Really need help to cope with debt - please

TheCrimsonAvenger

I have big problems with debt and it's blighting my life so much that it's making me anxious and depressed.

I an on a really good wage (£42k) and yet my debt repayments each month (£542) and rent (£800) mean that I'm left running out of cash in the second week of the month leaving me to scrape around for money for essentials for the rest of the month.

I owe £19k in debt mostly to credit cards and a £5k loan.

There's no getting away from it a few years ago if I couldn't afford something I would pay for it with a credit card. I mistakenly saw the credit card balance as my money to spend rather than have to pay back. I'm not trying to blame anyone else (although the banks have hardly been helpful). What I am trying to do is find a solution so I can live my life without this burden and the resultant stress.

I have a poor credit rating mostly through 1's and 2's rating but a couple of 3s and 4s/ I just want to settle this and get myself on my feet so I can get a mortage and a home of my own.

I've tried the budget and have cut down all unneccessary expenses but the debt repayments are the issue.

My debts were coming down but then Barclaycard raised my limits from 750 to £3000 on each card. Coming at a time when I was low due to a bereavement and their mixups in refusing me a balance transfer I maxed out on the cards bringing me back to square one. My fault but I'm stuck with this now.

gonzo127

hi well first thing as ever is to do a SOA be HONEST with it otherwise it is a waste of time the link is here
http://www.makesenseofcards.com/soacalc.html

make sure you format it for MSE and then post it up here, and we can all try and suggest things that you might have missed which could save you money

the next one would be contact either the CCCS, CAB or payplan (free debt charities!) to get some professional advice, however just having a quick run through of you situation above i would personnally say a DMP (debt management plan) would be the best course of action as this 'usually' gets your creditors to freeze interest and charges and gives you a set monthly amount which you give to your choosen debt charity who distrobute it evenly (based on the level of debt you have with each company) to your creditors

anyways just so you know you do not need to get depressed there is light at the end of the tunnel, yes you will need to have a change of lifestyle however pretty much everyone on these boards have been where you are now and we do understand, feel proud to have taken the first steps to deal with you debt

MrsTinks

With a monthly take home of £2575 you need to work out where the rest of your money is going... you pay £800 rent, £542 debt repayments... that leaves £1233 - you need to work out where that is going because that's a LOT of money to spend without knowing where...

Do the SOA and post it up so we can try to work out where the money is going...

DVardysShadow

MrsTine wrote: »

With a monthly take home of £2575 you need to work out where the rest of your money is going... you pay £800 rent, £542 debt repayments... that leaves £1233 - you need to work out where that is going because that's a LOT of money to spend without knowing where...

Do the SOA and post it up so we can try to work out where the money is going...

Agree

gonzo127 wrote: »

the next one would be contact either the CCCS, CAB or payplan (free debt charities!) to get some professional advice, however just having a quick run through of you situation above i would personnally say a DMP (debt management plan) would be the best course of action as this 'usually' gets your creditors to freeze interest and charges and gives you a set monthly amount which you give to your choosen debt charity who distrobute it evenly (based on the level of debt you have with each company) to your creditors

A DMP will screw your credit rating and your ability to get a mortgage for years. Mrs Tine is right, there seems to be a lot of slack in the budget and we should see the SoA before rushing to advocate a DMP. Just over half a year's income on credit with a good salary should be very easy to deal with.

gonzo127

DVardysShadow wrote: »

A DMP will screw your credit rating and your ability to get a mortgage for years. Mrs Tine is right, there seems to be a lot of slack in the budget and we should see the SoA before rushing to advocate a DMP. Just over half a year's income on credit with a good salary should be very easy to deal with.

although i agree about with this to some degree i was also looking at the fact the OP has already said their credit rating is poor so the DMP which only lasts on the credit file for 6 years might not be the end of the world, the biggest thing is of course the SOA and talking to one of the debt charities for professional advice

DVardysShadow

gonzo127 wrote: »

although i agree about with this to some degree i was also looking at the fact the OP has already said their credit rating is poor so the DMP which only lasts on the credit file for 6 years might not be the end of the world, the biggest thing is of course the SOA and talking to one of the debt charities for professional advice

The DebtFreeWannabe's can generally get to the bottom of an SoA quite quickly. Both Mrs Tine and I have doubts that there is any real difficulty in paying this lot off in the normal way. This should do less damage to the credit record than a DMP and should get the debt sorted well before a DMP would come off the record.

Percy1983

As it is me and my other half get paid what you get (yes 2 of us together) and we are paying back a similar level of debt and making great progress. A few cuts backs and we are now paying massive amounts off the debt.

As mentioned a SOA would be helpful, I don't htink you should need a DMP but some budgetting sounds like it may be in order.

TheCrimsonAvenger

Thanks for your help here is my SOA

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 2250
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2250
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 817
Management charge (leasehold property).. 0
Council tax............................. 46
Electricity............................. 20
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 12
Mobile phone............................ 44
TV Licence.............................. 12.18
Satellite/Cable TV...................... 33.75
Internet Services....................... 0
Groceries etc. ......................... 120
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
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)...... 0
Haircuts................................ 0
Entertainment........................... 14
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1118.93

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
Credit Cards...................19000.....542.......0
Total unsecured debts..........19000.....542.......-

Monthly Budget Summary
Total monthly income.................... 2,250
Expenses (including HP & secured debts). 1,118.93
Available for debt repayments........... 1,131.07
Monthly UNsecured debt repayments....... 542
Amount left after debt repayments....... 589.07
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,000
Net Assets.............................. -19,000
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using IE browser.

I have an overdraft of £400 which I use each month which swallows up my funds.

Percy1983

Other may go into your SOA line by line, to me it looks fine. The big question is do you have £589 left at the end of the month?

If so you shouldn't be in your overdraft or it should be cleared in full next pay day and not needed again. Likewise you should be able to pay minimum payment + £589 off your credit card with will soon start clearing it. If this isn't the case you are missing items off you SOA. If this is the case but you can't explain why it may be worth starting a spending diary and writing down where very penny goes so you can see it clearly.

What is the APR of the CC? as you might be abale to transfer all/some of it to better rates.

Overall the SOA looks very healthy and you shouldn't have any problems clearing you debts, but I can't see how you got into debt if the above has been like so for some time.

gonzo127

TheCrimsonAvenger wrote: »

Thanks for your help here is my SOA

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 2250
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2250
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 817 - this is massive could you get somewhere cheaper?
Management charge (leasehold property).. 0
Council tax............................. 46 - this seems very low compared to how much rent you are paying so either the banding is wrong or your rent is way above what i would expect it to be
Electricity............................. 20
Gas..................................... 0 - all electric property?
Oil..................................... 0
Water rates............................. 0 - no water?
Telephone (land line)................... 12
Mobile phone............................ 44 - this is a lot, find out if you are using all your mins and texts if not phone up the company and see if you can drop your tarrif
TV Licence.............................. 12.18
Satellite/Cable TV...................... 33.75 - this is a luxury that you probably should think about getting rid of for the time being
Internet Services....................... 0
Groceries etc. ......................... 120 - very high for one person try meal planning, batch cooking and freezing the left overs for future ready meals, and the drop a brand challenge, try and aim for about £60 a month (yes it is possible with some practice but it will take a bit of time to get used to shopping and cooking to get here)
Clothing................................ 0 - probably should be a little here even £2 for some new underware when needed should be budgetted for
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0 - no car and no travel costs do you walk or cycle everywhere?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 - running a risk here if you was robbed i would at least get a very low level of cover
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 14
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1118.93

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
Credit Cards...................19000.....542.......0
Total unsecured debts..........19000.....542.......-

Monthly Budget Summary
Total monthly income.................... 2,250
Expenses (including HP & secured debts). 1,118.93
Available for debt repayments........... 1,131.07
Monthly UNsecured debt repayments....... 542
Amount left after debt repayments....... 589.07
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,000
Net Assets.............................. -19,000
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using IE browser.

I have an overdraft of £400 which I use each month which swallows up my funds.

hi well done on posting this however there are a few bits which are missing, such as is it just you or others in the house do you own a car etc

anyways as to the other comments i have added in above, i do think you might need to re do your SOA as i am not sure it is a realistic view as there is no travel costs, no water costs etc

anyways even with a £400 overdraft taking up your money you would still have nearly £200 surplus each and every month to improve your debt payments.

now seeing this i would definatly say you should be able to sort your situation out with a GOOD budget however i think you will need to re-train yourself with some things.

a good plan would be to make a spending diary in which you write down EVERYTHING you spend from a 20 pence newspaper to a £50 drinking binge so you can see where in a normal month all yoru surplus cash goes, it will probably be a real eye opener!

the_cat

Ok, good start with the SOA but realistically it can't be accurate yet. If you are running out of money in week 2 of the month then you are spending much more than you have said.

Work out what you have REALLY been spending for the past few months and average it out. These are the figures you should be using at the start of you debt free journey. If you genuinely don't know where the money goes, a spending diary is in order to find out!