Help, i don't know what to do anymore

Ariel82

Hello,
My debts mount up to £10000 on loans/cards/over draft, I owe my parents a further £7500 for my car.
My rent + bills comes to £420 a month and I earn £241 a week (after tax), after making the minimum payments I'm left with £45 a week to live on. I work 7 days a week on my parents farm as their getting old and can't afford to retire. I don't know what to do, I can't carry on like this and I'm not able to pay the debts back only the minimum payments each month. I need a car to get to and from work since it's not along any bus route and taxis would cost more than what I'm paying them back for the car £100 a month. My credit records very very bad. I don't know how I can turn this around. I'm not a home owner and I have nothing of any value left to sell. Please what can I do?

HappyMJ

Ariel82 wrote: »

Hello,
My debts mount up to £10000 on loans/cards/over draft, I owe my parents a further £7500 for my car.
My rent + bills comes to £420 a month and I earn £241 a week (after tax), after making the minimum payments I'm left with £45 a week to live on. I work 7 days a week on my parents farm as their getting old and can't afford to retire. I don't know what to do, I can't carry on like this and I'm not able to pay the debts back only the minimum payments each month. I need a car to get to and from work since it's not along any bus route and taxis would cost more than what I'm paying them back for the car £100 a month. My credit records very very bad. I don't know how I can turn this around. I'm not a home owner and I have nothing of any value left to sell. Please what can I do?

You need to turn this around a bit.

Money comes in.

You pay all of your essential bills such as rent, council tax, gas, electricity and food first. You then work out what's left and pay some non-essential bills such as mobile, home phone and broadband, tv licence. You then work out what's left and divide that between your outstanding debts. If that isn't enough to cover your minimum repayments you can either borrow the money or use your emergency fund (not a good idea long term but can work is very limited short term circumstances lasting no more than a few months such as unemployment or sickness) or you come to an agreement with your creditors. This might mean you have to do something really drastic such as getting a debt relief order or bankruptcy which means you can wipe the slate clean and start again. However, in doing so the debt to your parents will be written off and will no longer be legally due.

Ariel82

I've looked in to bankruptcy, I'll lose my car which I need to be able to get to and from work, and I have no savings or emergency fund, I'm living pay cheque to pay cheque every week

HappyMJ

Ariel82 wrote: »

I've looked in to bankruptcy, I'll lose my car which I need to be able to get to and from work, and I have no savings or emergency fund, I'm living pay cheque to pay cheque every week

You can use around £1,000 of the money you get for your current car to buy another one. The remainder of the cash can be used to pay off your debts. You can do this before or after you consider applying for bankruptcy. As an older car is less energy efficient it'll require more fuel, require more maintenance and most probably has higher vehicle excise duty (road tax) so you will be given allowances in your budget to pay those increased costs and pay your creditors less each month if anything at all.

As your parents effectively paid for the car you could just give it back to them.

National_Debtline

Hi Ariel and welcome to the forum.


As HappyMJ says, budget first for what you need to live on, and then assess what is left to pay towards any debts, be they to banks or your parents.


If you were to go bankrupt, yes you would most likely lose that particular car as I am guessing it is worth a good deal more than £1K-£2K. That is not to say that you would be denied a car full stop, but you would be expected to get around with an older, cheaper model.


Looking at it another way, is it feasible for you to consider trading in for a cheaper vehicle now, and then using the proceeds to make settlement offers to your creditors?


Dennis
@natdebtline

rdone

Do you have anything like mobile phone/broadband/tv licence/netflix/spotify/amazon prime etc that you can cut out of your life?

HappyMJ

rdone wrote: »

Do you have anything like mobile phone/broadband/tv licence/netflix/spotify/amazon prime etc that you can cut out of your life?

With the OP's budget as presented there isn't much room for anything.

The major problem here is nearly £20,000 of debt a car as an asset and an income of £12,500 requiring monthly repayments of £430 per month.

The OP says their income is £241 a week which is £1,045 a month.

The OP spends just £420 a month on essential bills, £430 a month on debt repayments leaving £195 a month (the £45 a week claimed) basically for fuel, food and clothing which all together totals £1,045 a month.

I really doubt all the essential living expenses including rent and all car running costs are only £615 a month. I suspect the OP is using overdrafts and credit cards to make ends meet just to get those minimum repayments made.

asparagus1968

Give the car back to parents? how many more £100's do you owe them? how much would you be able to sell if for? get yourself an older (4/5 years)smaller engine, less tax, less insurance maybe ,type of car instead.
Could you move nearer to the farm ,at least until you are back on your feet? ask for a payrise?
have you "snowballed" your debts so you can pay them off in the most cost effective way?

PasturesNew

Best bet would be to move home, sell the car, then look at siting a mobile home temporarily on the farm grounds.... then work hard and save your nuts off.

You can do something this mad now ... leave it and it'll just go so mad you're stuck in a hole that will mess up the next 20 years of your life rather than "just" the next 2-3.

Gonzo1987

Ariel82 wrote: »

Hello,
My debts mount up to £10000 on loans/cards/over draft, I owe my parents a further £7500 for my car.
My rent + bills comes to £420 a month and I earn £241 a week (after tax), after making the minimum payments I'm left with £45 a week to live on. I work 7 days a week on my parents farm as their getting old and can't afford to retire. I don't know what to do, I can't carry on like this and I'm not able to pay the debts back only the minimum payments each month. I need a car to get to and from work since it's not along any bus route and taxis would cost more than what I'm paying them back for the car £100 a month. My credit records very very bad. I don't know how I can turn this around. I'm not a home owner and I have nothing of any value left to sell. Please what can I do?

How many hours a day do you work? You say you work for your parents 7 days a week on their farm - are you earning minimum wage?

Ariel82

Thanks for the advice, I've called the national debt helpline and it sounds like a debt management plan will be the way forward, I guess I just have to come to terms with the fact of being bone skint for the next 5-6 years but at least it's not forever which is what it feels like right now