Drowning In Debt

Craig32

Hi Guys,

I have acquired mass debts, mainly from gambling. Now I have stopped the gambling since 5 weeks ago (got to start somewhere), and I really want to clean this whole mess I am in. Towards the end of the gambling I was taking out bad credit loans to try and clean it all up, but it just went from bad to worse.

Debts are as follows:-

Hitachi Loan - £11,000 (£372.50 a month)
Barclaycard CC - £5,600 (£100 a month)
Natwest CC - £3,150 (£100 a month)
RBS CC - £1,800 (£70 a month)
RBS Overdraft - £4,500 (Don't pay anything towards this, but accrue £60 interest charge)
Pay Day Loan 1 - £400 (Over 6 months) (£100 a month)
Pay Day Loan 2 - £300 (Over 6 months) (£100 a month)
Bad Credit Loan 1 - £1000 (Over 2 years) (£73 a month)
Bad Credit Loan 2 - £1100 (Over 18 months) (£100 a month)

As you can see, this is a ridiculous & disgusting amount of debt accumulated. Now I don't need advice on the gambling, I have since joined Gamblers anonymous, and have closed down every gambling account available. I am needing the best advice to clear these debts.

I earn £1,780.00 a month (after tax).

Fortunately at the minute i am back living with my dad who is charging £200 a month rent. Other than that my expenses are minimal, so the idea with the extra disposable cash was to pay more towards debts.

Am I best to just continue trying to pay this all off to get out the mess myself? Ideally, if I had good credit I would get a loan to wipe it all out at a good rate, and repay comfortably, but unfortunately that is not an option with my bad credit. (Bad credit for so many loan/CC applications, I have never missed a payment).

Or is there alternative options? One ideally would be with my interest frozen so it could be paid off quicker but I have no idea if that can be done.

Also, I really need to move out around April/May next year I would imagine, as my dad has a 2 bedroom house and he is trying for a baby at the minute so my time here is counting down.

Another problem is that I am running the Berlin Marathon for charity at the end of September so the next 2 pays in August and September will need to be contributed towards that if I can.

Any advice would be greatly welcomed,

Thanks

Tyrone_Black

I think you're at least going to need to tell us how much interest you're paying on each debt to get anything useful.

Bad situation, but you've got a good income and are tackling the gambling. If you can stay on track you can fix this.

Craig32

Thanks for the positive words Tyrone. I'm amazed I could be so stupid to get myself in such a mess, but we are here now, so I am trying to only look forward.

I don't have the interest figures at hand, but I will get them together over the weekend, and then get some advice. The cc & main loan are pretty reasonable, it's the other ridiculous bad credit loans that are sky high.

Dobbibill

Finding the interest rates is definitely something you need to do.

After paying all your debt & your Dad each month, that leaves you with £564.50 to last the month, for transport to work, mobile phone contract and any other commitments you have.

Here is a link for snowballing. The idea is, using any spare money you have to pay the debt with the highest interest rate first and then use the spare money & amount from debt 1 to pay debt 2. They are then cleared one by one.

Congrats on joining GA, all the best to attack those debts.

DB

[Deleted User]

you might be best contacting one of the free debt advice charities e.g step change who can talk you through all your options
good luck

sourcrates

If you have no assets, is there any reason you can't go Bankrupt ?

You have approx 30k of debt, could take a long time to pay down, I would certainly do as the others have said, and get some proper advice on how best to tackle this.

National Debtline is a good place to start, here's a link to there website :

https://www.nationaldebtline.org

cookson

Good luck with tackling your debts.

Is there anyway you could cancel the marathon? If I was you I would seriously limit any non essential spending. I know it's for charity but any spending like that will mean you keep paying a large amount of interest.

Do you keep a budget to track your spending? Is there any areas you can cut back? People on here are great at looking at your SOA and identifying possible savings.

thegreenone

I'm far from being an expert but I would definitely have a look at the snowballing link from Dobbibill. If you can spare £50 per month from the £564.50, off the top of my head and not knowing the interest rates, I reckon you could shift the bottom four in eight months.


£150 to PDL2 for two months then £250 to PDL1 for one month.
£350 to BCL2 for three months by this time you should only need a couple of months to get shot of BCL1. (very rough figures).


These are the uglies and I would imagine be a big no-no for any future landlord doing a credit check on you next year. You will also need to save money for a deposit. Can you spare extra each month to pay into a new basic bank account? Keep the card but cut up the pin and request a new one when you need to access the money ONLY for a deposit.


Definitely talk to stepchange though about help with the big ones.
Good luck.

Craig32

Hi Folks,

These are the interest rates I have for my debts:-

Hitachi Loan (£11k - £372.50 a month) - Interest 34%
Barclaycard CC (£5.6k £100 a month) - Interest on Standard Balance 1.523%, Interest on Cash Balance 2.071%
RBS CC (£1.8k - £70 a month) - Interest 2.02%
Natwest CC £3.1k - £100 a month) - Interest 1.98%
RBS Overdraft (£4.5k) - Interest 1.98% + £6 charge Arranged OD Usage, £18 charge unarranged OD Usage
Payday Loan 1 (£400 over 6 months) - 0.8% Interest per day, equivalent to 292% per annum. (APR 1225%)
Payday Loan 2 (£300 over 6 months) - 0.8% Interest per day, equivalent to 292% per annum)
Bad Credit Loan 1 (£1k - £73 over 2 years) - Interest 55.24%
Bad Credit Loan 2 (£1.1k - £100 over 18 months) - Interest 71.587%

I hope i have done that right, some interest rates weren't stated clearly so I had to do some calculations. My maths was never spot on, mind! lol

Craig32

Dobbibill wrote: »

Finding the interest rates is definitely something you need to do.

After paying all your debt & your Dad each month, that leaves you with £564.50 to last the month, for transport to work, mobile phone contract and any other commitments you have.

The idea is, using any spare money you have to pay the debt with the highest interest rate first and then use the spare money & amount from debt 1 to pay debt 2. They are then cleared one by one.

Congrats on joining GA, all the best to attack those debts.

DB

Thanks mate. I have never heard of this but will be focussing tomorrow on coming up with a solution, so I will definitely be giving this a read.

Craig32

sourcrates wrote: »

If you have no assets, is there any reason you can't go Bankrupt ?

You have approx 30k of debt, could take a long time to pay down, I would certainly do as the others have said, and get some proper advice on how best to tackle this.

National Debtline is a good place to start, here's a link to there website :

If I am honest, I had never thought bankruptcy was a viable option for me, as I always thought you could only go down this route when your outgoings were bigger than what is coming in, and this isn't my case.

I was planning on contacting various helplines on Monday to get some advice. I figured i would come here and try and see what the response is, to get a better understanding of it all before I contact the helplines.