Struggled with debt for 12 years and now at the end of my rope.

spacey2012

cupcake32 wrote: »

What would happen if we defaulted on the Payday loans?

They would empty your bank accounts.

ValHaller

cupcake32 wrote: »

What would happen if we defaulted on the Payday loans?

Credit record trashed for 6 years. Multiple attempts to take money from your bank account (open a new one before you go down this road). Phone calls, threatening letters, threat of CCJ. Initiation of CCJ. You have to be hard about it and threaten to go bankrupt unless they stop interest - and be prepared to carry it out.

Doing it is pretty much nuclear, but if you have no way of paying them off, you would have to go bankrupt anyway - even though you could pay the rest off. But going bankrupt would mean they get nothing much. So better for them to back off and stop interest.

Think long and hard before you do. There is a fee to go bankrupt and you'll need to default for a month or 2 on virtually everything to get that fee saved.

cupcake32

God, that sounds really scary. I think it costs about £700 in total to file for bankruptcy. Is that each, if you are a married couple? I presume so... I'm not sure I could default on everything for a good couple of months to save up the money. Is that standard for people to do that when about to go bankrupt?

cydney65

Cupcake-Get yourself a cuppa and a biscuit then get over to the bankruptcy board and have a mooch round before you scare yourself witless. Talk to more nice people on there. You are doing the right thing trying to deal with your debts and you need to take a good look at all the options and get some advice from one of the debt charities too. Keep us up to date hun. It will get sorted X

cupcake32

I am so glad I found this site. You have all been brilliant with advice and helping me see that there might very well be a solution to this whole mess. All is not lost yet. Thank you so much. x

Willing2Learn

So what decisions have you made? What changes are you considering? What's the plan?

And do keep coming back with updates and for support if it starts getting you down.

cupcake32

I'm going to investigate bankruptcy in detail now. I'm really not sure whether it's the right thing for us or not, but I won't know til I find out some more about the whole process and how it will affect us and for how long.
If we decide it's not for us then I need to come up with a strategy for paying off the payday loans, and quickly. We'll take it from there, but something needs to be done to tackle the DMP because I cannot handle the thought of paying it for the next 17 years.

cocalls

i think im right in thinking that the payday loans can be put on the dmp even after they've been taken out-speak to your dmp people. At least it will give you breathing space while you think about the bankruptcy option.

chevalier

My comments are in blue

cupcake32 wrote: »

Household Information
Number of adults in household........... 2
Number of children in household......... 2 As you are about to become 3 will you qualify for the sure start grant?
Number of cars owned.................... 1 Do you really need this?

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 1900 No chance of OH doing overtime
Benefits................................ 135 no working tax credits? housing benefit?
Other income............................ 0
Total monthly income.................... 2035

Monthly Expense Details
Rent.................................... 525 This is quarter of your income, no way of reducing this?
Management charge (leasehold property).. 0
Council tax............................. 109 Is this over 10 months or 12 if 10 then use the free months to pay back the payday loans or else ask to pay over 12 months to help you budget better.
Electricity............................. 86 You need to check your electric usage as this seems a bit on the high side. Is electric just for lights and appliances or are you cooking with it too? If cooking too, then try and cook more than one thing in the oven at a time to save on electric.
Gas..................................... 60 Does the house have good insulation. Is you landlord proactive enough to get a warm start grant for the property if it isn't? Good tenants are worth their weight in gold. Check what your thermostat is set at for heating. Over 20 degrees C and you could turn it down a degree and wear extra layers. Also check that your water temperature isn't up too high. If you nearly scald yourself when you turn it on, then it can be dialled back also.
Water rates............................. 47
Telephone (land line)................... 40This seems pretty high, and do you need it if you have the mobiles?
Mobile phone............................ 30 Do you have any old phones you could sell? Is this a contract? Can you downgrade this?
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0 Is this in with the phone.
Groceries etc. ......................... 300 You could shave a bit off here with careful planning. Have a look in the likes of Aldi, Lidl etc to find cheaper alternatives. Also local veggie market (if you have one) maybe cheaper for fruit and veg than the supermarket. Shop with a list and only buy off the list. By meal planning for a week, you can then plan the list. On the oldstyle forum there is a thread for cheap but healthy meals which may help cut costs here too.

Little known tip, you don't need baby wipes, can cut up old towels and use them and then bung in the washer. Or else cotton wool and water is just as effective...:D
Clothing................................ 20 I am guessing this is mainly for the kids, but if you look on freecycle and freegle for your area you may find that you can get bundles of clothes on there for free.
Petrol/diesel........................... 100
Road tax................................ 16
Car Insurance........................... 56 Ouch do you have points or are young? This seems high to me. Check around at renewal and don't forget to get a new policy via a cash back site, to get some extra money.
Car maintenance (including MOT)......... 0 need something in here.
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 no one ever gets ill?
Pet insurance/vet bills................. 17
Buildings insurance..................... 0
Contents insurance...................... 6
Presents (birthday, christmas etc)...... 25 there is a thread on here about having money neutral birthdays and xmas, ie selling before buying or making ones own stuff to give. Might be worth a look?
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Electical insurance (white goods)....... 15 Are you sure these aren't covered on your contents insurance.
Maintenance............................. 300
Total monthly expenses.................. 1764


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1600
Other assets............................ 0
Total Assets............................ 1600

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
CCCS DMP ......................25000.....120.......0
Payday loan....................825.......175.......0
Payday loan....................200.......260.......0 As I said above anything you can sell? Ie old mobiles, dvds, cd broken gold. To just get rid of this debt. That would really help. If you came clean to your mum and asked for this money specifically to pay this off would she do it?

Also some credit unions will give loans specifically to pay back pay day loans as the interest is so bad.

Ref food you can ask your local church or the Salvation Army for a food pack. That would allow a bit of money more spare for a month.
Total unsecured debts..........26025.....555.......


Monthly Budget Summary
Total monthly income.................... 2,035
Expenses (including HP & secured debts). 1,764
Available for debt repayments........... 271
Monthly UNsecured debt repayments....... 555
Amount short for making debt repayments. -284

Personal Balance Sheet Summary
Total assets (things you own)........... 1,600
Total HP & Secured debt................. -0
Total Unsecured debt.................... -26,025
Net Assets.............................. -24,425

Whilst you are struggling, it seems to me that you may need to think about some sort of part time work once baby is born, and to this end you may only need to hold for a few months before things would improve.

Unless you can significantly up your income from other means, eg both taking surveys or mystery shopping, then a job it must be. It may be that you have to work different hours so there is no child care, but it would make a big difference to your circumstances.

Good luck
chev

fay510

Hi Cupcake

I am new to this and this is my first post, although I have been an avid follower since setting up my DMP last year.

I too fell into the trap of payday loans. Last week I bit the bullet and contacted Stepchange (who I have the DMP with) and explained my situation - they were amazing! I fully expected them to cancel my DMP as I had broken my terms with them, but they didn't. They were really understanding and have now included them in my DMP. I won't know until next month if they will accept the DMP but at least I am trying to sort it.

I know everyone's circumstances are different, but they couldn't have been more helpful. This maybe something else to consider whilst weighing up your options?

Hope this helps..