Impossible Situation

PixieFace

Hi all

Have been reading this site for a while now, and decided it's finally time to post for some advice.

My debt problems started when I was 18, through the likes of a bank loan, a laptop on hire purchase and an overdraft. This got worse when I was at uni, with a dodgy student account from Barclays Bank (who I hate), a student credit card, no money and no job.

In february 05, I started a new job, which involved moving, and thus buying a house. Three of us decided to buy together, and we had a very generous loan of £50k from the parents of one, as an investment, to use as a deposit. Because I've had such an appaling credit history, the only place I could find who would offer me a mortgage was Abbey, who will allow you to provide written information of your credit history. By this point all of my bad debts were paid off, but still registered as defaults on my credit file.

I am now in a reasonably good position. I got my latest credit report through on Tuesday and all of my defaults and bad debts are now gone, and everything on their shows that I have missed no payments etc, which I am really pleased about as it has been a long, hard slog.

Now I have a £10k personal loan which has been refinanced a couple of times to get cheaper deals - it started as a graduate loan to buy a car and a pc. Again the loan is with Abbey, as I figured if they gave me a mortgage, there should be no problem with a (relatively) small loan! I have two credit card, one with a limit of £2k, which has about £700 available on it, and one with a limit of £350, which I only use to buy things I already have the money to pay for, so as to help improve my credit rating.

I have just over £200 in an ISA, which is my long term 'don't touch it for any reason' savings, and about the same in an ING direct account. I pay just £10 a month into each of these.

However, I have been signed of work for depression since October, and am now down to SSP, of which I have two months left at the grand total of about £300 a month (which will pay my household bills and nothing else). I'm not in a position where I am able to go back to work, and when I do, I won't be returning to the same job, as that is the main reason for my lack of wellbeing. If I do return to work, I would prefer it to be on a part time basis, so I won't earn a great deal. (my current position pays £20k)

I have put together a list of things I can sell to raise some funds (including my car) to give me enough to last another couple of months, to give me some time to figure out what I'm doing with my life, and I have been reducing my monthly outgoings as much as I can to help.

I currently have to pay:
£300 into house account which covers mortgage, all bills and food
£217 on my personal loan
£36 to the gym, (will try to cancel but was 1 yr membership from June 05)
£40 average on phone - need to check tarriff
£6 pet insurance - which I want to keep
£20 to savings, again, I want to keep this
plus as much as I can afford to put on my credit card

I would really like to get a 0% balance transfer deal for my cc's, but I'm worried that it won't be approved, and am very aware of the impact of applying for thins on my credit file.

Also, I'm with the same bank I've been with since before uni. I have been declined by other banks in the past when trying to move to a better deal, so am wary of this. But also, because I am no longer earning, don't know that I would be able to get a better deal, as they often require a certain amount coming in each month, which I can no longer guarantee.

I appreciate that the sensible option would be to stick it out at work for longer, but I tried going back after 6 weeks off, and lasted three, and felt worse for doing so. I spoke to my boss the other day about my remaining holiday and SSP entitlements and this (plus counselling) have just confirmed in my mind that I can't do the job.

I'm not sure if anyone can offer any suggestions. I think it's more a case of getting it off my chest. I've been really proud of myself for getting to the point where all my bad debts are gone, and the rest are manageable, but a spanner has been thrown in the works, and I want to do as much as I can to prevent it from spiralling out of control again, the pressure of which is not really helping my mental health either.

If anyone out there can offer anything (even just a little hug would be great) then I would be overwhelmed.

PixieFace

loubie_lou

(((Hugs))) Well done for posting PixieFace. Its a sad thing that your job hasn't worked out but you have done the brave thing and posted your situation on here. Lots of people with good advice (i'm sure will be along to post soon!

I had my student account with barclays too (still have it with a £2.5k overdraft still on it! Oh well both ours faults for putting the limit up and up and up!)

I don't know if this a viable option or not but could you sell your share of the house and move back in with your parents for a while? You don't say how far you moved away but if may give you a bit of capital to pay off your debts and start again??

PixieFace

Hi Loubie Lou

Thanks for the Hug!

I'm 200 miles from my mum now (just move further and further up the country) I love the house (it keeps me sane) and I love the area. My boyfriends mum has just moved up the road from us, and is keen to start property developing, which I really want to do myself, so may be able to work for her, so there are some options in that respect.

the*dark*one

(((hugs))) hope things work out for you in the end and well done for taking positive steps to dealing with your situation before it got out of control. :grouphug:

PS I still have a student account with Barclays as well! :rotfl: Actually it’s now a grad account but nevertheless lol

ms_london

Hello PixieFace

Welcome to MSE.com

I totally sympathise with you on the mental health front. I was off work last April (after taking an OD) for 5 weeks, (and the year before 2 weeks) - but because it was a short period of time I was lucky enough to have full pay!! Whilst paying off my debt I was working full time & part time, and this was with hindsight, making me ill!! I just wasnt happy, and although it is good that you want to repay your debt, you also need to look after yourself & think about as you say, your mental health. Thankfully now that I am debt free, and have a bit of savings, I know that if I ever had a "relapse" I could afford a bit of time off work (although it wouldnt be ideal!!), or if I ever wanted to I couldnt afford to drop down to part time (although I dont, ask me in a few years!!) :0) My state of mind is a lot better now that I am debt free, although I was coping with repayments, I still felt stressed about it and carried it on my shoulders!!

Debts
Loan - £10,000
CC1 - £700 (Limit £2,000)
CC2 - £000 (Limit £350)

Savings
ISA - £200 in an ISA, which is my long term 'don't touch it for any reason'
ING - £200

Outgoings

£300 into house account which covers mortgage, all bills and food
£217 on my personal loan
£36 to the gym, (will try to cancel but was 1 yr membership from June 05)
£40 average on phone - need to check tarriff
£6 pet insurance - which I want to keep
£20 to savings, again, I want to keep this

* £300 into house account. What majority of this covers mortgage & bills? How much is left for food? Could this total amount be reduced? Do you and your flatmates share food? (sorry if i'm misunderstanding)

* I am sure that if you explained your situation to the gym they would understand and hopefully let you cancel your membership, however, I do think that it would be good to still do some form of exercise as this helps no end with moods etc

* Phone could do with being reduced, but you said you were looking into tariff, so I shall leave that with you.

* What is the APR on your loan? Is it correct that you only have £700 on one of your cards and the other is clear? What are the minimum repayments/APR's?

""I would really like to get a 0% balance transfer deal for my cc's, but I'm worried that it won't be approved, and am very aware of the impact of applying for thins on my credit file. ""

You might be suprised, as you said you checked your credit file & all defaults etc had been removed, it's worth a try??!! Use this website to see who is offering the best deal. If you cant get one, then perhaps its worth calling your existing creditors and seeing if they could reduce your interest? (say youve had a better offer elsewhere).

* Your loan - did you take PPI? If so, would you be covered against being unemployed through sickness. Look into this, and read t&c's carefully. The same with your CC's?

""and I want to do as much as I can to prevent it from spiralling out of control again, the pressure of which is not really helping my mental health either.""

I can understand that you might not want to touch your savings, but it would make more sense to use your savings than it would be to use your credit card/more debt. This way you wont be making your situation worse & increasing your debt, plus obviously with your savings you wont be repaying interest once youve spent it. I think that this is a good as enough of an emergency than any other reason you might be saving the money for long term, so dont feel bad about touching it - thats what its there for.

Good luck.
Ms_London

lulabelle

I totally feel for you with the whole barclays thing - I had one of their student accounts when I was a student as well as a credit card and they really do not help by increasing the amount of money you can have all the time.

I also sympathise with the depression as I have recently been diagnosed and put on medication. I am having counselling but the sessions are £50 a week which is a bit beyond me but I figure that it's worth spending if it can sort out my problems.

Good luck.

x

PixieFace

thanks guys for all the advice. I think one of the hardest things is working out what to do next, and that counts for all aspects of my life at the moment, so it's really tough.

The £300 a month I pay in is the same amount as the other two. It covers everything, including council tax, water rates and tv licence (I've become quite budget savvy over the last few years). The mortgage itself is only £380 a month. We all eat together, and we cook our own meals from scratch and grow our own veg - although we've eaten all last years (the first year of trying) so there is none at the mo, just preparing the ground for this year. We grow runner beans, carrots, leeks and I want to try spuds and onions this year too, and that's practically everything we eat on the veg front. Saved a fortune not buying carrots for 5 months!

We're coming up to the end of the first year, so I am going to investigate cheaper utilities and insurance.

My 1st cc (I have £1300 on it - £700 available) is 11.9%, the other is something ridiculous like 29.9% but always gets paid off - it's a capital one card for people who've got credit issues. Loan is 6.4%, which I think is quite good. I do have PPI on it, but it won't cover my illness because I had already seen the doctor about it before the loan was set in place (I was still working at the time) Sometimes I wonder if these insurances are even worth it!

I'd rather leave the gym than use it as I joined one near to work, not home so I could go in the mornings. I only joined to swim anyway. Have been thinking about going for walks in the morning, but these things take motivation that I tend not to have.

Lulabelle - I got 6 free counselling sessions through work as part of their benefits package, and they were really helpful. I'd pay for more if I need to, but I got enough out of the free ones to go on for the time being. Definitely worth it though. Trouble is one problem tends to enhance another and you just feel stuck in a rut. You may be able to get free counselling through your GP, but the waiting lists tend to be huge (mine was 14 weeks). I'm sure you could find cheaper sessions than £50 though, thus saving money also - try asking CAB.

PixieFace

So, I just rang Abbey to cancel the PPI on my loan, seeing as it doesn't cover me for being off sick at the moment anyway, and apparently I can't. It had to be cancelled within the first 30 days (I took the loan out at the beginning of september, around the time I first went off sick - it was to pay off an old loan which was costing me more money). :mad:

Does anyone know if there is a way that i can get round this?

Also, I spoke to my gym, and they said that a doctors letter confirming that I am no longer able to use the gym on medical grounds is all I need to cancel the membership, which will save me £36 a month. I'm seeing the doc on 2nd feb.

jonesMUFCforever

PixieFace wrote:

So, I just rang Abbey to cancel the PPI on my loan, seeing as it doesn't cover me for being off sick at the moment anyway, and apparently I can't. It had to be cancelled within the first 30 days (I took the loan out at the beginning of september, around the time I first went off sick - it was to pay off an old loan which was costing me more money). :mad:

Does anyone know if there is a way that i can get round this?

Did you take out the loan before you went off sick?
If so ask them why you are unable to claim now. If you had already seen a doctor then there is a possibility that you were mis-sold the insurance as it would not cover you.

Kevicho

You could claim that it was your understanding that when you took the PPI it would cover you against this , and thus was mis-sold the cover

Look into this more as im not a great expert on this, but it may work and get you a nice refund as well