£41k in debt

watnow

Hi,
I’m in need of help and advice. This is a long story but please stick with it because I’m really really hoping you guys can help.
Because of years being stupid, not caring how I spent my money and burying my head in the sand when it came to bills. I have ashamedly built up a debt of £41k and a rock bottom credit rating.
I had my light bulb moment over a year and a half ago and decided to do something about it. But because of my job I was limited to what I could do. I travel abroad a lot at sometimes very short notice so didn’t have much time to do research and joined a company called MoneyWorries. I now know firsthand how rubbish they are and I’m now worse off than when I started with them.
So I’ve decided to go it alone. In an attempt to free up as much of my £1500 a month wages, I’ve sold my flashy car, which the money for I bought a small cheap run around and paid off one of my creditors. I’ve also left my rented flat and moved in with a friend. So apart from my mobile and cheap car running costs I can now pay more money towards my debts.
But because I’m away a lot I can’t keep in constant contact with my creditors, which every time I come back I notice they seem to have taken advantage of and charged me for any old reason. So I’m under the impression a DMP is ideally what I need. So I contacted CCCS for help. But they said, because I have freed that amount of money I can afford my repayments, so they can’t help.
So does this mean if CCCS said this, all the other charities are going to say the same?
Is a DMP the right solution for my situation?
I’ve got no idea what to do?

gonzo127

hi well first of all welcome and congrats on yoru lightbulb moment

next thing to do is write up a honest and detailed SOA (statement of affairs) and post it up here for us to offer some extra advice on yoru income and expenditure http://www.makesenseofcards.com/soacalc.html

now the other debt charities might or might not say the same however it always depends on your SOA, in some ways you might be best doing it with proper budgetting as it might not affect your credit rating as much, you can always do a self managed DMP.

doing a self managed DMP does not mean you have to be in constant contact with them, just initally whilst you try and get them to agree to your payments once it is agreed what you have to do is set up a standing order to go out of your account each month for the agreed amount, this is automatic so will not matter if you are in or out as it will happen so long as you have the money in yoru account

Tixy

Hi

As gonzo says if you can afford the minimums you are better to be making these payments than doing a DMP.

Can you not arrange for online banking for all your debts so that you can keep an eye on all that is happening whilst you are away. Also most will move all paperwork to by email if you ask them to (in fact they usually prefer it).

If you start by doing a detailed statement of affairs this will allow us to advise better on what solution might suit you.

watnow

Sorry it's taken me ages to reply. I had to go away again.

Gonzo127 thank you for your quick reply and welcoming me to MSE.

Question for you, is it worth me doing an SOE? Because as of the end of this month, until i set up a DMP, i've managed to get myself in a situation where my only outgoings will be £360. They're for £200 for staying at my friends' with bills included. The rest is car insurance and running costs and my mobile phone.
Also it worth me trying to get a DMP with someone or should i try and organise one myself? Is it complicated to set one up? Also if i do set one up myself aren't the creditors more likely to keep adding interest?

Tixy,thank you for your reply as well. But to answer your question i'm sometimes unable to get to a computer when i'm away so internet banking can be difficult for me.
Do creditors accept contact by email only? I really don't want my friends' house to be inundated with my mail from creditors? Or can things only be done through mail?
Also, yes i can now afford the minimum payments but ideally i want to pay as much as i can to try and get rid of the debt as soon as possible. I'm now getting lots of phone calls offering me an IVA. But i just see that as me in handcuffs so to speak for 5 years where i can not do a thing. Plus a futher year to get my credit history ok again? Am i right in thinking that? Or is an IVA my only way to get debt free in the least amount of time?

Poosmate

I think I may be in a similar situation to you although I have nowhere near that amount of debt but I do have a mortgage and house to run.

It might help if you could post what your debts are and their APR's and minimum payments and the amount of salary you have available to pay towards your debts.

So basically, even though your outgoings have reduced dramatically, it would still be a good start to post your SOA. You could use this link:

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

The best way to reduce your debts and most economical is to pay minimum payments to all but the one with the highest interest rate. Pay as much as possible off the highest interest rate one first.

To get an idea of how what effect this will have on your debts use this link:

http://www.whatsthecost.com/snowball.aspx

Don't be too alarmed at the final date/length of time it gives, it's just a guide. You will probably get pay rises in the future, interest rates will go down as well as up, you may be able to shift some of your debt to interest free offers or low rate life of balance offers, so it's not set in stone. I have extra cash to pay a bit more off by the end of this month so will possibly knock about 2 months off my total debt free date.

Have a play with it and post your SOA on here.

Poo

speedycat

Hi Watnow

Welcome to MSE! - I'm fairly new too So you've got approximately £1140 left a month to throw at your debts at the moment then? That's good.

I think like the others have said, you should do a SOA and post it on here. It will be good for you to see all your options - get good advice from others - see how many creditors you have, which have the largest outstanding debts etc.

Remember that although creditors are not likely to freeze interest on debt, the interest does go down as the debt goes down with regular monthly payments and almost all creditors will offer you final settlement figures which can be considerably less than the original debt.

Personally I wouldn't go into an IVA but for others it can be a good option. I came to arrangements myself with our creditors. I pay them by either direct debit or standing order on the 1st of every month and when they contact me to talk about settling or to see if we can increase our monthly payments - it is always done by mobile phone. They don't need to post you anything if you don't want them to.

You need to get yourself on top of it. Take a day off and ring all of them up, talk to them and come to arrangements with all of them. (Doing an SOA really will help you know what to offer)

Best of luck

Poosmate

I forgot to say, I have direct debits set up for the minimum payments to all my creditors. I then pay extra off the one with the highest interest rate via internet banking. It's quick and simple and only takes a few minutes each month. I never miss any payments or get any charges. Interest? Yes I do pay the interest but I haven't trashed my credit file so have options to be able to shift the debt around to lower rates if needs be.

Hope that helps

Poo

JA1000

I think we are all guessing until we see an SOA. How can your outgoings be only £360, you say rent, car insurance and phone. I think you have missed loads off this, debt eating drinking.