to curb your spending habits now and learnt to stick to a budget, do you still want to be living with your parents when you are in your thirties?

Rik178m

I agree I've already started to do pack up for work and my gf is understanding and has started to get 2 busses to mine. The going out spending is also being cut down. but now I'm in a position where I cant get to work. I don't want to still be at home in my 30's no but for now my parents need the rent to pay their mortgage.

fredboris

I'm afraid I've been there done it and got the t-shirt.
What I ended up doing was contacting the CCCS who were excellent and now i'm on a debt management plan with them, the only thing is i wish i'd done it sooner.
Like milliemonster says you'd need to cut down a few expenses.

Smamfer

Two mobiles both at high tarriffs? Thats like 70 pounds a month.. You can get some great lower deals, I just got a family ones changed down 500 mins a month unlimited text 20 a month... this was with voda and loads of others doing it too. This would save you £50 a month!!

Tyres brakes and car tax 1200 quid!! I take it you are keeping up with the jones;s . I run a 2'2 high performance car and i get tyres at 60 quid each brand new on mine so how you managed that much i dont know. Maybe next time shop about a but more and think of safety rather than what other people have on their cars.
£300 a month on petrol is absurd. Im sorry but i work 20 miles from my work place so thats 40 a day plus i have other running trips to do taking DD to school things. family shopping and i would say mine is half of that., and before you ask no im not some 60 year old sunday driver. But with the cost of fuel its made my lead foot a tad lighter.
Your car insurance is crippling but i understand you are probably young and chose to drive a faster car and paying the consequences. Maybe shop around next time and get some cash back.

This all may sound harsh but its what makes us all look at it slightly differently. Just a rough look at two things and it will save you 200 a month and thats without high maintenance costs on your car... Good luck and remember we are all here for the same reason xx

mariagti

Hi Rik,

You sound alot like my BF!! He has a 2 litre focus St170 which has the same sort of MPG as yours does, We also live 12 miles apart and he has a 20 miles trip to work everyday too! He pays out about £200 plus in petrol a month and in 2010 his tax will go up to £310!! Anyway, he loves his car with a passion but has now realised he has to downgrade his car to a lower emisson and better MPG car. He car has gone down in price by about £2000 since last year when he brought it. But all other cars values have shot down too. Your bills are only going to go up even more as the years go on with that car.

I know you said you will lose roughly £3k if you sell the car but think of the thousands you would save in fuel, tax insurance etc on a smaller engined car. Also £1200 for tyres, brakes and tax!!!! What tryes did you have fitted!?!!!

£150 is alot for magazines and going out with your OH. You could cut the magzines out and have more nights in with your girlfriend.

Deep_In_Debt

Hi
Just read your post - hope this hasn't been mentioned before but apologies if it has.

If you are living with your parents, then an IVA would not be suitable for you. These are only suitable if you have assets to protect such as property. It may be that a debt management plan would be more suitable for you.

As others have said, getting a further loan is not the answer - it doesn't actually clear your debt. Many of us have been there and done that and ended up further in debt (me for one!).

I strongly recommend that you contact CCCS, CAB and National Debtline who are all free and offer advice in your interests only.

Rik178m

Thats alot to reply to thanks. I'm looking for a solution and realise howmuch I've spent, mags and going out are a no no now. Mariagti yes I'm alot like your bf I love my car BMW 330Ci however my tax wont be effected as it was built in 2000. The bmw tyre sizes are expensive and seeing as its the only think touching the road or stopping the car I thought of safety first. I brought falken tyres which are cheap for the size. 255/35/18w. I brought the car for £7400 and according to parkers would get roughly £4k

On the phones- With orange I was paying atleast £70pm it came to upgrade and they wanted £100. I went to 3 which gave me a free n96 and £45pm. I have 2 months remaining at orange who in shop said it would cost me £10pm then on the phone it turned out to be £25.

I need to phone CCCS on monday I think.

GirlRacer_2

Hi Rik178m I think that phoning CCCS would be a good option but you also need to take into account all the comments made. The CCCS are not going to accept you onto a DMP and reduce your monthly creditor payments and then allow you £300 for petrol and £150 for going out. Please be aware that CCCS will allow you only a set amount for petrol and socialising and it's up to you to stick to these guidelines so that the DMP works. Is there no way you could earn some extra money. I sell on e-bay, amazon and do mystery shopping as well as working full time. I'm debt free now but it was a struggle and I still earn on average about £150 extra per month by doing the little 'extras'.

I don't mean to sound negative but you really must take note of everyones comments as we've all been in the same boat and the only way to pay off the debt is to make some sacrifices.

Hope everything goes well with CCCS and keep us informed of your situation.

petrafyde

Also could you wear glasses instead of the contact lenses? That would be an extra £22pm, sandwiches for work.

Have you considered looking for a job closer to home to reduce petrol costs (yes I know in todays economic climate thats hard).

Do you use eBay or Amazon to sell on? Maybe you've got some stuff you no longer need you could pop on to raise some cash while you're struggling? Or maybe a car boot or something? Get your parents to 'donate' their old stuff/ offer to help them declutter it IS Sunday tomorrow so that could be a quick way to raise a few bob for now.

The car is the biggest issue obviously, and I know how hard it is to part with a 'baby' like that Good luck with CCCS on Monday.

milliemonster

To be honest, I appreciate how much you may like your car but, it's ONLY a BMW, thousands of 330ci's on the road so you have to be honest with yourself, you can't afford this car, you need to cut your losses and sell it and buy something cheap and cheerful until you get everything paid off (then you will have the money to buy the car of your dreams)

as others have said, an IVA is not a solution for you, you would be better off with a DMP but this will affect your credit rating significantly so you won't be able to get anymore credit at a decent rate for a long time.

I think really you would be better getting a hold on your spending and budget and start to look at things realistically, flash cars, clothes etc don't make you a better person or more attractive, to be honest they just scream someone who is in debt. Start thinking about your future now, you can easily manage your debts on your income without going down the DMP route (therefore saving your credit rating) but you have to cut back