Debt Craziness - Really Worried :(

NoCreditLifestyle

Hi there, I would love to hear any advice anyone could give for my situation. It's a bit weird, but I will try and make it as understandable as possible.

I'm an 18 year old, I have a good professional job I have been doing for 6 years in IT (don't ask, young starter.) I left my job earning 18k to start my own business, paying myself 25k, (tax free due to directorship.) Cash flow issues hit, and I decided against it... now my plan is to move to London where I can get a 40k+ job (but I know at least 40k, so this is the number I am using in my head.)

Due to not having any money except every now and again for a while, I have completely dried up. I am nearly 2 payments behind on my car (187/month,) insurance payment is coming up (112,) 2 months+ behind on my credit card (55/month, so about 110.) My credit card has reached 1750, and is maxed out. I got a personal loan at the start of this year for 2400 to consolidate my full overdraft, and full credit card. This is now at 1500, as I am paying off 190/month on a 13 month loan, because this is my first loan and I haven't got many payments on it, they will not give me any other loans. My HSBC account has a marker on it that says 'no more lending' and I literally cannot get any credit. Because I missed a bunch of payments, my credit rating dropped out of the sky.

I have no money to relocate to London, and no credit available to me from the banks, I honestly can't think of what to do. Right now, I'm still in the westcountry, completely skint. I can do some work and make 1200, but this will literally *all* go on bills/debt. So, the food budget has dwindled to a ridiculously small amount, meaning I can barely eat.

I currently "live at home" in an empty house that my mother is renting out mid september, so I have accommodation, but when I get a job in London they will be expecting me within a month at the absolute max.

At this point, I am getting very depressed, as I can't see a viable way for me to make the move (and make enough money to pay off my debts.) Worsening the situation, I had a telephone interview that went swimmingly, and agreed to a face to face interview on Thursday, but am unsure of how I can afford any of this? I have a place to stay in London, but no money for food/transport, and my mother's finances will really only go so far... (I can imagine the absolute max I can borrow is £50.)

So, is there any hope? Has anyone any idea of how I can get myself out of this situation, and what is the best thing for me to do? My biggest worry is that I screw up moving to London because I can't afford the initial outset, or that I default on everything until they cancel my car insurance (which they already did, and I had to get another insurer, oh and cherry on the top -- old insurer wants the remainder of the agreement (£1300!!!) All of this is causing me so much stress, I can't find anybody willing to listen or push me in the right direction, as it's far too complex.

At this point, I would like to thank you for reading through my essay... perhaps you have an idea?

EDIT:
Current Situation: I got offered my old job, for 18k, crap I know, and when I walked out they offered 22k, but it was literally instant hire, I walked in for a 'chat' and they said sit down lol...I'm also doing an extra 30 hours a week for the company that offered 28k. Basically, it's annoying, the 28k job said he couldn't guarantee the work, so I accept the 18k, crapping myself still...a week later, "you free for a 3 month minimum contract?" ...sigh. So I'm doing both of these and will be making good money to pay off my debts. In addition to this I will be freelancing to make extra money, basically working all hours of the day ideally.

My plan is to pay off all debt ASAP, it's hard to calculate as I don't know how often freelancing will come in, which will speed things up. I will be significantly reducing my spending, in order to save to move to London. I am very gracious of my mother, as she has just sold the house, and as a gift is paying for 6 months of my rent.

I think if I do this for 12 months, I can pay of all debt including HP in 4-5 months (dependent on freelance work) and have £5000 saved, with a car as an asset.

Thank you to everyone who helped me through that panic, as you can see at the top of post. I truly appreciate it, I will keep you posted.

Edit: I saw people attaching these so I thought I would.

Also, upon going through this information, it annoys me how low my overheads are, yet the fact that I cannot get any credit to actually address the problem. My mum's just gone on a DMP, but that means you get no credit etc? A terrible thing at my age? Is it worth me getting a DMP? I just think if the bank see my overheads, and my earning potential i.e. in the form of a job offer, surely they'll lend me a few grand? Also realised, if I move to London, I will want to sell my car, but as it is financed, am I not allowed to? or...?

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ inexistant?
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 0
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 100
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 120
Clothing................................ 0
Petrol/diesel........................... 120
Road tax................................ 0
Car Insurance........................... 112
Car maintenance (including MOT)......... 20
Car parking............................. 20
Other travel............................ 0
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)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Garage hire............................. 0
Total monthly expenses.................. 492

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 7500
Other assets............................ 0
Total Assets............................ 7500

Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 0
Total secured & HP debts...... 0.....-.........-
Unsecured Debts
Description....................Debt......Monthly.. .APR
Overdraft......................0......0........ .0
HSBC CC....................1774......55...... .19.9
Family.........................600......0...... .0
HSBC Loan...................1544.....197.......0
Volkswagen Finance.............9100.....187.......0

Total unsecured debts..........13018.....439.......-

Monthly Budget Summary
Total monthly income.................... 0? (read post)
Expenses (including HP & secured debts). 931
Available for debt repayments........... 0
Monthly UNsecured debt repayments....... 439
Amount short for making debt repayments. -439
Personal Balance Sheet Summary
Total assets (things you own)........... 7500
Total HP & Secured debt................. 0
Total Unsecured debt.................... -13,018
Net Assets.............................. -5518

EDIT 2: I have realised my statement of affairs may not be very useful due to my situation, not being to reduce costs, but to find a way I can afford to relocate and increase my income, and then easily pay off my debts.

NoCreditLifestyle

Hi there,

Thanks for your response. I think my mother and friends would never let me get to that point, housing wise. Being in my mother's place is cost effective, as she pays all bills, and I live with my sister where she cooks for me (food bill split.)

Regarding my expected salary, I have quite a good CV for my age, and my sector of IT is well paid. I worked for a company that got acquired by TripAdvisor, and have done some work with Google/Facebook as well as several local agencies, and my references and tech skills are both top notch. My recruiter says that he would expect my to easily achieve a salary of 40k. The sector is programming FYI, yes I have no qualifications, and would like to get some simply to feel better about myself, but for now my experience outweighs necessary qualifications, I am also quite personable (huge bonus in nerdy jobs.)

Thanks for the advice about JSA, it sickens me to imagine walking in there though. Is there no credit alternatives?

Regarding the DMP, I think it is a good idea, but I obviously need to be in employment to start it off. But, if I succeed in moving to London, on 40k, I should be able to repay my debts easily without a DMP, but just for curiosities sake, what are the implications of one?

I get the feeling I have royally screwed myself, being 18 years old, and ruined my credit due to a crappy business venture when I could have stayed in secure employment, and that is what is depressing me. The fact that I can get no mortgage or anything for the next 6 years... I'll even have to renew my phone contract as I won't be able to get one anywhere else!

Edit: @your second response, my phone bill is very high right now due to 08 numbers used during my self employment. I now have the 0870 app and am trying to only ring 08 numbers if absolutely necessary. I can try and reduce my food spending, and petrol wise I could potentially get rid of the car now, but it is in negative equity and this makes everything even more difficult.

Edit 2: I think many of the responses I receive will be about reducing my spending etc, and I know I'm looking for a magic bullet, some way of explaining to the banks that this is the best way for me to repay my debt. Is there no way I can present a 40k job offer and ask them for 3000 to facilitate it, reconsolidate everything, and then pay that debt back at a higher rate? At this point, all I need is a stepping stone to allow me to repay my debt.

Flugelhorn

could always do PAYG phone

neas

I have to start by saying I admire your ambition. Most 18 year olds wouldn't have tried half the stuff you say you have (risk for new business etc).

I like another poster dont want to dampen spirits but unless you are the proverbial 'dogs boll ox' so to speak getting a 40k job (which is akin to a good graduate salary in london) without a degree or even a-levels (by the sound of it) would on paper seem difficult.

At the moment you have had a telephone conversation and an interview date. An interview wouldn't necessarily mean a job but I have a feeling you'd do fine, you definately have confidence . By the way I work in a similar industry (engineering where i deal with S/W Engineers) and all recruiters will offer you the world.. because they get commission for generating candidates for interviews. I've had recruiters offer me jobs that (if they had read my cvs) were not relevant to my CV at all...also they always overegg the salaries.

Either way thats just my experience and you could get a 40k job.. stranger things happen.

Banks are logical beasts though and all the positive things about you are based on 'gut feeling'. You sound confident and ambitious and will probably succeed.. but to a bank theres nothing to base a 'go no go' decision on lending to you. For them they see your credit history and non-payments along with failed business being bigger drivers for not giving you credit as opposed to your ambition/skill/confidence.

I wish you luck though an would be fascinated to see how you do at interview and if you get the job or a similar job would love to know. Its always been a pet hate that a degree is mandatory for so many jobs, when alot of time engineering/programming is bout the capacity to learn and innovate.

DeltaWing

I'm worried about your insistence that you're going to land a £40k+ job. Ignore what the recruiter tells you; it's their job to lie - to you, and to the companies they're recruiting for. All they care about is getting their commission.

I work in IT (development manager for a FTSE100) and whilst £40k+ jobs are plentiful, I certainly wouldn't offer an 18-year old kid one. I might put them in the role, but it'd be at £20k-£23k max. I don't care how good your programming skills are; without a minimum of 2-3 years in an ITIL environment, plus qualifications, plus experience, you're just not worth it. Having said that, I'm assuming you're talking about desktop programming - if you're talking about web/mobile applications, probably for a smaller design studio, then you can probably ignore the ITIL requirements - but the competition in that sector is even more fierce (it seems every uni student thinks they're the next Zuck these days). Working with Google, Facebook, Microsoft etc is no big deal - I haven't seen a CV lately from anyone who hasn't; the fact you're not still there suggests they didn't think you were worth holding on to.

A letter offering you a job, even at 40k, is unlikely to wow your bank - offers can be withdrawn, and there's every chance you wouldn't last the probation.

Rather than trying to focus on moving to London, perhaps you could look at contracting? It's an excellent way to get a lot of experience quickly, and a few years of contracting with a Microsoft Gold Partner, for example, will give you an edge should you decide to go permy. You'll still need to get your qualifications, though - we don't much care about what degree you've got, but if you're not an MCP or similar then you're going to get binned at a lot of first rounds (your CV will probably get seen by HR first, and if they don't see any quals, they'll put you in the round filing cabinet quicker than you can blink). Sorry, I digress - what I'm trying to say is that contracting may well be the way to go. You wouldn't need to be based in London; we've just re-hired a contractor who is based on the NW coast; he travels down to our London office once a week for face-to-face and deployments, but works remotely the rest of the time. And of course the travel is paid for by us.

I know this post isn't very supportive, but the fact you're relying on this wonderful job in London is alarming, as is the fact you want to solve your debt problems with more debt. Give CCCS a call, see if you can get a DMP set up, and go from there. I sincerely hope you do land a nicely paid job; I just want you to be prepared for the reality.

Oh, and you're signed up with more than one recruiter, right? And your LinkedIn profile is up to date, you've got recommendations on there?

NoCreditLifestyle

neas wrote: »

I have to start by saying I admire your ambition. Most 18 year olds wouldn't have tried half the stuff you say you have (risk for new business etc).

I like another poster dont want to dampen spirits but unless you are the proverbial 'dogs boll ox' so to speak getting a 40k job (which is akin to a good graduate salary in london) without a degree or even a-levels (by the sound of it) would on paper seem difficult.

At the moment you have had a telephone conversation and an interview date. An interview wouldn't necessarily mean a job but I have a feeling you'd do fine, you definately have confidence . By the way I work in a similar industry (engineering where i deal with S/W Engineers) and all recruiters will offer you the world.. because they get commission for generating candidates for interviews. I've had recruiters offer me jobs that (if they had read my cvs) were not relevant to my CV at all...also they always overegg the salaries.

Either way thats just my experience and you could get a 40k job.. stranger things happen.

Banks are logical beasts though and all the positive things about you are based on 'gut feeling'. You sound confident and ambitious and will probably succeed.. but to a bank theres nothing to base a 'go no go' decision on lending to you. For them they see your credit history and non-payments along with failed business being bigger drivers for not giving you credit as opposed to your ambition/skill/confidence.

I wish you luck though an would be fascinated to see how you do at interview and if you get the job or a similar job would love to know. Its always been a pet hate that a degree is mandatory for so many jobs, when alot of time engineering/programming is bout the capacity to learn and innovate.

Hi Neas, thanks for your response. I completely understand where you guys are coming from regarding the salary. I have good connections work-wise in the westcountry, and have the opportunity of taking a job for 28k. So I am quietly confident about the London job being 40k, the recruiter has been told by me to only show me jobs circa 40k, and from then I will negotiate. You are completely correct about the degree requirements, some of the big companies will require it, which is ludicrous. I left A Levels because I was failing tests for submitting PhD level answers. The exam bodies do not keep up with the technology, and therefore a 4y degree is rendered obsolete by the end of it, though much of the experience is valuable, commercial experience is worth it's weight in gold.

I can see where you are coming from on the bank side of things though. Right now, I'm contemplating anything so I can get there on Thursday for the interview (recruiter should have set up a few more interviews for thurs/fri.) I have a place to stay for them, and if all goes well, I am going to schedule a meeting with the bank and explain my situation, show them my evidence of a job offer with enough salary to repay the debt in a year, and then go from there.

I completely agree with you on how you end up feeling...when I see single mums and losers burning twice the amount of money I do, and my friends who are doing bar jobs wanting to go out more than I do, I really do wonder...

I have missed/late payments, and I'm sure I will default soon, there is now way to escape it at this point, so I expect the best thing would be to setup a DMP to avert this disaster.

I'll look into the tax credits, in the meantime, I have just applied for JSA online much to me disgust, but hey, may as well claim a few of the pounds for an actual worthy cause as opposed to the mass chav culture spending it on drugs.

Thanks for all of your support guys, I really appreciate it.

DeltaWing

NoCreditLifestyle wrote: »

Hi Neas, thanks for your response. I completely understand where you guys are coming from regarding the salary. I have good connections work-wise in the westcountry, and have the opportunity of taking a job for 28k. So I am quietly confident about the London job being 40k, the recruiter has been told by me to only show me jobs circa 40k, and from then I will negotiate.

If you've a got a £28k job offer right now, take it. Get your debt sorted, get them to pay for you to sit some (industry) exams, get some cash saved, and THEN think about London. And stop believing that recruiters are on your side.

NoCreditLifestyle

DeltaWing wrote: »

I'm worried about your insistence that you're going to land a £40k+ job. Ignore what the recruiter tells you; it's their job to lie - to you, and to the companies they're recruiting for. All they care about is getting their commission.

I work in IT (development manager for a FTSE100) and whilst £40k+ jobs are plentiful, I certainly wouldn't offer an 18-year old kid one. I might put them in the role, but it'd be at £20k-£23k max. I don't care how good your programming skills are; without a minimum of 2-3 years in an ITIL environment, plus qualifications, plus experience, you're just not worth it. Having said that, I'm assuming you're talking about desktop programming - if you're talking about web/mobile applications, probably for a smaller design studio, then you can probably ignore the ITIL requirements - but the competition in that sector is even more fierce (it seems every uni student thinks they're the next Zuck these days). Working with Google, Facebook, Microsoft etc is no big deal - I haven't seen a CV lately from anyone who hasn't; the fact you're not still there suggests they didn't think you were worth holding on to.

A letter offering you a job, even at 40k, is unlikely to wow your bank - offers can be withdrawn, and there's every chance you wouldn't last the probation.

Rather than trying to focus on moving to London, perhaps you could look at contracting? It's an excellent way to get a lot of experience quickly, and a few years of contracting with a Microsoft Gold Partner, for example, will give you an edge should you decide to go permy. You'll still need to get your qualifications, though - we don't much care about what degree you've got, but if you're not an MCP or similar then you're going to get binned at a lot of first rounds (your CV will probably get seen by HR first, and if they don't see any quals, they'll put you in the round filing cabinet quicker than you can blink). Sorry, I digress - what I'm trying to say is that contracting may well be the way to go. You wouldn't need to be based in London; we've just re-hired a contractor who is based on the NW coast; he travels down to our London office once a week for face-to-face and deployments, but works remotely the rest of the time. And of course the travel is paid for by us.

I know this post isn't very supportive, but the fact you're relying on this wonderful job in London is alarming, as is the fact you want to solve your debt problems with more debt. Give CCCS a call, see if you can get a DMP set up, and go from there. I sincerely hope you do land a nicely paid job; I just want you to be prepared for the reality.

Oh, and you're signed up with more than one recruiter, right? And your LinkedIn profile is up to date, you've got recommendations on there?

Hi there, great response, thank you!

I just posted before you replied, I have a job offer down here from a company I have been doing contracted work for, and that's for 28k... so 20-23k, I'd be worried... I have been programming since I was around 12, all web based programming, job title would be 'lamp dev.' No ITIL experience, but I'm not applying for those sort of jobs, I'm applying for vc funded startups and growing organisations that are just delving into LAMP etc. I understand where you are coming from on experience, I lived in the US for 2 years, and it was then that I worked for those companies, and when I moved back to England I resumed FT education, so that would explain it, but I see your point.

I will contact CCCS to get a DMP ASAP, acronym overload!?

LinkedIn is up to date with many detailed recommendations, I'm only with 1 recruiter... eek. I shall talk to more tomorrow. If I don't land one of these well paid jobs in London, I won't be screwed, I will have to work in the SW on 28k, and still be able to repay debt. I really don't see the point in doing any contracting experience, all the companies my recruiter has put me forward to has given me telephone interview and been "impressed" with my CV, recruiter has indicated all jobs are circa 40k, and I said 40k would be my absolute minimum due to financial situation.

Thanks so much for your detailed response, would appreciate any other info you could give me from what I have just posted.

neas

I think deltawing makes some good points also. I'm just an Engineer and so only have experience with CV writing and the likes.

CVS these days list quals near the bottom with emphasis on experience (embedded with skills)and major achievements first. For example implementing a product/development that saved your company 100k would be a nice one to put on a CV. or Lead Engineer for say an £X Mill programme would show the level you are working at.

Point is on my CV at least my quals are at the bottom... But I do sneakily put my name followed by my qualifications/certifications.

I don't want to contradict what i've said earlier but want to clarify. GCSEs are useless if you have A-levels...A-levels are useless if you have a degree... degree is useless if you have s PHD. Chartered Status is a plus to those (degree/phd obviously :P).

Having a Degree shows you have gone through a structured programme of learning. When I learnt to program (Not my day job :P) I learnt in any ways I could to achieve a task. More often than not it was a 'hack it and crack it' job... It did not do any of the following:

- Employed the most efficient use of code (i.e. first way to make it work etc)
- Adhere to Coding Standards (structure,commenting etc)
- Adhere to Safety Standards (some software is safety critical e.g. Automotive/Aircraft)
- Employ formal methods of Software Development (Requirements, UML etc, Formal testing (High Level, Low Level, Module etc etc)
- Follow any normal software development structure.

It didn't follow any of this because I didn't have the foggiest what those things were. I could code...I could make something work but could I code well and prove the code worked and had no bugs? nope. Thats what an education partly is for. To show you have the capability to learn the basics and the aptitude to continually learn (to keep up with new tools/processed/languages). You learn some of it on the job as well though.

Degrees aren't necessary if you are a genius and passionate about what you do so you have learnt the 'formal stuff' because you love your subject area. If like me you aren't a mega genius then a degree offers structured learning to give you the background and evidence to move forward.

But I really wish if you are as good as you say you are you get the chance to prove yourself... as it would be a shame otherwise. Would really recommend you do a degree part time when you get settled thogh as in the future employability will be easier (not impossible without though) with one.

NoCreditLifestyle

I know I don't want to pursue any education right now, as I really do think I have enough experience to get myself into a good job, there is no point in me spending money on professional development, as my salary increase afterwards would be negligible.

This has really got me down though, that nobody sees a way for me to get credit to move to London. If I can't get that credit, it means I have to take a local job, which means I have to get a place here, which will be a 6 month rent. All of this would mean I couldn't pursue the career in London.

Is this my only option?

5t3ve

If you've been offered a 28k job locally, then take it - get yourself out of debt, and then consider the move to London. London is one of the most expensive places to live in the country - so you really need to have some money behind you before you consider the move. For example, if you're going to rent a flat within reasonable distance of the city - expect to play over £800+ a month on rent and council tax - with a 3 month deposit just to secure the place.

By the way - I live and work in London in IT - 40k a year for an 18 year old without any qualifications is unrealistic. I don't mean to be harsh - but it's important you don't get led along with unrealistic expectations.