New word in my life - DEBT !!!

Worried_Comrade

Hi All

This is my first post (as you can probably see) on your wonderful forum. I tend to find this all a bit daunting sharing my problems with people who have signatures revealing debts of £20,000 - £30,000 where as i'm in the under £15k catagory.

Even so, having recently moved in with my partner i've been having sleepless nights over my debts to Lloyds (£6000) - £2,430 from an old current account & £3,611 from a loan. The thing is being young and nieve i didnt pay these when i should have and have now defaulted on both and started recieving letters from Debt Collectors which i have stupidly ignored and ignored (Stupid i know) Then it really struck me when i joined CreditExpert.co.uk and seen my 'Poor' credit score off 499. Now its all i think about.

The reason i mentioned my partner above is that she doesnt know about this and i wouldnt like to see her reaction if she found out, after all her credit rating is good and she is very efficient when it comes to money and keeping on top of things.

I also have another loan that i have always paid on time (outstanding approx £7,000) and money to parents for my car

Monthly take home £1360

Rent £500
Loan £140
Car £320
Phone £25
Fuel £120

Total £1105 outgoings per month.

I need some advice on the best options for myself and any advice will be greatly appreciated

Regards

WC

pointypenguin

You need to do a proper SOA using the sticky on the first page.

You will need to break down the below amounts for people to advise on savings.

You rent and car costs are £940 out of £1360 income which is high to me. Can you live any where cheaper or look at cutting down car costs or doing without a car?

TheBex

I'm in the under 10K category, as of very recently, and now it's all owed to family, so relatively (excuse the pun) stress free compared to thte old situation. It's still a very real problem, even when your dents are comparatively small and we still want to help you!

Do the makesenseofcards SOA, it's easier for the clever people to advise. I'm more about the people side of things though, so here's my 2p:

Tell your partner. If she's worth having she'll be supportive. If she can't deal with it then she's not the girl you think she is. Good luck.

Nargleblast

You will have to tell your partner because she will find out anyway when you keep getting phone calls and letters coming to the house. If you do the Statement of Affairs we can help you with a provisional plan for clearing the debt, and with a plan in place it will be easier to tell your partner.

London_Welshcake

Good Morning Worried Comrade

Just checking in to see if you got any sleep last night? You've made such a huge step by coming onto the forums and seeking help and advice. There are some fantastic people on here who'll be able to point you in the right direction - but you do need to give them a clearer idea of your finances by filling out your SOA (Statement of Affairs). Grab a coffee, sit down and go through the SOA on the sticky on the first page of the DFW forum - you won't regret it.

Please do think about telling your partner... and remember you'll be telling her "I'm dealing with my debts" rather than just "I'm in debt" which are two very different things. If she is the girl you think she is she'll want to help.

My partner realised just before Christmas that he is over £8,000 in debt and has not yet sat down to figure out a way of paying it all off. I'm being as supportive and helpful as I can while he gets his head around things. He has stopped spending he just needs to look at the figures and figure a way to pay it back... which I'm certain is a place we'll get to by the end on January.

What I am trying to say is that I'm certain that if your partner loves and cares for you she'll be there for you and will want to help. Even seemingly little things like having a romantic meal in the house rather than an expensive meal out, setting a smaller and more realistic budget for gifts and presents for each other and agreeing on not going on holiday (or opting for a cheaper holiday) will all make a big difference.

And the people on these forums are and invaluable source of support - they'll be here to help at all ours of the day. Hang on in there!

Worried_Comrade

Good Morning all

Thanks for the support :beer:
i'm as well as getting straight into it. Telling my partner really is'nt an option for me. It is her house i have moved into and i really dont want to go down that avenue. hence the reason i have turned to you wonderful people for help and advice.

I've been through the SOA as you will see below, if there is anything else that you will need to know please ask (as i'm sure you will)

@ pointypenguin - like i said its my partners house so moving is'nt really an option and the car was taken out by my parents on HP (i could'nt get credit) and i work 30 miles from home with no bus/train route

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1360
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1360
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 400
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 9
Groceries etc. ......................... 70
Clothing................................ 50
Petrol/diesel........................... 120
Road tax................................ 2.91
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 20
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Pension ................................ 60
Payment to Partner towards Household.... 100
Payment to Parents for Car ............. 320
Total monthly expenses.................. 1246.91

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Welcome Finance Loan...........6976......140.......12
Lloyds Current Acc.............2430......0.........0
Lloyds Loan....................3611......0.........0
Total unsecured debts..........13017.....140.......-

Monthly Budget Summary
Total monthly income.................... 1,360
Expenses (including HP & secured debts). 1,246.91
Available for debt repayments........... 113.09
Monthly UNsecured debt repayments....... 140
Amount short for making debt repayments. -26.91
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -13,017
Net Assets.............................. -13,017

Harry_Powell

Well, it's as plain as a pikestaff that you need to get rid of that car. It's sucking in £442.91 per month, which represents a THIRD of your income. That's not including the costs of an MOT, servicing and Insurance that you haven't included in your SOA.

If you really want to address your debt issues then you need to work out how you can do without a car. The obvious choice would be to move into a shared house that is within walking distance of where you work. You could then sell the car and pay back your parents and you'd free up at least £500 per month to throw at your debts. If you move house, then you can also come clean with your girlfriend regarding your debts without the fear that she will throw you out. A relationship based on lies and fear is not one that will last.

Basically though, you simply cannot afford to spend a third of your income on a luxury like a car.

Worried_Comrade

Harry_Powell wrote: »

Well, it's as plain as a pikestaff that you need to get rid of that car. It's sucking in £442.91 per month, which represents a THIRD of your income. That's not including the costs of an MOT, servicing and Insurance that you haven't included in your SOA.

If you really want to address your debt issues then you need to work out how you can do without a car. The obvious choice would be to move into a shared house that is within walking distance of where you work. You could then sell the car and pay back your parents and you'd free up at least £500 per month to throw at your debts. If you move house, then you can also come clean with your girlfriend without the fear that she will throw you out. A relationship based on lies and fear is not one that will last.

Basically though, you simply cannot afford to spend a third of your income on a luxury like a car.

Agree, i have looked into this but i/we are only 13 months into the HP agreementand they wont allow me too hand it back till at least 50% is paid off. (insurance is paid off for the year)

I'll be the first person to hold my hands up with regards to the car, i never thought of my debts at the time now i've got myself in this mess

Ames

If the insurance is paid for the year, what are you going to do when it needs renewing? You need to be saving now for it. And what about servicing? I imagine it's got to be done at a main dealer, which is going to be expensive.

Is the £400 your contribution to the mortgage and all bills? As you didn't include any in your SOA. And the food, is that your half? What about other bills? £9 for internet isn't too bad, but if that's just half then it can be cut a lot.

Harry_Powell

It's not a case of 'handing' the car back - the finance company would not want it anyway, it's a case of selling the car with their permission and using the cash to repay the loan. You may find that the HP company will charge you a fee for paying back the loan by selling the car, but even this would be preferable to continuing to pay the finance, car tax/insurance/maintenance/petrol.

You should get your parents to contact them to see what can be done. Doing without a car is pretty inconvenient I have to admit, but you'd be surprised how little you need one if you live within walking distance of work, especially if you are also within walking distance of a supermarket.

Worried_Comrade

Contacted the BMW Financial Services and yep they said the settlement would be £16,058. So i have been searching through classifieds and the same make/model/spec/millage is selling/advertised for £16,000 - £17,000. This would free up approx £400 per month

So the car is going, i will need to buy a small run around to commute to and from work as moving is'nt an option thou