Can't seem to get my head around it

Karalyn

Hi all,

I currently have debts of around £9500 and wanted to get a debt consolidation loan to sort them out. Of course, nobody will give me one as I'm not a homeowner. I knew that debt management plans existed, but I didn't want to go that route because of letters still coming to the house and telephone calls. I can't let my parents find out and that becomes more likely with every letter.

My bank (HSBC) referred me to Payplan after refusing to refund the bank charges for this year (£800), though they did waive this month's charges which would have sent me even further off the rails.

I spoke to Payplan, and they seem nice, but I'm absolutely terrified. I'm supposed to be speaking to them for my appointment tomorrow morning, and I'm scared to pick up the phone. I don't think they're going to leave me anything for myself - no hobbies, nothing. A case study on their website said that someone on a similar wage to me 'could afford' over £400! If I could afford that I wouldn't have a problem in the first place!

I just don't know what to do, it sounds like whether I speak to them or not, I'm going to have nothing.

lynzpower

Ok you need to take a deep breath. Have you done a full SOA for yourself and worked out exactly what goes where. Someone will be along in a sec to give you the link.

Dont panic, there is an anwer.

Jesthar

Hi, Karalyn, and welcome! Don't worry, you just landed in one of the best places on the internet for help in keeping the debt worries under control

First things first, people here can give you the best help possible if you can provide them with a Statement of Affairs (SoA), which is a sport of summary of your financial position. You can find a handy tool for creating one of those here:

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

If you choose the 'MSE' format you can copy and paste the results straight into a reply here.

Secondly, you need to open a new basic' bank account with a bank which is not related to any you have debts with - this will prevent them 'stealing' your wages as soon as they go in to cover your debts, something which they are legally entitled to do and which landed a friend of mine in a whole heap of trouble after they cashed in her savings without telling her.

Thirdly, you need to start keeping a spending diary - put absolutely EVERYTHING in it, so you can see where the pennies slip away, you'll be amazed at how much can vanish on trivial things!

Finally, you're going to have to face up to the fact that if you DO need to go on a DMP, then you are going to find your entertainment budget is pretty restricted for as long as you are on it, and it IS going to take a while - but remember, the sooner you pay off your debts, the sooner you can go back to enjoying life to the (sensibly budgeted ) full! So don't be afraid of PayPlan - they will take your finances individually and see what is best for you.

~Jes

Ames

I don't think they should have examples like that on their site, as everyone's circumstances would be different. Take a deep breath, they will give you something for entertainment. Although in my case CCCS only let me have £15 a month, CAB were more generous. Remember, if you don't agree with Payplan's assessment you can go to one of the other free companies. I went to three and got wildly different assessments - CCCS said I should be paying more to my debts than the minimums, CAB told me to go bankrupt, and National Debt Line said I should just carry on making token payments indefinitely. That was all from the same figures!

And even if you don't get much officially for hobbies, you can try and save money on other things, or try things like mystery shopping to make more cash.

rayday2

Hi Karalyn, please don't worry this is the worst time deciding what you need to do to sort things out. Also a DMP is a very responsible way of dealing with your debts, a mortgage company told me that. You are thinking the buck stops here the borrowing cycle needs to stop and I need to start paying back.

I am 3 years into my DMP, and I have my life back, every month that goes by I owe less in the world.

When you speak to payplan what they are giving you is advice, if you don't like it don't take it. It could be that maybe you are living beyond your means but you need to make sure you are happy with the budget they set with you. If you don't like it after speaking you can go it alone using the national debtline website and set your own budget (in fact for peace of mind why don't you read up on their website). I set my own DMP up 3 years ago before I discovered this site, in fact I had so little knowledge it wasn't until I joined this forum I realised thats what I was in a DMP! All I knew was that I was living and tellign companies I have this much to pay you a month rather than paying companies and wondering how to feed 5 of us with this much.

Good luck and please don't worry its a phonecall - thats all!

david_hellier

Jesthar wrote: »

Hi, Karalyn, and welcome! Don't worry, you just landed in one of the best places on the internet for help in keeping the debt worries under control

First things first, people here can give you the best help possible if you can provide them with a Statement of Affairs (SoA), which is a sport of summary of your financial position. You can find a handy tool for creating one of those here:

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

If you choose the 'MSE' format you can copy and paste the results straight into a reply here.

Secondly, you need to open a new basic' bank account with a bank which is not related to any you have debts with - this will prevent them 'stealing' your wages as soon as they go in to cover your debts, something which they are legally entitled to do and which landed a friend of mine in a whole heap of trouble after they cashed in her savings without telling her.

Thirdly, you need to start keeping a spending diary - put absolutely EVERYTHING in it, so you can see where the pennies slip away, you'll be amazed at how much can vanish on trivial things!

Finally, you're going to have to face up to the fact that if you DO need to go on a DMP, then you are going to find your entertainment budget is pretty restricted for as long as you are on it, and it IS going to take a while - but remember, the sooner you pay off your debts, the sooner you can go back to enjoying life to the (sensibly budgeted ) full! So don't be afraid of PayPlan - they will take your finances individually and see what is best for you.

~Jes

Another way of using a spending diary is to allocate a weekly amount to yourself per week, from your budget after all essentials have been deducted. Using receipts, deduct as you spend through the week. Try to get to the end of the week leaving some over to carry forward to the next week. This has the effect of keeping your overdraft down and avoids overspend.