Stupidly in debt and need help to find best way out please!

LouiseF_2

I'm new to this site, having come here in desparation a couple of days ago. I'm up to my eyes in debt with a huge overdraft and hefty credit card. My monthly income is the same as yours. However, my problems have come from a 'head in the sand' approach for the last year since I took on a large mortgage. It's a huge comfort to know I'm not the only one out there. I too feel ashamed at being in this position. Anyway, I checked my bank statement earlier this week to discover that my monthly interest payments had spiraled to £75! This was the reality check I needed, I'm afraid. I'm sure there are plenty of people reading this who can't believe it's taken me so long to sort this out. However, I just didn't know what to do. Anyway, I've taken out a 0% credit card to clear my overdraft (the Virgin card lets you transfer money into a current account), and I've set up a monthly direct debit to pay off the balance. My other credit card is already a 0% one and I do pay into it monthly. My challenge now is to make sure I do not slip back into the red. I've also swapped my mobile company to 3-mobile. They have a great deal on at the moment of 1200 mins and 800 texts for £22.50 for six months. This then halves but the cost stays the same. You get a phone too! This is cheaper and gives more mins/texts than my orange contract. I've also registered on the BT light user scheme as I now intend to make my mobile my main phone. I now get all my petrol from Tesco as their loyalty scheme gives 4 x the value of the vouchers for companies like MFI. I'm sure these tips are a bit 'old hat' and obvious to most people - sorry - but I hope they help someone.
Good luck!! Hope it works out for you xx

stupidlyindebt

Thanks Louise. I'm not glad that you are suffering too, but it helps to know I am not alone. I'm afraid I let my issues get too advanced to be able to take advantage of of 0% deals, but I wish you all the best with sorting yourself out.

duncans-mum_2

stupidlyindebt wrote:

My only creditor is my bank and they are demanding instant repayment and have taken most of my last salary in charges. In terms of other 'creditors' I am now behind on monthly utilities payments and my car is no longer insured to drive. But the arm-twisting issue with the bank is that they will not help me or permit me to make payments to ANYONE unless I either go down their debt consolidation route, or get money from elsewhere.

From reading your subsequent posts from when I replied earlier, I now appreciate that you still need more money before the month end for your other bills. When do these usually come out? Are we talking over the next day or two or have you got some breathing space before they are due?

I too have been in the situation a few years ago that the salary I was getting in my bank was being swallowed up purely by my bank overdraft and my loan to the same bank, and it is a vicious circle. The only way I could stop it was to change to another account, and don't forget to cancel the direct debits with the existing account. This ensures they don't stick any more charges on you for failed DD's and also any charges that may come from your utility companies etc for a DD being refused.

It makes me mad that the bank will not give you an unsecured loan for a small amount but will give you a secured one for a big one to consolidate. Its just bullying you. Yes you probably could afford it, and you seem to be in a position to overpay on the mortgage, but have you checked that you have this option to do so? Sorry I am unable to give advice on the immediate cash flow problem and I can only see the bigger picture. Have you got anything to sell on e-bay and or car boot. Obviously this depends on how much you need for bills and how quick etc. I wish you all the best on sorting this out in your head and in practice.

tootles_2

Please , please, please consider very carefully before taking out a further consolidtion loan, its a step to nowhere, unless you are very strict with yourself you will just end up further in debt, beleieve me I know all aout that having done it myself some years ago, and still suffering from the fallout.....you need to work out a proper budget, there will will people along to help you.........lift your head out of the sand and decide that you are going to take control of your money and your life..........you can do it.......

stupidlyindebt

Thanks all. I really appreciate the concern and am touched by all of the help and kind thoughts you are sending my way.

The reason I am considering the loan is because I think it will be cheaper over a five year term than the interest payments would be on my (frozen)credit card and, if I pay off my bank's unauthorised overdraft ASAP, then I will be free to take my current account elsewhere and begin a claim for unfair bank charges.

I have been offered a secured loan for £8000 over 5 years at 11.9% APR. I don't like secured loan companies. I didn't like it when they told me brightly that they were happy to offer me up to £56k over 25 years, or when they tried to convince me to take PPI.... but I simply refused all of the patter and got them to cut to the chase on the deal I originally asked for. Sadly, because of the position I am already in, I don't have the option of chasing 0% credit card deals or getting a better loan rate, but I do have my wits about me and wasn't about to be tempted by the prospect of a new car or a payment holiday, or the option of paying a whopping great sum off over a longer term than I need to. I am in debt, and I am under no false illusions that what I deserve is a holiday - I deserve a kick up the ar*e and am giving myself one right now!

The cost of this secured loan over 5 years would be £175 per month - this is almost exactly the amount that I recently gained in a pay rise. It isn't a great way to celebrate a payrise, but it will buy me the time to get myself straight and take a good long look at a number of personal issues that I need to deal with. And it has already been a serious lesson to me about managing my finances.

My plan, if I complete the loan application is to:

1 Make contact with my credit card, bank and those affected by my recent cancelled direct debits to let them know that I can make payment in full within 10 days

2 Take a frank look at my new SOA and create a manageable budget and schedule regular time to manage it properly in future

3 Open a new current account, in readiness to:

4 Begin a claim to recoup the unfair bank charges I have paid over the last 6 years

5 As part of my new budget to save as much as I can squeeze out of my monthly income to provide (1) a contingency fund because I no longer have a credit card to fall back on, and which will later serve, hopefully as (2) a savings pot which I will use, once large enough, to repay the consolidated loan in full (I have checked , and can do this at any time, incurring only a penalty equivalent to 2 month's interest).

I know that I am not taking an easy road here - but I think that this road makes sense to me and is one I can follow to the end.

I have been inspired by reading through this site all day, in between phonecalls to finance people. Many of you here have got through debt problems by sheer hard work and determination, and have gone on to travel the world, or start to tackle their mortgages.

I would absolutely love for someone to come along and wave a magic wand and make this all go away. But realistically, that would teach me nothing.

I want to take control of this and I think this is the best way.

kathfisch

stupidlyindebt wrote:

I have been inspired by reading through this site all day, in between phonecalls to finance people. I would absolutely love for someone to come along and wave a magic wand and make this all go away. But realistically, that would teach me nothing. I want to take control of this and I think this is the best way.

That's a very healthy attitude, well done to you :T

You do seem to have taken time to look at the situation and decide what is best for you - only you can know what that is.

You're in the right place for keeping your monthly expenses as low as possible and striving for that debt free date - so stick with us won't you?!

Best of luck with negotiating with your creditors in the short term and claiming your bank charges back when everything's settled down!

Dr.Shoe_2

If my bank withdrew my overdraft I'd go to another bank PDQ and let them whistle for it!

Congrats on your lightbulb moment and welcome!

stupidlyindebt

Dr.Shoe wrote:

If my bank withdrew my overdraft I'd go to another bank PDQ and let them whistle for it!

Congrats on your lightbulb moment and welcome!

Thanks for the welcome!

Truely, it is tempting to let the bank whistle... but all that would do is defer my debt-free date. And this is about me, not them!

stupidlyindebt

Oh my goodness. I am sorry to come back to this thread again, but I received documents from the loan company today and am feeling sick about taking this forward. I know that the company legally isn't allowed to contact me during this cooling off period and there is nothing to be gained by rushing into a decision so I have some breathing space. But, oh gosh, I feel sick and wish I had someone to share this decision with.

I have read a lot on these threads about people getting their 'lightbulb' moments and thought that it meant a 'once for all' realisation before moving on. But what I am experiencing feels like a rollercoaster of emotions, feeling at first horrified at what I have done, then relieved to be facing up and dealing with it, then determined and hopeful that I can sort this out, now absolutely sick and breathless with fear at what the worst case scenario might be.

I think I am strong enough to get through this, I think my job is secure; I think I am healthy and fit for the future.... and at the same time I feel absolutely wracked with fear because of the tiny possibility that if I make a wrong decision now, my debt could spiral out of control and I might lose everything.

This is horrible, absolutely horrible. I know it is my fault, I know I got into this mess alone and I have no choice to deal with it alone, and I suppose I am just writing this to get it out of my system and record how it feels, in the hope that I will remember this and never let myself get in this situation again.

Oh God, I am sorry to ramble.....

kathfisch

Hiya!

I've been away and only just seen your post. How are you feeling about it now? It is most definitely a rollercoaster of emotions, its never easy whichever route you go down, but you have considered all the options and hopefully you'll have made the perfect choice.

Hope all's going ok