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Major Debt, Any Advice? Please Help!
Sanj_3
Posts: 3 Newbie
Hi, as the result of an bad divorce I am now in severe debt. I have £10K on 3 different credit cards, £10K on a personal loan and a £7K bank overdraft up to its limit. I earn £25K a year and am struggling!
I can pay my mortgage each month and just about cover the minimum repayments on my cards and loan each month. But it leaves me with virtually nothing. I keep going over my overdraft limit with my bank so they end up charging me on average £150 each month which makes the problem even worse month after month. I wrote to them and they refused to help me saying these were normal charges.
My credit rating is surprisingly good because in the past I've always been very good at handling my money. But this problem is now getting out of hand and I have no idea what to do. I cannot keep paying these amounts each month. I've had to sell anything I can find in my house on ebay to try and keep me afloat each month.
I just dont know what to do, and am getting quite desperate. I've tried to find another job to supplement my income without success.
Can anyone out there help me please?
I can pay my mortgage each month and just about cover the minimum repayments on my cards and loan each month. But it leaves me with virtually nothing. I keep going over my overdraft limit with my bank so they end up charging me on average £150 each month which makes the problem even worse month after month. I wrote to them and they refused to help me saying these were normal charges.
My credit rating is surprisingly good because in the past I've always been very good at handling my money. But this problem is now getting out of hand and I have no idea what to do. I cannot keep paying these amounts each month. I've had to sell anything I can find in my house on ebay to try and keep me afloat each month.
I just dont know what to do, and am getting quite desperate. I've tried to find another job to supplement my income without success.
Can anyone out there help me please?
0
Comments
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hi and welcome
first thing as ever when you want to tackle debt is to actually find out where you are financially the best way of doing this is with a SOA (statement of affairs) which you will need to sit down with a cuppa and fill in as accuratly and honestly as possible http://www.makesenseofcards.com/soacalc.html is the link to use
once you have filled it out format it for MSE and post it up on here for us to try and help you spot areas of potential savings and any other ideas to help you
the other advice i can give at the moment is to seek advice from one of the FREE debt charities who are CCCS, CAB, national debt helpline or payplanDrop a brand challenge
on a £100 shop you might on average get 70 items save
10p per product = £7 a week ~ £28 a month
20p per product = £14 a week ~ £56 a month
30p per product = £21 a week ~ £84 a month (or in other words one weeks shoping at the new price)0 -
Hi and welcome
Just wanted to say well done for coming on and looking for advice.
I agree with Gonzo's action plan.
Once you have a written monthly budget we can see just how far short you are of meeting your repayments, which will then help decide what is the best course of action.
Additionally as you are have an overdraft and are getting charged it might be a good idea to set up a new bank account with a bank that you don't owe any money to, then move you salary etc across to the new account, this will help you control how you spend your money without having it all swept up in charges and leaving you short. Additionally if you frequently exceed your overdraft there is a chance that they will cancel your overdraft and 'use' all your pay etc to repay the debt leaving you with nothing to live on for a month.A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0 -
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1556
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1556
Monthly Expense Details
Mortgage................................ 420
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 86
Electricity............................. 39
Gas..................................... 40
Oil..................................... 0
Water rates............................. 19
Telephone (land line)................... 20
Mobile phone............................ 45
TV Licence.............................. 12.29
Satellite/Cable TV...................... 20
Internet Services....................... 10
Groceries etc. ......................... 80
Clothing................................ 20
Petrol/diesel........................... 60
Road tax................................ 0
Car Insurance........................... 29
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..................... 15
Contents insurance...................... 15
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 8
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Bank Fees............................... 145
Overdraft Interest...................... 45
Bank Account Charge..................... 25
Child Maintenance....................... 235
Total monthly expenses.................. 1388.29
Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 221000
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 192000...(420)......0
Total secured & HP debts...... 192000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................10000.....117.......0
Barclaycard....................5000......80........0
Lloyds TSB Card................5000......100.......0
Halifax Card...................5800......80........0
Total unsecured debts..........25800.....377.......-
Monthly Budget Summary
Total monthly income.................... 1,556
Expenses (including HP & secured debts). 1,388.29
Available for debt repayments........... 167.71
Monthly UNsecured debt repayments....... 377
Amount short for making debt repayments. -209.29
Personal Balance Sheet Summary
Total assets (things you own)........... 221,000
Total HP & Secured debt................. -192,000
Total Unsecured debt.................... -25,800
Net Assets.............................. 3,2000 -
Hi Sanj,
As well as looking at reducing your outgoings, you should also see if you can increase your income. Have you got an option to take in a lodger to help supplement your income? The government has a rent-a-room scheme whereby you can earn £4,250 a year tax-free just from that.
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804
Also have a look at this forum to see if there's anything else you can do:
http://forums.moneysavingexpert.com/forumdisplay.html?f=145
Many of us on here do online paid surveys, 2nd jobs and focus groups to help increase our income, so you wouldn't be alone.
Good luck.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1 Is this essential or could you do without it?
Monthly Income Details
Monthly income after tax................ 1556
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1556
Monthly Expense Details
Mortgage................................ 420
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 86 If you are living alone do you have the 25% single occupancy discount? Is this split over 12 months or 10? Swap to 12 months, if not already.
Electricity............................. 39 Seems REALLY high. Mine is £12 a month for one person living in a 2-bed flat.
Gas..................................... 40 I'm sure this could be reduced too. Try to see if switching suppliers will reduce it. Also turn down thermostat and turn unused radiators off.
Oil..................................... 0
Water rates............................. 19
Telephone (land line)................... 20 Can this go?
Mobile phone............................ 45 Very high! Try to lower your tariff or go PAYG.
TV Licence.............................. 12.29
Satellite/Cable TV...................... 20 Get rid of this.
Internet Services....................... 10
Groceries etc. ......................... 80
Clothing................................ 20
Petrol/diesel........................... 60 Do you drive to work or can this be reduced? Can you do without the car altogether?
Road tax................................ 0 You need something here if you have a car on the road.
Car Insurance........................... 29 Shop around for cheaper insurance the next time it's due.
Car maintenance (including MOT)......... 0 You need something here.
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..................... 15
Contents insurance...................... 15
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 8
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Bank Fees............................... 145
Overdraft Interest...................... 45
Bank Account Charge..................... 25
Child Maintenance....................... 235
Total monthly expenses.................. 1388.29
Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 221000
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 192000...(420)......0 Is this interest only or repayment? If not already, can you go interest only for a short while until you find your feet?
Total secured & HP debts...... 192000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................10000.....117.......0
Barclaycard....................5000......80........0
Lloyds TSB Card................5000......100.......0
Halifax Card...................5800......80........0
Total unsecured debts..........25800.....377.......-
Monthly Budget Summary
Total monthly income.................... 1,556
Expenses (including HP & secured debts). 1,388.29
Available for debt repayments........... 167.71
Monthly UNsecured debt repayments....... 377
Amount short for making debt repayments. -209.29
Personal Balance Sheet Summary
Total assets (things you own)........... 221,000
Total HP & Secured debt................. -192,000
Total Unsecured debt.................... -25,800
Net Assets.............................. 3,200
I've made some notes in red. I also notice that you have about £28k equity in the house. Is selling and moving to a cheaper property an option?This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
Hi Sanj
That was quick!Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1556
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1556
Monthly Expense Details
Mortgage................................ 420 is this a repayment mortgage?
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 86 do you claim the 25% single person discount?
Electricity............................. 39 looks quite high for 1 person, do you have arrears? are your bills estimated or actual? have you checked recently to see if you are with the cheapest supplier and the best tariff? internet tariffs are cheaper than the standard tariffs.
Gas..................................... 40
Oil..................................... 0
Water rates............................. 19 is this on a meter?
Telephone (land line)................... 20
Mobile phone............................ 45 can you reduce this at all? ask if you can drop to a lower tariff?
TV Licence.............................. 12.29
Satellite/Cable TV...................... 20
Internet Services....................... 10 can you try combining landline, internet & tv to get cheaper than £50 per month, or switch to freeview and get combined landline & internet for £20.
Groceries etc. ......................... 80
Clothing................................ 20
Petrol/diesel........................... 60
Road tax................................ 0 need to budget 1/12 of the annual cost here
Car Insurance........................... 29
Car maintenance (including MOT)......... 0 need to budget something for annual service, MOT, tyres etc
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 do you never have any?
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 15
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 8
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Bank Fees............................... 145 :eek: open a new account then write to your bank with an offer to start repaying the OD, ask them to freeze interest & charges
Overdraft Interest...................... 45 as above (although really you need to look up the APR and include it below in your debts.
Bank Account Charge..................... 25 almost never worth paying for a premium account, cancel straight away.
Child Maintenance....................... 235 is this the CSA figure?
Total monthly expenses.................. 1388.29
Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 221000
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 192000...(420)......0 is this right? how long is the mortgage over? or is it interest only, do you have any plans in place for repaying the equity?
Total secured & HP debts...... 192000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................10000.....117.......0 what are the APRS on all of these, look them up on your statements.
Barclaycard....................5000......80........0
Lloyds TSB Card................5000......100.......0
Halifax Card...................5800......80........0
Put your overdraft in here as well.
Total unsecured debts..........25800.....377.......-
Monthly Budget Summary
Total monthly income.................... 1,556
Expenses (including HP & secured debts). 1,388.29
Available for debt repayments........... 167.71
Monthly UNsecured debt repayments....... 377
Amount short for making debt repayments. -209.29
Personal Balance Sheet Summary
Total assets (things you own)........... 221,000
Total HP & Secured debt................. -192,000
Total Unsecured debt.................... -25,800
Net Assets.............................. 3,200
Hi Sanj
You are clearly struggling and cannot go on as things are. I would suggest you talk to one of the debt charities - http://forums.moneysavingexpert.com/showthread.html?t=2077631
about the options suitable for you.
Do keep trying to find a second job. Is there any chance of payrise/promotion in your current job? or of you finding a better paid main job?
Could you get a lodger to help with the costs perhaps?A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0 -
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1556
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1556
Monthly Expense Details
Mortgage................................ 420
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 86
Electricity............................. 39 can you try and reduce alittle? use a comparisions site to see if you can get a better deal
Gas..................................... 40 same as above
Oil..................................... 0
Water rates............................. 19
Telephone (land line)................... 20
Mobile phone............................ 45 reduce this cheaper deal or try PAYG
TV Licence.............................. 12.29
Satellite/Cable TV...................... 20
Internet Services....................... 10
Groceries etc. ......................... 80
Clothing................................ 20
Petrol/diesel........................... 60
Road tax................................ 0 is your road tax free? if not you should budget for it
Car Insurance........................... 29
Car maintenance (including MOT)......... 0 you need to budget something here
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 you should budget a little here
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 15
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 do you not buy any presents?
Haircuts................................ 8
Entertainment........................... 0 you should budget even a little something here
Holiday................................. 0
Emergency fund.......................... 0 you should put something here
Bank Fees............................... 145 are these the charges for going over your overdraft?
Overdraft Interest...................... 45 your overdraft and charges should be in you unsecured
Bank Account Charge..................... 25 whats this? are you paying for your account?
Child Maintenance....................... 235
Total monthly expenses.................. 1388.29
Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 221000
Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 192000...(420)......0
Total secured & HP debts...... 192000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................10000.....117.......0 what are the aprs on all your debts and if on special rates when do they end and what rate will they revert too
Barclaycard....................5000......80........0
Lloyds TSB Card................5000......100.......0
Halifax Card...................5800......80........0
Total unsecured debts..........25800.....377.......-
Monthly Budget Summary
Total monthly income.................... 1,556
Expenses (including HP & secured debts). 1,388.29
Available for debt repayments........... 167.71
Monthly UNsecured debt repayments....... 377
Amount short for making debt repayments. -209.29
Personal Balance Sheet Summary
Total assets (things you own)........... 221,000
Total HP & Secured debt................. -192,000
Total Unsecured debt.................... -25,800
Net Assets.............................. 3,200
hi
firstly well done for posting
ive listed a few comments above but have to say i feel you really need to relook at your soa as i dont think you have listed everything, you need to be budgeting for car maintenance etc, and do you really not buy any presents or not spend anything on entertainment
also you bank charge of 25 are you paying that for having the accounts as you really cant afford it
i hate to say it but i think you prob have a bigger shortfall than it says above that may sound bad but we just have to work out ways of reducing your outgoings an upping your income, do you have anything to sell? can you get a lodger etc
stay positive and remember there are always debt charties who you can talk to also0 -
Thank you all so much for your quick replies.
My mortgage is interest only and on base rate.
My gas & electricity have just been changed to try and get a better deal
Just phoned Orange who've now reduced my monthly bill to £30
My car tax is £125 per year
My father does my MOT's and maintains my car for free
I spoke to my bank regarding the account charge, if I switch to a normal account, then I lose my preferential overdraft interest rate and I end up paying more each month
Barclaycard 16.9% APR
Lloyds TSB 0.945% Monthly
Halifax 15.9% APR
The telephone, Internet and TV is all with sky and is the cheapest I package I could find
Council tax is with 25% discount
Many thanks!0 -
car tax you need to budget about 11 per monthThank you all so much for your quick replies.
My mortgage is interest only and on base rate.
My gas & electricity have just been changed to try and get a better deal
Just phoned Orange who've now reduced my monthly bill to £30
My car tax is £125 per year
My father does my MOT's and maintains my car for free
I spoke to my bank regarding the account charge, if I switch to a normal account, then I lose my preferential overdraft interest rate and I end up paying more each month
Barclaycard 16.9% APR
Lloyds TSB 0.945% Monthly
Halifax 15.9% APR
The telephone, Internet and TV is all with sky and is the cheapest I package I could find
Council tax is with 25% discount
Many thanks!
does you father pay for any spares needed? what about tyres? if not you still need to budget something for these
what is your current overdraft rate? what will it changes to? you really cant afford to pay 25 per month for your account i hate to sound harsh but your paying for an account with credit really as you can not possible be living off your wage without using credit
you really need to open a new account with a diff bank and get wages payed into that then come to some agreement to pay off your overdraft and stop paying for an account you cant afford0 -
Sanj
You need to be opening another basic bank account and think about moving you income into there ASAP.
Then talkj to a debt charity like CCCS or NDL.
Can you take a lodger by the way?If you've have not made a mistake, you've made nothing0
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