Years of Payday Loan Hell, Advice Needed (SOA Included)

Break-Free

I first took a payday loan from Wonga around 4 years ago and I think I probably have done every month since.

At first it was me just being young and irresponsible but for a couple of years now it has been a case of borrowing from various payday lenders to pay the others back and my debt has just snowballed.

Over a year ago I confessed to my mum I was in trouble and she took a loan in her name which I am repaying her every month.

Trouble is I didn't tell her the full extent of it and thought I could sort out the rest myself, then was a lack of overtime available and car trouble and again I'm in a mess.

I have cut out all unnecessary expenditure but still have no way out and obviously the debts are still getting bigger.

I live with my girlfriend who obviously sees that I have money problems but also has no idea of the extent.

From reading this forum I think possibly my best (or only) option is to contact the lenders with my SOA and attempt to make payment offers?

I assume this will result in them all putting defaults on my credit file, meaning no change of getting a mortgage for over 6 years?

I wish I could campaign and stop young people like myself from ever taking these loans, I understand we are fools for doing so and the costs and risks are all there in writing but how the company owners sleep at night I have no idea.

They ask how much I earn every month and yet borrow me more than my pay every single month but claim to be committed to "Responsible Lending"!

Wonga for example I must of paid over £10,000 in interest over 3 years, around 3x my debt problem now!

I really appreciate anybody who has taken the time to read this post and offer any advice.


[tt]Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1250
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1250

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 325
Management charge (leasehold property).. 0
Council tax............................. 60
Electricity............................. 35
Gas..................................... 35
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 10
Mobile phone............................ 40
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 120
Clothing................................ 5
Petrol/diesel........................... 80
Road tax................................ 16
Car Insurance........................... 90
Car maintenance (including MOT)......... 10
Car parking............................. 0
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)...... 5
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Mum Repayment........................... 175
Total monthly expenses.................. 1039


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Wonga..........................1347.36...1347......0
PaydayUK.......................194.92....194.......0
Pounds to Pocket...............865.44....141.......0
Sunny..........................664.32....664.......0
Total unsecured debts..........3072.04...2346......-


Monthly Budget Summary
Total monthly income.................... 1,250
Expenses (including HP & secured debts). 1,039
Available for debt repayments........... 211
Monthly UNsecured debt repayments....... 2,346
Amount short for making debt repayments. -2,135

Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -3,072.04
Net Assets.............................. -2,072.04

[/tt]

Debt Details & Offer to Creditors

Secured & HP Debt Description Debt(£) Monthly(£)
Mortgage 0 (0)
Secured & HP Debt totals 0 -

Unsecured Debt Description Debt(£) Offer(£)
Wonga 1347.36 92.54
PaydayUK 194.92 13.39
Pounds to Pocket 865.44 59.44
Sunny 664.32 45.63
Unsecured Debt totals 3072.04 211

matttye

First of all write to your bank by recorded delivery with the following: -

"I hereby remove my authority for the following companies to take money from my account in accordance with Regulation 55 of the Payment Services Regulations 2009: -

1. Wonga;
2. PaydayUK;
3. Pounds to Pocket;
4. Sunny.

I am aware that I am entitled to a full and immediate refund from you if my instructions are not carried out and you allow these companies to take money from my account. This is in accordance with Regulation 61 of the Payment Services Regulations 2009.

Please confirm by return that this has been done."

Payday loan companies will often try to clear you out even when you enter a repayment plan and you must do the above immediately to stop them from doing so. Hopefully you're in plenty of time before they're going to take the money.

Only once you've done this and got a response from the bank that they've removed continuous payment authority for those companies should you contact them to arrange repayment plans (although as soon as the bank have signed for the letter they're liable to refund you if they allow money to leave your account). They will probably each want you to fill out an income and expenditure form to see how much you can pay.

Realistically you're probably only going to be able to pay them about £25 each unless you confess to mum and she's willing to give you a bit of a payment holiday from her while you sort this mess out.

You will most likely get defaults from the PDL's yes, but PDL's in themselves cause some mortgage lenders to instantly decline, so don't worry too much about the defaults in terms of getting a mortgage as you're unlikely to get one for six years even if you don't default with that many PDL's on your record.

Hope this helps

ilovelondontown

Break-free I feel for you.

I've never had a PD loan but I do have other debt and I've been around these forums to see the damage PD loans can do to someone's life and it makes me mad. They claim that they are a source of help to those who need it most and yet those who need it most are the ones who cannot afford to use them. It makes my blood boil.

The thing to remember is your not the first person and won't be the last to find themselves in this situation and while it may feel embarrassing to you it's a trap many people find themselves in and is becoming more and more commonplace.

I concur with what matttye said (Matttye knows their stuff!) YOU need to start taking control, stop trying to find the quickest way out of this and start finding the absolute way out of this. Confess up to your mother again if you can and tell her everything but also tell her you've got things already in place to fix this. You may also want to tell your girlfriend. It would be hard but you need to have support and encouragement to fix this.

Doing it on your own only allows you more chances to slip back into old ways.

This doesn't have to chase you for the rest of your life, but act now before it starts taking over.

Best of luck!

Break-Free

Trust me it has already taken over my life, I can't sleep and when I do I dream about money problems or that I've managed to get a £3,000 loan from a normal lender!

I guess that has been my problem for the last couple of years, I've always hoped that I could get myself out of the cycle or at least if I manage to make all payments on time I might be able to repair my credit history, get a consolidation loan with a normal APR then within 3 years and a manageable £100 monthly repayment I would be in the clear.

As for speaking to my mum that is the one thing I want to avoid, I agreed on repayments with her and she is a single mum who works full time whilst caring for my disabled sister, she struggles with money herself, this was a loan she took, not from her savings.

I know if I told her this she would borrow the extra 3k also but I can't do that to her.

Just seems like such a big deal to have these defaults on my credit file but I appreciate what you say about lenders declining just due to having PDL's on record.

The sooner these companies get some real regulation the better, lately I've thought a lot about taking my own life and really compared to other people its a relatively small amount of debt, its purely who its with that is the problem.

I believe payday loans should be one month only, no option to defer or extend and if you take a loan one month they can't lend to you again the next month.

But thanks for your time, looks like I need to admit defeat and stop thinking I can fix the problem, if only I'd done this 2 years ago the debt would of been a lot smaller and I would already be 2 years closer to having the defaults off my file

matttye

Break-Free wrote: »

Trust me it has already taken over my life, I can't sleep and when I do I dream about money problems or that I've managed to get a £3,000 loan from a normal lender!

I guess that has been my problem for the last couple of years, I've always hoped that I could get myself out of the cycle or at least if I manage to make all payments on time I might be able to repair my credit history, get a consolidation loan with a normal APR then within 3 years and a manageable £100 monthly repayment I would be in the clear.

As for speaking to my mum that is the one thing I want to avoid, I agreed on repayments with her and she is a single mum who works full time whilst caring for my disabled sister, she struggles with money herself, this was a loan she took, not from her savings.

I know if I told her this she would borrow the extra 3k also but I can't do that to her.

Just seems like such a big deal to have these defaults on my credit file but I appreciate what you say about lenders declining just due to having PDL's on record.

The sooner these companies get some real regulation the better, lately I've thought a lot about taking my own life and really compared to other people its a relatively small amount of debt, its purely who its with that is the problem.

I believe payday loans should be one month only, no option to defer or extend and if you take a loan one month they can't lend to you again the next month.

But thanks for your time, looks like I need to admit defeat and stop thinking I can fix the problem, if only I'd done this 2 years ago the debt would of been a lot smaller and I would already be 2 years closer to having the defaults off my file

No amount of debt is worth taking your own life over. If it's worrying you that much you need to speak to somebody; preferably your girlfriend/mum but also a debt charity (you can tell your mum but stress to her that you're managing the situation on your own and will continue paying her too). The problem really isn't as big as it seems, although I remember how stressed I was when I only had £1k of debt to pay off, so I know how you feel.

Defaults do affect your ability to get credit but there's not much you can do to avoid them when you owe so much money and only have £200 spare each month. Think of the 6 years as a positive thing; it will give you plenty of time to save up a decent deposit for a mortgage and then you'll have the pick of the deals. Like I say, you're unlikely to get decent mortgage offers with so many payday loans on your credit files anyway.

It's not impossible to get a mortgage with defaults or even CCJ's against you, it just means you'll pay a hell of a lot more than somebody with a better credit history.

This is a problem but it's solvable and not the end of the world.

redpete

Regarding the SOA:

Why no income for your partner?
£40 a month for a mobile is too much if you are struggling, a contract around £15 be good enough or PAYG.
When do the repayments to your mum finish?
Car insurance looks very expensive - any opportunity to reduce?
Time to contact the lenders with your SOA, explain you can't pay, ask for lower monthly payments and frozen interest (they might insist that yur payments to your mum are also reduced). You should have something like £250 a month according to the SOA, maybe more if your partner gets involved in sorting out the problems.

Break-Free

I didn't include my partners income because this is my problem and not hers, the monthly expenditure for rent, utility's etc only show my share.

Yes I know the mobile is excessive but its a two year contract that I still have around 8 months left on.

I have 7 or 8 repayments to my mum to go.

The car insurance is the best quote I could get due to having only had a licence for a couple of years and being young, trust me I wish I could get rid of it, but my work is over 15 miles away and not close to any public transport, all the motoring costs together are over £200 and that is nearly purely for commuting to work.

That's one thing I was worried about, that they wouldn't like my mums repayments but for me that is non-negotiable

Maybe I need to find a way to hide that in other costs and not declare it, maybe its dishonest but I'm not going to make problems for her.

amorge

Well done on finally taking the step to review your finances

Just a couple of things on your SOA
For just 2 of you the gas & electric are huge if your half is £35 each.
Food is the same, your £120 should nearly feed you both
TV licence is £12.12 a mth so your half would be £6.06 not £13 as on SOA

I know you've mentioned that GF would take a loan out, do you have joint bank, utilities or rental agreement, if so then you are financially linked so her credit rating will also be affected.

matttye

Break-Free wrote: »

I didn't include my partners income because this is my problem and not hers, the monthly expenditure for rent, utility's etc only show my share.

Yes I know the mobile is excessive but its a two year contract that I still have around 8 months left on.

I have 7 or 8 repayments to my mum to go.

The car insurance is the best quote I could get due to having only had a licence for a couple of years and being young, trust me I wish I could get rid of it, but my work is over 15 miles away and not close to any public transport, all the motoring costs together are over £200 and that is nearly purely for commuting to work.

That's one thing I was worried about, that they wouldn't like my mums repayments but for me that is non-negotiable

Maybe I need to find a way to hide that in other costs and not declare it, maybe its dishonest but I'm not going to make problems for her.

Don't hide that loan in other costs as that would be fraud, and you'll dig a deeper hole.

http://www.legislation.gov.uk/ukpga/2006/35/section/2

"2Fraud by false representation

(1)A person is in breach of this section if he—
(a)dishonestly makes a false representation, and
(b)intends, by making the representation—
(i)to make a gain for himself or another, or
(ii)to cause loss to another or to expose another to a risk of loss."

You would be making a false representation and intending to make a gain for your mother.

The difficulty is that you're supposed to treat all creditors equally. Your mum is a 'creditor' just like the others, so should get what the others get.

That said, even if they don't accept your payment plan, they can't refuse the payments you do send them as that would make it impossible to pay off your debt. Even if they say no, just send them what you can afford each month - which should be about £50 per month if you don't spend much money on anything else.

You should speak to a debt charity though for some professional advice. I really think you should speak to your mum and girlfriend and share the burden; you'll feel better having told people you know.

Break-Free

amorge wrote: »

Well done on finally taking the step to review your finances

Just a couple of things on your SOA
For just 2 of you the gas & electric are huge if your half is £35 each.
Food is the same, your £120 should nearly feed you both
TV licence is £12.12 a mth so your half would be £6.06 not £13 as on SOA

I know you've mentioned that GF would take a loan out, do you have joint bank, utilities or rental agreement, if so then you are financially linked so her credit rating will also be affected.

The splits aren't really 50/50, she used to be in college so only worked part-time so I paid more, now she works but will still be on a low wage for a while.

Saying that for the last year she's being paying more than me and I wanted to get back to paying my fair share and stop being a burden, that's one of the things depressing me more than anything.

We do have a joint bank account which we have never used, does this mean that my poor credit record will already be affecting her, and even more so if I default on these loans?

If so will simply closing it take away that connection?

matttye

Break-Free wrote: »

The splits aren't really 50/50, she used to be in college so only worked part-time so I paid more, now she works but will still be on a low wage for a while.

Saying that for the last year she's being paying more than me and I wanted to get back to paying my fair share and stop being a burden, that's one of the things depressing me more than anything.

We do have a joint bank account which we have never used, does this mean that my poor credit record will already be affecting her, and even more so if I default on these loans?

If so will simply closing it take away that connection?

Yes the joint account will affect her, but like you say closing it will take away the connection. You/she may also have to file a 'notice of disassociation' with the three credit reference agencies.

Here are the links for notice of disassociation forms:

http://www.experian.co.uk/consumer/faq/AR3.html (link at the bottom of the page)
http://www.thecreditagency.co.uk/equifax/equifax-notice-of-disassociation.pdf

For Noddle there's a link you can press in your credit report itself to report a problem with a financial associate.