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Debt help!

edited 30 November -1 at 1:00AM in Debt-Free Wannabe
4 replies 695 views
Theblackangel14Theblackangel14 Forumite
1 Post
edited 30 November -1 at 1:00AM in Debt-Free Wannabe
Hi, just new here and would really appreciate any advice on what other people would do in my current situation!

I have the following debt:
- Loan from tesco for £4500 that I have about 2 years left to pay off - £105/month
- Loan from sainsburys for £4000 that I have about 2.5 years left to pay off - £100/month
- £2000 arranged overdraft (currently interest free for the next year)
- £6500 student loan still due back (taken from salary)

I have been ill off and on from my current job, which I have been in just less than 2 years, and have recently been off for 2 months. I've been informed that they're looking into ill health dismissal and - despite my initial panic about this - have realised it seems it's for the best as I definitely can't go back to that position now health-wise and so if I need to find a new job anyway then this way I'd be able to claim benefits immediately post-dismissal and receive one week's lump sum pay for one full year's service.

I'm starting applying for jobs so that I can try and find something (that does suit me health-wise) post-dismissal but am also aware that I could receive Jobseeker's Allowance and (I believe?) 13 weeks full rent housing benefit.

My question relates to the fact that I'm obviously in a very stressful situation financially in that I have a maximum of 2 months more half pay on sick leave, then I'll be unemployed. I live alone and have rent for a flat, all bills, my two monthly loan payments as detailed above, other essential direct debits, I run a car etc - half pay doesn't cover all of these, let alone general living on top. With £300 money I'm owed from my job (due to their accidental underpayment previously) and the ill health dismissal week's payment and payment for 2 weeks annual leave I haven't taken, I have enough money to pay everything and live until September (and I can't cut down monthly outgoings any more than I have). However from then onwards I don't have enough to live on and pay outgoings and so the whole thing is dependent on me finding a job for September onwards (and this also obviously relies on my health being stable enough then, which in hoping it will be, and finding a job I can manage health-wise without ending up off on sick leave in this new position). When I start claiming housing benefit and Jobseeker's Allowance after being dismissed (which is looking like it'll take place at the end of my 2 month half pay period), this amounts to a similar monthly amount as my half pay salary, so even then I'll not have enough coming in to cover all my monthly outgoings let alone geenral living etc.

I was wondering if anyone has advice on:
- the best way to pay off my debts and whether there's a better way for me to change to than the high interest loans I already have
- how to deal with paying monthly loan payments once unemployed (I don't have insurance and I'm presuming it's too late since I have a pre-existing health condition and I'd be looking to claim on the insurance within the next 2 months but I also know very little about I insurance)
- how best to manage financially with this upcoming situation

Also I have never paid into a pension scheme (choosing to focus on paying off my loans first - I realise this past decision is questionable) - and wouldn't be thinking about ill health retirement anyway as I'm young (20s). I realise my financial choices in the past haven't been wise but I'm now very organised with money and live within my means, pay everything on time, budget etc, but upcoming lack of any incoming finances is stressful!

Thanks so much in advance, and apologies if this isn't the correct section of the forum.


  • edited 30 June 2015 at 11:19AM
    MrWillyWonkaMrWillyWonka Forumite
    285 Posts
    Ninth Anniversary Combo Breaker Debt-free and Proud!
    edited 30 June 2015 at 11:19AM
    Didn't you already post this message already?

    In regards to your job, how confident are you that you will be able to find a new job before September? Will your dismissal affect these chances?

    Either way you will need manage your finances as if you are still going to be unemployed in September.
  • FireflyawayFireflyaway Forumite
    2.8K Posts
    Fifth Anniversary 1,000 Posts
    Speak to your creditors and negotiate a lower monthly payment due to your circumstances. Sign on when you are unemployed and draw up a budget and stick to it and make adjustments where you can - ie cheaper food etc.
  • andyfromotleyandyfromotley Forumite
    2K Posts
    Ignore the student loan, its not a loan in the traditional sense.

    You need to find £205 cpm to pay your current liabilities. Plus find a way to pay down the the OD. Obviously this is extremely unlikely if you go on benefits.

    You need to find a job ASAP. If you can't then i suggest that you call either StepChange, CAP or National Debt helpline as soon as you can't meet your obligations. The sooner you do this the less charges you will incur. However any debt relief will trash your credit history for up to 6 years.

    Like i said, new employment is your answer.
    £1000 Emergency fund No90 £1000/1000
    LBM 28/1/15 total debt - [STRIKE]£23,410[/STRIKE] 24/3/16 total debt - £7,298
  • edited 30 June 2015 at 3:32PM
    National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
    8K Posts
    edited 30 June 2015 at 3:32PM

    If you get to a point where can’t afford your contractual debt payments and can tolerate the negative impact to your credit file you could negotiate reduced payments plans, try a debt management plan with Stepchange, or you may qualify for a debt relief order to have the debts written off depending on the rest of your circumstances.


    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
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