debt disaster

jax3003

hi, im a 23yr old female who lets just say has been more than foolish with money over the last few years and it has smowballed so much i dont know were to begin!

my debts are detailed as follows:
unsecured loan - £3600
overdraft - £2400
store card - £138
just bought new car on finance deal - £160 per month for 60months!!

other monthly outgoings aside from these are mobile phone bill roughly £50, car insurance and tax £55! i pay £25 towards the od each month and 96 towards loan! 12.50 also towards account!

i earn aprox 650 a month after tax! the od needs paid within next 5weeks!
helllpppppppp!!! pleassseeee!

milliemonster

I'm not going to say how daft you were getting a new car which with insurance and tax takes up a third of your income! why oh why did you do this when you have a £2400 OD that has to be paid back in the next 5 weeks????

However, I take it you still live at home? what about board? you haven't included that anywhere?

Do you still have the store card? if so cut it up immediately.

Your outgoings you have mentioned here come to £398.50 which leaves you with £250 for everything else, but I presume you must be paying some living costs amongst this somehow.

Can you do a mini SOA with all your outgoings inc living costs? money spent on entertainment, petrol, lunches etc?

fermi

Hi.

Post a fuller income an expenditure, so the regulars can help.

Go to http://www.makesenseofcards.com/soacalc.html

Fill that in and make sure you click the "format for MSE" button before you copy and paste here.

chalkie99

4 months ago you posted that you were in financial difficulty and then never bothered following up when help was offered and now you say you have recently bought a new car!

If your earnings are so low and you already have debts what did you put on your loan application which persuaded the lender to approve it?

jax3003

i no how stupid it was! the od was from an acc i took out a few years ago as a student and i kinda decided to 4get about the acc as i do not use it! now im getn leters to say the od needs payin bac n sept! i bought the car previous to the letter! i do still live at home yes but i do not pay any board! im n a low wage at the min but hopefully by jan my wages wil increase to min 16,000 per annum due to a course i hav just undertaken. other outgoings would be car fuel £10/15per week, lunch/food £15 per week, birthdays £20 per month, hairdresser £15per month, entertainment/hobbies £25 per month.

i have already snapped the store card n half!

Tixy

Layout your I&E like this

Income £650

Outgoings
Mobile £50
Car Ins & Tax £55
Car Fuel £65
Lunch food £65
Birthdays £20
Hairdresser £15
Entertainment £25
Account fee £12.50
Total £307.50

Left for repayments £342.50

Debts
Car Loan £160
Store Card ?say £10
Overdraft £25
Unsecured Loan £96

Debt repayments £291

Surplus £51.50

Is this roughly how your finances are at the moment Jax?

jax3003

thanx 4 makin that easier to undrstand the car is on my bf name but i pay 4 it! thinkn of sellin it to clear debt bt i duno how that works with takin it out on finance! my od is main concern!
yea tixy thats my finances!

milliemonster

Ok so that then adds another £60 per month fuel, £60 a month lunches, £60 for presents/hair/entertainment, so in total your outgoings come to around £580 out of your £650, if you can stick to these figures religiously then you can overpay your overdraft and storecard by £70 a month.

In view of the fact your bank are requesting almost immediate payment of your OD back, you need to focus on that, I would suggest you reply to the letter today and explain you cannot afford to repay the full amount by the date requested but that you are willing to increase the monthly repayment from the current £25 a month to £50 and see what they say.

Long term, you really have to get a grip on your finances!, you are fortunate you are not being charged board but this is not giving you the opportunity to learn financial responsibility for the future. You have to learn to accept responsibility for your finances and what things cost in the real work and I'm afraid 'grow up' a bit.

You obviously knew you owed this £2400 on the overdraft but despite this went ahead to purchase a new car, did you think the bank would just forget about the debt you owe them?

I don't mean to be harsh but you are heading down a dangerous path to a life of spiralling debt if you don't take some action now to control what you spend, learn to prioritise your debts and this should include paying your keep when you are earning.

Tixy

You obviosuly cannot afford to repay the overdraft in 5 weeks. Is this the current account you are currently using? If so set up a new basic bank account with a bank you don't owe any money to and move your wages and dds to this account- do this as soon as you can.

Then after this is set up write to your bank and suggest a repayment plan for paying back the debt - perhaps you can afford £75 per month? (£25 currently and £50 surplus). If so offer that amount.

Then try to cut back your expenditure as much as possible.
Cut your mobile bill by 50% (if in contract as to go to a lower tariff.
Take packed lunches to work and don't buy extra food whilst out & about. Consider leaving your hair longer between cuts or look for a local hairdressing college which will do it really cheap.
Cut back on birthday presents - try signing up to survey/review sites to earn vouchers which you can use to buy presents.
Cut back on entertainment as much as you can.

All your debts will take a long time to clear at the current rate - hopefully you will get a payrise soon as you think. If so I'd suggest instead of thinking you can afford to spend more decide to pay off your debts at a quicker rate.

Hope this helps.

milliemonster

jax3003 wrote: »

thanx 4 makin that easier to undrstand the car is on my bf name but i pay 4 it! thinkn of sellin it to clear debt bt i duno how that works with takin it out on finance! my od is main concern!
yea tixy thats my finances!

If your car is brand new, you will find it will already be in negative equity, meaning you will owe more on it than it is worth so it may not be in your interest at the moment to sell it, just use this as a sharp learning curve

lazy&indebt

How long ago did you purchase the car? It'll be worth less than you owe on it now so selling it may not be the best idea... I would NEVER get a brand new car on finance again. You lose VAT/Duty as soon as it is registered!