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Spiralled out of control - desperately seeking advice!

Hi, I'm more of a lurker but decided I need to take the plunge and ask for advice as I have officially had my 'lightbulb moment'!

My debts, as they stand, are currently £9,000. £3,000 of this is my overdraft. I actually feel sick typing this - I'm ashamed that I have let it get as bad as it is.

I have just signed up to the 1% challenge as I figured this would be the best place to start.

I'd like to start off by chipping away at my overdraft but I feel that I need to separate everything from my overdraft (if that makes sense). How would I go about this? I'm assuming the best thing would be to open a new basic bank account but what account would I get my wages paid in to? What account should I get the bills paid out of? I've thought about it so much that I've now confused myself!

Any help would be appreciated!

Thanks in advance :)
Lightbulb moment: 15/09/14 :idea: 1% = £90 | Aiming to be debt-free by July 2017 (my 30th birthday) :beer:
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Comments

  • sourcrates
    sourcrates Posts: 30,667 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    Hello,
    I would open a new basic bank account, get your wages paid into it, and your bills paid out of it. Treat the OD on the old account as just another debt you need to service, a S.O.A (statement of affairs) would give everyone a better idea of your financial status, and they would then be able to advise accordingly.:)
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Thank you :) I'm just concerned about the drastic reduction of money going in to my regular account. I have paid at least £1000 into that account for the past 10 years now (have held the account for 14 years) and am worried that when they see that I am not putting as much as this in, they will request I pay the overdraft back at the end of the year. Hope that makes sense!
    Lightbulb moment: 15/09/14 :idea: 1% = £90 | Aiming to be debt-free by July 2017 (my 30th birthday) :beer:
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    Tenth Anniversary 1,000 Posts Combo Breaker
    mum2amelie wrote: »
    Thank you :) I'm just concerned about the drastic reduction of money going in to my regular account. I have paid at least £1000 into that account for the past 10 years now (have held the account for 14 years) and am worried that when they see that I am not putting as much as this in, they will request I pay the overdraft back at the end of the year. Hope that makes sense!

    Hi mum2amelie

    Yes, the bank are very likely to ask for all their money back - but that doesn't make opening a new account elsewhere a bad idea. The important things to remember are:

    - the bank could reduce your overdraft facility or call it in altogether at any time in theory, even if you are still depositing money with them on a regular basis. So far they have been happy to let you run the overdraft as it has presumably earned them a lot in interest over the years!

    - what matters now is that your money should be in a safe place where you, and you alone, are in control of what goes where.

    It would be good to see your SOA as sourcrates says above - that way we can offer more advice on your next steps after changing banks.

    Dennis
    Twitter: @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • Thank you very much for the advice. I've used the SOA calculator - I hope this works

    Statement of Affairs and Personal Balance Sheet
    Household Information

    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 2
    Monthly Income Details

    Monthly income after tax................ 1228
    Partners monthly income after tax....... 0
    Benefits................................ 130
    Other income............................ 0
    Total monthly income.................... 1358

    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 270
    Management charge (leasehold property).. 0
    Council tax............................. 0
    Electricity............................. 0
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 34
    Telephone (land line)................... 0
    Mobile phone............................ 50
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 0
    Groceries etc. ......................... 500
    Clothing................................ 20
    Petrol/diesel........................... 50
    Road tax................................ 0
    Car Insurance........................... 54
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 250
    Other child related expenses............ 10
    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)...... 20
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0
    (Unnamed monthly expense)............... 0
    E-cigarette............................. 80
    Total monthly expenses.................. 1338


    Assets

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


    No Secured nor Hire Purchase Debts

    Unsecured Debts
    Description....................Debt......Monthly...APR
    Vanquis........................2340......90........0
    Very...........................750.......0.........0
    Next...........................750.......0.........0
    Overdraft......................3000......0.........0
    Total unsecured debts..........6840......90........-


    Monthly Budget Summary

    Total monthly income.................... 1,358
    Expenses (including HP & secured debts). 1,338
    Available for debt repayments........... 20
    Monthly UNsecured debt repayments....... 90
    Amount short for making debt repayments. -70

    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -6,840
    Net Assets.............................. -6,840
    Lightbulb moment: 15/09/14 :idea: 1% = £90 | Aiming to be debt-free by July 2017 (my 30th birthday) :beer:
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    Tenth Anniversary 1,000 Posts Combo Breaker
    Hi again

    Just based on a quick glance at the figures above (thanks for posting them), am I right in guessing that you've deliberately left your partner's income out and that they pay certain bills such as council tax, gas and electricity, which are all showing as zero amounts here?

    Thanks for clarifying

    Dennis
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • Hi Dennis,

    Yes, that's correct. We keep our finances separate (as much as possible) and I would rather not involve him as he has a huge amount on his plate at the moment.
    Lightbulb moment: 15/09/14 :idea: 1% = £90 | Aiming to be debt-free by July 2017 (my 30th birthday) :beer:
  • FireWyrm
    FireWyrm Posts: 6,557 Forumite
    Part of the Furniture Combo Breaker Debt-free and Proud!
    mum2amelie wrote: »
    Groceries etc. ......................... 500

    You can do something about that for sure. £500 a month is huge for two adults and two children.
    mum2amelie wrote: »
    E-cigarette............................. 80

    Out of curiosity, is this really the best you can do? I buy e-liquid and I can buy 6 packs of liquid each lasting at least a week for £20. What on earth are you buying for £80? I'm sure you can do better than that.


    Your SOA seems to be incomplete. I'm sure you dont get utilities for free for instance?
    Debt Free! Long road, but we did it
    Meet my best friend : YNAB (you need a budget)
    My other best friend is a filofax.
    Do or do not, there is no try....Yoda.

    [/COLOR]
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    Tenth Anniversary 1,000 Posts Combo Breaker
    mum2amelie wrote: »
    Hi Dennis,

    Yes, that's correct. We keep our finances separate (as much as possible) and I would rather not involve him as he has a huge amount on his plate at the moment.

    OK, fair enough. Nonetheless, it would be useful to have a rough idea of how much he brings in and the size of the bills he accounts for.

    Your options for dealing with these debts don't need to directly involve your partner, but it is useful to get an idea of how fairly the household bills are proportioned between the two of you.

    Another question - does your household get an award of Tax Credits, and if so is this something you have classed as income for your partner in the SoA above?

    Thanks

    Dennis
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • FireWyrm wrote: »
    You can do something about that for sure. £500 a month is huge for two adults and two children.



    Out of curiosity, is this really the best you can do? I buy e-liquid and I can buy 6 packs of liquid each lasting at least a week for £20. What on earth are you buying for £80? I'm sure you can do better than that.
    [/B]

    Your SOA seems to be incomplete. I'm sure you dont get utilities for free for instance?

    You are quite right - I know I need to do something about our grocery spending. I'm in charge of the food shop and need to swap from tesco/asda to lidl/aldi to start with. No reason why I can't, it's just pure laziness as I order my shopping online. Simply a case of actually going out to do the big shop.

    With the e-cigarettes, again, I know I spend too much, I started using the tanks but found that they were becoming 'spent' too quickly (after only a day's use) so went back to using the carts but again, they are expensive. I'm a heavy user which is why it amounts to so much. Where do you order yours from?
    Lightbulb moment: 15/09/14 :idea: 1% = £90 | Aiming to be debt-free by July 2017 (my 30th birthday) :beer:
  • OK, fair enough. Nonetheless, it would be useful to have a rough idea of how much he brings in and the size of the bills he accounts for.

    Your options for dealing with these debts don't need to directly involve your partner, but it is useful to get an idea of how fairly the household bills are proportioned between the two of you.

    Another question - does your household get an award of Tax Credits, and if so is this something you have classed as income for your partner in the SoA above?

    Thanks

    Dennis

    I see what you're saying. I will work this out later but I know that he does pay for most of the household bills (also the lions share of the rent) and also pays for the car that I use (it was his but he was offered a company car so now I use it to get to work). He earns more than double what I do therefore we aren't entitled to anything other than child benefit unfortunately.

    The fact of the matter is that I know I am grossly overspending on luxuries etc but it's actually making the changes necessary to bring my debts down that is overwhelming me. A case of 'where do I start??'. Hope that makes sense and thank you for your replies so far :)
    Lightbulb moment: 15/09/14 :idea: 1% = £90 | Aiming to be debt-free by July 2017 (my 30th birthday) :beer:
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