I'm in a big debt hole and need your help please!

Lottie1980

Hello everyone, firstly can I say thank you for taking the time to read my thread. I’ve taken some advice from the beginners page and set out my SOA using that template. Here goes!

My salary - £1625.87

Monthly Outgoings:

Rent - £425
Council Tax - £22
Gas - £24
Electric - £20
TV License - £3
Water - £8
Phone - £60
Food - £160
House Insurance - £8
Bike - £27

Total: £757

Mint CC – Balance £3,806.90 (limit £3,850.00) APR is 0% until 1st Nov when APR will be 14.9% - monthly payment: £87

HSBC Loan – (to pay back today (minus payment protection)) Balance £18,700 APR 3.7% Length of term 96 months, 84 months to go – monthly payment: £337

Overdraft - £303 (limit £400) APR 18.8%

Total: £424

I have roughly £444 to live in each month, that may sound like a lot to some people and I really don’t want to offend anyone, i'm so sorry if that does. I live in London and it is very expensive, I’m always loaning money from friends and I’ve been in a relentless owing situation for months now. Luckily I have very, very good friends but I don’t want to do this to them, or myself anymore, it’s not good for your self worth having to rely on others to get by every month.

I’m at a loss now with what to do, I can’t see a way out – should I declare bankruptcy? It’s odd as I have what people would refer to as a good job and I always make my bill and loan/cc payments but it’s crippling me, I can’t do anything/enjoy life, everything is a struggle and I’m sure you all know how that can get you down.

I know I’ve gotten myself in this situation, I have no one to blame but myself and bad money management, also living beyond my means for too may years but I am prepared to do whatever it takes to get straight again.

Any help or advice will be so greatly appreciated, thank you very much in advance…

benbenandme

:hello: Hello and welcome !! How do your monthly payments work? I'm guessing your splitting council tax / tv licence etc with others??? Some other amounts are very high (food/phone) ... I will be back in a minute and have a proper look then x

ifstar

You need to keep a spending diary to see where your £444 is going. Just looked back and this isn't including your food as you have listed that already at £160 per month.

Your phone bill looks quite high, is that a mobile or home phone? If it's a mobile then perhaps you can try and re-negotiate and haggle with your price plan. You might end up with more minutes for your money or pay less for what you have got. Check Martin's article on mobile phones and haggling in general.

If your £424 is made up of nights out/meals out etc then it is very easy to cut back on this. You would be able to get your overdraft paid off quite quickly then you could start chucking more money at your mint CC as that will be on the higher rate soon. If you can chop say £150 of the £424 then you will pay your overdraft in a couple of months then you can chuck the £150 at your CC and you will pay that off in around about 16 months as opposed to around 40 if you keep paying just the £87.

Skinted_stodge

Hi there!

i am a londoner too so i understand that it can be really expensive for going out sometimes. the price of drinks, club entries and so on are more than other places ive been too.

im planning on spending about £50 a week max on my social life (which is still 5 times more than a lot of guys on here!) but i know i need to be able to go out a bit or else ill fall off the wagon when my friends go out for a drink. i have been doing a lot of research and if you sign up to email newsletters like Flavourpill, londontown etc then there are a lot of nights out which are free entry or really cheap. whereabouts are you based? Im in north london and there are tons of cheap restaurants we have hunted out in our area, so i can eat out with friends for tenner including a beer.... :A

looks like food is your biggest area you can reduce- £35 shop challenge, all my food and toiletries for £35 in total... maybe you could set yourself a limit and use the rest to pay a bit off a credit card?

good luck! Skinted x

misspoppy

Hi

can i ask what is it you feel you are missing out on if £100 a week isn't enough? This might be where your problem lies.

msmicawber

Blast - I just lost my post for some reason, but the gist of it was echoing ifstar and misspoppy and advising you to do the following:

1) Have a quiet month and pay off your overdraft, so you're not paying interest at 18%.
2) Look for a new 0% deal that you can transfer your CC balance to once the current deal ends in November.
3) Play with the calculator in www.whatsthecost.com so that you can see the effect (or lack of it) of only paying the minimum payment on your credit card. (30+ years and £5k+ interest!).
4) Keep a spending diary and start asking the questions: do I need it? can I get it more cheaply?
5) Start making more realistic payments towards your debt.
6) Look for cheaper things to do for relaxation (vouchers, Orange Wednesday, taking it in turns to cook with friends, that sort of thing). £100 a week is plenty of excess cash even in London and you could easily halve it without becoming a hermit. Are you spending money on taxis insteading of getting night buses, for instance? Are you wasting money on fares by not getting a travel card or oyster card?
7) Have you items that you could sell, then put the proceeds towards your debts?
8) Can you get a better paid job, or a second job to pay off your debt more quickly?

I can see no reason for you to think about bankruptcy and, to be honest, unless you address your overspending habit, you would end up in debt again even if you were able to go bankrupt this time.

lynzpower

How much do you owe to your freinds as this too should be added to your list of debts

duchy

I'm a Londoner too and I do understand what you are saying BUT there are lots of free and cheap events in London all the time. It may not be exactly what you are doing now but it might even broaden your horizons and introduce you to things you'd never even thought of.
Also how much of your spending is "face-saving" spending-trying to keep up with your mates ? I know you've said your mates have been great but what happens if they get sick of you constantly borrowing off them ?
Quite honestly going bankcrupt might help short-=term but what needs to change is your spending patterns . As you say-you have a good job but you live above your means. £100 a week is more than most people have to spend on food AND petrol/fares but looking at your SOA this is purely going out/paying back mates money.
Getting a second job in a bar is quite a good idea as you wouldn't feel it was compromising your social-life so much-and if you're working you're not spending
I've made some big assumptions here and maybe you disagree with them but why do YOU think you are so skint compared to all your mates in similar jobs ?.

RAS

Hi

You need to get out, so what about doing one of two evenings bar work for a few months?

If you can get the OD under control and start impacting on the Mint CC and then transfer to another 0% or low life balance card, things could improve.

Also your food bill is huge for one person, even if you are in London. Go over to the Money Saving Old Style Board and ask help sorting out a menu plan. Either cook wiith flat mates, and learn some lower price meals, or batch cook, so there is something in the freezer if you get home late.

talk to mates and see if you can arrange to meet up at one person's place (rotating) once a week/couple of times a month for a simple supper to which you all contribute the cost, then you get company and reduced cost food. Make it a challenge to see who can do the best deal?

tallyhoh

£444 a month to spend? Not to try & put you off but wow, you are right, I think it is a lot. My last months personal spend came to £44.16p

As everyone says You really do need a spending diary to see what is happening to it.

Don't forget to include EVERYTHING, I didnt bother with the really small purchases ar first till I discovered I was spending over £12 a week on sweets and chocs.

It might be something as simple as that.

britishvixen21

Maybe if you set yourself a spending limit, I limit myself to $50 a week (sorry for the $ sign but im a brit living in Canada) I put my cards away so that I am not tempted to spend anymore money, if you set yourself a spending limit of 50 quid a week that would halve your current outlay and could pay off your OD in 2months.