It's time to pull my head out of the sand

Paul_london_2

Hi,

This is my first post but i have been looking at the forum for a while and decided to make today the day i start to try and change my financial situation.

i am 26 and over the last 8 years have found myself getting deeper and deeper into debt purely by my own stupidity and living beyond my means.:(

Like many people on here i started using a credit card with a small limit, this was increased time and time again and to cut a long story short i have now found myself in a very large amount of debt (around £30k :eek:)

Credit card 1 £6,000
Credit Card 2 £4,850
Credit card 3 £1,450
Credit Card 4 £200

Personal loan £15,000 (down from £24,000)

Now for the worst part, before xmas 2009 i took out one small payday loan this has now increased to three payday loans totalling £2,400

I have a fairly well paid job and have always convinced myself that the debt will be paid off if i am careful for a few years...... as you can see this has not happened and i have decided enough is enough and today is the day i need to change my situation.

I have looked into IVA's and DMP but due to my job and the amount of available income i would have a month (around £1,000) if not for the payday loans i feel if i am strict i will be debt free quicker going it alone.

I was planning on starting my long journey to being debt free by paying off the horrible payday loans, i have phoned my credit cards and loan company and explained my situation, they are unwilling to freeze the interest and accept reduced payments for a limited period (i asked for 4 months) to allow me to pay off the payday loans, a couple of the compaines were very understanding although they could not accept a short term payment plan they have advised me to not make a payment for two months which would allow me to clear the payday loans.

I have been looking on the internet and have seen that a default is not ideal as i was hoping to get a mortgage in a few years once i am debt free. Does anyone know if by not paying my cards and loan for two months they will register a default even if i have been up front and honest with them???

Any advise regarding my situation would be appriciated, i will try and keep you updated as to my progress

Faye449

Upfront and honest wont make the blindest bit of difference to them but I THINK you have 3 months before you get a default- is it in your Ts and Cs?? Only thing is if you miss payments they will expect you to make up the difference? Sorry I'm not one of the fountains of knowledge on here but didn't want to read and run :-)

Well done for getting your head out of the sand, thats the worst bit!

happyhaddock_2

Hi Paul can't really offer any advice, just wanted to say well done for facing up to it all, often the hardest part, and good luck with getting debt free. I think those Payday loans are the worst it seems they prey on people when they're most vulnerable. Take care xx.

Paul_london_2

Thanks Faye449, I should be able to make up the arrears within two months so hopefully that will stop them registering defaults, like many others on the forum i'm really just hoping to break the cycle of payday loans, once i have done this i will put up my SOA and hopefully with some advise i will be able to start making a dent in my debt.

katsu

Try your local credit union to get a loan from them to replace your payday loans (or at least one of them maybe?) at a sensible interest rate.

Post an SOA here (a full list of incomings and outgoings from makesenseofcards) and people can help you save money for your repayments.

savingholmes

I think the paydayloans are priority as their interest is so extortionate. If you post a statement of affairs we can have a look whether there is any fat left to trim off your budget so that you might be able to avoid defaulting. It may also be good for you to ring CCCS and National Debtline prior to making any decisions.

We have been in £30K of debt in the past and although it is an uncomfortable place to be - there is hope. You will clear it one day with some effort and persistence.

Paul_london_2

Hi all,

Here is my SOA as promised, this includes my current Payday loans i will add another SOA minus the payday loans which is where i hope to be after i have missed my card and loan payments this month, not ideal i know but it's the only way i can see of clearing these.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2550
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2550

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 180
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 50
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 13
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 0
Satellite/Cable TV...................... 30
Internet Services....................... 30
Groceries etc. ......................... 120
Clothing................................ 20
Petrol/diesel........................... 30
Road tax................................ 15
Car Insurance........................... 48
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 120
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................................ 12
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1088


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 4500
Other assets............................ 0
Total Assets............................ 4500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 5600.....(180)......0
Total secured & HP debts...... 5600......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................15000.....412.5.....0
Bt Credit Card.................6300......180.......0
Egg Credit Card................1450......35........0
Halifax Overdraft..............1440......30........0
QuickQuid PD Loan..............937.5.....937.5.....0
Payday UK Loan.................831.......831.......0
Wonga PD Loan..................832.......832.......0
Capitalone CC..................200.......15........0
Halifax Credit Card............5000......130.......0
Total unsecured debts..........31990.5...3403......-


Monthly Budget Summary
Total monthly income.................... 2,550
Expenses (including HP & secured debts). 1,088
Available for debt repayments........... 1,462
Monthly UNsecured debt repayments....... 3,403
Amount short for making debt repayments. -1,941

Personal Balance Sheet Summary
Total assets (things you own)........... 4,500
Total HP & Secured debt................. -5,600
Total Unsecured debt.................... -31,990.5
Net Assets.............................. -33,090.5

RAS

If you have a card and bank account with the same company (Halifax), there is a very real chance that they will off-set your unpaid credit card debt against your current account.

Do you have to run a car?

RAS

Paul_london wrote: »

Hi all,


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3 - house share?
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2550
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2550

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 180
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 50
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 13
Telephone (land line)................... 0
Mobile phone............................ 40 - can you reduce this pqackage?
TV Licence.............................. 0
Satellite/Cable TV...................... 30 - get rind of this ASAP
Internet Services....................... 30
Groceries etc. ......................... 120
Clothing................................ 20 - do without for a few months?
Petrol/diesel........................... 30
Road tax................................ 15
Car Insurance........................... 48 - this is high?
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 120 - what iss this?
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................................ 12
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1088


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 4500
Other assets............................ 0
Total Assets............................ 4500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 5600.....(180)......0
Total secured & HP debts...... 5600......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................15000.....412.5.....0
Bt Credit Card.................6300......180.......0
Egg Credit Card................1450......35........0
Halifax Overdraft..............1440......30........0
QuickQuid PD Loan..............937.5.....937.5.....0
Payday UK Loan.................831.......831.......0
Wonga PD Loan..................832.......832.......0
Capitalone CC..................200.......15........0
Halifax Credit Card............5000......130.......0
Total unsecured debts..........31990.5...3403......-


Monthly Budget Summary
Total monthly income.................... 2,550
Expenses (including HP & secured debts). 1,088
Available for debt repayments........... 1,462
Monthly UNsecured debt repayments....... 3,403
Amount short for making debt repayments. -1,941

Personal Balance Sheet Summary
Total assets (things you own)........... 4,500
Total HP & Secured debt................. -5,600
Total Unsecured debt.................... -31,990.5
Net Assets.............................. -33,090.5

Can you get a credit union loan to cover one card? Speak to your laon company and ask for two months grace and sort out the second payday loan?

Paul_london_2

RAS wrote: »

If you have a card and bank account with the same company (Halifax), there is a very real chance that they will off-set your unpaid credit card debt against your current account.

Do you have to run a car?

I have just applied for a basic step account with Natwest and plan on having my wages paid into this account (i have no debt with Natwest) due to all the payday loans going out on the last working day of the month their will be nothing left for the Halifax to take

I could live without a Car but as it is on finance i am unable to sell it until this is repaid, the Petrol is for one trip home a month and a weekly shop.

RAS

Re the car, can you get it off the road, SORN and cancel the trips home for three months. Assuming that you can dfer the insurance in some way. It is another 100 per month.