A bit of a mess

pryko

So I've managed to get myself in a bit of a mess.

I've got 2 seperate loans (for £8k and £7.5k) both taken out earlier this year so with plenty of payments to go on them.

I've got 2 maxxed out Credit Cards (£6.4k and £1.7k)

2 maxxed out Overdrafts (£2.5k and £4.4k)

And also got into a pickle with 2 payday loans.

Personally, I thought I was going to have to go onto a Debt Management Plan, but I've been talked into getting in contact with the Payday Loans, explaining my situation and going on a payment plan with them (although looking at Sunny.co.uk, it looks like they'll just keep charging interest by the day on that.) which I have yet to actually do.

So yeah, that's my situation. I'm now back living at my mums (although I just have a mattress on the floor, so it's not really a life of luxury) and I'm trying to find as much extra work as possible online that I can do in my spare time to help pay off all my debts.

grannyjo

pay day loans will charge you relatively high levels of interest and you will probably never pay it all off- don't do it
go to citizens advice bureau to give you names of charitable debt management agencies that do not charge you interest. - I was recently offered debt management by the coop bank that said they had the names of agencies that could help. Our local churches do payment management and they arrange with your creditors to pay back at no interest. It may be better to declare yourself bankrupt. it limits you- I don't think you can have a bank account for a while- but please investigate other ways of sorting yourself out and don't- don't do payday loans
Well done for facing up to your difficulties.

rokat

Lotsof us on here have got ourselves into a mess but you're in the right place!

Are you paying all the minimum payments or are you struggling to do that? If you are struggling I would advise speaking to StepChange or Payplan asap.

pryko

I did consider StepChange. I got talked out of taking that route though, as minus the Payday Loans, I can financially afford to cover everything. It's just the Payday Loans where I am struggling. However, if I can phone them up and come to terms on a payment plan, even if it's just paying them back £10 a month, I wouldn't need to go down the route of the DMP. I've been told a DMP will seriously affect my credit rating, as seeing as though I'd have to open a new bank account for my direct debits, my existing banks would ahte me seeing as though I have overdrafts / loans with them. Would it really be that bad?

My first instinct was to go with StepChange, set up a DMP and in 4 years time when I'm out of it, my credit score wouldn't be ridiculously bad, and by the time I'd saved up any money (for example for a mortgage) it may have improved anyway

grannyjo

At the top of this forum there is a heading as the title of this reply. Read it . One section is for charitable debt management agencies- one being ' step free' but others are mentioned. My son had problems about 10 years ago and an agency helped him. He had to list his budget and debts. The agency arranged that all interest was stopped on all debts. Then he had to pay back slowly but with no interest payments, with only his real necessities being allowed for in his monthly budget- good luck - and beware the smiling snakes that prey on people in trouble, rolling up interest, late payment defaults etc etc.

pryko

Sorry for double posting, but I should also note, I do have a decent job with a decent wage coming in each month, so bankruptcy probably isn't my best option at all

pryko

grannyjo wrote: »

At the top of this forum there is a heading as the title of this reply. Read it . One section is for charitable debt management agencies- one being ' step free' but others are mentioned. My son had problems about 10 years ago and an agency helped him. He had to list his budget and debts. The agency arranged that all interest was stopped on all debts. Then he had to pay back slowly but with no interest payments, with only his real necessities being allowed for in his monthly budget- good luck - and beware the smiling snakes that prey on people in trouble, rolling up interest, late payment defaults etc etc.

YEs, this was something I did a sort of test run with on the Step Change website. It seemed like it was OK do-able, but as I mentioned, I don't know how bad something liek this may affect my credit scoring in the distant future

rokat

If you can afford the minimum on everything else then probably a DMP won't be best for you then...

I'm not sure which payday loans you are having problems with but I set up a repayment plan myself with Wonga through their website. I just had to input my incomings and outgoings and they suggested how much I could afford each month. They also stopped interest straight away but they did say if I missed a payment then they would add all the interest that they had stopped back on. This is just being shown on my credit report that I am paying on time monthly so no negative effect. (although payday loans will probably have a negative effect on it anyway).

I'm on a DMP with StepChange and it has resulted with me having to change my bank and 5 defaults so only do that if you are really struggling

pryko

rokat wrote: »

If you can afford the minimum on everything else then probably a DMP won't be best for you then...

I'm not sure which payday loans you are having problems with but I set up a repayment plan myself with Wonga through their website. I just had to input my incomings and outgoings and they suggested how much I could afford each month. They also stopped interest straight away but they did say if I missed a payment then they would add all the interest that they had stopped back on. This is just being shown on my credit report that I am paying on time monthly so no negative effect. (although payday loans will probably have a negative effect on it anyway).

I'm on a DMP with StepChange and it has resulted with me having to change my bank and 5 defaults so only do that if you are really struggling

It is actually Wonga, and also Sunny.co.uk. Sunny says they don't charge late fee's or anything because they charge interest by the day, so it would just keep building up and up I guess :mad:

QuietOne

Either way, your credit file will take a hit, and from your previous posts I would say carry on paying the other stuff as normal and contact the two payday loans and see if they can freeze the interest and come to some payment arrangement.

Personally I would put the two payday loans at the bottom of my priorities and focus on the rest. Then try and come to an arrangement with them

Vikipollard

pryko wrote: »

I did consider StepChange. I got talked out of taking that route though, as minus the Payday Loans, I can financially afford to cover everything. It's just the Payday Loans where I am struggling. However, if I can phone them up and come to terms on a payment plan, even if it's just paying them back £10 a month, I wouldn't need to go down the route of the DMP. I've been told a DMP will seriously affect my credit rating, as seeing as though I'd have to open a new bank account for my direct debits, my existing banks would ahte me seeing as though I have overdrafts / loans with them. Would it really be that bad?

My first instinct was to go with StepChange, set up a DMP and in 4 years time when I'm out of it, my credit score wouldn't be ridiculously bad, and by the time I'd saved up any money (for example for a mortgage) it may have improved anyway

With payday loans and maxed out overdrafts on your credit file, it's going to say to any potential lender that you can't manage your money anyway, so I'd forget about a mortgage for a considerable time yet.


Any arrangement to pay will negatively effect your credit worthiness, regardless of if you 'only' choose to do so with the payday loans.


You say you can manage the other payments if you don't have to pay the payday loans back in full. So why did you need to take them out? If you're maxed out on cards and overdrafts, it suggests that you can't actually manage all the payments.


You need to post up an honest SOA, with all the interest rates for the loans/cards so the goodly and wise people on here can see if it's possible to snowball the debt after a month of beans on toast to pay off the payday loans. You NEED to post the SOA as until you do (and people analyse it), you won't fully see whether your situation is manageable or requires intervention of a more serious kind.


And finally...your credit 'rating' is a pointless figure that the companies charge for their opinion of your situation. No lender will ever see it or use it as they all have their own lending criteria and formulae. What your credit report says will influence them though.