Facing up to it, the OrangeProse way

OrangeProse

Hi Folks

After discovering, then spending hours reading, and eventually getting rather emotional over (yeah, really) some of the stories on this site, I've decided to start really attacking the problem of debt in my life.

I'm almost 29 now, and I spent most of my 20s spending money indiscriminately on RUBBISH. From new clothes and toiletries to books, CDs and DVDs, somehow I managed to load thousands onto credit cards and loans. Not to mention my habit of changing my car every couple of years, rolling one load of negative equity onto another new loan.

Anyway, here's the SOA for everyone to ponder over. I'll go make a cup of tea whilst you all digest it...

Income: varied
I'm a freelance copywriter, so my earnings vary hugely month on month. My last salaried job, which ended in November 2006, paid me £1375 per month so I've been aiming to pull that in through freelancing - not easy, even at £250 per day (my charge out rate). To give you an idea, in January I earned £850 and this month I'll earn about £2000. So you can see how much it can vary!

Rent: £550
I live with my BF, and this figure is my contribution towards everything - rent, water, council tax, electricity, home insurance, TV licence. The idea is that we split everything 50/50, but in reality he tends to pay out a bit more than me because he earns more than double what I do. He's good like that!

Travel: £10 - £50 per month
Again, this varies due to the nature of my work. Sometimes I work from home and can avoid travelling, and sometimes I have to shell out £10 per week for a bus pass. I don't have a car anymore.

Mobile Phone: £20 - £30 per month
Now on PAYG, which is fine although very expensive to make calls during the day, which I have to do as I call recruitment agents a lot and speak to potential employers.

Food: £75 per month
Again, my half of the total food budget for two people. We usually go over it, however.

Now the debts...

Egg Loan: Balance £12,400 maturity date April 2012, paying £255 per month
7.66%APR

Natwest Loan: balance £9,500 maturity date February 2010 paying £260/m
7.3%APR

Sainsburys Loan: balance £5,500 maturity date January 2009 paying £145/m
7.1%APR

Egg CC#1: balance £5,900 minimum payment £118-ish
16.9%APR, limit £5,900

Egg CC#2: balance £5,900 minimum payment £118-ish
16.9% APR, limit £5,900

Tesco Plat CC: balance £1750 monthly payment £50
19.9%APR, limit £2,100

Morgan Stanley CC: balance £3650 monthly payment £100
23.9% APR, limit £4,400

Overdraft £3,400 (and I'm using it all at the moment) which results in around £35
interest charges each month


Bank account fee: £12 per month


My BF is helping me out on some of this debt (he feels partly responsible - when we first got together we lived a dumb 'champagne lifestyle' overspending wildly, largely on his insistence) so he's paying £400 - £500 per month against my debts.

The next step for me is to get a full time job again, as I can't hack the pressure of being freelance with all this hanging over me. However, the job situation for writers is pretty rubbish in Manchester.

The matter is complicated further by a potential move to London over the next couple of months. BF and me are both able to command much bigger salaries in London, over and above the increased living costs. Plus, in career terms it makes a lot of sense - I wouldn't struggle to find work in London the way I do in Manchester. However, moving expenses are going to be massive - deposits on flats, finding fees for greedy agents, etc.

I suppose I have to suck it up for now and get on with it - then plan to get a part time or weekend job once we've moved.

hobo28

Hi

I'm not a big expert on debt. Am sure there will be others coming along soon with words of wisdom.

Just wanted to say well done for having the courage to face your problems and that your BF sounds like a keeper!

Good luck and all the best.

lynsayjane

hi orangeprose and welcome to the site, here are my thoughts on your situation, i hope they help somewhat and i'm sure plenty other will chuck their tuppence in too!

OrangeProse wrote:

Hi Folks
I'm almost 29 now, and I spent most of my 20s spending money indiscriminately on RUBBISH. From new clothes and toiletries to books, CDs and DVDs, somehow I managed to load thousands onto credit cards and loans. Not to mention my habit of changing my car every couple of years, rolling one load of negative equity onto another new loan.don't beat yourself up about the past, it's done and you can't change it, now your facing up to it and dealing with it you should only look to the future!

Income: varied
I'm a freelance copywriter, so my earnings vary hugely month on month. My last salaried job, which ended in November 2006, paid me £1375 per month so I've been aiming to pull that in through freelancing - not easy, even at £250 per day (my charge out rate). To give you an idea, in January I earned £850 and this month I'll earn about £2000. So you can see how much it can vary!i can see this is going to make budgetting difficult, it's good you have an undrerstanding oh to help and the full time job once you get it will be great. what about doing some bar work in the evening to supplement your income in the meantime?

Rent: £550
I live with my BF, and this figure is my contribution towards everything - rent, water, council tax, electricity, home insurance, TV licence. The idea is that we split everything 50/50, but in reality he tends to pay out a bit more than me because he earns more than double what I do. He's good like that!

Travel: £10 - £50 per month
Again, this varies due to the nature of my work. Sometimes I work from home and can avoid travelling, and sometimes I have to shell out £10 per week for a bus pass. I don't have a car anymore.

Mobile Phone: £20 - £30 per month
Now on PAYG, which is fine although very expensive to make calls during the day, which I have to do as I call recruitment agents a lot and speak to potential employers.i know payg are usually recommended on here but as you need to call it for work would it be better to consider a low tarriff contract that might provide better coverage during the day? i'm with o2 and for £19 a month i get 75 anytime minutes and 300 texts, but i'm on the texter tarriff you can get less text and more calls for that

Food: £75 per month
Again, my half of the total food budget for two people. We usually go over it, however.this is quite a lot especially if it's only half and your often over, pop over to the moneysaving old style forum for advice on meal planning and all things food! don't stay too long tho or we'll miss you!

Now the debts...

Egg Loan: Balance £12,400 maturity date April 2012, paying £255 per month
Natwest Loan: balance £9,500 maturity date February 2010 paying £260/m
Sainsburys Loan: balance £5,500 maturity date January 2009 paying £145/m
Egg CC#1: balance £5,900 minimum payment £118-ish
Egg CC#2: balance £5,900 minimum payment £118-ish
Tesco Plat CC: balance £1750 monthly payment £50
Morgan Stanley CC: balance £3650 monthly payment £100
Overdraft £3,400 (and I'm using it all at the moment) which results in around £35 interest charges each month
Bank account fee: £12 per month
do you know if you are able to make any overpayments on your loans? i'd suggest changing your bank account if you can ot one that doesn't charge you a fee, it's a total rip off. you could also try looking for an account you can switch your od to, some do 0% ones.

can you edit this to include the credit limit on your cards plus apr's, special offer rates etc, that way we can maybe suggest a few shifty balance moves to lower the interest your paying. other than that just fire your spare cash into the one with the highest apr!

also is there any chance of applying for 0% cards to balance transfer and again save on interest?

My BF is helping me out on some of this debt (he feels partly responsible - when we first got together we lived a dumb 'champagne lifestyle' overspending wildly, largely on his insistence) so he's paying £400 - £500 per month against my debts.i presume your just not paying him rent money then? would seems daft to pass money bakc and forth! :rotfl:

OrangeProse

Hi lynsayjane

Thanks for your comments... I've added the APRs for everything to the original post now. As you can see it doesn't leave much room for movement!

Happily, all of my loans are pretty flexible - I can make overpayments, or increase the monthly direct debits, without incurring additional charges. Ultimately it is my intention to do this, when I have more money coming in.

And yes, that £400 per month that my BF owes me is being knocked off the rent - there's no money flying around unnecessarily!

This is the frustrating thing - I have a plan (snowballing) which I can kick in once my BF and I move house and get ourselves settled in London. Once we've done that I should be able to find a full-time job much more easily, and then get an evening/weekend job (maybe both) to start chucking hundreds at my debt each month.

It all hangs on his job applications, at the moment. I'm working as much as I can, but I can't take on any permanent work at the moment, even part time, as I may have to leave it again in as little as a couple of weeks.

Still, it has made me feel a bit better to know that my snowball exists, in potentia so to speak!

shameless-about-money

You have £50K of debts.

You have no assets and no house.


You would have a problem securing an IVA because of the income issues.

Instead of taking years on a DMP and your credit rating being shot for all those years plus six, your best route is bankruptcy, no two ways about it. You have nothing to lose except your debts and a new start, without worrying about your income being up and down every month

OrangeProse

Thanks for the suggestion @shameless-about-money

I will respectfully disagree with you there though, for a number of reasons.

First of all, when I do get a full time job it'll be a pretty well paid one. I'll be bringing in around £28,000 - £30,000 per year so my monthly net income will be £1,700 - £1,800. This is enough to make minimum payments on everything, plus rent, food, travel and a (small) budget for things like haircuts and razors.

As my work (writing) is not particularly strenuous, I will also have the time spare to add to my income with evening/weekend work. I would only have to work in a coffee shop or bar for around 15 hours per week to bring in an extra £300 or more per month, which could go straight at my debts.

This way, by snowballing I could pay the whole lot off within 3 - 4 years.

The second reason is that I don't want to feel like I've ducked out of something that was my responsibility. I bought all that stuff, no-one was holding a gun to my head and I wasn't drunk (I don't drink alcohol at all!) so I'm determined that I will pay back every penny. And unless I get unexpectedly ill, or for some other reason I'm physically or mentally unable to work, that is what I'll do.

Funnily enough, the idea of bankruptcy is less appealing to me than the idea of working hard for three years and being debt-free on my own terms.

Call it bloodymindedness on my part, but I reckon I can do it. I'm just in a job bottleneck right now where things are incredibly tight.

shameless-about-money

Well, if you think that you can manage!

sured

well done orangeprose, for taking resposibilty for your debt,
could you sell some of the things you have bought, cd's etc?

misspoppy

HI
Contrary to popular opinion London's streets are not pathed with jobs waiting for people to walk into them!

You are better letting your OH to get a proper job in London with a relocation package and moving down and looking for work, you need some security at least.

OrangeProse

misspoppy wrote:

HI
Contrary to popular opinion London's streets are not pathed with jobs waiting for people to walk into them!

You are better letting your OH to get a proper job in London with a relocation package and moving down and looking for work, you need some security at least.

That's pretty much the plan, misspoppy!

I've already had one job offer in London, but because BF is the higher wage earner in our household I can't afford to move without him. So I had to pass it up. However, research and talking to recruitment agents tells me that I won't struggle, with the specialisms that I have. Not many people can do what I do!

misspoppy

ok sorry it wasn't clear thats the plan