What would you do in this situation?

shameful_2

Hi everyone, I apologise in advance for the very long post - could really do with some advice.

I have been in and out of debt for the past 8 years but it has been pretty much unmanageable for the past year or so. My circumstances have recently changed again which means that things are now even worse in terms of being able to pay back my debts.

All the debt that I have gotten into has been unnecessary - I got used to living a life style that I couldn't afford and spent money as a way of making myself feel better as I was unhappy with my life (know that's not an excuse).

My current situation is that I have just finished a professional training course and have got a job that will hopefully start in January. This means that I have no money coming in from now until then but I need to make repayments on my debts. I am so worried about it that I am not really sleeping.

I have moved back to my parents house in order to save money but obviously I have no money coming in apart from JSA which I have recently started to claim for. I am looking for temporary work between now and January but also need to make sure that I finish a large final piece of work for my course.

I will get the deposit back on my house shortly so that will give me £700 towards my repayments but this isn't enough to cover November, December and January (I won't get paid until the end of Jan when I start my job).

I have posted my SOA below although I can't really cut back much because I am not really paying for anything at the moment being back at home! Have posted it though so that you can see all the debts in once place:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 286.8
Other income............................ 0
Total monthly income.................... 286.8

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 13
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 20
Clothing................................ 0
Petrol/diesel........................... 25
Road tax................................ 12
Car Insurance........................... 37
Car maintenance (including MOT)......... 20
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................................ 5
Entertainment........................... 15
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 152


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Loan 1 ........................2924.17...241.9.....14.9
Loan 2 ........................626.22....52.63.....24.9
CC1............................5800......135.......16.9
Catalouge......................90........0.........0
Storecard4.....................235.......10........29.9
Storecard3.....................160.......5.........28.9
Storecard2.....................280.......10........29.9
Storecard1.....................379.27....31........24.9
Overdraft......................1600......100.......17.4
CC3............................800.......20........0
CC2............................3314......85........21.9
Total unsecured debts..........16208.66..690.53....-


Monthly Budget Summary
Total monthly income.................... 286.8
Expenses (including HP & secured debts). 152
Available for debt repayments........... 134.8
Monthly UNsecured debt repayments....... 690.53
Amount short for making debt repayments. -555.73

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -16,208.66
Net Assets.............................. -14,208.66

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using other browser.

I am not sure what to do really. I think I may just about be able to stretch to pay November and December's payments but that leaves January? Even after I start my job, my repayments are at a level that are unmanageable once I move out of my parents home again. I'm not in a position where I can sell my car either as I will need it for my new job. I could completely cut the entertainment, presents and haircut budget. I have reduced this a fair bit already though.

I feel silly posting this as it is all my fault that I am in this mess but I really would appreciate any help or advice. Thanks.

Tixy

Hi and welcome to the forum

What is the situation currently with your debts? are you at this point up to date with them?

How much would you expect to be able to put towards debt repayments a month once you start your new job?

What is your housing plans? are you planning/hoping to stay at home with parents for a while? or only until you start your new job?

I would think a DMP may suit your situation and to speak to a debt advice charity. You could perhaps just pay token payments to all creditors for the next 3/4 months and then commence a DMP properly once you have your first pay packet from your new job.

IMPORTANT - Where to seek professional impartial advice about your debts.

shameful_2

Tixy wrote: »

Hi and welcome to the forum

What is the situation currently with your debts? are you at this point up to date with them?

How much would you expect to be able to put towards debt repayments a month once you start your new job?

What is your housing plans? are you planning/hoping to stay at home with parents for a while? or only until you start your new job?

I would think a DMP may suit your situation and to speak to a debt advice charity. You could perhaps just pay token payments to all creditors for the next 3/4 months and then commence a DMP properly once you have your first pay packet from your new job.

Thanks for your reply Tixy.

I am currently upto date with all my debts, never missed a payment. I have struggled to pay them every month for a while though and this resulted in me having a number of payday loans. I know this wasn't the right thing to do but thankfully I have paid those off now.

In terms of when I start my new job, I think I could just about manage the minimum repayments although it would be very tight.

I am planning on renting again with my partner once I start my new job. I thought about DMP before but a number of things concern me about this:

- I really don't want to ruin my credit rating (my credit rating is already not great but I don't want to trash it completely)

- My family don't know about my debts as I am so ashamed about it. They have helped me out and supported me so much and I really don't want them to know. I am terrified of getting lots of letters sent to their address demanding money

- My partner knows I have debt, not the full extent, and has said that he would be concerned about our future together if I went on a DMP. He would like us to try and buy a house in the future if possible and obviously I would not be able to do this on DMP.

I think I need to try and find a way to make the next few months payments and then struggle on with the minimum repayments for another year or so as both of the loans will be paid off by the end of next year. Part of me thinks this would be the right decision but another part of me feels that I don't know whether I can struggle on for another year.

Tixy

If you want to try to struggle through then you could try asking the loan companies if either will let you take a payment holiday for 3 months (particularly loan 1 as obviously thats the highest monthly amount).

Are the cards and overdraft maxed?

Anything else would likely affect your credit file further, but you could contact perhaps the 2 large cc and explain you have a short term problem and ask if you could pay lower payments to them for a couple of months?

Anything you could sell to help raise a bit more money towards the debts? perhaps something you don't need if you are no longer living in your own place?

shameful_2

Tixy wrote: »

If you want to try to struggle through then you could try asking the loan companies if either will let you take a payment holiday for 3 months (particularly loan 1 as obviously thats the highest monthly amount).

Are the cards and overdraft maxed?

Anything else would likely affect your credit file further, but you could contact perhaps the 2 large cc and explain you have a short term problem and ask if you could pay lower payments to them for a couple of months?

Anything you could sell to help raise a bit more money towards the debts? perhaps something you don't need if you are no longer living in your own place?

Thanks tixy. I might try ringing about the loans although I had to ring them a few months back as I couldn't afford the higher payment one month. They resolved this for me by letting me miss a month and then added the cost of the missed payment to the next 3 months payments (if that makes sense?) This was helpful in that it wasn't logged on my credit file but was unhelpful in that the next 3 payments were really high.

Cards are maxed yes. I am gradually reducing my overdraft at the request of my bank so this is also maxed too yes.

I have sold a fair bit of stuff recently and don't think I have much left to sell unfortunately. Hoping to do a car boot sale soon which will raise a bit but not much.

Thanks for your suggestions.

dktreesea

How about getting a temporary Christmas job? It would be much better than the dole and see you through to when you start your new job in January. The Royal Mail do a lot of hiring in our neck of the woods for the Christmas period. So do places like Debenhams and Boots. Boots are quite good - the give a discount of over 20% to their staff, including the temps :-)

If you fancy the Royal Mail, this is the link:
http://www.royalmailgroup.com/our-people/careers/royal-mail/christmas-jobs-royal-mail

[Deleted User]

Any chance you could SORN the car, until you start the job?

That would save you £148, over the two months.

iancrt

first of all contact your bank and explain to them you cannot pay down your overdraft at £100 a month at the moment. If they are unhelpful look at opening an account at another bank and move stuff. Once all you have is the overdraft and no money coming in they will be more willing to talk repayment options.
Loan 1 is the issue - try see if you can get a 3 month payment break on that - but extend the term rather than increasing payments.
How critical is the car? is it really sellable for £2000? may not be a practical option but it would give you £2k to pay back Loan2, all you store cards and would free up £200 a month. I assume there would them be other transport costs by bus or train but would this be £200 a month? Can you consider walking or cycling?
To be honest, with commitments being 4 times your available money (nearer 6 times if you consider normal living expenses) a DMP is probably your best option.

shameful_2

Thanks for all your replies everyone.

Yes I have been thinking about getting a Christmas temp job and have been having a look at what's available.

I couldn't SORN the car really or sell it as I need it to get around now and when I start my job - my parents live in a really rural area and it would cause me a lot of problems. It is tempting though as it would really help me out in the short term in some ways.

I am going to speak to some of my creditors I think it's rubbish because I would love to use the £700 from my deposit to pay off some of the smaller debts and this is what I would do if I was still in my old job and would be able to do if I had started my new job.

Feeling very hopeless about it all really and angry with myself for racking up so much unnecessary debt

System

I think there has been some pretty good advice offered here, good luck to you.

Have you wrote down 4 weeks jobseekers for the month? Just a comment to say that it is fortnightly and not a set payment over the month, so there could be another fortnights money available to you before the end of January.

tallyhoh

You seem to have a lot of store card's, anything to sell on ebay?