Don't know where to turn

katu

Hi, I am new to the forum so please don't shout at me if this has all been asked before.

I have a few credit cards (I only use one out of necessity to buy petrol to get to work) and am having trouble managing financially. I was made redundant last year and been temping since on a lower salary than that of what I was in my permanent role. My credit cards went up basically through having to temp before for a number of years and not being able to manage so living off the card and helping out family (they promised to pay back but never had the money to so I have been lumbered with the bill - a lesson learnt).

At the moment I cannot afford essentials such as a visit to the dentist or optician. (I have a filling need doing but have to put up with the twinges). I cannot buy clothes (I have one long sleeved work top and the weather is getting cooler), get a haircut or by food of my own, I hate feeling like people have to look after me. I am trying to find a decently paid permanent job but not having much success at the moment for one reason or another. I am lucky if I have £20 that I can call my own at the end of the month.

At the moment I live at home, I cannot afford to pay my parents rent and as they contributed to my debts they know they cannot ask this of me. But I want to move in with my partner, he does not know about my money problems and I am scared and embarrassed to tell him about them as he does not understand about getting into debt so please do not tell me to tell him because I can't. It's not his problem or debt so I don't want him to think that I want him to help me out.

I have read up about DMP's and IVA's and to be honest I don't really like the sound of them. I have looked at CCCS and Payplan and they don't instill me with confidence. I also know of people who went for a DMP and still had the creditors chasing for payment because the company did not pay on time.

If I did go down this route I have a few questions;

• What guarantee is there that my creditors would agree to reduced payments?
• What guarantee is there that after the agreed number of years payment terms that the creditors or company use would not then say that they want more money?
• Will it really release money so that I can afford essentials?
• How can I ensure that my partner will not find out?
• How can I ensure that it will not affect my partner if he needed credit when it is not his debt?
• Can I pay as normal until an agreement is made so that I/my family don't get the phone calls (I don't want to be scared to answer my phone when I am trying to find a job).
• I may also move overseas if my partner gets a job there, how would this affect any plan that I went for? (I would assume that I could transfer money to a UK account).

Thanks in advance for any advice.

looktothefuture

Hi, firstly well done for coming here - you've made a first step to being debt free. Secondly, post up a SOA (Statement of Affairs) and members will be along to give you some hints and tips on where to save...

I self manage my DMP and have done for over 2 years now - I'm 9 payments away from paying off a grand total of £12000 odd!

To answer your questions:

• What guarantee is there that my creditors would agree to reduced payments? You can't pay them what you don't have... even if you pay them a nominal amount of £1 a month, you are still showing willing that you are committed to paying them back.
• What guarantee is there that after the agreed number of years payment terms that the creditors or company use would not then say that they want more money? Sorry, I can't answer this question fully as I don't know.
• Will it really release money so that I can afford essentials? Yes it certainly will release some money - each creditor is paid on a pro rata basis of what you can afford - no creditor gets more than the other in terms of what you can pay.
• How can I ensure that my partner will not find out? It is always best to let your partner know - mine was very supportive (still is) when I started on this road to be debt free. Also it's good to be able to talk about it with someone you care for and trust.
• How can I ensure that it will not affect my partner if he needed credit when it is not his debt? It may have some effect on his credit if you move it with him but keep everything seperate.
• Can I pay as normal until an agreement is made so that I/my family don't get the phone calls (I don't want to be scared to answer my phone when I am trying to find a job). There are template letters you can write to your creditors in the mean time offereing them £1 a month... I'll see if I can find them.
• I may also move overseas if my partner gets a job there, how would this affect any plan that I went for? (I would assume that I could transfer money to a UK account). Unsure of this - I assume you would be able to transfer the money into an account back here - I used to do this for a company I owed money to back in Sout Africa.

KingElvis

I feel for you and wish you luck.

I can't advise on some of the questions but to try and keep this from your partner will be a nightmare and at some point, it will all fall in on itself.

Also when those guys get their teeth into you, expect calls and letters by the squillion. Sorry to tell you that but I'm just being realistic.

All the best

katu

Hi

Thanks for your replies.

That is what I am afraid of. The other thing is that I have spoken today to someone who had a DMP but has just entered into an IVA, they have been told that one of them has to find a part time job within 6 months (the other does FT) or they will review it and put the payment up. Thus giving me another reason to think that this is not the route to go down.

I did do the CCCS debt remedy report online and it suggested a DMP but that they can't guarantee that the creditors will freeze the interest. They estimate that if they did freeze the interest I could pay it off in just over 4.5 years but in 3 years my loan is paid off so it is a question of would it actually be beneficial for me to enter into a DMP?

The other thing is that I have read a few posts from other users who say that creditors did not freeze interest and put them on a higher rate. I know they don't have to freeze the interest but it doesn't help to get the debt down, it scares me that although I have no money left over I am paying (at the moment) and they are happy that if I go for a DMP things will be worse.

I am totally confused right now I have to be honest.

boblardo

Well done for posting, you have taken the hardest step which is asking for help.

No one can really advise you on which action to take as only you know what is best for you but please do listen to the members of this board. My wife and I got into a tough situation and eventually went down the route of a DMP with the CCCS. They then suggested an IVA and we even consider bankruptcy.

In the end we remained on the DMP for a while then, once my wife returned to work started paying off the debts one by one whilst maintaining payments. We will have cleared 8 debts in under 6 months (around £4K) but this was only possible with the advice on this board.

The only advice I can give is; Write to each creditor asking that they only communicate in writing, send them an SOA and offer £1 (if thats what you can afford).

Well done again it does get easier!

Bob

McKneff

Why not post an SOA on here so we can help you further.
You havent said what you are earning or what you are paying out.

Your b/f would expect you to pay half the bills if you moved in with him, if you cant pay your parents board and lodge how can you
expect to pay half his bills,
Post an SOA and take it from there.

katu

I know Mckneff, that's why I would like to get something sorted beforehand.

At the moment with temping I am earning a lot less than I was before in my perm job. Whilst I wasn't earning a lot there I did have money left over at the end of the month after everything was paid

I have done a SOA as suggested, I have added in things like essentials as I will need to contribute something towards living costs. I've tried to keep these minimal


Monthly Income Details[/b]
Monthly income after tax................ 1000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1000
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 192
Rent.................................... 60
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 19
Groceries etc. ......................... 40
Clothing................................ 3
Petrol/diesel........................... 60
Road tax................................ 10.41
Car Insurance........................... 28
Car maintenance (including MOT)......... 20
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..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 5
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 457.41

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 4000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 959......(192)......0
Total secured & HP debts...... 959.......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
C/c MBNA.......................4185......120.......0
C/c MBNA.......................4880......140.......0
C/C MBNA ......................4700......120.......0
Loan HSBC......................8826......246.......0
C/C Cap 1......................3450......167.......0
C/C B/Card.....................1040......25........0
Total unsecured debts..........27081.....818.......-

Monthly Budget Summary
Total monthly income.................... 1,000
Expenses (including HP & secured debts). 457.41
Available for debt repayments........... 542.59
Monthly UNsecured debt repayments....... 818
Amount short for making debt repayments. -275.41
Personal Balance Sheet Summary
Total assets (things you own)........... 4,000
Total HP & Secured debt................. -959
Total Unsecured debt.................... -27,081
Net Assets.............................. -24,040

MrsTinks

katu wrote: »

I have a few questions;

• What guarantee is there that my creditors would agree to reduced payments? Absolutely none - sorry but there is NO guarantee of this, however if you use one of the charities I think you have slightly more chance of the creditors agreeing. Ultimately if they don't stop interest then keep paying even if yoru debt keeps going up and as you manage to put a little by when you get a perm job then you should have enough eventually to do a full and final offer to them - probably potentially less than the original debt when you defaulted...
• What guarantee is there that after the agreed number of years payment terms that the creditors or company use would not then say that they want more money? Are you on about an IVA or DMP here... DMP - you pay off the debt and it reduces each month - IVA is a legal agreement on both parts...
• Will it really release money so that I can afford essentials? Yes
• How can I ensure that my partner will not find out? You can't - not if you move in with him. There is always a possibility that a creditor will turn up on your doorstep or send a letter... Honesty really is the best way forward.
• How can I ensure that it will not affect my partner if he needed credit when it is not his debt? So long as you do not have joined financial products like cards, loans, even savings accounts - then your financial records will not be linked.
• Can I pay as normal until an agreement is made so that I/my family don't get the phone calls (I don't want to be scared to answer my phone when I am trying to find a job). An agreement? You mean till they accept your DMP/IVA? Nothing stopping you paying whatever you want till then... It may take some of your creditors months to stop moaning about the reduced payments.
• I may also move overseas if my partner gets a job there, how would this affect any plan that I went for? (I would assume that I could transfer money to a UK account). Keep paying if you want the debt gone... Make sure that you can get to your post in the event they decide to go for a CCJ though...

Thanks in advance for any advice.

Honesty with your partner - much better to hear it from you than being told lies abotu why you don't want to move in...

scotdebs

Hi Katu
Well done for posting I know i seems scary but at least you are facing up to it. From looking at your SOA the main thing I would ask is do you really need a car (dont know your circumstance re work travel etc) as this is a big chuck of your monthly spend. Also I know that you said you are looking around for a better paid job but in the mean time could you take on a second job on your days/evenings off - pubs/shops/cafe/resturant etc would get you some extra cash quickly that you could use to live rather than exist and start making more than just min payments on the cc's (which if you read the snowballing part of the website where you got the SOA you will see is the surest way to start striking off the cc debt)
good luck xxx

katu

Hi Scotdebs,

Yes I need the car, I need it to get to work plus this is also a debt which is paid off soon so that will be freed up. Also I know some people may not agree with me here but it is something that I worked so hard towards getting and the only thing that I have to show for anything. To give it up would cut me off from pretty much everything and then limit my job search. This payment I can manage, it's the credit cards that are the problem because they are all high payments, the interest is often more than the payment and they just don't go down.

Regarding the job, it's proving hard enough to find anything permanent since being made redundant, to try to find a second job along side plus I never know what time I finish where I am as I usually end up working late (also to get paid a bit more) even finding temp work this time around has been hard.

Mrs Tine, I know that I should tell him how much I owe but he really doesn't understand people getting into debt. There have been times where I have gone to tell him and then he spots something on the news about owing monies etc and he says how he can't understand how people can get in that situation so the words get stuck and I can't tell him.

To pay them the min payment while waiting for an agreement by them 'if' I decide to go for a DMP would avoid the calls from them but I fear that would make them say well you have been paying it why can't you continue?

barbiedoll

You can always ask that creditors reduce or freeze the interest on your debts, there are letters that you can send and most of them will eventually agree. If any of the card providers try to increase your interest rate whilst you are in financial difficulty, you can dispute this and they will not be able to increase it.
With regards to your partner, if he doesn't understand how people can get into debt, why not try telling him how it happened to you? He is obviously lucky to have secure employment and/or be very good with money. It's a skill that doesn't come easy to many of us, tell him that you could benefit from his wisdom and money sense. (You know how men respond to flattery! )
I know that you think that you'll be able to get out of this without anyone knowing and without the calls/letters/nasty stuff, but the truth is, you can't. You need to be able to eat and to live and if you do want to live with your partner, you need to get a handle on these debts. That means facing up to the situation and learning how to deal with the nasty stuff. We have all been there and we're all still here. Lots of posters on here have had terrible times trying to tell their partners and I think that all of them were relieved to come clean in the end. It's too big a secret to keep, you're clearly under enough strain as it is so bite the bullet and tell him. We can help you every step of the way, that's what this board is for. Today is the day to start changing how you live your life so go and get on with it. Good luck!