Wanting to be debt free...need help!

evo5819

Hello everyone!

I joined around 4 years ago when I was 20 years old and wanting to get out of debt. Unfortunately, I was still immature and racking up the debt without making payments. I recently decided this NEEDS to stop so I'm here to try and conquer it. The only thing is I have no idea where to start.

So, I recently looked at my credit report which told me I have a 1/5 credit score, 4 CCJ's and around £5500 worth of debt. It doesn't sound like a massive amount but when your as bad with money as I am...it seems like a mountain.

I want to rid myself of all this debt and get my credit score up but I have no clue where to start. I have an attachment of earnings order which is clearing the payment of one of my CCJ's so far but as for the rest, I don't have a clue. I'd love to pay one single monthly payment to someone to get it down to 0 as knowing me, I wouldn't be able to keep up with paying multiple companies.

Is the best thing for this a debt consolidation loan (will anyone even give me one with such a bad credit score?) or a debt management company or something along those lines?

Thanks in advance for your help everyone!

lee111s

Post up a statement of affairs. Google it, fill in the form and post it here. Then we can see how much your income vs outgoings are and also see where you could potentially save money to pay towards your debt.


With a relatively low amount of debt, I wouldn't consider a DMP (it'll further damage your credit history) and probably wouldn't advise a consolidation loan...they very rarely work and often people take them out and then rack up the debt again on credit cards etc.

enthusiasticsaver

No a debt consolidation loan is not usually the way to go unless your existing debts are on a high rate of interest and you can get a low rate loan (unlikely with a bad credit rating) and you need to ditch all credit cards until you have addressed the reasons for getting into debt in the first place.


The first thing you need to do is work out a budget and stick to it. Post up a soa as suggested above and get into the habit of paying bills at the beginning of the month or whenever you get paid, stick a proportion of your money into an emergency fund, pay a certain amount of debt off (highest interest rate first and minimum payments on the rest) and then draw out a weekly amount of cash for entertainment, food, petrol etc and do not use credit cards until you get to a point when you are back in control of your finances (usually when all debt is paid off and you have an emergency savings account). If you have ccjs come to a monthly arrangement for clearing them.

[Deleted User]

as above,plus why do you want to improve your"credit score"(which means very little in the real world when what you really want to do is pay off debt NOT get yourself into more trouble?
my advice once you have done an SOA would be to write down every single penny you spend every day for a month in a diary then look at where you are wasting money,as an example do you really need a £3 coffee everyday,or 2 newspapers(you get the idea)
good luck on your journey

evo5819

Thanks everyone! I looked up a SOA but it looked a little daunting and wasn't sure how to even fill it in so I'll post all of my financial info here:

Income after tax:

£1020 a month

Outgoings:

£120 rent (still living with parents)
£100 overdraft
£15 bank account fee (I use this account as it is free to use my overdraft whereas if I downgrade I will have to pay £1 a day and right now I end up using it more than 15 days of the month)
£10 phone
£10 haircut
£40 birthdays etc
£20 provident
£100 cigarettes (I know..ridiculous! I'm giving up to help with this debt battle)

The rest is literally spent on leisure activities, going out on weekends etc.

My current debts are:

Capital one £435
Arrow Global £195
Vanquis bank £398
MyJar loans £272
Capquest £338
Lowell £742
Provident £200 (payed off at 20 pound a month)
RBS £1069

CCJ's:
£953
£631 (this is being payed off with the attachments of earnings order at 20 pounds a month)
£248
£282


It's not so much the amount that is bothering me it's more the amount of companies that I owe to. i'm also finding it difficult to find out who the CCJ's are for? I just want this cleared

Thanks again everyone! If you need any more info, please let me know.

[Deleted User]

so you spend £600 on leisure? you can cut that in half asap,£100 on cigs?get an electric one and start vaping at £5 a week.stop buying presents or at least cut that right down,£10 on haircuts?buy a trimmer for £10
then throw all the savings at your ccjs and your most expensive debt(highest aprs)whilst maintaining at least min.payments on the rest

tealady

Hi
If you packed in thr cigs you would be saving loads not just now but in the future and your health will benefit. If you want to stop (and as an ex I appreciate many people don't) then head off to your GP or chemist to see if you can get signed up for a stopping smoking course. When I joined I got 8 weeks wrth of nicotine replacements for 1 prescription charge, best decision I ever made. Now if they could only find a similar thing for cream cakes.
As for going out, look at what you spend most on, is it clubbing, taxis, drinking and find a way to cut down without missing out.
Keep a spending diary for a month, you will be amazed where the money goes and will help you set up a realistic budget.
HTH

HappyMJ

evo5819 wrote: »

Thanks everyone! I looked up a SOA but it looked a little daunting and wasn't sure how to even fill it in so I'll post all of my financial info here:

Income after tax:

£1020 a month

Outgoings:

£120 rent (still living with parents)
£100 overdraft
£15 bank account fee (I use this account as it is free to use my overdraft whereas if I downgrade I will have to pay £1 a day and right now I end up using it more than 15 days of the month)
£10 phone
£10 haircut
£40 birthdays etc
£20 provident
£100 cigarettes (I know..ridiculous! I'm giving up to help with this debt battle)

The rest is literally spent on leisure activities, going out on weekends etc.

My current debts are:

Capital one £435
Arrow Global £195
Vanquis bank £398
MyJar loans £272
Capquest £338
Lowell £742
Provident £200 (payed off at 20 pound a month)
RBS £1069

CCJ's:
£953
£631 (this is being payed off with the attachments of earnings order at 20 pounds a month)
£248
£282


It's not so much the amount that is bothering me it's more the amount of companies that I owe to. i'm also finding it difficult to find out who the CCJ's are for? I just want this cleared

Thanks again everyone! If you need any more info, please let me know.

You're living far beyond your means.

I love going out just as much as you do but you've got to cut that down. Maybe try going out much later in the evening so you don't get caught with a friend turning up just as you're about to leave that you didn't expect and have another drink...or several drinks. Closing time will force you to go home.

The quickest way to clear all this debt is to go bankrupt. Everything will be reset back to zero and you can start again. The OR (official receiver) will take all of your income allow you enough for your essential expenses and give you £10 per month to spend on going out. Maybe this is what you need.

Gmask21

The first thing you need to realise is that if you keep living beyond your means then you will never pay off your debt.

After your overheads as outlined above you have £600 left/m. My next steps from there would be to work out the combined total of minimum payments on all the debt. These minimum payments are essential monthly payments.

How much are your combined monthly minimum payments?

I would work this out, deduct from the £600 and work out then how much I can overpay. I would start with the highest interest one and overpay as much as possible until balance at zero, close that account and then move on to overpaying the next highest interest one.

This was the method I used and it helped me. One thing I did was cut up my cards and ask the lenders to put a block on my spending on the accounts so I wasn't able to request a card and use again once I had paid some of the balance off.

It's hard to break the cycle but worth it once done. I haven't had a credit card in 4 years and have just been focusing on paying my debt off. I have one final account with £1200 balance which I should have paid off next month.

For a bit of motivation, I am just back from a 2 week holiday in Portugal, my flights, apartment, spending money, everything cost wise associated with the holiday was paid for from money I had saved rather than borrowed and coming home not being in any debt for something g that is past, feels absolutely amazing!

Good luck to you!

rockm87

Hi!

well done for taking the first step, hopefully it has given you a little shake as to what you need to do.

You need to cut down your expenses wherever you can! be bold, and remember it wont be long and then you can breathe again!

I'd list you debts, smallest to largest. Pay minimum on all but the smallest and get rid of it. Once that it gone start on the next one (you will have more available income to use on paying that down)...and continue til they are gone.

Dont spend on anything that isnt keeping you physically alive (i.e food and rent) for a bit, just to get the ball rolling.

watch youtube videos of Alenn Carr to stop smoking...it helped my hubby.

Listen to Dave Ramsey podcast daily to pick up tips and keep focused on your cause!

best of luck.

evo5819

Thanks so much everyone! I'm going to find out the minimum payments and start paying them off. I'm also going to just get rid of the smaller ones by paying one in full each month as they're only around the 2-300 mark.

Thanks for being so kind