Advice Would be very much appreciated

poisonplant

Hello I'm in debt and really not sure what to do about it all, I have no excuse for my situation and am really struggling to sleep at night anymore.
I have £3,500 on two credit cards, £1,000 overdraft and owe £2,500 on payday loans which I keep paying off by taking out more.
I live at home and have to admit to being reckless and burying my head in the sand.
People say a DMP is a good idea and I contacted a company last year who were really helpful but i'm really worried about the repercussions of going ahead with a DMP.

HappyMJ

You live at home....i.e with your parents? You must stop going out negotiate a lower payment of board to your parents for a few months and put ALL of your income towards paying these debts. A DMP can be good but having defaults on your credit record will not be good if you want to rent somewhere.

It's £7,000. How much do you earn? Do you have any essential expenses that you cannot live without paying such as your board? Get rid of the mobile and any other non-essential expenses.

EssexHebridean

The payday loans are your biggest problem as you probably know. Well done for acknowledging the issue though, now you can make a start on dealing with it.


First things first - you need to do your SOA - use the link HERE then format for MSE at the end and copy and paste it here. Once you've done that people can work through your figures and help you decide the best way of tackling it.

poisonplant

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 800
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 200
Total monthly income.................... 1000
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 36
Groceries etc. ......................... 80
Clothing................................ 20
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 8
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 8
Entertainment........................... 60
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 532

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
loans..........................2500......2500......NaN
credit cards...................3500......120.......39
overdraft......................1000......8.........0
Total unsecured debts..........7000......2628......-

Monthly Budget Summary
Total monthly income.................... 1,000
Expenses (including HP & secured debts). 532
Available for debt repayments........... 468
Monthly UNsecured debt repayments....... 2,628
Amount short for making debt repayments. -2,160
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -7,000
Net Assets.............................. -7,000

cardia

****EDIT I've just seen a CCCS thread in here, pop in there, they are a free service with all the uptodate info you need ***

I worked for DMPs for a number of years and my advice is to only use a free service (ive been out of the business a while now and there has been a lot of changes) because most DMPs have hidden charges, and only a small amount goes to the creditors.
My advice from my experience and knowledge:
Speak to CAB - see what help you aren't already getting.
The worst debts are the ones to deal with first, if you are struggling then its ok to not make the payments, reason being you are then in a position to re-negotiate the payments and possibly freeze the interest, all this you can do on your own. Unfortunatly its not until your in arrears and getting charges that you really can get help and make some big changes.

If you would like to chat to me more about this, ill get some info together for you, just PM me

Poosmate

Ok so after your living expenses and debt repayments (apart from PDL's) you have £340 left so where is this money going?

If you are serious about getting out of debt you need to stop doing everything that got you into debt in the first place. This £340 could become £400 if you knock your entertainment spends out - make your internet and tv your entertainment for the next few months at least!

Doing this means your next PDL should be £2100, the following month £1700 and so on. Eventually you can wean yourself off these. Stop spending on your CC and start living within your means.

Do you have anything you can sell on Ebay, Gumtree, Amazon, Magpie etc.? If so, get them sold and put that money towards your credit cards (the one with the highest interest rate). This will bring your monthly payments down a bit and you can use the surplus to make an additional payment to your credit cards.

Otherwise you can just save these bits of cash and reduce your PDL's by a bit more each month to be free of them quicker, though your CC payments are probably only going to come down by pences per month.

What mobile pgone do you have? Is there any value in it? Can you sell it and buy a crappier one? Just tell people you lost it if anyone asks.

Do your parents know about your debt? If not did you give the PDL's their landline number? If you default on your PDL's your parents will most likely find out from a phone call - not a nice way for them to find out. Can you discuss this with them?

Poo

EssexHebridean

poisonplant wrote: »

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 800
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 200
Total monthly income.................... 1000 Any way of increasing this at all? Overtime, second job?
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300 Would your parents consider taking a little less while you sort this out? As it appears you buy your own groceries anyway, if they would let you drop your keep to £200 until the debt is cleared that would be a real help.
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 10 Is this PAYG? If not, can you save at all by switching? It's not an unreasonable sum in any case so if not I can't see it as a problem
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 36 This is pricey - can you change supplier?
Groceries etc. ......................... 80
Clothing................................ 20 Can you manage on the clothes you have at least until the payday loan is gone?
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 8 If this is a regular monthly prescription can you get it cheaper on a pre-pay arrangement?
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 8
Entertainment........................... 60 Harsh I know, but again, just until the Payday loan is gone can you cut this by half?
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 532

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
loans..........................2500......2500......NaN How much interest is going on this every month?
credit cards...................3500......120.......39
overdraft......................1000......8.........0
Total unsecured debts..........7000......2628......-

Monthly Budget Summary
Total monthly income.................... 1,000
Expenses (including HP & secured debts). 532
Available for debt repayments........... 468
Monthly UNsecured debt repayments....... 2,628
Amount short for making debt repayments. -2,160
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -7,000
Net Assets.............................. -7,000

Think about small ways of adding to your income too - so eBay, surveys, that sort of thing. You already know, I'm sure, that the Payday loan HAS to be your first priority whatever. Talking to one of the Debt charities is a good idea too - they'll be able to advise you if you can actually get out of this without a DMP.

Poosmate has already said some of this I notice. Think about every single way you can cut back - even on things like groceries (I take it that this *is* for your regular food, rather than being lunches for work or something?)

poisonplant

Thanks for all the kind messages, i'm going to cut my spending as much as possible and am considering my options. I have contacted one company that deals with payday loans and sets up re-payment options and will see what they say. I am also considering the possibility of contacting some companies myself to see if they will accept a payment plan although I doubt it.
I really don't want to go down the DMP route but have 9 payday loans at £2,500 all due by end of March at the very latest- thats why a company that deals with them on their own as an option sounded good as can deal with cc cards and overdraft in long term myself - in theory if i can sort something out.
Thanks for listening

Poosmate

That sounds really dubious. I hope they are not going to charge you for this. Also, that is exactly what a DMP is so if you're going to do that with your PDL's you may as well go the whole hog and bung in your credit card debts too and use one of the free DMP charities such as CCCS, Payplan or CAB.

If you do go with this company you've already contacted be prepared to be paying those debts off for a vey long time as they will take a big chunk of what you pay to them for the debts. Plus your credit file is going to be shot to poo for a very long time and will have an adverse effect on you in the future should you wish to take out a mortgage or move out of your parents home.

Please think very carefully about what you are doing. A good 6 months of frugal living will see you more or less out of the PDL trap and much more capable of dealing with your CC debt. Your credit file will look better and you will have learned a very good life lesson for the future.

Poo

HappyMJ

poisonplant wrote: »

Thanks for all the kind messages, i'm going to cut my spending as much as possible and am considering my options. I have contacted one company that deals with payday loans and sets up re-payment options and will see what they say. I am also considering the possibility of contacting some companies myself to see if they will accept a payment plan although I doubt it.
I really don't want to go down the DMP route but have 9 payday loans at £2,500 all due by end of March at the very latest- thats why a company that deals with them on their own as an option sounded good as can deal with cc cards and overdraft in long term myself - in theory if i can sort something out.
Thanks for listening

That sounds just like it a managed DMP which will cost you a lot in fees. You will still go into default on those credit agreements. You can do it for free by getting help from CCCS or another similar charity but I would advise you just knock all your spending down to zero for the next year and get them paid off ASAP. Look for more work. If you are working a second job then you are not spending or have any temptation to spend.