Need debt advice - total mess!

badders256

Hi all, just wanted to post quickly as I need some urgent advice as to which general direction to head in. I'll post a full soa when I get to work tomorrow (laptop charger is broken and can't afford a new one!) but for now here is as complete a breakdown I can give.

Now what I did to get here was not wise - I invested everything I had into something which flopped, luckily my bank did not bounce my direct debits but instead allowed them out as an informal overdraft. Current standings is this:

Current account (hsbc): formal overdraft £2000, current balance £2887 overdrawn.
Hsbc credit card: £2000 limit, current balance £2046 (cancelled direct debit by mistake and had no funds to make minimum payment on 17/3/14)
Barclaycard: £800 limit, current balance £799.20
Vwfs (car) £9761 outstanding with £5k balloon payment on top in 43 months time.


Outgoings: Rent inc. gas/elec/water/tax: £400pcm (dd 29th)
Car £227 (dd 2nd)
Barclaycard £8 minimum repayment (dd 8th)
Petrol: £100
Contact lenses: £12.50 (dd 1st)
Mobile phone: £18 (dd 12th)
Supermarket ( food plus household etc): £150
Overdraft charges: £32 (12th) + informal overdraft charge £150 (this month only)

Incomings: £1231 (27th) main job
£135 (28th) second job

Now my predicament is when my money gets paid in, as at 28th my current account balance will be -1521, hsbc collections will be taking £46 to take me back within my limit, and I need to pay out £100 which I missed off my rent last month, so ill be at -1667 after this. My rent will come out on the 29th and take me over my overdraft again at 2067.

Should I seek further finance by way of a loan, ring hsbc and see if they can temporarily increase my overdraft? I don't know what the best thing is to do. I don't know how freely credit will be available considering I missed a credit card payment this month. A costly error I'm sure I will find out.
I know I'm in such a mess but I just want to be debt free as soon as possible before potential complications arise in 7 months!

Many thanks in advance for any help.

FireWyrm

You're pregnant? Does that mean maternity leave in 7 months will be necessary because on your income, I dont see how you are going to be debt free before the deadline short of winning the lottery.

OK, so, you need to increase your income or decrease your outgoings. Clearly, you cant sell the car because it has outstanding finance on it, but what about surrendering it? In the short term, you are obviously going to have a very tight month in April and I think you are literally going to have to tighten your belt and cut your food bill by £100. Can you cut down on petrol outgoings? Are your estimated outgoings right? Where are you living for just £300 a month rent because I dont know of many council tax bands under £100 a month now, never mind the cost of power and water too.

What have you got to sell? TV? Electrical goods? Phone? Computer? Jewellery? Dont pay anything not entirely necessary for life. You'll have to clean up the mess next month, you must buy some breathing room and you need to pay your rent in full, let alone get down out of unauthorised overdraft. Cut up the cards now - they are no use to you and going forwards, you're only going to have to do that anyway. Might as well get it over with.

Any family you can borrow a bit off?

Poppops

Hi there

I think you will struggle to get a loan as your current credit is a very high proportion of your salary. Your debt at the moment is higher than your take home annual salary and you need to either increase your incomings or decrease your outgoings as your current position just isn't sustainable.

It's the car that is killing you. It's just too ambitious for your salary. Even if the bank would increase your overdraft, which might be unlikely, this isn't going to help in the long term. You will be back in the same boat next month with a bigger overdraft.

Your rent with bills looks like a good deal and you could get your shopping down if you live really frugally but it's difficult to see where else you could save whilst you are still servicing your car loan. Have you also car insurance to pay?

badders256

I'm not pregnant, OH is. Again, foolish mistake but that's another story.

I can't surrender the car, as it is essential for work, I live in the sticks where the public transport is appalling, which is why rent is £300pcm in a shared house with £100 bills on top per month (split between 3 others). In terms of assets that I could sell, I literally have nothing, old CRT tv I would probably have to pay someone to take and 6 year old ps3 holds little value (and saves my entertainment budget). No jewellery. MacBook which is 6 years old also holds little value.

I'd rather not involve family for fear of disappointment and not knowing when I can pay them back. I took out and repaid a wonga loan last month to see me through but it wasn't enough. Car insurance paid until start of July, tax until start of October.

I think I don't have a choice but to ring hsbc and see what they can offer, even if its minimising those pesky overdraft charges.

Thanks for your replies!

Edit: just realised that take homepay for my second job will increase to £200/month due to pay rate increase, and for my main job there will be a little increase due to tax code change. Is it worth stopping pension contributions for a little while? As that would free up around £80 per month.

Poppops

If you go down that road, I really don't see how your situation is going to improve.

If you can't up your income, you need to find a way to reduce your debts, not increase them. With a baby on the way and the need to save more than £100 per month to pay your balloon payment on your car, increasing your overdraft isn't going to do it.

And that Wonga loan won't have helped your credit rating.

I live in the wilds also and admittedly public transport is rubbish (and non-existant on Sundays) but can you not make it work? Anyone who can give you a lift to work? It just seems mad to be paying for a car of that value when you are struggling.

hettiecarro

Hi
Don't mean to be personal or pry, but is your OH one of the others in the shared house?
Just trying to get an understanding ofthe situation, are you managing your finances as a couple or separately?
This will make a big difference to the SOA you post and the advice you then get.

Dazedandconfused

What is left on your contract for your mobile? You could potentially get that cheaper. That shopping bill is quite high really if it's just for one person.

getmore4less

cars the main problem. and you have the other costs not included in the £227

if you can't cut costs you will have to increase income. bar work or anything.

get some cheap glasses and save on contacts for a few months
what's the prescription I can then assess if it is doable on-line.

Mobile phone can be cut

How much would rent/bills be on a place close to work