Pay Day Loan Nigthmare

nowp45

I have just got myself in a dreadful mess with pay day loans and in need siome advice. I know i should have known better, but I have just had a baby and there was a drastic cut in overtime at work and I suddently found myself borrowing money from these payday lenders. My partner also had to work part time so as to look after the baby

I will definately not have money to repay at the end of the month and i need help. I have read some of the posts from others and i have just opened a new account with Coop Bank.

I currently bank with Barclays bank and all my direct debits are coming from that account. Here is my balance of affairs.


Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax.................................... 2400
Partners monthly income after tax....................... 280
Benefits........................................................... 0
Other income.................................................... 0
Total monthly income........................................ 2680

Monthly Expense Details
Mortgage......................................................... 0
Secured/HP loan repayments.............................. 284
Rent............................................................... 580
Management charge (leasehold property)............. 0
Council tax...................................................... 150
Electricity......................................................... 60
Gas................................................................ 55
Oil.................................................................. 0
Water rates..................................................... 40
Telephone (land line)........................................ 30
Mobile phone................................................... 45
TV Licence....................................................... 12
Satellite/Cable TV............................................ 40
Internet Services.............................................. 0
Groceries etc. .................................................. 250
Clothing.......................................................... 50
Petrol/diesel.................................................... 400
Road tax......................................................... 20
Car Insurance.................................................. 140
Car maintenance (including MOT)........................ 34
Car parking...................................................... 33
Other travel..................................................... 30
Childcare/nursery.............................................. 50
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................................................ 15
Presents (birthday, christmas etc)....................... 20
Haircuts.......................................................... 20
Entertainment...................................................30
Holiday............................................................ 0
Emergency fund................................................ 20
Total monthly expenses.................................... 2408

Assets
Cash............................................................... 0
House value (Gross).......................................... 0
Shares and bonds............................................. 0
Car(s).............................................................3000
Total Assets.................................................... 3000

Secured & HP Debts
Description..................................Debt......Monthly...APR
Mortgage..................................... 0...........(0)........0
Hire Purchase (HP) Card debt ....... 10000......(257).....0
Hire Purchase (TV)........................320.........(27).......0
Total secured & HP debts.............. 10320.....(384)......0

Unsecured Debts
Description..................................Debt......Monthly...APR
Quick Quid - Pay Day...................1800......0.........0
Payday Uk - Pay Day....................940.......0.........0
Wonga - Pay Day........................1060......0.........0
Wage Express -Pay Day................300........0.........0
HFC Credit Card...........................305........8.........0
Barclays Loan..............................760.......150.......0
Barclays Credit Card.....................4880......120......0
HSBC Credit Card.........................3366......88........0
Capital One................................1150......60........0
Total unsecured debts..................14561.....426......0

Monthly Budget Summary
Total monthly income.............................. 2,680
Expenses (including HP & secured debts).... 2,408

Available for debt repayments................... 272

Monthly Unsecured debt repayments......... 426
Amount short for making debt repayments...154

Personal Balance Sheet Summary
Total assets (things you own)................ 3,000
Total HP & Secured debt...................... -10,320
Total Unsecured debt.......................... -14,561
Net Assets......................................... -21,881

camuk81

Nowp45,

Thank you for posting the SOA and welcome onto the boards. I will have a quick look on our errant money savers will cast their eye over to see if we can save any more money.

Can I ask what started the cycle of payday loans and has this been resolved?

Do you also know the APR on the loans and credit cards you have listed?

Tixy

Hi and welcome

Have you read the first few posts on this thread - Dealing with Payday Loan Companies
if not have a read of that. Although obviously you've already taken some of those steps with your new account. Have you arranged for your income to be paid into the new account yet? if not do that asap as move across your essential DDs (but not the debt repayments).

I'd also contact one of the debt charities as it looks like a DMP might well be the best option for you given your level of debt and your budget. IMPORTANT - Where to seek professional impartial advice about your debts.

A few comments on your budget


Partners monthly income after tax....................... 280 - is there anyway they can increase their hours when you can be at home with baby?
Benefits.......................................... ................. 0 - have you checked if you are entitled to anything here? don't forget to include your child benefit.

Rent.............................................. ................. 580 is this competative where you live?
Council tax............................................... ....... 150
Electricity....................................... .................. 60 have you shopped around to see if you can find cheaper suppliers for gas & elec (your elec looks very high, do you have arrears on it?)
Gas............................................... ................. 55

Telephone (land line)........................................ 30 have you shopped around to see if you can fnd cheaper
Satellite/Cable TV............................................ 40 consider ditching for freeview or dropping to a lower tariff

Groceries etc. .................................................. 250
Clothing.......................................... ................ 50 try to keep to a minimum - obviously not easy with a baby, but check out local nearly new sales etc
Petrol/diesel............................................ ........ 400 is this all essential mileage? is any re-imbursed by work? do you drive as 'fuel efficently' as possible and fill up at the chpeaest places?
Road tax............................................... .......... 20
Car Insurance......................................... ......... 140 how soon until renewal? do you shop around each year?
Car maintenance (including MOT)........................ 34
Car parking........................................... ........... 33 is this at work? anywhere you could park for free instead (even if you have to walk a bit further)
Contents insurance......................................... ... 0 do you not have this? consider looking into this (can be just a few quid a month)
Other insurance......................................... ....... 15 what does this relate to?

FireWyrm

Hello and welcome.

You say that you will have money to pay the PDLs at the end of the month? In that case, I would rank the PDLS as a higher priority than everything except rent and council tax. Can you do some round robin bill dodging? Try the energy companies first, tell them that due to unexpected circumstances, you are experiencing hardship and coould you TEMPORARILY reduce your DDs for say 3 or 4 months? You'll have to pay them back eventually, but it might buy you a little time to knock the PDLs on the head and get yourself a little more square. The PDLs will be charging horrendous interest so you need to get rid of them asap whereas the other companies are unlikely to be quite so inconsiderate under the circumstances. The PDLs will wipe out your account given half a chance so perhaps with a little juggling around, you can pay them off sooner and mop up the rest later?

Your grocery bill is a little high. You could probably shave a £100 off that without breaking a sweat, but you're going to have to go to the likes of Aldi etc. We are all victims of the big 5 supermarket propaganda but I assure you, you will be able to buy a months food there for under a £100 and it will be the same if not better quality than you usually buy from a mainstream supermarket.

lizzywig

By the look of your income you'd be entitled to child tax credits, we are and our income is only slightly less than yours. You can find out about them here http://www.hmrc.gov.uk/taxcredits/start/who-qualifies/children/index.htm, you need to call them on 0345 300 3900 with yours and your partners P60's from the last tax year. They will go everything over the phone with you and send you a form if you are eligable. At least this should be £40/month. You will be entitled to child benefit, £80.20/month.

I agree that you should cut your food bill, while this feels impossible (I have been there), it is actually really easy to do. Head over to the oldsytle board for tips on cutting your food bill and to the Food & Groceries board to find out about cheap food offers. We used to pay out £250 for 2 adults inc all food, household and toiletries. We now pay out £200 for 2 adults and a baby and that includes all of the above, nappies and if DS is lucky then a crate of beer! We plan to cut back even further soon so we can pay off some debts, it's done by batch cooking/freezing, downshifting in your choices, meal planning, looking out for bargains and yellow sticker items, e.g. picked up 4 steaks, 8 ch drumsticks and 4 burgers for 68p in the supermarket the other day, these went in the freezer and next month I will plan meal around this, reckon I can get a weeks worth of food out of that!

Re your gas and elec, do you pay monthly and take an actual meter reading, this is what we do, we have just elec and our last quarterly bill for 2 bed house was £120, that works out at £40/month rather than your £115/month. When is your mobile phone contract due to be renewed. I was paying £40/month and decided now we have a baby it's too much for just me, so I called to cancel (end of contract) a couple of days ago and they offered me £13/month for unlimited texts, 600 mins and free internet!! Only other thing I wonder is could you travel to work by bus instead of car, would cut your travel costs but then again might not be possible.

Your monthly cc repayments seem quite high to me, we have £1900 on one and £1600 on another and the monthly repayments are only £25 each, although we do pay more each month to pay them off faster. Would you be able to contact your providers and see if they would fix you a lower rate? If you have a lower rate and chosing to pay more to clear them then pay less and more on the pay day loans....depending on the highest APR.

Well done though for facing up to it all, so much easier to bury your head in the sand and think how great you will feel once it's all sorted. You've got to look at it like a challenge, how much money can you clear and how many inventive ways you can do it! Think of all the free things you can do instead and once you're debt free you can keep on doing those free things so that you can save for a nice family holiday. That's how I try to look at it anyway.

nowp45

camuk81 wrote: »

Nowp45,

Thank you for posting the SOA and welcome onto the boards. I will have a quick look on our errant money savers will cast their eye over to see if we can save any more money.

Can I ask what started the cycle of payday loans and has this been resolved?

Do you also know the APR on the loans and credit cards you have listed?

Reply
I started the payday loan borrowing just after I had a baby and this spiralled since then. At the time overtime had work had been cut and I did not have any income for the extra bills due to the drop in income.

nowp45

FireWyrm wrote: »

Hello and welcome.

You say that you will have money to pay the PDLs at the end of the month? In that case, I would rank the PDLS as a higher priority than everything except rent and council tax. Can you do some round robin bill dodging? Try the energy companies first, tell them that due to unexpected circumstances, you are experiencing hardship and coould you TEMPORARILY reduce your DDs for say 3 or 4 months? You'll have to pay them back eventually, but it might buy you a little time to knock the PDLs on the head and get yourself a little more square. The PDLs will be charging horrendous interest so you need to get rid of them asap whereas the other companies are unlikely to be quite so inconsiderate under the circumstances. The PDLs will wipe out your account given half a chance so perhaps with a little juggling around, you can pay them off sooner and mop up the rest later?

Your grocery bill is a little high. You could probably shave a £100 off that without breaking a sweat, but you're going to have to go to the likes of Aldi etc. We are all victims of the big 5 supermarket propaganda but I assure you, you will be able to buy a months food there for under a £100 and it will be the same if not better quality than you usually buy from a mainstream supermarket.

Reply
I have worked a bit of overtime this month and I am expecting an extra £800, which I wanted to to use to help with the debt situation. Do I pay off the Barclays loan of £750 balance (of which I am paying £150 a month instalments) or do i focus on the pay day loans and try to negotiate with barclays and other creditors? help

nowp45

Tixy wrote: »

Hi and welcome

Have you read the first few posts on this thread -
if not have a read of that. Although obviously you've already taken some of those steps with your new account. Have you arranged for your income to be paid into the new account yet? if not do that asap as move across your essential DDs (but not the debt repayments).

I'd also contact one of the debt charities as it looks like a DMP might well be the best option for you given your level of debt and your budget.

A few comments on your budget


Partners monthly income after tax....................... 280 - is there anyway they can increase their hours when you can be at home with baby?
Benefits.......................................... ................. 0 - have you checked if you are entitled to anything here? don't forget to include your child benefit.

Rent.............................................. ................. 580 is this competative where you live?
Council tax............................................... ....... 150
Electricity....................................... .................. 60 have you shopped around to see if you can find cheaper suppliers for gas & elec (your elec looks very high, do you have arrears on it?)
Gas............................................... ................. 55

Telephone (land line)........................................ 30 have you shopped around to see if you can fnd cheaper
Satellite/Cable TV............................................ 40 consider ditching for freeview or dropping to a lower tariff

Groceries etc. .................................................. 250
Clothing.......................................... ................ 50 try to keep to a minimum - obviously not easy with a baby, but check out local nearly new sales etc
Petrol/diesel............................................ ........ 400 is this all essential mileage? is any re-imbursed by work? do you drive as 'fuel efficently' as possible and fill up at the chpeaest places?
Road tax............................................... .......... 20
Car Insurance......................................... ......... 140 how soon until renewal? do you shop around each year?
Car maintenance (including MOT)........................ 34
Car parking........................................... ........... 33 is this at work? anywhere you could park for free instead (even if you have to walk a bit further)
Contents insurance......................................... ... 0 do you not have this? consider looking into this (can be just a few quid a month)
Other insurance......................................... ....... 15 what does this relate to?

Reply
My car expenses are a bit high as i Work 80 miles from home (80 miles to and from work), hence my fuel bill of around £400. My insurance costs are quite high and I will shop around for cheaper gas and electricity bills. I will contact the DMP companies. Thanks

FireWyrm

nowp45 wrote: »

Reply
I have worked a bit of overtime this month and I am expecting an extra £800, which I wanted to to use to help with the debt situation. Do I pay off the Barclays loan of £750 balance (of which I am paying £150 a month instalments) or do i focus on the pay day loans and try to negotiate with barclays and other creditors? help

I'd need to know more about the situation. What is the interest on the Barclays loan? If you pay it off, can you guarantee that you will put the £150 towards the PDLs? Is this £800 a one time only deal? Is there a chance of more windfalls like that? Can you string the PDLs for another month and put £150 to them next month?

JulieGeorgiana

nowp45 wrote: »

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax.................................... 2400
Partners monthly income after tax....................... 280
Benefits........................................................... 0 You are entitled to £80 every 4 weeks Child Benefit and possibly £40 every 4 weeks CTC/WFTC
Other income.................................................... 0
Total monthly income........................................ 2680

Monthly Expense Details
Mortgage......................................................... 0
Secured/HP loan repayments.............................. 284
Rent............................................................... 580
Management charge (leasehold property)............. 0
Council tax...................................................... 150
Electricity......................................................... 60 See below
Gas................................................................ 55 These are high, are you monitoring your usage? have you unplugged everything? Turned the heating down by 1 degree? Are you on the best rate?
Oil.................................................................. 0
Water rates..................................................... 40
Telephone (land line)........................................ 30 This is high considering you have a mobile too. Are you making the most of the unlimited talk for £5
Mobile phone................................................... 45 This is high, can you renegotiate/change contract? make sure you get a contract based on your past usage and not what you THINk you need
TV Licence....................................................... 12
Satellite/Cable TV............................................ 40 Go Freesat, you don;t need this
Internet Services.............................................. 0
Groceries etc. .................................................. 250 This is very high. Go to the OS board and try the grocery Challenge. I feed 2 adults, 1 child, 2 rabbits and 2 cats for £200 and it won;t change with the baby.
Clothing.......................................................... 50 £600 a year??? This can be cut... try charity shops... recycle your current clothes
Petrol/diesel.................................................... 400 This is very high again... is it for work? on your wages this is too much. can you take a bus?
Road tax......................................................... 20
Car Insurance.................................................. 140 £1680 a year??? Really???
Car maintenance (including MOT)........................ 34
Car parking...................................................... 33
Other travel..................................................... 30 What's this for?
Childcare/nursery.............................................. 50 Do you qualify for childcare vouchers
Other child related expenses............................... 0
Medical (prescriptions, dentist etc)....................... 0 You need something here. £17 a checkup now.
Pet insurance/vet bills........................................ 0
Buildings insurance............................................ 0
Contents insurance............................................ 0 If you rent you are normally legally obligated to have this. Costs very little (mine is £7)
Life assurance .................................................. 0
Other insurance................................................ 15 Whats this for?
Presents (birthday, christmas etc)....................... 20
Haircuts.......................................................... 20 You can't afford this much right now.
Entertainment...................................................30 Maybe cut to £20
Holiday............................................................ 0
Emergency fund................................................ 20
Total monthly expenses.................................... 2408

Assets
Cash............................................................... 0
House value (Gross).......................................... 0
Shares and bonds............................................. 0
Car(s).............................................................3000
Total Assets.................................................... 3000

Secured & HP Debts
Description..................................Debt......Monthly...APR
Mortgage..................................... 0...........(0)........0
Hire Purchase (HP) Card debt ....... 10000......(257).....0
Hire Purchase (TV)........................320.........(27).......0
Total secured & HP debts.............. 10320.....(384)......0

Unsecured Debts
Description..................................Debt......Monthly...APR
Quick Quid - Pay Day...................1800......0.........0
Payday Uk - Pay Day....................940.......0.........0
Wonga - Pay Day........................1060......0.........0
Wage Express -Pay Day................300........0.........0
HFC Credit Card...........................305........8.........0
Barclays Loan..............................760.......150.......0
Barclays Credit Card.....................4880......120......0
HSBC Credit Card.........................3366......88........0
Capital One................................1150......60........0
Total unsecured debts..................14561.....426......0

Monthly Budget Summary
Total monthly income.............................. 2,680
Expenses (including HP & secured debts).... 2,408

Available for debt repayments................... 272

Monthly Unsecured debt repayments......... 426
Amount short for making debt repayments...154

Personal Balance Sheet Summary
Total assets (things you own)................ 3,000
Total HP & Secured debt...................... -10,320
Total Unsecured debt.......................... -14,561
Net Assets......................................... -21,881

I got into my debt when my DS was born nearly ten years ago now... drop in wages, increase in expenses... credit bridges the gap, it seems to happen frequently.

However you don;t have enough for your minimum repayments right now, and you have £4k on payday loans which I assume should be paid back next payday? Which you just cannot afford.

Swich accounts ASAP and get some advice from CCCS and think about working on getting a DMP.

Good Luck x