Help, the inevitable has happened (long post)

alias_debt_boy

Hi all, i've been a long time user of these forums, and am (was) quite active on the Grabbit and Shop forums. Now i'm on the DF board to share my own debt problem, (under another user name as i'm not ready to share my crisis with the whole world yet, just you warm friendly DF Nerds!).

OK, this is my situation. I quit my well paid sales job about 2 years ago, and didn't do a huge amount for a long time, went through a period of complete inactivity, difficult to put into words but I simply hid from the world for a long time. I got by on credit cards which I had taken out during my employment in case i ever needed them, and shuffled debt around to suit myself. I did casino bagging for a while, and made enough to keep things ticking over. About a year ago I realised I was in danger of going bankrupt through this suicidal lifestyle, and I got it together enough to get a job. It paid a decent amount, over £35k, but only lasted 3 months at which time the company went bust. Since then I have been working for various companies doing sales on a self employed basis, and not doing too well, but lying to myself that everything was OK, earning about £1200 each month, ignoring that my outgoings were far higher, and also aquiring a nasty gambling habit as a result of the casino bagging.

For the puposes of this thread i'd like to set my personal issues aside, except to say that I don't gamble any more and am currently working hard to go back into full time sale repping ASAP. However it was only this month that I have been shocked into accepting how much trouble I am in. I was told that my employer that after this month they no longer need me and this is my final month. I have suddenly opened my eyes and realized my total debts total around £25k, on a mixture of credit cards at around 15% APR (£15k in total), a loan (£8k) and a £2000 overdraft. Until this month I have been paying everything I needed to (ie minimum payments and keeping under OD limit).

Now I find that the company I’ve been working for haven’t paid me yet, and that I am £600 over my OD limit, and my mortgage payment direct debit has been returned unpaid as has my Egg loan payment, and I’ve been charged £125 fees, meaning I’m £2600 in the red plus a £500 mortgage to pay and £199 Egg payment, with only £1717 due in any day from a variety of sources inc employer and lodger.

So, when all the payments go in, and payments are made which I’ve missed, I will end up £1600 in the red, with no job and no lodger (she is moving out next week). I am confident however that I can find myself a sales job at a salary of around £30k basic within a month, though this means that I might end up 8 weeks before I actually get paid.

As you can see, this is a huge mess that was waiting to happen, I know that I have been living on borrowed time for far too long, and had to pay the price some time. What I need help with now is my options, and some advice on tackling the creditors. To give you some help here are some more details

1. I have a mortgage of around £115,000, and house is worth £135,000 at a push

2. I ran a check my file credit report quite recently which said I was rated 'excellent'.

3. I have never missed any payments before, though have recently broken through my OD limit a few times, each time for a day or two.

I am ready for any kind of advice, abuse or help. I need to work out who to talk to, whether to sell my house, or to consolidate, or to just stop paying bills til I get a job. And once I get my job I’m happy to throw whatever it takes to drive these debts away.

I thank you all in advance for your consideration and help, and though I have only just come out of the debt closet, I have been reading all your posts with interest for quite some time now, and have read some inspirational stories which have kept me sane as I have tried to understand what I’ve got into.

Cheers

ADB

GreyPilgrim

Guess I'll just say what everyone else will say mate - welcome, and congratulations at taking the first, biggest step of actually working out exactly how much you owe and writing it down in front of you. Thats the one the scared the crap out of me. It gets better from here.

All the best.

lynzpower

First off welcome!

2- you are in a very fortunate position in respect of your credit rating. Shunt your CC debts onto 0% pronto!

3- if you could so an SOA, then that would help us ( maybe youve seen how it works round here) identify savings. We are well versed in cutting back sometimes without even noticing some things.

You are in the right place, definately, and regardless of your alias etc, you are all the more welcome

Lynz
x

alias_debt_boy

Cheers for the replies so far. I've read up on the stickies and the snowball and all the great stuff available from this site, but I have a couple of issues in general. 1 is that it would be great to shift onto another zero % card or two, but I can't really lie about my salary (or lack of) can I, and secondly I guess the recent defaults will zap my rating pretty quick. The second point is that a SOA is great, and i'm happy to bare all (gulp) to the professional money savers, but there seems little point during this period of unemployment.

The question I am asking is therefore- what do I do for the next month or two and what is the likely reaction from those I owe money to? I need to call my bank tomorrow, and Egg too, plus there are some more DDs due this week which will fail unless I am paid tomorrow. I am confident that within 1 month (2 if you count that I wont get paid for a while), I will be earning £30k+, and will then be able to work out a plan, do some 0% deals, snowball my debts and all that wonderful stuff (oh yes, and tear up all my cards and stop spending money I don't have, almost forgot that one!). But in the meantime, there's no way I can do anything about it, and that's a scary thought, it's like a house of cards that is falling down. I may have been hit around the face by my brightly flashing lightbulb today, but there's absolutely nothing I can do about it short term.

Any thoughts? I'll thank people when I get the ability. I'm new you see

ADB

Justicia

As others have already written, well done for acknowledging and facing up to your situation

Regarding your response to the posting of a SoA. You say that "there seems little point during this period of unemployment." Surely that is more reason to look for ways to make cutbacks? I would urge you to do this, so that others can assist you where possible to improve the situation, again where possible...

My other concern is your statement of being able to find a £30k job within a month. Although I am not necessarily doubting this as I do not know your situation (you do not make it sound like a definate/done-deal), I think you need to have, or start making, a fall-back plan just in case and start the reductions in spending where you can.

Sorry if the above appears negative and critical towards you - it is not meant to, as I do commend you on realising that the situation needs to change.

I wish you the best of luck in resolving the issues mentioned in your post (extra well done on kicking the gambling)

all_hours

Look into whether you are eligible for any unemployment, Job Seekers Allowance, Housing Benefit (they would at most cover the interest not the repayments, but could you organise to pay interest only for a month or two) council tax benefit. Apply for everything as soon as possible as it could take longer to find a job.

Posting a SOA would help because other posters could advise about cutting down expenditure to an absolute minimum during this time of uncertainty.

Also, I'd apply for the 0% cards soon in case your credit status takes hit and and returned payments are updated on your report.

Little_Miss_Winner

Hi,

Just a quickie as I am still thinking and re-reading, but as you don't finish your employment till the end of the month, technically if you applied for a couple of new 0% credit cards now (LIKE TONIGHT!), you aren't lying about your incomings. Get the 0% cards, but cut them straight up!

Seriously you don't know what the next 0-3-6 months hold, and if you are unemployed won't be able to swap them at all.

regards
pot

alias_debt_boy

Hello again all

Good replies on the 0%, i'll take that advice straight away. One freshly baked, honest to goodness SOA on its way too, you are all right, better sooner rather than later. Should be reasonably easy as I use MS Money to keep track of stuff so know my outgoings. And before I know it i'll have a wicked signature with lots of :money: and :j and :T smilies...

More later and thanks again

ADB

lynzpower

ADB, just to add to what sophistica said, I think now is the time to be making those cutbacks, so that when you have an income, you will notice it more & free up more money to snowball at your debts.

All the best with it, and great to have you here

sanfrancisco

welcome...alias debt boy. Lets work on changing that name to alias debt FREE boy.

Be honest with yourself and you will be fine. It will be hard but it will all work out in the end.

Rebob

Phone your bank and let them know of the problem regarding your employer not paying your wage on time so you might avoid some bank charges.