We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

Debt, payplan and bank charges

Hi, I'm Gemma and I'm a spendaholic. I'm 25. I owe the following amount of money to the following companies:

Alliance & Leicester loan £ 1608.16
Barclaycard £ 1006.01
Egg loan £ 2743.89
HSBC overdraft £ 1500.57
HSBC grad loan £ 6304.34
HSBC credit card £ 928.81
Virgin credit card £ 2655.24
MBNA pc loan £ 417.88
Viva La Diva online shoe account £ 102.39
Wescot Credit Services (Vodafone) £ 176.20

This debt is all my own fault, I was too reckless when I left university, then I kept borrowing to try and get myself out of it. When I took a paycut (reduced hours) at work last Sept everything became unmanagable and I started getting into trouble. I forced myself to look at my debts for the first time in years. I was terrified by what I saw.

I've since (January) found a full time job and work in a College in London. I earn about £17,500 before tax. This, coupled with my rent costs, means that I cannot afford my monthly repayments. I paid my first payment to a Payplan debt management plan last week.

I've got a place on a PGCE course next year to study to be a teacher (one year, fully funded) and that should ensure a starting wage of £24,000 when I graduate (2008).

I know that one day I'll be earning more. But I can't shake the guilt and fear that my current debt situation holds. I feel guilty all the time. I feel I have let everyone down. I keep waking up in the night all hot and panicky. I'm worried that none of my creditors will agree to my management plan and will take me to court or try to declare me bankrupt. I'm worried that if I am declared bankrupt I will not be able to find anywhere to live, as rented accomodation and mortgages are impossible to find. I'm worried that I won't be able to work as a teacher if I am declared bankrupt.

I dread going home every night to letters on the hearth. I force myself to open them all and digest the information inside, but I feel so futile and helpless.

I have also got an ongoing claim with HSBC, as they have charged me over £1500 in bank charges in the last 2 years. I feel this has had a significant effect on increasing the amount of my overall debt. I'm still waiting for the outcome on this.

I only buy food and bus fares. And the occasional newspaper. I spent £10 in Primark the other day on 2 new tops and felt like I was committing a crime. It was the first time I have bought any new clothes in 6 months.

I feel lost, trapped... you name it. I don't know what to do.

Is anyone else around my age in this situation? Some advice would be lovely.
Debt
[strike]April 2007 £17197.49
June 2007 £16593.49
[/strike]

Currently: £15293.49 (thanks HSBC!)
Watch this space for progress!
Aims:
To pay off in Oct 07
£102.39 - Viva La Diva
£176.20 - Wescot
£417.88 - MBNA
To pay off in Jan 08
£2665.24 - MBNA CC
To pay off in May 08
£928.81 - HSBC CC
£1006.01 - Barclaycard
«1

Comments

  • Sus1e
    Sus1e Posts: 235 Forumite
    Gemma,

    The first thing is congratulations for taking the first step and facing up to what you owe.

    Secondly, can you post a Statement of affairs (SOA - see the sticky at the top of the forum) so that the wonderful people here can give you some advice on where you can make savings etc.

    Susie
    Sealed Pot Challenge Member Number #1906
  • Sus1e
    Sus1e Posts: 235 Forumite
    PS - Forgot to say that I am 28 and owe £10k in student loans plus a mortgage, so you are definately not alone
    Sealed Pot Challenge Member Number #1906
  • sonee2405
    sonee2405 Posts: 1,451 Forumite
    hiya gemma your not the only one so please don't worry yourself -i know its a scary & lonely situation but you are already on yor way to recovery as you are trying to sort your self out! Im 25 and almost £15000 in debt.I was a spendaholic aswell and treated myself and family/friends .I had to stop working because of a helath problem for a little while and suddenly drowned in debt-i never noticed the excessive intrest and charges store cards were taking off me and happily paid every bill by minium payment direct debit until recently when i had to resort to payplan.Its hard but you will succeed and don't feel guilty about treating yourself once in a blue moon it is allowed.
    I'm about to claim back excessive charges from hsbc aswell so good luck to you.The dmp is a good idea and will help- try to stay in contact regularly with your case leader so that any new letters from creditors can be forwarded to be discussed.If your were a spandaholic like myself you probably have loads of things lying around that you no longer use or need such as clothes shoes accessories etc-have you thought about ebaying a few items for a bit of extra cash, that way you could pay off some of your smaller creditors quicker or use the money to treat yourself.
    good luck -will keep an eye on your posts.
    Love can tame the wildest
  • Thanks a lot, it really does mean loads to talk to people in the same situation.

    Has anyone else noticed how much debt ages you? I used to look 25, now I look and feel about 50!
    Debt
    [strike]April 2007 £17197.49
    June 2007 £16593.49
    [/strike]

    Currently: £15293.49 (thanks HSBC!)
    Watch this space for progress!
    Aims:
    To pay off in Oct 07
    £102.39 - Viva La Diva
    £176.20 - Wescot
    £417.88 - MBNA
    To pay off in Jan 08
    £2665.24 - MBNA CC
    To pay off in May 08
    £928.81 - HSBC CC
    £1006.01 - Barclaycard
  • My SOA

    In

    Approx £1050 (just had pay review so waiting for concrete figure)

    Out

    Rent £350 pmth
    Council Tax £50 pmth
    (both heavily subsidised by boyfriend)
    Travel £80 pmth
    Pet £20 pmth
    Prescriptions (asthma and bipolar) £20 pmth

    THE DEBTS

    Alliance & Leicester loan £ 1608.16
    Barclaycard £ 1006.01
    Egg loan £ 2743.89
    HSBC overdraft £ 1500.57
    HSBC grad loan £ 6304.34
    HSBC credit card £ 928.81
    Virgin credit card £ 2655.24
    MBNA pc loan £ 417.88
    Viva La Diva online shoe account £ 102.39
    Wescot Credit Services (Vodafone) £ 176.20

    Payplan £302 pmth (though do not know if creditors will respond positively or not)
    Debt
    [strike]April 2007 £17197.49
    June 2007 £16593.49
    [/strike]

    Currently: £15293.49 (thanks HSBC!)
    Watch this space for progress!
    Aims:
    To pay off in Oct 07
    £102.39 - Viva La Diva
    £176.20 - Wescot
    £417.88 - MBNA
    To pay off in Jan 08
    £2665.24 - MBNA CC
    To pay off in May 08
    £928.81 - HSBC CC
    £1006.01 - Barclaycard
  • RAS
    RAS Posts: 34,446 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Gemma

    thanks for the SOA. Can you put up the interest rates and the minimum payments? Also the limts on your credit cards

    That will enable people to advise you better
    If you've have not made a mistake, you've made nothing
  • findingmyownway
    findingmyownway Posts: 1,803 Forumite
    also food,clothes many other things are missing from your soa. have a look at your bank statements and see where the money has REALLY gone over the last few months.

    see southernscousers sticky for more info for first time posters

    good luck !
  • Swishter
    Swishter Posts: 107 Forumite
    Hi and welcome :hello:

    I'm 29 and up to my eyes in it!

    What subject are you going to be training to teach? If it is a shortage subject you will get £9K for the 9 months and either way you should hopefully be entitled to a maintenance grant on top but that depends what your BF earns. That means you could be better off and could temp in the holidays or even get a bar or supermarket job for one or two evenings a week and then overtime when you're off. Then of course there is the golden hello at the end of the NQT year, by that stage you will have hopefully reduced a lot of debt and you can use that cash to clear even more! All your bursaries and grants are tax/NI free so are worth a lot more than the equivilant taxed income!

    I think that you should start keeping a spend diary and accounting for where every penny goes, start selling all your excess on e-bay etc and use the cash to pay off bigger chunks. I think a judge would frown on any company trying to force you into bankruptcy when you are trying to get it all paid off, so don't worry about that. Claim back any charges you can, I would expect if you are in arrears that the company would offset the cash against your debt but then at least it has gone down!

    Don't beat yourself up too much. I used to go on and on about what a mess I've made but whats done is done, so what! You are dealing with it now and that's all thats important we can't undo the past but we can change the future.

    Swish
    xx
  • Swishter
    Swishter Posts: 107 Forumite
    Oh and I claimed back £2K worth of charges from HSBC last year, they offered partial settlement, I refused, filed a claim, they filed a defence and offered me full settlement on the same day. I had the cash in a week. Don't be scared of them I think it is a tactic as they hope people will get worried and pull out.

    We are all here to support you!
  • southernscouser
    southernscouser Posts: 33,745 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    As you are taking responsibility for your debts and looking to manage and service them there isn't a court in the land who would accept a bankruptcy petition against you. :)

    Keep chipping away and you will be fine! :D
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.3K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 240.9K Work, Benefits & Business
  • 617.1K Mortgages, Homes & Bills
  • 175.6K Life & Family
  • 254.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.