Debt-free wannabe newbie checking in for advice

OldStreetBum

Hi everybody I'm new here so bare with me as I explain my particular situation.

I've been trying to deal with debt since I left University and while I've always just about managed to deal with the payments I've never actually cleared any debt and its gradually gotten worse as result. Worse still I hid my problem from my family and partner and its come to a head very recently where I revealed what I actually owed. Naturally I'm feeling a bit ashamed as a result. Still though, things can only get better from here (I hope)!

First, a rundown of my incomings and outgoings:

My salary - £1,960
Total - £1,960

Note - Bonus of £1500 paid in September and March of every year. I also get paid overtime most months but this can vary from £400 - £1000 and sometimes the work doesn't come at all so as a rule I've decided to assume that I get no overtime when budgeting.

Monthly usual outgoings:

Mortgage/Rent - £768
Council Tax - £68
Gas - £35
Electric - £35
TV License - £25 (quarterly)
Phone - £22
Food - £120
Transport - £50 (cycle to work mostly)

Total: £1125

Now for the dirty debts:

Payday Loans:

Wonga - £1320
Payday Express - £812
PaydayUK - £757
Swiftsterling - £638
Uncle Buck - £520
1MonthLoan - £390
WageDay Advance - £250

Total - £4687

Absolutely mindblowingly stupid of me to get into such a level of payday debt but theres more:

Natwest Overdraft (Graduate interest free) - £1400
Natwest Credit card - £70 a month (£3400 total)
ZOPA loan - £136 a month, 3,620.64 total.
MBNA credit card - £45 a month (£3400 total)

Total - £11,820

So thats over £15k worth of debt but its the £4687 that scares me the most.

Since I've actually accepted I have a problem I've decided to seek help here and also take urgent action including the following steps:

• Moving out of my expensive flat and moving out of London, expect rent to fall to £300 - £400 a month.
• Have contacted Wonga, PDUK, Payday Express, Uncle Buck and several others and have secured payment plans for each of these.
• Have created a budget for the next six months using MSE articles and my family as inspiration.

So not a total basket case! My aim is to deal with the PDL first and then focus on the credit cards and escape the minimum payment trap by the end of this year!

Now, when I talk about contacting Wonga, etc and getting payment plans the revised payments are as follows:

Wonga - Originally owed £1320 - now £200 on my next payday followed by regular monthly payments from thereon out to be agreed upon. They are in principle happy to agree a payment plan which is positive news.

WageDayAdvance - Originally owed £259 - now three payments of £86. Will have paid this off by late July.

Uncle Buck - Originally owed £520 - now two payments of £260. Will have paid this off by late June.

Payday Express - Originally £812 - now regular payments of £252 until debt settled.

1MonthLoan will be settled by September. So far so good..I'm sure Martin would approve! :money:

HOWEVER - the fly in the ointment it seems is Swiftsterling. Have contacted by phone and they were adamant that they would not consider an extension or payment plan (which I believe contravenes OFT rules?). I will be writing to them tomorrow because this loan comes out on the 28th of May. They did say that if they could not take the money out of my account they would charge me a £56 penalty and "assign me an account manager" and if that didn't work would pass me to a DCA.

I'm not sure how to deal with Swiftsterling, I haven't got enough time to cancel my current account and move to another bank and I doubt they'd get my letter by next tuesday in time to respond. Short of transferring all of my cash on the 28th to my savings and withdrawing £150 to survive on what can I do?

Anyway thanks for baring with me and I'm looking forward to building my signature. I'm also happy to accept that I have a problem and say without hesitation after almost five years: I'm OldStreetBum and I'm in debt!

jamesd

To deal with Swiftsterling you might consider borrowing from one of the lenders at lenderscompared.org.uk. None is cheap but all are cheaper than payday lenders. You can start out with a year and overpay as fast as you're able.

MBNA and NatWest quite often do 0% for some time deals, got any of those offered to you?

The payday loans are soaking up a huge part of your income. Your situation should rapidly and dramatically improve once you've got rid of them.

Tixy

Hi and welcome

When you say you've set up repayment plans with them all - have you first opened a new bank account with a new bank and ensured your wages will be paid into that?
If not then despite what you've agreed with them you may find they take out more than you are expecting them to.

Do you have any credit available at all on your overdraft or credit cards?

In terms of swift and moving your money to savings - if its with the same bank as they will be about to try to raid - then your bank may pay them and offset the funds from your savings (obviously not an issue if its a different unconnected bank).

OldStreetBum

Hey guys! Thanks for the replies and it looks like theres a bit more work for me to do!

I'm looking at setting up a new account ASAP to get that done but that won't be set up before Tuesday so I'll have to be extra sharp as to what I've agreed to pay and what they actually take out.

My credit rating is currently very bad (did the 30 day trial at credit expert trick reccomended here at MSE and its...well..bad). So bad that not even Payday lenders will lend to me! So right now I don't believe getting more loans is possible.

I haven't any credit availible on my overdraft or credit cards sadly.

jamesd

Next stop is Zopa. Give them a call and ask them for an arrangement where you pay £1 a month until you've got rid of the payday loans, then increase the payments above the current level to get the loan back onto its original payment schedule. Tell them how long each time will be and deliberately tell them that you want one more month than the absolute minimum as safety margin to be more sure that it'll work according to plan if something unexpected happens. With the moving to lower your costs you've already demonstrated a commitment to fixing things with real sacrifice on your part.

Zopa will make such arrangements. They understand that things like this happen, that your current situation is not stable and heading in an undesirable direction, so it is in their interest and that of those who lent to you to help you get back on track. Lenders also understand this - an arrangement while you get sorted out is better than a default, so don't worry about it. This doesn't mean that they will necessarily do so for you, nor in the way I've described, just that they are open to helping people get back on track before things get worse.

Delaration of interest: I've both had a loan via Zopa and have lent via Zopa, having loans being repaid to me at present, including loans in arrangement, collections and default states. I don't currently have any offers to lend there. I haven't checked whether I'm one of those who lent to you, and won't, but it seems unlikely.

OldStreetBum

Hey James!

Thats an awesome idea. I'll be getting in touch with ZOPA and will let you know how I get on. I have dealt with them in the past as I had a smaller loan with them previously and TBH they were great so might be sorted by today

Wish me luck!

jamesd

Good luck!

jamesd

You start to deal with Swiftsterling using the Payment Services Regulations 2009.

"The Payment Services Regulations 2009

Consent and withdrawal of consent

55.—(1) A payment transaction is to be regarded as having been authorised by the payer for the purposes of this Part only if the payer has given its consent to—

(a)the execution of the payment transaction; or

(b)the execution of a series of payment transactions of which that payment transaction forms part.

(2) Such consent—

(a)may be given before or, if agreed between the payer and its payment service provider, after the execution of the payment transaction; and

(b)must be given in the form, and in accordance with the procedure, agreed between the payer and its payment service provider.

(3) The payer may withdraw its consent to a payment transaction at any time before the point at which the payment order can no longer be revoked under regulation 67."


First tell you bank that under the Payment Services Regulations 2009 you are notifying them formally that you have withdrawn consent for Swiftsterling to debit your account by £638 on 28 May and they should refuse to complete their transactions if any are attempted.

Tell them that you will shortly be telling Swiftsterling the same thing, to ensure that all parties are aware that consent has been withdrawn.

Don't expect it to be easy, you may have to ask for a supervisor before you get someone who knows that you have a right do do this and that if they make the payment after notification they are required to refund the money to you. Be sure that you follow up in writing with the bank saying that the letter is to confirm the telephone notification that you provided.

Then tell Swiftsterling:

1. That under the Payment Services Regulatons 2009 and following initial advice from National Debtline you withdraw consent for them to take the payment and have notified your bank already that consent is withdrawn.
2. That they either negotiate a reasonable repayment plan now or they wait until they receive notification that you are setting up a debt management plan with National Debtline that will inevitably get them paid slower because of the lower value of their debt compared to others.

Then see how they wish to proceed. Normal debt management plans are paid pro rata with the ones owed most getting paid most each month. Swiftsterling is a low value debt compared to the rest so if they wait they are going to get their money back much more slowly than if they make a sensible offer to take money over say six months with no additional charges now.

Expect Swiftsterling to be unhappy but there's little they can do when the bank is refusing to let them take money.

Don't let them get anywhere threatening you with debt collectors, bailiffs or the county court. All a court would do is work out what you could afford to pay and order them to accept that much, so it'll be a waste of their time and money to go there.

OldStreetBum

Thanks for the advice RE: SwiftSterling. I'm prepping the letters for SwiftSterling and my bank. Are there templates for this kind of thing?

I spoke to Wonga ZOPA and they said it is possible to sort out an arrangement like that and urged me to contact them in writing (e-mail or letter) rather than discuss it over the phone and asked me to send my SOE and a clear explanation of what I want (to pay a nominal repayment each month until September/October) which I have done so we'll see how that works.

OldStreetBum

Okay I've got some updates.

- Was sorting through all my financial statements and unopened stuff and found that HMRC owe me £845 but never sent me a cheque! Have phoned HMRC and they asked me to send them a letter instructing them to cancel the cheque they sent out and to pay the money directly into my account.

- Have contacted the CO-OP and opened an ultra-basic Cashminder account although looking at what they offer when I get on an even keel I might upgrade that to a current account in future!

- Have found £31 worth of random cheques for share dividends and refunds that I never paid into my account! Have promptly done that and now I'm already £30 odd up

Now counting down the hours until Monday 28 May. Will probably be up at 2am watching the online banking to see what happens. Really excited but pretty scared as well! Wish me luck!

Theatregal83

Ooooh good news on the tax rebate, that should be a bit of help for you