Confused and in debt

Show_me_da_money

Hi All,

With so many posts and threads I am really confused and cannot see the woods from the trees!

Long time spectator to MSE but finally found the courage to do something about it. Here is my situation...

Never missed a payment, took out loans and credit cards and bought whatever I wanted on credit because I could afford the payments. I was made redundant and the money stopped coming in, so trying to cover just under £600 in credit cards and loans plus the mortgage and council tax/utility bills soon overwhelmed me. Managed to find employment some 7 months later but earning significantly less than what I was.

Currently in a agreement with the creditors to pay them £1.00 each a month until I find a job; (not told them I have started work as my o/d is 6k in one bank and 2k in the other.

MBNA - 5300
Tesco Finance - 6770
Barclays Finance - 7660
Hitatchi Finance - 3770
Natwest O/D - 6000
Santander O/D - 2000

Spoke to Payplan who came up with a DMP to repay £137/month.

Is this my best option? If I managed to borrow money from family to pay off some of the creditors, do you think they would take a reduced settlement figure as £1/month will take like forever to pay back... I just don't know.

Help.....

quantic

I would be careful borrowing off family and friends, I can't see how - in for foreseeable future you would be able to pay them back. Is the payment plan with Payplan affordable to you? With those repayments it will take you 19 years to pay back the debt, assuming interest is frozen forever.

Could you post an SOA so we can get an idea of your finance, difficult to advise without this...

http://www.stoozing.com/calculator/soa.php

Enter all your info, click calculate, then MSE and copy and paste the results here.

Show_me_da_money

quantic: my thinking behind borrowing off friends or family would be to eliminate the monthly o/d charges and occasional bounced dd thus giving me the slight leverage to pay more back.

john1993: reason for not telling my creditors is because i am 8k over drawn, that £1/month will give me breathing space to reduce significantly my o/d by the time i have my review with the creditors in 4 months time.

i am just trying to take advantage of my situation for the next 4 months, that's all.

Missmarple

Really Show me da money I would not borrow off family or friends now you have been given this lifeline. Family may forgive you if you default but you WILL lose your friends. The £137 sounds fantastic given your outstanding balances.
As this is such a low amount can you save towards paying off the amount earlier or put the plan at a higher amount if you can afford it although you may not be able to change it back again.
I think I would accept the plan sit back and lick my wounds and then look at all the things people do on here to be debt free. You can do it.....

Missmarple

I assume the banks are not charging you now on the overdraft and they have come into the Payplan ?

Show_me_da_money

Missmarple wrote: »

I assume the banks are not charging you now on the overdraft and they have come into the Payplan ?

Hi Missmarple,

Unfortunately when Step Change put the plan in place they did not take into consideration the bank overdrafts. Payplan have advised me that they cannot guarantee that the creditors and banks will cease to charge me interest, so its a gamble in that respect; unless its a caveat they quote just to be on the safe side...

One half of me tells me that I should accept this, wifey's first instinct is a 'no'... and she is usually right. If I had her backing straight away I would not hesitate for a minute. Me thinks we need to sit down and weigh up our options.

antonic

I have just become DF after clearing £24k in 90 months with Payplan.

My advise would be to take the Payplan option.

I know 19 years sounds a long time (so did my 90 months) BUT its going to be the best deal your going to get UNLESS you want to spend the rest of your life being in debt.

Its not easy when your on a DMP, but at least your going to be DF in approx 19yrs rather than being in debt for the rest of your life !.

Show_me_da_money

Hi atonic... I guess you are right, I want to be able to go on family holidays again without feeling guilty and the elated feeling of financial freedom, to a certain degree....

Payplan were very generous when it came to calculating what my expenses are, so I guess I can afford to pay back more than the 137 they suggested. I just want rid off these ghastly creditors.

Katzen

Sounds like the kind of solution that prompts most people into a 'bust this debt much faster' type of diary, a quick look at the diaries section might cheer you up a bit.

I think the best thing you can do with any extra initially would be to save an emergency fund so the next time something breaks down or you're off work you've got some alternative to the CC. Then look at ways to up your income in order to get cleared earlier.

See it as a challenge, and good luck

Missmarple

Once on the DMP I hope that you should be able to negotiate with the bank as they will be well aware you don't have the money. A DMP has never happened to me but I guess the banks don't fall into the same category as credit cards/loans etc. Still, by taking the payment plan you may be able to reduce the overdrafts each month and then that is two debts paid.
I know you want to go on holiday but really for now you must try to throw everything at the debt. Look around here there are lots of free things you can do as a family, take up one of the challenges on here, I afraid they become quite addictive...... at least you will be able to relax and not wonder who is knocking at the door. That is worth it weight in gold. Nineteen years is a long time but you can do it sooner you are not stuck with it as perhaps your wife thinks. You both incurred the debts work together to sort it out without family and friends, certainly without friends. They will be watching your every move, if they hear that you have been out for a meal resentment will build. Further down the line when you have saved some money you may be able to find out if the companies will settle for a lower amount but you need to take proper advice on that. For the moment I would take the offer.
Have a look at what Katzan said, you are in the right place.....you made a good choice with MSE. Allsorts of things to help along the way No Spend Day challenges, ebay, surveys, mystery shopping, sealed pot challenge, free days out, earn £10 a day extra. The list goes on and on.
The most important thing is not to build up the debt again.
Good luck

RobertLamb61

Borrowing from friends and family is a difficult one, it really depends on the individual cases and isn't always the worst option. If it means clearing the decks it can be worth thinking about.