We are so ready!

Oasis10

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pelirocco

Even if you clear the pay day loans the remaining debt can not serviced by your income .even if you reduce your expenses by a few £s here and there, once you include your car repayments with other monthly debt repayments that's more or less your whole income . We aren't talking about biting the bullet for a few months , this is years worth of debt repayments , it's just not sustainable. You need to enter a debt management plan , and I would guess you would lose your car, but as things stand I would imagine someone will come knocking for it soon

Lemonsqueezer78

Hi Oasis,

It’s fantastic that you are prepared to tackle this and that you have picked yourself up and that you feel optimistic about things. You should feel that way as, just by coming here and asking for help is a big step.

My concern is that you are letting this new-found optimism shield your eyes from the reality of your finances.

Your plans to sell a few things just to make it through this month – and then cut back in a few areas and get whatever help you can from your boyfriend and hope for a bit of overtime simply don’t stack up I’m afraid.

You need to come up with a credible and detailed plan which uses some actual numbers/figures – not just your optimism - to show that this plan can work.

It is simple, but I’m afraid you’re still missing it; for you to stop building up more debt AND be able to pay your existing debts you need to be able to show how you can achieve a regular Income figure that is consistently HIGHER than your expenses & debt repayments. Right now it is not. Your income is lower than your monthly outgoings by a large margin which simply means, your debt is actually going to increase each month.

Even getting rid of your of the PDLs and reducing your expenses in the ways suggested still leaves you short by several hundred pounds (around by more than £400 p/m by my reckoning). Even a £5k a year pay rise (whilst it will obviously be great) actually won’t fully cover that.

Your boyfriend sounds very nice to be standing by you and helping you – but you are not going to be able to address this shortfall reliably just by getting “occasional help” from your other half.

I’m not trying to be a downer. I want you to come up realistic plan – but to do that you need to call someone like Debt Line to speak to someone about this. You won’t get through this on blind optimism alone and you may end up making things much worse.

Can you create a "predictive" SOA - using your best case scenario to try and see this? Take your SOA and change all the figures to their predicted new lower amounts. Include the payrise you hope to get.

Take out the smoking and clothes figures, lower the groceries and entertainment figures, remove the PDLs - increase you monthly income to £1720 (equivalent to a £5k pay rise) and post the revised SOA so that you/we can review the effects of all these changes and see where we are....

Lemonsqueezer78

Here you go – I’ve done it for you

Your “Best Case” SOA Below;

Monthly Income Details
Monthly income after tax................ 1720
Total monthly income.................... 1720

Monthly Expense Details
Secured/HP loan repayments.............. 290
Mobile phone............................ 50
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 120
Road tax................................ 12
Car Insurance........................... 115
Car maintenance (including MOT)......... 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 35
Presents (birthday, christmas etc)...... 10
Entertainment........................... 100
Smoking................................. 0
Total monthly expenses.................. 892

Unsecured Debts
Description....................Debt......Monthly.. .APR
CC1............................200.......8........ .39.9
CC2 ...........................250.......10........49. 9
Loan 1.........................3500......150.......49.9
Overdraft......................250.......12....... .NA
Next...........................480.......25....... .25.99
Bank Loan......................6000......200.......11.2
Furniture......................2000......98....... .0
Parent.........................1360......100...... .0
Catalogue......................170.......40....... .0
Loan 2.........................3500......335.......103. 8
Total unsecured debts..........17710.....978......-

Monthly Budget Summary
Total monthly income.................... 1,720
Expenses (including HP & secured debts). 892
Available for debt repayments........... 828
Monthly Unsecured debt repayments....... 978
Amount short for making debt repayments. -150

Lets be clear - this best case SOA basically assumes you pretty much transform you life. You clear those PDLs in full this month. You give up smoking straight away, you stop buying any new clothes, you reduce your entertainment budget to £100 and learn to cook for yourself so your groceries will be £150 a month only AND you get your £5k p/a promotion. And it assumes no holidays, haircuts and no unexpected costs/expenses ever come up.

And after all that – if you can achieve it – you are still short by £150 a month.

I honestly can't make this any clearer.

Assuming you do still feel this is achievable, then you will need to consistently clear at least £150 or more in either additional overtime - or from your boyfriend by my reckoning. Not occasionally - consistently. And for each £1 over £150, that will enable you to pay off £1 of your debt per month. You will need to live like this (a pretty sparse existence - probably difficult for even an experienced MSE) for quite a long time and very carefully pay down your most expensive debts first. And you need to cut up all your credit cards.

If you can’t get this pay rise AND £150+ of additional income from somewhere then none of this will be achievable really.

Can you see now why I am suggesting you need to contact Debt Line and start tackling this differently? Are you saying you think you can really live like this and then after everything, still not actually be able to make ends meet?

StrugglingYouth

Lemonsqueezer78 wrote: »

...said many things you need to pay attention to.

Please take this advice. Do the math. Your current 'method' of solving your debt problem wont work. You are past the point of 'cutting back' will sort it out. Way past it infact.

Please speak to an organisation like StepChange or the debt helpline on the first page.

All the people of MSE can do it offer advice, you are the only one who can fix it.

Lemon has done the math for you. Heed the advice or you wont stop spiralling downwards.

EssexHebridean

Just another one echoing the above really. Please PLEASE take the advice. You honestly can't handle this on your own. If you carry on as you are you WILL end up bankrupt, and then your dreams of getting a mortgage are put on hold for a good long while...

Oasis10

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Pixie5740

So the only way you can meet your minimum debt repayments is to borrow more money using credit cards? :think:

What happens when you reach your credit card limits and nobody else will lend you any more money?

As you've quite rightly pointed out you can't snowball because there is no surplus. Optimism alone will not get you out of this debt hole. You need to take action now by contacting one of the debt charities. What's the alternative? Living at home whilst not contributing anything towards the household waiting for your debt situation to implode?

selloptape

Hello Oasis,

The worry is that you increase your borrowing by living on credit card each month and last month took out PDLs so it feels to posters as if your debt is escalating. You might be making your minimum payments but this is a drop in the ocean if you're increasing borrowing. If you call a debt charity they can help before the balance tips and you can't afford those minimum payments.

Have you done a future calculation to show how much you'd be paying back in six months time if you carried on borrowing more each month? Might be a wake up call.

Good luck

crazy_cat_lady

I think that you're getting yourself a bit frustrated because people aren't saying what you want to hear. It doesn't matter how many times you ask, the situation as it is now won't change and you are in trouble financially. If your standard dd's etc each month total up to £1374 and you bring in £1450 then you have very little for day to day living and I expect it's soon sucked up in day to day life.
Did you know that you can go onto the Stepchange website and enter all of your information anonymously - then they will give you their opinion on the best solution. May be worth considering if you don't like the advice you're getting here...