Drowning in debt - please help

Woodie127

If anyone could help me with any of the following I would be so grateful - I really don't know where to start and am feeling completely overwhelmed.

Here are my debts:

£3000 on my credit card
£1400 on a Natwest loan that I took out at the start of 2008 and which I pay £120 per month, so I have about another year remaining on it.
£2000 bank overdraft ( am not overly worried about this because I know everyone has one, but I am up to the limit every month)

£13,000 special Natwest loan - I am currently studying for a law conversion course in London and £8000 of this is for my fees and the rest I get paid in installments throughout my academic year through to the end of May. Although this sounds an awful lot, I am currently applying for jobs at law firms who promise to reimburse your fees for your studies retrospectively, so if I can secure a job for when I finish my studies the £8000 would disappear. The additional £5000 I chose to take on to help me with living expenses.

I am currently working locally and this money helps me pay the rent exactly for each month. This, combined with installments of £1200 through my academic year I thought would be enough to live on.

However, the massive problem I have is that I am not actually using this money for living expenses but on paying back my other debts. Therefore each month I am paying:

£120 on my Natwest loan (the one I mentioned 2nd above)
£100 on my credit card - I am completely up to the limit and have to pay this much or the interest payments take me over my £3000 limit - essentially I am throwing this money away each month. In addition, I never actually spend on the card anyway.
£30 phone bill


I have tried to take action by transferring this balance to a 0% interest card, but I was only given a £250 limit, which is obviously not sufficient (presumably because I have a bad credit rating.)

I don't know if it is possible to get a balance transfer for such a huge amount as £3000? I have instead considered (I haven't done anything yet) taking out a loan to completely pay off the entirety of my credit card (then chopping it up) and agree monthly installments to re-pay it, therefore saving myself these painful interest payments.

Obviously this would have the advantage of regular payments whittling down the amount I owe and stopping me from just spending what I have paid off if it was on a credit card. However, in the short-term as a student it would mean I am committed to paying the £120 I already pay monthly in addition to, say, another £100. I have thought about this problem and could work more hours in my current job while I am studying, though this would be difficult for me in combination with my studies. My parents can help me a little.

Obviously if I get a job offer from a law firm in the summer (this is when they mainly recruit) they will pay all my fees and also give me a maintenance grant which I don't have to pay back to them.


I apologize if the above is too long-winded - I have tried to be rational about it. I just feel that I am drowning and the situation is a constant source of depression for me and never seems to go away.

If anyone has any advice about my situation and thoughts about what I should do, I would be so very grateful - I just don't know what to do.

Hopefully hear from someone soon. Thank-you very much.

TotallyBroke

Hi well done for posting....

If you use this link https://www.makesenseofcards.com/soacalc.html and fill this in. Once this is in order it'll be easier to see where the money is going. If you can dig out loan amounts and apr's etc it'll be a good help.

Here's a rubber ring to stop you drowning for this moment.

laura2481

Ok, don't panic!! Post your SOA and I'm sure everyone will be able to give lots of advice!

Tryingveryhard_3

Have you tried reclaiming any credit card charges you may have had in the past? Although bank charge reclaiming is on hold, credit card reclaiming can be quite quick, depending on who you're dealing with. Hope this helps a bit.

Woodie127

Hi guys, thanks for the initial words of encouragement - it means such a lot. I have completed the SOA below. I am not sure how accurate it will be compared to other people's as I am a mature student (for example, the maintenance grant I get as part of one of my loans comes every 3 months, so this may skew my monthly income.)

Also, I couldn't find the % rate on my Natwest personal loan (no paperwork anywhere, but I do know it is a fixed payment of £118 a month - I hope this is sufficient info?

I am also quite bad at estimating personal expenditure, but have tried to be as accurate as possible.


Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 550
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 600
Total monthly income.................... 1150

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 550
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 30
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 280
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1030


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
Credit card....................3000......80........18.9
Personal Natwest loan..........1413......118.......0
Total unsecured debts..........4413......198.......-


Monthly Budget Summary
Total monthly income.................... 1,150
Expenses (including secured debts)...... 1,030
Available for debt repayments........... 120
Monthly UNsecured debt repayments....... 198
Surplus(deficit if negative)............ -78

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -4,413
Net Assets.............................. -4,413

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.



How bad is it?:eek:

TotallyBroke

Oh it's not bad at all. Your not drowning you've just stepped in a deep puddle. Put your legs down straight and you'll touch the bottom then you can slowly walk up the slope until you get the hang of it then you can run.

At the moment you are only showing -78 and that is easy to save by cutting back a bit. £280 for groceries is an awful lot for 1 person. By meal planning and making from fresh you could easily halve this. Stop buying starbucks coffees if these are added into here! Maybe cut clothes to £30 every 2months and maybe consider cutting the entertainment budget.

So if in January you halved your groceries £140, no clothes £30 and only spent £70 on entertainment you would have an extra £200 to through at whichever of your debts is costing the most in interest.

Woodie127

Hey, thanks very much. I suspect the groceries bill is too high actually anyway but I thought I would err on the high side. The entertainment bill should come down too, I agree, and with the amount of university work, exams and job applications to do in January I won't have time to spend as much.

To be honest, I'm actually pretty frugal from day to day- it's just these enormous debts from my past that have built up.

The other short term problem I have is that the next installment of my loan is not due until February 1st (£1250) and the money I earn each month - £550 covers my rent only. I actually only have £130 pounds left in my bank account now until the end of January- I'll be at home with my parents for one week at Christmas and with a little help could manage for the next couple of weeks...but that still leaves January. My friend that I live with is also the landlord so he would probably let me defer my rent until for January until February possibly...


Also, I wonder what to do about the £3000 on my credit card - can I put it on another card or would it be better to take out a loan to pay off the entire amount and have regular monthly payments? Of course if I did this and agreed to pay £100, for example, back a month, that would mean my outgoings on paying back loans is over £200 (including my existing £117 repayment).

What do you think would be best about these problems?

Uniscots97

Make sure you keep a spending diary too, find out where your money is really going

Woodie127

Bump... (sorry, just wanted to make sure it didn't disappear...!)

RAS

Woodie

In your current circumstances and the current climate, you will not get a loan for less than 18.9%, so you need to stop spending money.

What can you put on amazon, e-bay or car-boot?

Can you get any temporary work over Christmas? Reclaim you charges? Stop using your moble phone altogether, or downgrade your contract.

laura2481

Woodie127 wrote: »

Hi guys, thanks for the initial words of encouragement - it means such a lot. I have completed the SOA below. I am not sure how accurate it will be compared to other people's as I am a mature student (for example, the maintenance grant I get as part of one of my loans comes every 3 months, so this may skew my monthly income.)

Also, I couldn't find the % rate on my Natwest personal loan (no paperwork anywhere, but I do know it is a fixed payment of £118 a month - I hope this is sufficient info?

I am also quite bad at estimating personal expenditure, but have tried to be as accurate as possible.


Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 550
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 600
Total monthly income.................... 1150

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 550 I'm assuming this covers all other bills too/ gas/electricity etc
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 30 can you get a cheaper deal?
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 280 eeek! You can halve this easily! Buy own brand stuff, make things from scratch, limit how much you go out for food.
Clothing................................ 30 cut that out for a bit..
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40 can you get a weekly/monthly pass which is cheaper
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 100 this will have to get cut waaay down for a while, time to do cheap things like staying in with a DVD!
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1030


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
Credit card....................3000......80........18.9
Personal Natwest loan..........1413......118.......0
Total unsecured debts..........4413......198.......-


Monthly Budget Summary
Total monthly income.................... 1,150
Expenses (including secured debts)...... 1,030
Available for debt repayments........... 120
Monthly UNsecured debt repayments....... 198
Surplus(deficit if negative)............ -78

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -4,413
Net Assets.............................. -4,413

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.



How bad is it?:eek:

Not too bad! If you cut back on the non essential like going out (or at least cut it down!!) Then you will soon have more cash to pay the debts. I wouldn't consolidate now, the interest rates won't be too good. Better to overpay on your credit card as much as possible . Use the snowball calculator to work out how fast you can pay it off... erm, I'm sure someone will know where the link