Help, in deep debt!

Mr_Debt

I have written the story/events behind my debt, you may wish to skip it, but I am sure it is a situation that many can relate to.

Right first of all my story, I went to uni straight from a well paid job (during which all my wages were disposable income), during uni I built up a large over draft of £2,200 which I always saw as my zero amount (stupid I know), I also signed up for a credit card as it offered me free gift vouchers as an incentive, again I built up a debt on this not realising the stupidity. After university I lived in a similar style always spending up until the end of my overdraft limit every month, figuring that I would clear it when I got a "proper job" (i was working in retail).

I then got my first proper job during which I started to make a small impact on my debt, although this was then eclipsed by the death of my long term partners mother (who she lived with in rented accomadation on their own). With the prospect of her having no where to live, I moved into rented accomdation with my partner and also paid the funeral fee's for her late mother. This pushed me back into the old position of being right up to the limit of my overdraft and eventually the limit of my credit card.

Six months later we were hit with some major bills (car), so took out a loan with a company that charged very high rates (as they were the only ones that would touch us). There was then a situation in my career that resulted in me receiving a considerable lower wage for six months, again during this time we hit hard times (had to buy a headstone etc) and refinanced our loan with this loan company for an extra £3000, this was done with the intention of clearing our credit card debt of £4000, however we foolishly slipped into old habits and built up the debt on the card again.

It was in December this year when our first child arrived and I realised that we had a debt that was limiting the way we lived our lives, that we couldn't buy a house for a long time and we had considerable less spare cash than our friends in similar situations.

Income

My salary 1100
Partners salary
Benefits 68

Total 1168

Monthly Outgoings:
Account Fee 5
Mortgage/Rent 260
Council Tax 65
Gas 25
Electric 20
TV License 11
Phone 15
Food 120
Car Insurance 28
Petrol 85
Mobile Bill 45
Home insurance 15
Total: 694

Debts
Loan £8500 for £272.50 a month for another 78 months @ 22.3% (I believe)
Student Overdraft £2200 @ £8.78 interest a month (not sure of rate)
Credit card £4000 paying off £100 a month @ 19% interest
A total of £14,700 debt, with very little to show for it!


A few questions
I am going to look at reclaiming the bank charges (as described in your article), I am firstly looking into to see if this will clear my overdraft, if not I am wary about doing this as I'm not sure how I will be able to cope if the bank closed my account (as some do) and lose my overdraft, does anyone know what they would do to me in such a situation?

I am going to investigate benefits avaible to us as at current we only claim child benefit, can any one advise as to what others we could apply for?

Under what situations do banks normally withdraw overdrafts, as its a prospect that scares me, and if they do what is the process (do you automatically owe it them and in X amount of days they send the bailiffs in)?

How bad a situation am I in, as worst case scenario my partner and me could possibley move into my parents home, although it would be worst case, and would probabley send me over the edge.

I am also interested in additional ways to bring income into my home, I have singed up as a mystery shopper and have my first three assignments on the same day in the same town (lucky), can anyone suggest any others?


Sorry for the meandering thread.Any help greatly appreciated!


Bob

lynzpower

hiya bob and big welcome

Sorry to hear about everything youve been through, most of us can relate to life creating problems for us and us ending up in debt, you are not alone

First off, if you are going to reclaim bank charges its thought best to open a new "parachute account" with a different bank. Go through quidco and get paid for doing so


In terms of your SOA Ill offer a bit of advice here

Monthly Outgoings:
Account Fee 5 ( whats this for? all those snazzy extras, travel insurance etc, cancel it i would)
Mortgage/Rent 260
Council Tax 65 ( you could apply for CT benefit, worth a go)
Gas 25
Electric 20 ( check ou are on the cheapest suppliers & change if not using uswitch- but get quidco cashback!)
TV License 11
Phone 15
Food 120
Car Insurance 28 ( checked this is the cheapesrt)
Petrol 85 ( can you cut back any jounreys?)
Mobile Bill 45 ( could you reduce your contract to a cheaper one?)
Home insurance 15
Total: 694

Debts
Loan £8500 for £272.50 a month for another 78 months @ 22.3% (I believe)
Student Overdraft £2200 @ £8.78 interest a month (not sure of rate)
Credit card £4000 paying off £100 a month @ 19% interest
A total of £14,700 debt, with very little to show for it!

this suggests you should have 92. odd left over- do you see this?

Is your OH working?

~evanesco~

Mr_Debt wrote:

I have written the story/events behind my debt, you may wish to skip it, but I am sure it is a situation that many can relate to.

Right first of all my story, I went to uni straight from a well paid job (during which all my wages were disposable income), during uni I built up a large over draft of £2,200 which I always saw as my zero amount (stupid I know), I also signed up for a credit card as it offered me free gift vouchers as an incentive, again I built up a debt on this not realising the stupidity. After university I lived in a similar style always spending up until the end of my overdraft limit every month, figuring that I would clear it when I got a "proper job" (i was working in retail).

I then got my first proper job during which I started to make a small impact on my debt, although this was then eclipsed by the death of my long term partners mother (who she lived with in rented accomadation on their own). With the prospect of her having no where to live, I moved into rented accomdation with my partner and also paid the funeral fee's for her late mother. This pushed me back into the old position of being right up to the limit of my overdraft and eventually the limit of my credit card.

Six months later we were hit with some major bills (car), so took out a loan with a company that charged very high rates (as they were the only ones that would touch us). There was then a situation in my career that resulted in me receiving a considerable lower wage for six months, again during this time we hit hard times (had to buy a headstone etc) and refinanced our loan with this loan company for an extra £3000, this was done with the intention of clearing our credit card debt of £4000, however we foolishly slipped into old habits and built up the debt on the card again.

It was in December this year when our first child arrived and I realised that we had a debt that was limiting the way we lived our lives, that we couldn't buy a house for a long time and we had considerable less spare cash than our friends in similar situations.

Income

My salary 1100
Partners salary << This appears to have no figure....
Benefits 68

Total 1168

Monthly Outgoings:
Account Fee 5 << can you cancel this??
Mortgage/Rent 260
Council Tax 65
Gas 25
Electric 20
TV License 11
Phone 15
Food 120
Car Insurance 28
Petrol 85
Mobile Bill 45 <<Are you on contract, can you get it reduced? I got mine reduced to £20, doen from £35. Give them a call, it's worth a try.
Home insurance 15
Total: 694

Debts
Loan £8500 for £272.50 a month for another 78 months @ 22.3% (I believe)
Student Overdraft £2200 @ £8.78 interest a month (not sure of rate)
Credit card £4000 paying off £100 a month @ 19% interest
A total of £14,700 debt, with very little to show for it!


A few questions
I am going to look at reclaiming the bank charges (as described in your article), << definately do this, try CAG for more help. I am firstly looking into to see if this will clear my overdraft, if not I am wary about doing this as I'm not sure how I will be able to cope if the bank closed my account (as some do) and lose my overdraft, does anyone know what they would do to me in such a situation? << they're not allowed to do this.

I am going to investigate benefits avaible to us as at current we only claim child benefit, can any one advise as to what others we could apply for? Have you looked at entitled to?

Under what situations do banks normally withdraw overdrafts, as its a prospect that scares me, and if they do what is the process (do you automatically owe it them and in X amount of days they send the bailiffs in)?

How bad a situation am I in, as worst case scenario my partner and me could possibley move into my parents home, although it would be worst case, and would probabley send me over the edge.

I am also interested in additional ways to bring income into my home, I have singed up as a mystery shopper and have my first three assignments on the same day in the same town (lucky), can anyone suggest any others?


Sorry for the meandering thread.Any help greatly appreciated!


Bob

Hope this helps a bit, some ot the hardcore DFW's will be along soon to offer more help.

Evans. xox

moonlightpjs

I would imagine you are entitled to Working Tax Credits and Child Tax Credits - the helpline number is 0845 300 3900, give them a call - everybody with a child is entitled to Child Tax Credits at least. You may find that that boosts your income somewhat.

Good luck and well done for posting!!!

Mr_Debt

Thanks for all the responces,

R.e. the account fee, that includes mobile phone insurance and maintains my overdraft limit (its for a graduate account)

R.e. the mobile phone bill, it includes my broadband and saves me a lot as a result

R.e. my partners income, at the moment she is on Statory maternity leave at £108 a month, but that is only until march time, so I am realistically looking at my budget as if not receiving this additional money in the short term. Also my partner is not looking at returning to work.

Thanks!

Bob

chivers1977

In terms of the baby make sure that you are limiting the costs, ie own brand nappies or reusables as your little one is still little! lots of councils will give a grant towards reusables or try on your local freecycle group. https://www.freecycle.org.uk Also babies don't need new clothes or toys. See what you can get 2nd hand from boot sales, charity shops, hand me downs or freecycle. HTH

chivers1977

R.e. the account fee, that includes mobile phone insurance and maintains my overdraft limit (its for a graduate account)

Have you checked if there is another bank who will give you one for no fee?

R.e. my partners income, at the moment she is on Statory maternity leave at £108 a month, but that is only until march time, so I am realistically looking at my budget as if not receiving this additional money in the short term. Also my partner is not looking at returning to work.

Can you afford her not to? We can't! What about PT work and you would still get WFTC towards childcare I believe....

.....................................

Mr_Debt

Ref the above post,

I am nervous about going to another bank, as I doubt they would let me open an account with such a high overdraft limit given my recently poor credit history.

My wifes previous job, is unworkable for her to do with a child in the household (very antisocial hours/long shifts), so I cannot see it as a solution in anyway for her to return to work. Maybe after six months we may look at a part time job in the local shop, but this is not the way we want to bring up our child.

chivers1977

I know that, I didn;t want to leave my son either but needs must and the budget can only go so far.

I must say that I actually enjoy going to work as once you are over the first weeks, the days can start to get repetitive and it is nice to have the adult company and he looks forward to seeing me.....

chivers1977

R.e. my partners income, at the moment she is on Statory maternity leave at £108 a month, but that is only until march time, so I am realistically looking at my budget as if not receiving this additional money in the short term.

So what is this money being used for.... I don't want to be harsh but it must be being used for something at the moment and it will be a big drop in a few months

Tustastic

Well done for posting Bob, happy new year and huge congratulations to you and Mrs Bob on becoming parents. It'll be a great adventure to raise your lovely baby while becoming debt-free. You've had lots of good advice already but hardcore MSE members are able to feed two adults and a baby well on much less than £120 per month. Have a look on the Old Style board for inspiration and practical advice - and get Mrs Bob to take a look too. HTH:)