Help to sort myself out?

fatmcgav

Evening all

Have been reading the forums for a little while, and thought it was about time I posted to try and sort myself out... Apologies in advance for the length, however wanted to give as much info as possible...

First things first, I'm in my mid 20's, in a secure job for the past 6 years, currently earning £39,600, rising to £45,000 pa this month.
I've recently (last 3 months) purchased a first house with my partner, largely thanks to generosity of my parents by gifting us a 10% deposit in exchange for purchasing their property. Mortgage process went through without any issues, which was a surprise tbh. However the purchase process didnt help my overall situation, as there was all the associated fees that we had to contend with, with minimal savings behind us...

My current issue is that I'm creeping further and further into my overdrafts, and having to rely more and more on PayDay loans, which is only antagonising the situation. So time to try and get back on track.
I've tried to consolidate my debts (existing loan, OD's, CC and PD loans) into a single loan, however have been turned down by my current banks (Santander and Halifax). Looking at my Experian credit report, it doesn't make pretty reading, with a current score of ~400, which puts me in the 'Very Poor' band...

Up until the last 3 months all my accounts have all been up-to date. However in the last 3 months, I've managed to miss a couple of payments on a CC, and an old current account with HSBC which has gone into arrears due to an unplanned overdraft brought about largely by bank charges that I don't agree with.
Long story short, back in Feb I bought a new car on HP, and the first DD instalment came out quicker and for more than I was expecting, which meant I hadn't transferred enough money into the account to cover. This in turn resulted in a £25 bank charge being applied to my account due to 'unauthorised overdraft usage'. However I received no notification of this charge via either post, email, SMS; as it was purely a bills account, I foolishly didn't check the account from one months end to the next, as I was confident that the right money went in to cover the money that was due to go out...
Due to not receiving any notifications, I didn't correct the following months standing order transfer to account for the additional expenditure, which resulted in further charges. Couple that with a mistaken purchase on the wrong card incurring additional fees, and I ended up with an OD of over £120. I therefore agreed to set-up a payment plan with HSBC, on the understanding that by doing so, there would be no impact on my credit file. However upon checking this month, the account is now showing as 3 months late
I've currently open a formal complaint with HSBC to try and get that account correct, which should hopefully go some way to helping my CR...

Going back to PD loans, I've been using Wonga on and off for the past 18 months, usually the odd couple £hundred here or there, however the last few months I've been having to use the full £1000 allowance that's available to me, just to cover bills and essential outgoings such as fuel and food. It got to the point last month where I also took at a loan with QuikQuid for £500, and staggered the repayments over 3 months to try and stem the flow - £70 on 30/10, £100 on 29/11 and £500 on 30/12. However this month I'm back into the same position, having just taken £800 from Wonga to pay some of my bills and put fuel in the car... This will then become a £1000 repayment at the beginning of next month...

On paper, we've got a budget that looks fairly comfortable. Between joint house bills and personal bills, total outgoings come to ~£1950. My partner earns a fraction of what I do, so can only contribute about £200 to the joint bills, which leaves me to pick up £1750. I've also got a monthly fuel bill of around £250 due to a 40 mile round trip to work 5 days a week. However that should still leave me with ~£300 a month for 'general' expenditure - food, going out, etc.
However due to the fact that I'm embedded in my overdrafts and PD loans, that just isn't happening

So, my SOA looks like this:
Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2350
Partners monthly contribution........... 200
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2550

Monthly Expense Details
Mortgage................................ 830
HP car repayments....................... 270
Council tax............................. 110
Electricity............................. 50
Gas..................................... 30
Water rates............................. 40
Mobile phone............................ 0
TV Licence.............................. 13
Virgin TV/Phone/Internet................ 25
Groceries etc. ......................... 60
Clothing................................ 0
Petrol/diesel........................... 250
Road tax................................ 0
Car Insurance........................... 80
Car maintenance (including MOT)......... 0
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..................... 31
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1789


Assets
Cash.................................... 0
House value (Gross)..................... 193000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 193000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 173700...(830)......4.8
Hire Purchase (HP) debt ...... 14210....(270)......0
Total secured & HP debts...... 187910....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................500.......15........16
HSBC Loan......................8882......300.......0
Santander OD...................700.......0.........0
Quik Quid......................600.......0.........0
Wonga PayDay Load..............800.......1016......0
Halifax OD.....................200.......0.........0
Total unsecured debts..........11682.....1331......-


Monthly Budget Summary
Total monthly income.................... 2,550
Expenses (including HP & secured debts). 1,789
Available for debt repayments........... 761
Monthly UNsecured debt repayments....... 1,331
Amount short for making debt repayments. -570

Personal Balance Sheet Summary
Total assets (things you own)........... 193,000
Total HP & Secured debt................. -187,910
Total Unsecured debt.................... -11,682
Net Assets.............................. -6,592

Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

I've seen a few posts on here where people have successfully set-up payment plans with PD loan providers. However what I'm not sure of is how they'd react to someone of my earnings level asking for a payment plan. Or if that's the right way to go for me? How will it impact my already poor CR?

I believe that if I didn't have make the large repayments at the beginning of the month for PD loans, I think I could get back on track and work my way out of my overdrafts fairly easily...

So, over to you guys.
Any suggestions/pointers/must do's?

Thanks in advance for any responses.

Regards
Gav

matttye

Sort out payment plans with them all.

They can refuse to accept your offers and take you to court, but a judge will look at your expenditure and if he thinks you're offering all you can, will make a judgment ordering that you pay what you've offered.

If they don't take you to court, all they can is blow hot air.

Your credit file is trashed because of taking out payday loans so don't worry too much about the effect on your files. You need to work something out ASAP.

Only communicate with these companies in writing by recorded delivery.

~Beanie~

Is that a joint SOA or just your half?

No road tax? No car maintenance? No mobile? Only £60 on groceries? Nothing spent on birthdays or christmas? Your gas also looks a bit on the low side.

fatmcgav

Mattye, cheers for your response.

When you say "all of them", do you mean just the PD loans, or some of the other accounts as well?

What's the best method of working out a payment plan that is likely to be accepted by them?

And is email sufficiently recordable for communications?

Beanie: As mentioned below, my partner contributes £200 to the shared bills of £1300, leaving me with £1100 shared bills, and £650 of my own...

With regards to car, it's a new diesel, so no road tax, 3 yr maintenance plan and warranty included.
I've got a company mobile, so no cost there.
£60 for groceries covers my share. Partner does the rest.
Partner is doing most of the Christmas shopping atm as well...
And gas is a guesstimate, based on the 1 months worth of usage in September with British Gas before I switched to Scottish Power.

Cheers again for responses.

Regards
Gav

matttye

fatmcgav wrote: »

Mattye, cheers for your response.

When you say "all of them", do you mean just the PD loans, or some of the other accounts as well?

What's the best method of working out a payment plan that is likely to be accepted by them?

And is email sufficiently recordable for communications?

Beanie: As mentioned below, my partner contributes £200 to the shared bills of £1300, leaving me with £1100 shared bills, and £650 of my own...

With regards to car, it's a new diesel, so no road tax, 3 yr maintenance plan and warranty included.
I've got a company mobile, so no cost there.
£60 for groceries covers my share. Partner does the rest.
Partner is doing most of the Christmas shopping atm as well...
And gas is a guesstimate, based on the 1 months worth of usage in September with British Gas before I switched to Scottish Power.

Cheers again for responses.

Regards
Gav

Any unsecured credit that you're struggling to pay back every month.

You could send them the SoA that you've posted at the start of this thread if you like. You're under no obligation to provide them with that much information though.

What you should do is write to your bank, recorded delivery, asking them to cancel continuous payment authority for all of the payday loan companies to take money from your account. Alternatively you could open a new bank account and move all of your money into it ASAP.

If you cancel CPAs with your bank, they may still allow the money to go out but they will then be required by law to refund it. The bank may try to tell you that they can't cancel CPAs, but the law requires them to do so.

You can prove an e-mail was sent but not read. With recorded/special delivery, which are signed for, you can prove that they are received.

Alternatively sell the car and buy something cheap, use the proceeds to pay off some of your debt and then save up for a new car.

dreamdreamer

You should be able to live quite comfortably, you earn a good wage and your household expenses are not outrageous. It's your current debt that's causing this vicious circle. You need to look at two things here:

1) How to get out of the payday loan cycle - you've already had some really decent advice on this.
2) Work out why you've got into this mess.

It's no good doing 1 without 2 or in a years time you'll find yourself in the same mess again. You've been overspending. You need to work out where and why. Start a spending diary so you can get figures for all the things you haven't budgeted for (presents, entertainment, holidays etc) and get accurate figures for the others.

Does your partner work full time? If so she'll be earning at least £950, why is she only contributing £200? Does she have other debt or commitments? If she's not working full time, is this an option while you don't have children?

Your car - you're doing 800 miles a month commuting and spending £250?! That's about 18 mpg. :eek: You need something more economical if that's really the case.

I think you can turn this around quite easily but you do need to get to the root of the problem and work out how you built all this debt up in the first place.

fatmcgav

Mattye

Cheers for confirming. I've been thinking of moving away from my Santander current account for a couple of months, so think will get a new account opened and move whats left of my money in that account, and then setup a payment plan for the £700 OD. I've already moved my wages into a different account for the past couple of months...

With regards to selling the car, unfortunately I don't think that will get me very far, as it's on HP, so any money in the car belongs to the finance company atm...

dreamdreamer Thanks for the honest reply.
My parents say exactly the same thing with regards to living comfortably, as I'm earning as much as them combined....
However I guess up until the last 12 months I've had it fairly easy with no real commitments; was renting a flat with my partner which was cheaper, and was probably a bit spend thrift with my money...
But then in late November 2012 I was involved in a RTC which resulted in my car being written off, and having to buy a new one, which took all my savings, and tied over £300 up in an excess payment. Even though the 3rd party have admitted liability, I'm still waiting on my excess being returned, nearly 12 months on
The in March all the issues with HSBC started happening...
And the icing on the cake was the house landing in our laps in August, which was a bit of a bolt out of the blue. However it was too good an opportunity to pass up - owning the house I'd lived in for 18 years of my child hood, knowning it inside out, masses of future potential, etc...

With regards to my partner, she works 30 hours a week in a nursery job, so only just above minimum wage. She averages £750 a month atm, but has got her own debts - Personal Loan, CC, Mobile phone, car. So we've agreed on her committing £200 pm to bills, and then picking up the majority of the shopping tab.

With regards to commuting, I'm averaging 1000-1200miles pm, on a new Diesel car which is averaging 48mpg+. So £250 on fuel is probably overkill. Now I think about it further, I usually fill up every 10 days, with a full tank costing £60. So closer to £180 pm. However my parents now live in Wales, a 200 mile round-trip, and the plan is to try and visit them once a month, so need to allow fuel for that...

Thanks for the positive words though...

Now just to work out what is a sensible payment plan for Wonga, QQ and my Santander Overdraft... Is there any recommendation on what repayment time-frame to aim for?

Cheers
Gav

Kate_fixing_it

Congratulations on noticing you need to take measures. As regards to your situation I'm in a similar boat. Mostly keeping on top of minimum payments but I was still turning to wonga every month. Does your partner know the situation? Mine didn't and I got myself into all kinds of knots trying to fix it. On paper we're wealthier than most people but I just couldn't get the figures to add up.

I've no real advice as I'm just starting my journey too but the people on these forums are amazingly helpful and supportive, you're in the right place. I just wanted to say this can be fixed. The hardest part is facing it and accepting there's a problem and you've done that. I'm now very strict with my spending, meticulous about sticking to budgets and joining a few challenges here keeps me on the straight and narrow. I'm a different person to who I was just a month ago. I'm now PDL clear and hope to have the credit cards sorted by this time last year.

I used to spend every day now I hate opening my purse! If I can change the way I live in just a month anyone can. Keep your eyes on the end prize (debt free) and remember that every penny you pay off is a step closer to the goal and a step away from the debts being stagnant or getting worse. Sorry I can't be more help practically but I know I value the pats on the back just as much as the practical solutions and it's a relief to no longer feel alone in the mess I've created.

Kate x

[Deleted User]

fatmcgav wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2350
Partners monthly contribution........... 200
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2550

Monthly Expense Details
Mortgage................................ 830
HP car repayments....................... 270
Council tax............................. 110 - Over 10 or 12 months?
Electricity............................. 50 - Seems high, compared to gas. Do you have electric heating and cooking?
Gas..................................... 30
Water rates............................. 40
Mobile phone............................ 0
TV Licence.............................. 13
Virgin TV/Phone/Internet................ 25
Groceries etc. ......................... 60 - This seems very low. Are you sure this is all you spend on groceries?
Clothing................................ 0
Petrol/diesel........................... 250 - This is a lot. Is some of it business use?
Road tax................................ 0 - Nothing?
Car Insurance........................... 80 - That's nearly £1,000pa. Try comparison sites.
Car maintenance (including MOT)......... 0 - Nothing?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 - No prescriptions, ever?
Pet insurance/vet bills................. 0
Buildings insurance..................... 31
Contents insurance...................... 0 - You need this. It needn't cost much.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0 - You need something in here.

Total monthly expenses.................. 1789


Assets
Cash.................................... 0
House value (Gross)..................... 193000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 193000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 173700...(830)......4.8
Hire Purchase (HP) debt ...... 14210....(270)......0
Total secured & HP debts...... 187910....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................500.......15........16
HSBC Loan......................8882......300.......0
Santander OD...................700.......0.........0
Quik Quid......................600.......0.........0
Wonga PayDay Load..............800.......1016......0
Halifax OD.....................200.......0.........0
Total unsecured debts..........11682.....1331......-


Monthly Budget Summary
Total monthly income.................... 2,550
Expenses (including HP & secured debts). 1,789
Available for debt repayments........... 761
Monthly UNsecured debt repayments....... 1,331
Amount short for making debt repayments. -570

Personal Balance Sheet Summary
Total assets (things you own)........... 193,000
Total HP & Secured debt................. -187,910
Total Unsecured debt.................... -11,682
Net Assets.............................. -6,592

Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

My comments in red.

That 16% CC is crippling you.

At the rate you are paying, it's going to take over 4.5 years (and cost nearly 1/3 of the amount in interest) to clear just £500.

Any way you can raise the £500 to clear it?

fatmcgav

Kate_fixing_it wrote: »

Congratulations on noticing you need to take measures. As regards to your situation I'm in a similar boat. Mostly keeping on top of minimum payments but I was still turning to wonga every month. Does your partner know the situation? Mine didn't and I got myself into all kinds of knots trying to fix it. On paper we're wealthier than most people but I just couldn't get the figures to add up.

I've no real advice as I'm just starting my journey too but the people on these forums are amazingly helpful and supportive, you're in the right place. I just wanted to say this can be fixed. The hardest part is facing it and accepting there's a problem and you've done that. I'm now very strict with my spending, meticulous about sticking to budgets and joining a few challenges here keeps me on the straight and narrow. I'm a different person to who I was just a month ago. I'm now PDL clear and hope to have the credit cards sorted by this time last year.

I used to spend every day now I hate opening my purse! If I can change the way I live in just a month anyone can. Keep your eyes on the end prize (debt free) and remember that every penny you pay off is a step closer to the goal and a step away from the debts being stagnant or getting worse. Sorry I can't be more help practically but I know I value the pats on the back just as much as the practical solutions and it's a relief to no longer feel alone in the mess I've created.

Kate x

Kate

Thanks for the encouraging words. No, my partner doesn't know my current financial situation, and tbh she's got enough going on for me to add to it... I know that's not necessarily the best route, but I believe it's the right decision for the time being.

Bedsit_Bob wrote: »

My comments in red.

That 16% CC is crippling you.

At the rate you are paying, it's going to take over 4.5 years (and cost nearly 1/3 of the amount in interest) to clear just £500.

Any way you can raise the £500 to clear it?

Bedsit Bob, thanks for the reply.

To answer your comments in Red:

• Council tax is over 10 months.
• Electric - Have electric oven, gas hob and gas central heating. Haven't had any kind of bill for electric as yet, so it's a bit of a guestimate.
• Groceries - This is all I spend p/m. The rest is picked up by my partner.
• Fuel - As previously mentioned, I'm probably only spending about £200 pm atm, but am hoping to be able to visit my parents in Wales once a month, which is a 200 mile round trip, so allowing a bit extra for that. No business use in there.
• Road Tax - Car is in the £0 road tax bracket.
• Car Insurance - It's a multi-car policy with by mine and my partners car on. Will amend my initial SOA to clarify.
• Car Maintenance - As it's a new car, has 3 years servicing and maintenance included.
• Medical - Nope, I'm fortunate that I rarely get ill. I should probably go back to the dentist though, as it's been about 4 years since my last check-up. However I have got a Health Cash plan provided through work which will cover the costs.
• Contents Insurance - Included with my buildings insurance. Will amend SOA.
• Emergency fund - Agreed, will amend SOA to try and put £50 pm aside.

With regards to the CC, agree completely. I've wanted to get it cleared for ages, just haven't been able to get there...

As mentioned in my first post, I've got a pay rise coming this month which should give me about £250 pm extra take home.

So will aim to use that in it's entirety to clear my CC over the next few months.


Cheers again for the responses, all useful stuff



Gav

justjohn

fatmcgav wrote: »

.

With regards to my partner, she works 30 hours a week in a nursery job, so only just above minimum wage. She averages £750 a month atm, but has got her own debts - Personal Loan, CC, Mobile phone, car. So we've agreed on her committing £200 pm to bills, and then picking up the majority of the shopping tab.

It is far easier and more efficient to pull all the money in a relationship into one big pot. Especially if dealing with debt. Any extra funds can be ploughed into debts, if it is going spare.