Time to tackle the problem..please help!

Irishmummyof2

I don't know where to begin really so please bear with me.
My problem with debt started when I left home at 17 with a baby and realized that i could get catalogues and prov loans on the never ever.
The hubby and I did get good at keeping up with repayments but lately things are starting to spiral out of control and my hubby has been taking out those payday loans. We had 2, I cleared one from paydayuk after a few months but he went and got another one to try and 'help us' from payday express for £400, then they charged £100 and it is due at the end of the month plus we still have an outstanding one from quickquid for £150. I have just found out that I have no job, was only part time as needed but unfortuantely there is just no work.

So i have sat down this morning and had a full and frank discussion with my husband and we have both decided that it is time for us to both knuckle down and pay off the debt instead of borrowing more from Peter to pay Paul.

I have completed a SOA to the best that I can and any advice would be much appreciated.

I am starting to feel sick and panic over these payday loans more than anything else as they are planning to take £650 out of our bank account at the end of the month and that will put us even more in a bad situation.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 930
Benefits................................ 490
Other income............................ 0
Total monthly income.................... 1420

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 360
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 40
Gas..................................... 0
Oil..................................... 20
Water rates............................. 0
Telephone (land line)................... 40
Mobile phone............................ 30
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 30
Petrol/diesel........................... 80
Road tax................................ 15
Car Insurance........................... 38
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 12
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)...... 40
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 917


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 300
Other assets............................ 0
Total Assets............................ 300

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
o2 mobile......................190.......0.........0
provident......................1200......120.......0
simply be......................80........0.........0
loan from a friend.............380.......100.......0
credit union...................400.......40........0
social fund....................300.......0.........0
m & s credit card..............1600......50........0
payday express.................500.......500.......0
quickquid......................150.......150.......0
Total unsecured debts..........4800......960.......-


Monthly Budget Summary
Total monthly income.................... 1,420
Expenses (including HP & secured debts). 917
Available for debt repayments........... 503
Monthly UNsecured debt repayments....... 960
Amount short for making debt repayments. -457

Personal Balance Sheet Summary
Total assets (things you own)........... 300
Total HP & Secured debt................. -0
Total Unsecured debt.................... -4,800
Net Assets.............................. -4,500

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.



Edited to add I forgot that we also have an overdraft with our bank account which we are constantly living in and we are charged roughly £5 a month for doing this.

irishnini

Hi irishmummyof2, Welcome to MSE!! theres loads of people on here that can help and many who have been in similar situations to yours...they'll be along soon...just a thought, if your in ROI could you see if you credit union could help - got me out of many a sticky situation. Also, check out the oldstyle moneysaving board, really good for keeping the food costs down.

Well done on tackling this, know your probably in a panic, but your in the right place...

Nini:T

Jedilibrarian

Hi Irishmummy
I'm no way an expert (they will be along soon!) but I've put some suggestions below. Well done for posting and taking your debts in hand.

Irishmummyof2 wrote: »

I don't know where to begin really so please bear with me.
My problem with debt started when I left home at 17 with a baby and realized that i could get catalogues and prov loans on the never ever.
The hubby and I did get good at keeping up with repayments but lately things are starting to spiral out of control and my hubby has been taking out those payday loans. We had 2, I cleared one from paydayuk after a few months but he went and got another one to try and 'help us' from payday express for £400, then they charged £100 and it is due at the end of the month plus we still have an outstanding one from quickquid for £150. I have just found out that I have no job, was only part time as needed but unfortuantely there is just no work.

So i have sat down this morning and had a full and frank discussion with my husband and we have both decided that it is time for us to both knuckle down and pay off the debt instead of borrowing more from Peter to pay Paul.

I have completed a SOA to the best that I can and any advice would be much appreciated.

I am starting to feel sick and panic over these payday loans more than anything else as they are planning to take £650 out of our bank account at the end of the month and that will put us even more in a bad situation.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 930
Benefits................................ 490
Other income............................ 0
Total monthly income.................... 1420

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 360
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 40
Gas..................................... 0
Oil..................................... 20
Water rates............................. 0
Telephone (land line)................... 40 can you reduce this further?
Mobile phone............................ 30 can you reduce this further
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200 wow amazing! Do you have enough food in that you could spend less this month? The OldStyle boards will help you make meals from practically nothing!
Clothing................................ 30 can you cut this back for a while?
Petrol/diesel........................... 80 any chance of lowering?
Road tax................................ 15
Car Insurance........................... 38
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 12
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 nothing here?
Life assurance ......................... 0 or here?
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40 cut to bare minimum
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 917


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 300 is your car essential? if you used pub transport instead could you make a saving?
Other assets............................ 0
Total Assets............................ 300

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
o2 mobile......................190.......0.........0
provident......................1200......120.......0
simply be......................80........0.........0
loan from a friend.............380.......100.......0 would your friend let you defer for a couple of month to get the payday loans cleared?
credit union...................400.......40........0
social fund....................300.......0.........0
m & s credit card..............1600......50........0
payday express.................500.......500.......0
quickquid......................150.......150.......0
Total unsecured debts..........4800......960.......-
are you not paying anything to o2, simply be, and social fund every month? Are they ok with this?

Monthly Budget Summary
Total monthly income.................... 1,420
Expenses (including HP & secured debts). 917
Available for debt repayments........... 503
Monthly UNsecured debt repayments....... 960
Amount short for making debt repayments. -457

Personal Balance Sheet Summary
Total assets (things you own)........... 300
Total HP & Secured debt................. -0
Total Unsecured debt.................... -4,800
Net Assets.............................. -4,500

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.



Edited to add I forgot that we also have an overdraft with our bank account which we are constantly living in and we are charged roughly £5 a month for doing this. What does your overdraft look like? Can you use it to pay the payday loans? Might be cheaper in long run.

Since you are no longer in work will your benefits go up?

Hannah_10

You forgot MOT, it's a £300 car so it's definately past the 3 years old or however old they are for needing an MOT. Not sure what MOTs cost, call it a fiver a month for the sake of a figure. Then you absoloutely do want to put some in maintainance for a car that old, I would put on another fiver at least, even if all maintainance means is oil every so often or for many people another battery last february when the old ones all karked it in the snow!

Couldn't help but notice your car insurance either, it's over £450 a year! On a car that old/cheap/tatty (sorry, not meaning to sound rude) if you've got anything more than 3rd party it's pointless most of the time. See if you can save any by taking out optional extras you might not have realised were in there too- like european cover (probably not using) and consider lowering the breakdown cover. If hubby or you have the sort of friends/family who know thier way round a set of spanners then you ought to be able to get away with just roadside (inc. local recovery) as I doubt that car does many long trips. Also look at Martins page on the main forum about how to reduce your car insurance- which of you has a Nan and Gramps with a clean record then! (Will make sense if you find the page).

Overall your expenditure is impressively low to be perfectly honest.

If you don't mind a question what's the £12 "other child related expenses"?

Also another thing to consider is- are you sure you don't need prescriptions for hubby or you every so often? If any of you wears glasses think about that too, I add mine into my budget even though I only buy them every 3 years.

So are your water rates in with the rent then or are you building up horrible arrears?

Oh and who cuts your hair for nothing? Got a sister in the trade or just forgot that bit?

And entertainment, I know not everyone will agree but with two children (the most precious things you have ever been gifted or ever will) allowing a fiver for a game rental occasionally or a go on the waltzer when the fair is in town is what keeps life from becoming a monotone depression coloured hell. Stick a fiver to a tenner on this and treat yourselves in small ways every so often.

Not that I mean to be putting your expenses up, just that unless the budget is practical any plan you base on it wont work and the last thing we want to see is you going into full scale financial meltdown just coz little Timmy sat on his specs and broke them, or something else unexpected like that. On a budget as tight as yours is unless we make sure that things like MOTs, occasional prescriptions, etc. are factored in then you're too vulnerable to the slightest disaster. A good plan is one that you can live with.

Even after we chuck in a bit of leeway I'm reckoning that you're going to find you have £450-ish to repay with every month and £4800 of debt. That's actually really really good! According to my maths thats you debt-free in 10-11 months, even after we build a bit of leeway back into your budget because right now it's too tight to last without a disaster.

The next question is how to make your £450ish meet all your repayments- well right now the sums don't add up no matter how you look at them eh. Your repayments are more than your whole family lives on including rent!

I count nine creditors there, of which six are known to get tricky sometimes and pretty much all of them have got high interest levels (provident- typical 272% apr). So I think repaying your total accumulated debt over 10-11 months is going to be hard to get some of them to accept.

That said- what choice have you got, you really can't cut back much harder without the kids getting ill!

For this reason I am gonna say get hold of (look up cccs. co.uk sorry I'm not allowed to post links) and get on a debt management plan.

They will take your £450ish and split it up to pay your creditors off. The difference between CCCS and other organisations is CCCS are a charity. Other organisations offering a debt management plan (DMP) are making money and thier charges may cost you quite a lot more that you realised in the long run.

The down side is you may end up with your creditors filing defaults against you which are like classroom demerits on a kids gold-star sticker chart. They show up when a company credit checks you for a loan/card/account.

But the upside is the CCCS will walk you through the whole process and help you with how to respond to any snotty letters and in 10-11 months you'll both be free to lie on the whole of your £1420 each month without the stress of ondering how you're gonna pay and who!

Irishmummyof2

Hi, Thanks for your replies.
Here is some answers to the things you have suggested.

Car Ins- Yep we drive an old banger, and only have 3rd party insurance for 2 drivers...it is due for renewal in october and it will be with a new company as current one is Quinn Direct.

Mobiles/ telephones- £30 a month for mobiles is for 2 pay as u go. The landline amount is for the internet and landline.

The other child expend is youth club which my 2 kids go to once a week.

Water rates- There is none in northern ireland..thank god.

Rates- Is in with the rent.

Haircut- My cousin does all of the household for nowt, usually just a cooked meal and a glas of wine.

I don't have contents or life insurance at the minute.

I have well stocked cupboards and freezers and am trying not to do any shoping until neccessary.

I am guilty of not paying anything to 02 etc at the minute, I have just received a payment card from simply be and am going to start paying payments through tht at payzone outlets.

Unfortunately I cant get out of paying £100 to the friend a month, they really need this paid back asap.

little_miss_T

Hi Irishmummyof2,

i know exactly the position you are in with these payday loans, i have had them and ny hubby currently has one.

Will one of them not let you deffer the payment for this month (only paying the interest) that means that it may be possible for you to pay the other one off. then next month you can pay it off and be rid of these sharks.
I say sharks because i once applied for a Payday Express Loan but they said that if i am successful someone will call me, no one did, but then they put money into my account without telling me about it and i spent it without realising that it was not my money.. now they are chasing me for the full amount (which i understand) and the interest, which i think is totally unfair.

I know some of them say that deffering the payments is not really an option(supposedly promoting responsible lending) but if you call them and tell them that you have had an unexpected bill to pay and you just dont have the money to pay it, but you will pay it off in full next month, they might just be reasonable.

The only other option is (and i know i am going to be shot down in flames for this) cancel your debit card with the bank and tell them that you have lost it, as this is where they will take the payment from first, and then try and scrape some money together from somewhere and call them and pay it.. at least then it is on your terms. but dont leave it too long because they will probably kidnap you for the money if its not paid(ok ok slight over exaggeration)
There is a chance that if they have got your bank details (which they will have as they paid the money into that account) they may try and take the money out of there.. there are not suopposed to do this but they can set up a DD and get it like that.. if they do just recall the direct debit with the bank..

I know that i am probably telling you to do the total wrong thing in terms of getting rid of these debts but i know how they work and how hard it is to get away from.. otherwise you will borrow from another one to pay this one and so on and so on.. it will be a never ending spiral unless you put a stop to it.

hope this helps

Best of luck

xxx

Happytogetdebtfree

Hi and welcome just wanted to wish all the best xx

Irishmummyof2

Thanks little miss T,

I have read a few posts where people seem to think this is the best option. If they do try and recall it through a direct debit and there is no funds available, will my bank still pay it and then ask me to pay them?

I am going to pay the quickquid one off in full this month as I have the funds to do that..but that leaves me short paying towards the other one.

I have filled out a debt remedy profile on another website and they have supplied a letter which i will send to the other payday company.

I will get there slowly!

dancingfairy

I would try and speak to your bank and see if you can incease the overdraft by 500 this month if possible. This will enable you to pay off both the payday loans and make minimum payments to the others and you should then be in a position to pay all the minimums on the other debts and start tackling them as well next month.
If this is not possible then you will probably need to consider a dmp as suggested already.
Get in touch with your local CAB/CCCS/National Debtline and see what they say if the bank can't help.
CCCS will give you budgets for everything which may well be higher than what you are currently spending - it's good to have leeway in your budget. However say CCCS give you a budget of 400 pounds a month for food and you only spend 200 pounds then the other 200 pounds can be saved for full and final settlements or used for emergencies or whatever.
df

Hannah_10

Irishmummyof2 wrote: »

I have filled out a debt remedy profile on another website and they have supplied a letter which i will send to the other payday company.

What website? Because unless it's one of the charities you will end up in MORE debt because you will be charged a fee by them. They generally look great (of course they do- they want your trade after all) but Martin cautions against them. Have a read of his article before you commit to anything you later regret.

I'm still not allowed to post links (not even in-house ones I see) so above here, right at the top of the page, under the picture of Martins face with the St George flag painted on, it says "Cards Loans" in blue. Click that. Then click "problem debt help", second from last on the left. Then you can either watch the video and read the whole page or shortcut to the important bit by clicking "where to get one on one help" in the blue, near the top of the article, next to the video.

You might still decide to go with a paid service (if a paid service was what you were looking at) but at least you'll know what you're getting into.

Wee_Jo

Hi IrishMummy :hello:

Just read through very quickly and just wanted to say well done for posting on here and facing up to your worries. You seem a bit more settled than when you first posted, so hopefully you are feeling calmer after receiving advice from here. How is your OH feeling now? Have you discussed the advice with him?

Jo