What should she do?

ftbworried

Ok, I'm trying to help out a friend who has a debt problem (and no access to the web so i will be printing the thread out to show to her).

She's recently admitted that she's in lots of trouble with debt. She's 21 and quit university a year or two ago- now wants to go back in September.

Student Loan:£1000 (obviously not payable back until she's earning over £15k)
Student account: £1000 overdraft
Another bank account overdraft: £2000
Another current account: £400

She is at the top of all her overdraft limits (which are all at about ~16% interest) and is in arrears with her rent and council tax (don't know how much by). She says that her parents won't let her move home and her letting agency will chuck her out of her rented house if she cant pay her rent arrears.

what should she do?

Emmzi

Is she working, and does she have a decent salary? This doesn't seem like such a wild amount of debt for someone on a graduate salary to service and repay.

I'm not sure you're getting the whole story - why not print out a sample SOA for her and get ALL the details on the table.

bargainbetty

You could tell her to contact the banks in the meantime and see if she can get the rates on her overdrafts brought down or frozen. Also read the posts on unfair bank charges (can't find the link, sorry) and see if she could recoup some of those staggeringly high fees they charge on overdrafts. I'll bet she has been stung on them a few times and every little helps

Does she get any kind of educational grant? If not, maybe she could consider trying to find a better paid full-time job and putting off University for a year. Alternatively, do what I am doing and work while studying at the Open University. She could transfer her existing credits to them, and it costs a hell of a lot less!

Definitely need a SOA to work with. If she doesn't want one posted, then she could try keeping a money diary to see where her cash goes, and make savings accordingly.

Most of all, tell her that recognising and assessing the debt is the scariest bit. Then she can start dealing with it.

Hugs to you both.

ftbworried

Emmzi wrote:

Is she working, and does she have a decent salary? This doesn't seem like such a wild amount of debt for someone on a graduate salary to service and repay.

I'm not sure you're getting the whole story - why not print out a sample SOA for her and get ALL the details on the table.

She is not on a graduate salary- she dropped out of university. She is working in a pub but I guess will only be on £6 an hour max and at around 30 hours a week. Her rent is £350 a month, council tax ~80 a month. She has a car- I don't know how much she spends on petrol/insurance/tax etc....but the sums just dont add up, she doesnt earn enough.

The main issue here, although working out a budget for the long term will help, she has NO access to any funds in the short term. She's at the top of every limit and in arrears for her rent, and council tax- both wanting the money NOW.

I'll try and get a SOA from her soon.

Emmzi

Be careful not to lend her the money yourself.

She sounds like she needs a friend in the long term more than she needs the cash...

Immediate next step for me, after working out the ins and outs, would be a second job. She needs to get income up if she can't get expenditure down. Presumabley pub is nights - local shop, call centre during the mornings?