I make £40k but still can't keep up with payments - SOA

gingerfurball

You say you make £38,500 and then you say that your incomings are £2300...I'm bad at maths but surely 38.5K divided by 12 is more in the region of £3000 pcm?

Cannon_Fodder

I'd reckon he's quoted Gross salary, which less tax (some at high rate) is around £2300...

bandraoi

You're supporting two people on £38500, which is less than £20,000 each,
In the London area that's not a whole lot of money.

Is your partner a full time student?
Are you taking full advantage of that for discounts/reduced council tax etc.
How would your partner have funded her study if you weren't around?

sammy115

Prior to coming onto this site over twelve months ago, I had gone down the payday loan scenario, and it was a downward spiral. Things got really out of control last year when I lost my job and my OH was also out of work. We did what you have done and cancelled ALL DD's so as not to incurr bank charges.

We also contacted National Debtline and arranged for a payment plan. If you really can't manage to get more income then maybe it is the route for you. We actually managed to cut our expenditure down and get our income up and we now self manage a payment plan.

Good luck on sorting yourself out - you are in the right place. And I know this will upset some people but I didn't cancel my SKy or my gym membership (although I did manage to negotiate reduced packages) as otherwise I would have had nothing left to do at night except count my debts!

JohnD76

Hi,

I am new here, been lurking, but have managed to reduce a very scary debt over the past 4 years to a nearly gone debt :-)

First things first dude, Don't panic, sit down and create a spreadsheet of all the money you owe, apr's, payments, etc...

Do any of your credit cards offer a balance transfer facility with a good apr? Have you tried applying for a Capital one card or similar that offered life of balance transfers or 0% transfers? If this doesn't work how about your partner, can she apply for one and have you as an additional card holder?

You need to list the APR's of all your debts and ideally reduce the ones that are costing you the most.

Have you got things that you can sell on ebay to raise some cash?

I also feel that the Sky and Cinema subs are a luxury you can't afford mate. We have got Sky Movies + 2 mixes and £5/month sky broadband which costs £39 a month. Alright we have to wait for films to come onto the movies channels, but you are effectivley paying £64 for your broadband, sky and cinema subs. Call sky and ask to get the free 2mb broadband and cancel your cinema subs to save some money. Use this money to pay off the lower of your credit cards.

Have you looked at swapping utility providers via Quidco.com? There are a few good articles on this site about doing this.

You can save a fair amount of money by not going to Starbucks and taking packed lunches with you to work, may not apply to you, but I have saved a fair amount of cash doing this.

Have you thought about Pay as you go Mobiles? Depends on how often you use them, but I am saving about £20 a month by going PAYG. Your BT phone bill is about what mine is and I hardly use the phone, so you are either using your mobiles too much or just paying out loads each month in line rental. You can take your numbers with you if you ask for a PAC code.

As for not having contents insurance, that is a real risk Peter. Create yourself a Quidco account and check out their Zurich home insurance offer. While you are at it look at their car insurance too. They are currently offering £120 cash back to customers. I have just swapped our buildings and contents insurance over to them and the price was £151.50 with a voluntary £250 excess, with the £120 cashback a years insurance paid annually has just cost me £31.50 :j I know people who are paying more than that a month for their insurance!

With the £3000 you are hoping to get as a bonus, I would clear the Egg and Barclaycard credit cards.

If you think you can honestly and realistically tackle your debt then do so, if not don't let your pride get in the way and look into an IVA, if applicable, or bankruptcy.

I also don't think you are in a situation where you can support your girlfriend. Sorry dude, hard truths but you need to sort out your debt problems.

Keep posting Peter,

John.

chimaeric

Thanks again for the comments - to cover them all off!

Car - Can't really do without it, but it is a last resort.

Rent - you're right, it is about as cheap as it gets in London for a 1 bed flat. We did share for a while a couple of years ago, but that was a nightmare ...

Sky + Cinema - you're right, I am going to look into getting Freeview in SKy's stead.

Debt reduction - I guess the fact that I haven't really been able to get any more credit for a year, and haven't missed any loan payments have contributed to the £5k reduction. I think with the girlfriend back in work we should be on track again - but I'd rather increase the debt reduction rate if I can.

Broadband - I'll definitely be getting either free or cheap broadband in March when my current contract runs out. It wasn't as bad a deal as it seems, as it was half price for 9 months.

Salary - you're right, for two people in London it isn't that high ...

Student queries - My girlfriend is American, and has federal loans to pay her tuition and more - in fact she has just banked a $2.5k cheque, having already paid her fees. And another $2.5k on the way - so these will help a lot.

chimaeric

Took a while to post that, so missed sammy and John's posts.

sammy, great to hear you managed a similar situation. I may look into the Debtline option and a payment plan, but need to know the ins and outs (I'll do some reading up).

John, thanks for the post also. I've about exhausted my balance transfer options and my credit won't allow the attractive 0% offers unfortunately.

I am already bringing my lunch to work and don't spend any on coffee etc - just use Work's free supply =0)

Utilities - I actually just switched our gas and electric to get a better deal, so that should help a little.

Mobile phones - PAYG could be an option, the contract for both is up in March so I'll assess at that point.

Home insurance - you're probably right and I will check out the offer you describe - do they allow monthly payments?

IVA & bankrupcy - maybe it is pride, but I see these as a last resort ...

And as for the girlfriend, well it's a long term thing and I know this summer when she's done with uni and gets a full time job, our combined incomes will help enormously. And in the same situation, one day, she would definitely do the same for me.


Cheers all

JohnD76

Hi Peter,

Have you thought about moving further out to reduce your rent?

How have you run up this debt, buy being a typical bloke and buying loads of stuff or just by not being aware of what has been going out, or other personal matters that you don't want to discuss?

The reason I ask is that I did the first of these options, I used to buy loads fo CD's, DVD's, had an expensive car and was very generous to my friends etc... Doing this ended me up in £35000 of debt, but thankfully I had loads of stuff I could sell on ebay which helped recoup some of the money.

Honestly check out Quidco.com, this is a brilliant way to earn cashback from swapping utilities providers, broadband, insurance etc.....

Yes, you can pay monthly for the insurance, not sure if this works out more expensive though...

Good luck matey.

chimaeric

Hey John

Well we are being forced to move soon, our landlord has decided to sell. So we're looking at the options, weighing up travel costs versus rent. For example, if I could walk to work I could save over £100/month - but getting somewhere close enough might not be possible. Living further out may save £100/month on rent, but would that be swallowed up by train costs?

As for the debt, well I am certainly not extravagent - not for the last few years anyway. It's mostly been down to travel, to the USA to visit the GF's family, or elsewhere. We haven't been anywhere for a long time though.

And to blame someone besides myself, I would blame HSBC! It was their constant increases on my CC limit that started the spiral - it went from £2k that I agreed, up to £8k over the year. I took a loan to pay that off, but then it built up again. I reduced it, only for them to increase it again, against my wishes. Of course I was weak and didn't ask for another reduction ... all too easy.

Thanks again.

xela_17

Do you just pay the minimums on the credit cards or do you pay a bit extra? If you do (and even if you don't it's still helpful) go to https://www.whatsthecost.co.uk and see in which order you should be paying off the cards to save the most interest. It will also give you your debt free date which may or may not be something you want to know!

Also, have you tries the dvd rentals by post? if you go via quidco you can have free trials and get paid for them! Worth considering versus the cinema.