Help! I am drowning in debt!

dharr1609

Ever since going to uni i have been in debt!
I have always managed to get out of it somehow, with help from friends and family.
But i have finally hit my lowest ebb!
I owe over £30000 in credit cards and loans,and can see no light at the end of the tunnel!
I have tried applying for more credit cards and loans to consolidate my debt, but have been refused credit due to my poor credit rating!
I have considered asking my mum and dad for help, but they are retired and i just don't think they have that kind of money to lend me!
I own no saleable assests or have any dependents!
I can't eat, sleep or move on with my life until this is sorted.....does anyone know what i can do? What is my best option?

jerseygirl74

hi im no expert but i do know how you feel about drowning in debt. we have had debt spiralling for a few yrs now and have just made a phonecall to payplan to try sort out a dmp with them, i cried my eyes out when i came off the phone but i really hope that it is a step in the right direction. I found them really helpful and non judgmental, i have a telephone appt with them on sat to go through it in more detail. I too cannot rely on family to help me out and would feel too ashamed to ask anyone else anyway. I do feel a bit more positive that i am starting to try sort things out after a few yrs of playing about with it. I'm sure someone will come on with some real practical advice.

i just wanted to say try to think positive and there are options out there and i think there is more people in our situation than we realise, we are not alone.

dixon-bainbridge

Well done for asking for help. People will able to help you more if you complete an SOA at the following link and post the results on here. Be honest, people won't judge but may be able to offer ways you can save money.

http://www.makesenseofcards.com/soacalc.html

dharr1609

Household Information[/b]
Number of adults in household........... 1
Number of children in household.........
Number of cars owned....................
Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1300
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 375
Management charge (leasehold property).. 96.7
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 50
Petrol/diesel........................... 15
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 75
Childcare/nursery....................... 0
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......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 22
Entertainment........................... 150
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 978.7

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
Credit Card....................5750......170.......0
Credit Card....................4800......120.......0
Credit Card....................3200......60........0
Loan...........................10500.....225.......0
Credit Card....................6000......150.......0
Credit Card....................5250......140.......0
Credit Card....................3100......31.18.....0
Total unsecured debts..........38600.....896.18....-

Monthly Budget Summary
Total monthly income.................... 1,300
Expenses (including HP & secured debts). 978.7
Available for debt repayments........... 321.3
Monthly UNsecured debt repayments....... 896.18
Amount short for making debt repayments. -574.88
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -38,600
Net Assets.............................. -38,600


These are my figures they are fairly accurate give or take!

Little_Miss_Uni-Debt

Hi Dharr1609,

I totally understand the whole debt-since-uni situation - same here!

Your SOA shows that without your debts you would have a very comfortable surplus each month. I know it's painful but you need to look at where the money went, you may have assets that you've not considered (designer clothes, expensive products)

Perhaps if you run through your credit card statements and see if you can track down the root cause of your overspending. Maybe by highlighting similar purchases, e.g food, nights out, shopping, travel.

Decide whether it's made up of simple living expenses while you were on a lower wage or in a difficult situation or if you were making extravagant choices that you need to correct.

I would also urge you to investigate the APR% you are paying on each debt so you know which to pay off first.

Before you can start to pay your debts off properly you need to be sure that you have stopped spending - not just that you have stopped because you've ran out of credit. I know that sounds harsh, but I know first hand how old spending habits die hard.

Getting to the end of the credit line is a good thing - I know it doesn't feel like it but it is. If you got a consolidation loan your debt would jump from £38k to £43k just by signing the papers. And that's if you got a decent rate!

Once you start to get sorted you'll be glad that you weren't offered one further down the line.

So I guess next steps are -

Investigating where it went and if anything can be reclaimed (PPI, charges) or sold (items you bought), getting your % APR's for each debt & perhaps keeping a spending diary for a few weeks.

Keep us updated! Well done for starting now!

Bored

Hi, welcome to the forum

Your income is £1300 and your monthly debt repayments are £896 so obviously this is a situation that cannot be sustained. I would recommend talking to a free debt charity such as CCCS or Payplan ASAP and seriously consider a debt management plan. The monthly repayments as they currently stand are crippling you, and no amount of cutbacks from your SOA is going to allow you to make the contracted repayments. A debt management plan is an agreement you make with your creditors to pay a reduced amount towards your debt, based on how much you can afford. They are not to be entered into lightly though, as it will essentially prevent you from obtaining any form of credit for at least 6 years.

Could I ask (if you don't mind) the origin of your debt? Has it resulted from specific purchases or simply living above your means for an extended period of time? I'm not trying to be nosey, but working out where the debt has come from is a major help when trying to tackle it.

dharr1609

It started at uni with help on fees and living and it has never really recovered.
Been Living above my means and spending silly money, and I don't really have anything to show for it at the end of it all which is the sad thing!

I have looked into a IVA? has anyone had one of these? Or can give me any advice about taking on up?

Millionaire

Mobile phone............................ 35 - This is high, end of contract tell them your leaving and get upgrade offers. I only pay £13 month with new phone. Or go PAYG might be cheaper.
Groceries etc. ......................... 150 - Seems high for one person. Should be able to do under £100. Look at value brands, taste just as good in most cases.
Clothing................................ 50 - Buy only when sales are on unless urgent. Should be able to reduce from £600 a year.
Entertainment........................... 150 - This is high, What you spending it on? Try to budget £100 or less

Gettingtherequickly

You list a management charge, but rent. What is this for?

Also, you have £15 for petrol/diesel but no vehicle, do you travel with a colleague and contribute this?

dharr1609

I have put my mangement charge in as i pay all my utilities and stuff in that one lump sum a month.

I share a car with another family member on the odd occasion i go home

Ebz

Hi,

There are definitely some areas you could cut back in on your SOA, as has been pointed out. However it might be that there are some things you have missed out on, such as contents insurance and some emergency fund money....

But I would say that even with cutting back on the things that have been suggsted you would struggle to make up your deficit. Unless there was any way to reduce your rent? Not sure if you're on your own, but you could flat share or get a lodger?

You mention an IVA, I don't know much about them, other than that they are very ridged in what they make you pay. As I understand it a DMP is more flexible in terms of your payments. For example if your circumstances changed and you lost your job, or had your hours cut, you can amend the payments to what you can afford.

As a previous poster said though, it does have consequnces for your credit file, but then again more credit won't help. You should definitely give CCCS or Payplan a ring and discuss the options with them (don't go to anyone else as these both administer DMP's for free - other companies will charge you). CCCS also offer an online debt rememedy which you could fill in to see what it suggests firstly.

Hope that helps!