what's the worst you have heard of?

mmyers80

I am currently helping my brother sort out his finances. he owes 85K in unsecured debts on a salary of 50K. He is in a mess. We are planning to speak to Stepchange this week. He is 28 years old!

I don't have any debts apart from my mortgage so I have never been in his position. He reckons that he knows other people who have debts of a similar to but I don't think I know anyone who owes such a huge amount. I am still trying to establish how his debts reached such a level

Is this sort of debt level common and is it fixable on his salary of 50k? I cannot offer him any financial support.

sourcrates

Hi,

All too common unfortunatly, many people on this forum are repaying 50/60/70k plus, usually stems from too much credit in a persons younger years, stays with them into there 30's, they try to consolidate these debts, get into even deeper trouble, then have to look at more radical solutions, after, hopefully, seeing the error of there ways !!

That's today's credit driven society we live in, and it's a pretty damm poor reflection on the human race if you ask me.

enthusiasticsaver

Unfortunately all too common. There is a sad acceptance that credit is necessary to live today and a reflection on today's society that many people want instant gratification rather than the discipline of saving and waiting for things they want. Bad financial education and ready credit available makes it a potent mix which often leads to disaster.

Elsewhere

My daughter (like the rest of our family) has always been very careful with her money. She is now 32, has saved £100,000 and is about to buy her first house outright.

dancingfairy

People who earn a lot are able to borrow a lot. He earns a decent amount so there should hopefully be a lot of money being frittered away/ spent on luxuries which can hopefully be curtailed.
Part of the problem may be either trying to keep up with people who earn more and/ or trying to demo strategy to people their wealth ( ie expensive e cars etc).
It's pretty easy to get in a mess, you buy a few things on a credit card and mean to pay it off at the end of the month, then you buy a few more things, and it gradually creeps up each month, then you work hard so treat yourself to a new car/ laptop ( insert expensive items of choice), then the washing machine goes/ roof leaks all the while you are buying new suits, going out to lunch everyday, drinks, leaving dos, etc etc. Debt gets piled on debt, the lenders throw more credit at you as you're such a valued customer. Interest builds on interest builds on interest until one day you realise you owe a huge sum of money. It's easily done.
Like I said though hopefully with a decent salary hopefully he can make some changes and knuckle down and start paying it off.
Df

Kitten868

The main thing is try not to judge him too harshly and be positive. Find a way to make him want to take it on. I'm guessing he's there because he's come to you for help. There's people here with far higher debts that can rapidly pay them off, theres people here with small debts that struggle as their incomes are too small to pay back fast enough. I think the first thing to do is go through all of his last 3 months of statements and find out what he is spending on. It can make for shocking reading. Then you can put together an SOA and find places you can cut back on.
Good luck with stepchange x

mmyers80

Elsewhere wrote: »

My daughter (like the rest of our family) has always been very careful with her money. She is now 32, has saved £100,000 and is about to buy her first house outright.

Thanks for posting however I am not sure that it is supportive or appropriate for this particular thread. I posted asking for advice regarding my 29 year brother and his 85K debt.

I am really pleased that you daughter has made such positive financial choices. I wish my brother had... but he hasn't.... so to show him an example of someone who has 'done good' might just tip him over the edge!

I am sure that there are threads and forums for success stories but i am afraid that this isn't one of them.

mmyers80

enthusiasticsaver wrote: »

Unfortunately all too common. There is a sad acceptance that credit is necessary to live today and a reflection on today's society that many people want instant gratification rather than the discipline of saving and waiting for things they want. Bad financial education and ready credit available makes it a potent mix which often leads to disaster.

This is very true in my bros case. He has lived the single high life, eating our, nights out drinking, lots of girlfriends etc. He has had a great time but now has an 85K bill for the privilege.

Thank god he has a good job! I am trying to be non judgemental and supportive and he is showing real signs of wanting to sort out this mess.

northerner999

mmyers80 wrote: »

Is this sort of debt level common and is it fixable on his salary of 50k? I cannot offer him any financial support.

Definitely not uncommon, and I have seen many on here of higher levels and recently one was £100k+. The average family now has £13,250 in unsecured debt according to figures released last week.

That last figure means that while I best myself up trying to pay off my credit card, even at my highest total debt I wasn't anywhere the average for the country. That means lots of people are way above that £13k figure. For me I realised managing the debt and repayments was unsustainable even at my lower total, and realised I didn't need all the fancy things to have a fulfilling life.

Is it fixable? Absolutely. But he has to realise this is a problem and want to solve it. If you don't address the underlying cause - is it debt from an event or just general overspending - then nothing will be solved. There are people who come on here who have paid off large debts but once cleared end up in the situation again a second or third time.

Speaking to someone like, Stepchange is a good first step, they have a good reputation on here. I think you need to sit down with him and work out a true SOA of income v expenditure. Not what he wants to spend or thinks he is spending, but what he is spending.

Stepchange will advise if they think you need to go down a specific route, but, although I don't know where you are to take certain regional living costs into account (I pay £340 PCM on my mortgage for a property that would cost at least £1k PCM to rent in London), there will surely be plenty of fat to trim from it in order to make it a budget that allows him a reasonable living and repays his debt at an affordable rate. Of course, your brother needs to realise that the coffee he used to grab in town or subscription to satellite TV may need to be sacrificed.

Once you have got debts collated there are ways to manage them most effectively, too. Stepchange will no doubt advise on this but things like the snowball calculator can help advise how quickly he can expect to pay off the debts. Anything charging interest should be priority, or shifted if possible to a lender who charge less/nothing in interest (good offers at the moment, but depends how much credit he can access to utilise these).

To summise, people with far greater debts have sorted them. Coming here for advise was a good move, and please don't be too harsh on him so long as he realises this needs sorting. Clearing such debts will be a long haul and you will feel real progress with easy early wins - moving debt to save interest, repaying, cancelling expensive expenditure. It is six months down the line when he will need your support to keep him going as that is when it becomes a long haul, he has to maintain his resolve for several years and if he is lucky has a loving sibling by his side.

GwylimT

One of my brothers has over £100k of unsecured debt, at the moment he is spending a month in Dubai, so he has added a good chunk to his debt.

Only certain things are good enough for him it seems, he leases a brand new A6, he rents a huge house with a swimming pool. He has a cleaner, an ironing person, and a gardner. He throws lots of parties at his house with huge amounts of booze and expensive catering, I don't go as I don't ageee with his financial stupidity.

He is a year younger than me, he earns around £43k before tax, he doesn't have any form of pension. He sees himself as some rich playboy, sadly he uses this to attract the wrong sort of partner, who on discovering how much he actually earns they all leave.

Thatsthespirit

Elsewhere wrote: »

My daughter (like the rest of our family) has always been very careful with her money. She is now 32, has saved £100,000 and is about to buy her first house outright.

Why post this? In what way, shape or form is this helping the OP?