Debt

LinkBlue

I'm 23 and over the years, I've lived beyond my means and have basically been immature and naive, running up debts to fund my lifestyle with little care. As long as the minimum payments were paid, in my way of thinking, it was dealt with.

Recently I was made redundant and to cut a long story short, I have had a huge reality check and have felt the full force of the mess I've got myself into.

I need to get myself out of debt and I need to figure out why I treat money the way I do. I confided in my mother, who has offered me a place to live.

A few weeks ago, I handed in notice for my apartment and will be moving in with my mother, I've cancelled all unnecessary payments (gym, subscriptions, etc) and have sold my car (can pay off some debt, and I can save a lot of money by using public transport).

The debts I have are
CapitalOne £900 - 18%
Halifax £2300 - £2 a day
NatWest £1250 - 0% graduate account for the time being I believe
HSBC £500 - unsure of %
First Direct £100 - 0%
Barclays £600 - 20%
Flybe £1000 - 20%
AquaCard £500 - 40%
Lloyds TSB £1500 - 18%

Total: £8650

I have around £1500 sitting in a first direct savings account at the moment from the car. I am currently receiving £160 a month DLA at the moment and that is it.

I am sending out CV's left, right and center for any job, but so far have had no replies. I'll keep at this and keep my fingers crossed.

I'm not sure why I posted this, but I guess it's nice to just write things down and air them. If anyone has any advice to offer, it'll be very much appreciated, both good and bad. I got myself into this mess, and now I need to try and get myself out.

Thanks!

Moneymash

Hi LinkBlue,

Posting here is a good start. If you check in regularly with the forums you will get lots of advice and support.

First of all, is the money from your car all the money you have, apart from the DLA?

Is there anything you can sell via Ebay?

Is there anything you can do for income e.g.part-time work, temporary work until the right job comes along?

Are you able to reduce your outgoings any further?

What are your total monthly minimum payments?

Have you contacted your creditors to tell them you are in financial hardship and asked them to freeze interest and charges for the time being?

LinkBlue

Moneymash wrote: »

Hi LinkBlue,

Posting here is a good start. If you check in regularly with the forums you will get lots of advice and support.

First of all, is the money from your car all the money you have, apart from the DLA?

Is there anything you can sell via Ebay?

Is there anything you can do for income e.g.part-time work, temporary work until the right job comes along?

Are you able to reduce your outgoings any further?

What are your total monthly minimum payments?

Have you contacted your creditors to tell them you are in financial hardship and asked them to freeze interest and charges for the time being?

Hi, thanks for the reply.

First of all, is the money from your car all the money you have, apart from the DLA?

Yes, it's all I have.

Is there anything you can sell via Ebay?

I'm currently selling what I have left from my apartment (fridge freezer/washing machine/sofa) which should raise a few £xxx. Apart from that, I own nothing apart from my mobile and laptop.

Is there anything you can do for income e.g.part-time work, temporary work until the right job comes along?

I'm currently applying for anything and everything, part time or full time. Just have to keep my fingers crossed.

Are you able to reduce your outgoings any further?

I don't think so. All I have left is my mobile phone (£46 and cannot lower as in contract) and the minimum payments on the credit cards.

What are your total monthly minimum payments?

I'm trying to get the statements together and work this one out today. I think it's around £100-£130 overall.

Have you contacted your creditors to tell them you are in financial hardship and asked them to freeze interest and charges for the time being?

I haven't, no. If I do this, will my credit rating be ruined? It's definitely going to have some blemishes, but I'm hoping I wont ruin my credit report so much that I can't get a mortgage in the future should I get that opportunity.

Moneymash

If all you've got is your monthly £160, plus what you have raised from selling your possessions. I would pay off the Aqua card completely as that is costing you the most in interest and then cancel it.

I would then make minimum payments on everything else. Although, if you want to avoid a minimum payment marker, then pay the minimum payment plus £1. This will keep your credit file looking ok.

You are also paying £2 a day on your Halifax overdraft. Some of the money you make ( at least enough to keep you under the £2000 threshold) from the sales of your goods should be kept in the overdraft account to save you a £1 a day which would save you about £30 a month.

You don't say how you use this overdraft account, but you should have some money running through it, so that Halifax don't cancel your overdraft facility.

I hope the above helps for now and good luck with the job hunting.

LinkBlue

Moneymash wrote: »

If all you've got is your monthly £160, plus what you have raised from selling your possessions. I would pay off the Aqua card completely as that is costing you the most in interest and then cancel it.

I would then make minimum payments on everything else. Although, if you want to avoid a minimum payment marker, then pay the minimum payment plus £1. This will keep your credit file looking ok.

You are also paying £2 a day on your Halifax overdraft. Some of the money you make ( at least enough to keep you under the £2000 threshold) from the sales of your goods should be kept in the overdraft account to save you a £1 a day which would save you about £30 a month.

You don't say how you use this overdraft account, but you should have some money running through it, so that Halifax don't cancel your overdraft facility.

I hope the above helps for now and good luck with the job hunting.

Thanks for the reply. Have just logged into my Aqua account and it's £241 I owe rather than the £500 (I must have got confused somewhere). Have paid that online and will close it after the next statement.

Will look at how much I need to pay into Halifax to put the overdraft into the £1 a day bracket.

I've had a few late/missed payments in December, so I'll give it a month and view my credit report and see what the damage is.

marathon_man_3

Is there any chance that your mother might be able to help out by lending you some cash to repay all or part of the loans?
If so, you should of course pay her the money back when you have a job together with any lost interest income (which doesn't amount to much in this low-interest environment that we are currently in).

LinkBlue

marathon_man wrote: »

Is there any chance that your mother might be able to help out by lending you some cash to repay all or part of the loans?
If so, you should of course pay her the money back when you have a job together with any lost interest income (which doesn't amount to much in this low-interest environment that we are currently in).

Thanks for the reply. She has a small amount of savings (£3k) that she has offered to lend me, but I can't take it. It's all she has, and if she needed it for any reason, I could not guarantee I could get it quickly.

Got to dig myself out of this one.

marathon_man_3

I can appreciate your reluctance to borrow from her and respect that.

Incidentally, although you are responsible for running up the debts, you did not choose to be made redundant so you aren't responsible for the overall situation that you have found yourself in. Don't beat yourself up about that.

LinkBlue

After strolling through my bank statements today, First Direct have been charging me monthly for the current account I hold with them, along with a fee that is apparently for 'renewing my £250 overdraft'. I thought they couldn't charge me as I held a savings account, but apparently they can.

I've transferred the few direct debits I have with them to my HSBC account, transferred £100 into the account and asked for the account to be closed.

So I'm -£100 now, but at least it's one less account to worry about.

LinkBlue

Does anyone know if I send a letter to Halifax explaining my circumstances, they would freeze the fees or change the overdraft into a loan?

LinkBlue

Just wanted to come back and post that Halifax have frozen my charges for 6 months and removed all charges added to my account last month. They were really understanding, went through my outcome/income and have offered lots of advice.

My account was downgraded from a reward to a standard current account, and something called 'control' added for free. They'll send me out a letter before the 6 months is ending to ensure I can start paying some charges again.

I don't think I've ever been treated so fairly of nicely from a bank before, particularly one I owe a lot of money to.

CapitalOne have also refunded a few charges in the last 6 months.

Onwards and upwards!