My lightbulb moment has arrived!

Problem

It took a while for my light bulb moment - I reckon it's because I use those funny energy-saving light bulbs that take so long to get to full brightness

My story isn't awfully interesting but goes to prove it can sneak upon you with a sledge hammer. I'm hopinh to document my way out of debt with so so limited earnings...as you will see.

I'm single, in my 20s and until Mar 2008 everything was going along fine until I lost my job. I expected to find another job quickly - but that never came and I foolishly lived on my saving and never claimed JSA.

Still expecting to find a job just like that, I continued to use my limited saving, then I got into overdraft and couldn't pay any of my bills and basically the **** hit the fan .

I still have no job and I'm now going to visit the job centre - I know I should have done this a lot sooner, I'm living with my family which is helping a lot to reduce costs.

I've just spend the last two hours opening up all my bills that I hadn't open since August 2008 and being physically sick after seeing some particular debts.

So here are my enemies for the next year.

O2 - £98.58
Next - 238.74 (Receiving wonderful letters from debt recovery agency)
BarclayCard - £99.01 (Receiving wonderful heart warming letters from debt recovery agency) - 18.9 APR prior to this mess.
Capital One - £1046.25 (Receiving wonderful though-provoking letters from debt recovery agency) - I think I was on a 13.9% APR prior to the mess.
Halifax Current Ac OD - £2192.07 (Receiving wonderful heart-wrenching letters from debt recovery agency)
Halifax Loan - £2347.49 (Receiving wonderful tear-jerking letters from debt recovery agency) - Total amount loan which debt agency are requesting. I was paying £200 per month as loan repayments prior to this.

TOTAL: £6356.46 :eek:


Income?
I have no job at present but I did a 6 week job in Nov last year and I've been paid £2400 on Friday, but I don't knwo how to "spend it" I'll be going to claim JSA on Monday. I do Mystery Shopping here and there but I only get about 3 jobs a month ~£30 total.

Action Plan?
I would really like some advice on how to pay of this debt. I do have some particular questions and would be so grateful for answers or suggestions.

1. Should I pay of the smaller debts all in one go and ring the relevant debt agency about reduced payments for the 3 larger ones?

2. Should I arrange small payments on all of the debts? I'm a bit worried that they'll say "What you're willing to pay is not enough, you need to pay more.

3. Should I ask the Capital One and Halifax agencies to reduce the amounts, is that possible?

4. I have my £2400 in a separate bank account, can the creditors take the money out of my account without my acknowledge.

:j :j :j :j I'm going to make this the year I finally get out of debt :j :j :j :j

Forris

Hi, glad you've had your LBM! I used to 'file' my bills too, now I am not allowed to touch the post until my wife has seen it (a mutual decision).

The one thing that springs to mind (but I'm sure others will come up with more) is that, due to some of the debts being a few months behind, it may be worth writing to each of your creditors offering a substanstially reduced figure in 'Full and Final Settlement'.

You should also do a Statement Of Account. I'm sure someone will give you the link very shortly.

MissShoes

Hi Problem,

just found your thread. How's your debt-free journey going so far? How is the job-hunt going??

Love Miss Shoes x:A

Forris

Sorry that you have had no other replies. I hope you're still looking in.

The site for the SOA is http://www.makesenseofcards.co.uk/soacalc.html

Complete this form, format it for MSE and post it on here. Then loads of people will be able to look at it and offer help and support.

madmalteaser

There's also the snowball calculator on here somewhere, I'm sure someone will drop a link by soon, to help you work out which debts to tackle first. I think the advice is usually to clear the one with the highest APR first and work your way down that way.

beanielou

Well done on your LBM
Look forward to seeing your SOA.

kimdegsidash

welcome problem
The snowball calculator can be found here http://www.whatsthecost.com/default.aspx

You need to put the full amount owing on each debt, the current APR and the amount you pay, or intend to pay, each month, then the calculator will work out which debts you should pay first and show you when they will all be paid off.

I think your first priority though is to have a look at the Newbies Sticky on page 1 of this forum - there is a list of the non-fee charging debt advice charities that will give you free advice on the best way to start tackling your debts.

Your next priority is to ensure that you have money coming in to live on and to pay your priority expenditure - housing, heat, food, etc. I do hope that you can get to the Job Centre on Monday. There's a website that shows you which benefits you may be entitled to - www.entitledto.co.uk? Not sure if this is the correct address - can someone else confirm?

Once you know what you've got coming in, and going out, you can prepare an SOA. This will show you whether you have any money left each month to pay your non-priority creditors. If you have, that's when the snowball calculator comes in really useful as an incentive and to keep track.

Good luck with your debt-free journey. It's always the scariest bit having your lightbulb moment, what follows is messy, but liberating. Please don't let this get you down - I know it's hard opening all those letters, but you've done it now and can start on your journey feeling that you have a least done something positive.

All the best.

gratefulforhelp_2

You sound articulate and funny, I predict that you will soon be snapped up for employment. Good luck.