In a right mess

Popup_Pirate

Hello folks,
I've managed to get myself in a bit of a financial pickle and desperately need a few pointers.

About a year ago I owned a flat with my (then) partner. Other than the mortgage we had joint debt of approx 5k between us.

The relationship split and things went downhill for me from there. I was left with 3k of the outstanding debt, but I was able to stay in the flat for a few months and was earning just enough to cover everything.

I was then pressurised into selling, this went on for absolutely ages due to incompetent solicitors. I moved out of the property but still obvioulsy had to keep up mortgage repayments while staying in rented accomodation, this was not meant to go on for long but was drawn out over about 5 months. I ended up with 6000 upon exchange.

While all of this was going on, I needed an operation (which also went quite wrong), various other things happened... one thing built up ontop of another and I went off the rails a bit.

Long story short... I managed to lose my job and rack up 15k of Credit card debt.

I'm now in this position:

I earn 0 - Hopefully this will change very shortly, unfortunately I'm looking at only earning anything between 13 - 20k MAX so working on worst case, 13k

I owe 15k between 4 credit card companies
I have about 3k of the money received from selling the flat left to cover outgoings.

Monthly Outgoings are (roughly)

Rent - 575
Council Tax - 87
Phone/internet - 35
Gas - 25
Electricity - 30
Mobile - 25

Leaving about £50 for food and everything else.

I don't own a car.
I can thankfully get help for £300 towards rent + bills each month.

So I could have £350 towards food etc, potential work travel costs and to pay creditors.

The little money I still have left isn't going to last long so getting a job is obviously top priority. So, if I earn 13,000 that would work to roughly £825 per month ?
What would my best options for clearing/repaying these disgraceful debts ?

I have been in contact with payplan, they have provided me with number of letters to send out to each creditor.

The first explains I having a bit of financial difficulty and request the following details while I revise my situation and devise a payment proposal:

Balance owing
Terms of repayment and interest/penalties accruing
Type of agreement
Arrears
Any insurance policies attached to the agreement

The next few steps involve working out my situation and exactly how much disposable income I could possible have.
Then providing a copy of my financial situation to each creditor with a monthly payment proposal (they have suggested I offer £1 to each creditor) but clearly state that as circumstances improve I will be revising my statement and offer.

This has to be a starting point for me, but as I do start to earn more money I will need a way of being able to clear these debts as soon as I possibly can.

Assuming I can raise about £120 per month to pay debts would this be best put into a consolidation loan over a very long period of time? Would I stand any chance of an IVA ? or would some kind of debt management plan be the way to go ?

I'm desperately hoping that I manage to find work paying better than 13000.

Apologies if this has been hard to follow, and many many thanks for any advice given.

beverleyhills

:hello: and welcome to MSE

Sorry to hear of your predicament.

There will be people around later this morning to help you. Are you receiving any Benefits?

Can you list details of your debts with name of Company, amount and APR.

The advice on the consolidation loan will be to hold fire. Although you may have more disposable income you end up paying more over a longer period of time.

immoral_angeluk

https://www.entitledto.co.uk will show you what benefits you will be entitled to while you're not working, as you should be able to claim JSA, income support plus housing/council tax benefit..

chevalier

Sorry to hear that you have had such a rough ride. If your op went wrong, will you be getting any compensation? Do you have anything you can ebay, to raise a bit of cash now? I would think that a DMP with Payplan would sort you out pretty well. It would mean being on a restricted budget for a while, but the debts are eventually paid.

Best of luck
chev

SunderlandBlackCat

Your story is quite similar to mine about 5 years ago. Luckily you've found this site now tather thasn 3 years into the struggle as I floundered around for about 3 years without making much of an impact & it wasn't until I started lurking on here that I started having a real positive impact on my debts.

Around 3½ years ago I was starting out again after an 18 month lay off due to a serious car crash in a £12800 a year job with
around £15000 in debts.

There are plenty of ways you can supplement your "day job" income & you can keep looking for another job once (always seems easier to get a new job once you're in a job) & as I knew I couldn't afford to be without the lower paid job I worked really hard when other people at work were just coasting along & when other people were getting redundancy notices I actully got pay rises & eventually promoted.

I still live/spend as if I'm on £12800 & the salary increases all go to paying the debts & I'm now down to under £6000 so it can be done.

Best of luck & don't give up.

CLAPTON

as i see it

you have 15,000 debt
3,000 savings

spending 775 per month plus food ..lets say 875
have 300 income from ????

so
a. why are you not getting JSA?
b. are you able to get HB? and council tax relieve.
c. where is the 300 coming from? is this secure or only temporary?
d. can you get any temporary work while looking for a permanent position.

can you reduce your outgoing ..say move back with parents?

at the moment you obviously can't pay anything other than a nominal token £1 to show good intentions.


you hope to get a job paying about 825 per month. with that you can't pay anything back either. basically your rent is far too high for this income....you are paying way over 50% of your potential income in rent. however with the 300 extra might be able to...how secure is this money?

bonnie_2

Would his money not effect getting hb and ctb though. Presumably he hadn't worked the last 2 tax years so couldn't get jsa. Also he would get wtc if over 25 and working, which would help.

Popup_Pirate

Thanks to everybody who has replied.

I'm not claiming any benefits at the moment. To be honest, I thought I'd be back in work long before now.. The plan was that I'd be back in work ASAP, use the bulk of the money I had left from the sale to pay one of the larger card balances or 2 of the smaller ones and then work out a plan to pay the rest off.

The £300 per month comes from my new partner, she is here alot of the time, knows how much poo I'm in and helps me out. There's always a possibility of her moving in (she practically lives here anyway) but she wouldn't be able to contribute much more

The rent, in all fairness is far too high and I will be attempting to lower this. A friend has gone travelling for 12 months, he needed someone to look after his house and I needed a place to live quickly... Kind of just ended up here but feel a bit stuck now. I have found paperwork suggesting he re-mortgaged earlier this year... And guess who is expected to repay this for a year to fund his travel !!!!

Getting the 13k job is very likely as it's a family friend who has passed the application on to me before it hits the papers. It's just warehouse work but they also need somebody to help out with the office computers now & then.. I've worked in IT for over 10 years.

Moving back in with my parents is unfortunately not possible even short-term, they are leaving the country very shortly.

SunderlandBlackCat - Many thanks for posting, it doesn't seem completely impossible now.

If I could get the debt to below 5000 then that would certainly relieve an immense amount of pressure and get me sleeping again lol. Although it's still quite high, I see it as a manageable figure.

As I've been out of work for quite a while now, I should hopefully be due a tax rebate (last salary was 17,500, earned until June 2006) so that should help a bit.

The cards I owe on are

Virgin - 4500
Egg - 3000
HSBC - 3000 - Current account is with HSBC
Morgan Stanley - 4500

Not certain of each APR, there has been alot of cash advances made and some BT's around.

The standard rates are between 13 - 17 %

CLAPTON

sorry dont understand why you dont just go down to the job center now and find out what you are entitled to.
i would sort out the rent situation asap ..its just too high for you
i wouldnot rely on the 300 from your friend when making any offers of payment.