Self Employed - Debt advice appreciated

nick6979

Hi guys,

For 2 years I felt compelled to go it alone. I have felt bad about seeking help from others, but now I feel like I have to. I am in bad debt. Not as bad as some others are, but because of myself being self employed, I have a few bad months that lead to me getting charges on my current debt. Below is my list of debt:

- Gas from my old house - £350
- Wonga - £800 (from a £400 loan)
- Capital One - £250
- Barclays Business Account - Unused with £280 of debt
- Interest Free overdraft - student account with £1000 of debt
- Owe friend - £1000

TOTAL: £3680

For some, this may seem like small debt. But for me, I have serious issues. My income can be anywhere from £2,000 down to £300 depending on the month. This usually means I am left with very little money to deal with my debts.

Also, my living partner doesn't know about my Wonga debt. I feel ashamed of having this debt, because I promised I would never touch them again. So what is your advice for myself? I currently have £25 to my name, with £450 expected next week.

Nick

vics1928

Come clean as scary as it is
.if they love you they will help you through it

hohum

Budgeting on self employment income is tricky. I've decided to do a monthly budget based on what we predict coming in that month and then review as needed. The temptation I have is to live like kings when we get paid, because we spent the last two weeks living on beans. One thing that made budgeting easier for us was to set up an account just for bills, I know exactly how much we have to put in to cover it and when by - I was forever getting caught out by dds before that.

I would do a budget based on worst case income and figure out how much you can stick to repayments for each debt. I would focus on the wonga loan because that's the one that's accruing massively. Eg how long does the £425 have to last you? What payments do you need to cover with it? Do a budget for the £425 and however long it needs to last. Right now you are at crisis so all the smart stuff about putting aside money for tax, repairs etc can wait.

Now others would have specific advice on how to deal with wonga, but my question is what caused you to take the loan? What did you spend it on? And seriously please use this situation to motivate yourself not to take out in future.

To me your situation is probably solvable in the short term, and then there's some thinking about how to handle in the long term which others might advise better on. It's totally possible though

nick6979

Thanks for the reply,

You are definately right about the living like kings part when a payment does come through. The wonga loan was taken out because one particular month I did poorly and needed a quick fix. Unfortunately the interest was just over what I could afford and I sent up a repayment plan. Then I failed to accrue enough funds once more.

It's stupidity on my part, but this website has been a great help recently including your comment. What self employment do you currently engage in?

Also I am seeking Debt Management through either a charity or gregory pennington. Im not sure if you have any ideas on which is best? The latter sounds great on the phone, but I have yet to make up my mind.

Nick

marliepanda

With the DMP, do you want to pay off your creditors, or pay Gregory Pennington? Yes they tend to get lower monthlies, but that will just drag your plan out longer, and then even longer due to their fees.

hohum

nick6979 wrote: »

Thanks for the reply,

You are definately right about the living like kings part when a payment does come through. The wonga loan was taken out because one particular month I did poorly and needed a quick fix. Unfortunately the interest was just over what I could afford and I sent up a repayment plan. Then I failed to accrue enough funds once more.

It's stupidity on my part, but this website has been a great help recently including your comment. What self employment do you currently engage in?

Also I am seeking Debt Management through either a charity or gregory pennington. Im not sure if you have any ideas on which is best? The latter sounds great on the phone, but I have yet to make up my mind.

Nick

I'm in the arts so it's a total kiss of death re financial stability

Are you sure you need to set up a dmp? To me it depends whether you can make repayments to service your debts or not. That will probably depend on what work you have coming in the next few months. If you can deal with wonga, you may well be able to pay what you owe without defaulting (which is what I think a dmp would mean).

I don't have experience of payday loans apart from one my boyfriend took and repaid the next month. I also don't know about dmps but the general point around here is why pay someone when you can work with a charity or self manage.

If you have already failed to keep up with a repayment plan, it suggests to me that you don't have a good idea of what's affordable and maybe overestimate what you can manage.

So I ask again: how long does the upcoming £425 need to last (ie what's coming in after that) and what do you need to cover? You can't pay things back but you will need to keep up the minimum payments plus stuff like rent. How much do wonga want and when?

Are you up to date with class 2 NI contributions?

sourcrates

Hi,


The gas debt, capital one, and Wonga, will just do the rounds with various DCA`s for a good while, they tend to make a lot of noise at first, but will soon go quiet, my advice is, when you can, pay back the two bank accounts, and then your friend, the other debts can wait until you are in a better position to pay them, remember they threaten lots, but rarely make good on them, don't be intimidated and do what you can, when you can, they cant have what you aint got mate can they !!!!!


DONT BE TEMPTED TO GO WITH A FEE PAYING DEBT MANAGEMENT COMPANY EVER !!!!! YOU DONT NEED A DMP WITH SUCH SMALL DEBTS AS THESE, PRIORITSE THEM AS I HAVE ADVISED ABOVE.
GOOD LUCK !!