14k Debt - Age 24

trying2fixmymistakes

So here goes - I need help with the below...

I'm 24 years old and I have 14k debt. This is broken down into;

1x barclaycard with around 4K on it. Currently on a payment plan of £50/month
1x credit card with £1250 on it - making minimum payments each month of around £36

1x payday loan - Wonga - 200 pounds
1x payday loan - QuickQuid - 700 pounds
In the process of negotiating payment plans for both

S/O took out a loan in my name (I made the foolish mistake of clearing the aforementioned credit cards with said loan and then maxed them out again - lesson learnt) - outstanding balance 5600 pounds - 152/month payment to S/O account

Borrowed family money/interest free but needs to be paid as I've had far too long too pay it back and have not yet done so as I've been out of work until recently;
Borrowed money to s/o parents - £595
Borrowed money to s/o Aunty from help when moving with deposit/fees etc £3457

I currently earn £32k per year and have a small student/maintenance loan which means that my net take home is around £1950 per month.

My rent is 680 per month (I know I need to cut my outgoings generally) but my main question is should I explore an IVA, debt management plan or bankruptcy etc or should I attempt to snowball/consolidate/something along those lines.

I've tried several times to get consolidation loans etc but have been declined. I'm aware I'm at my credit/debt capacity for my salary but I feel sick and anxious at my current situation and I'm not sure the best approach to take.

Thanks for any advice

JHiggins91

Hi there,

Firstly, welcome to the forum, I'm not long on it and everyone is really friendly so in posting this you've done yourself a favour.

Secondly, I'm by no means an expert at all, and a lot more people will comment with better suggestions and points perhaps but I thought I shouldn't pass through without commenting after reading as your situation is eerily similar to mines.

I'm also 24 and my debt is hovering at around 13k. Most of my debt is a car finance deal which is a fixed payment each month and I know that your particular debts (that aren't family related) are accruing interest each month which would make it harder I suppose I just wanted to say don't give up.

Many of the folk will tell you the first thing to do is post up a statement of affairs, sometimes it's good to get a fresh perspective of your outgoings and that's exactly what we can offer if you post it up.

Sorry if I haven't been of much help, I just wanted to say don't give up, there's many people here with higher debts that have been obliterated.

Post up a SOA and take it from there

All the best,

John

gettingtheresometime

As already been said post your budget and people will suggest ways that you can reduce expenditure so that money is freed up to pay off your debts.

My initial feelings are don't get a consolidation loan.....you already gone down that road and you've fallen into the classic trap that many of us have also done.

My next feeling would be to get rid of the 2 payday loans first if only because they're the smallest amounts and probably costing the most in interest.

3rdly I would set up a standing order to pay off the 2 family loans....at least it shows you're willing to pay them back which is often a source of family arguments .

4th I wouldn't try to renegotiate your payment to your s/o.....I wouldn't be impressed if someone I took a Loan out for then tried to renegiotaiate repayments

minjara

I agree, having to owe my dad eats away at a conscience but that is not how any company would look at it sadly. They are family so therefore very low in priority to pay back. As harsh as it is, they will not be looking for interest or charge you any fees so they should be far down your list. I'm not trying to cause trouble, just I know that position and the sooner you can pay the company debts the better.

Kitten868

I have tried to answer you like 10 times. Blooming thing.
Anyway, I would say do token payments to family £5/£10 whatever you feel comfortable with. You're on a huge salary, especially for 24 and you can get this sorted. Do an SOA. Get an idea of what you're actually spending and where you can cut back and what you can pay back. You know what being unemployed can do so make the most of this chance to set yourself straight. Soon you'll be saving up for a decent car. X

Kitten868

Snowball definitely snowball you're not at DMP stage

National_Debtline

Hi there, welcome to MSE.


It is important to try and treat all of your debts fairly. All of the debts that you have described are a non priority debt and they all have the same rights to enforce the money owed - so make sure you treat them all fairly. Do your SOA (as the other posters have said) and post it here so people can have a look. It is difficult to know whether you should negotiate or consider some kind of refinancing without knowing how much disposable money you normally have.


You also need to protect your income. Move away from any bank that you owe debt to and cancel the payment authority for the payday loans (you can send this letter to your bank to do that - https://www.nationaldebtline.org/EW/sampleletters/Pages/Withdraw-your-continuous-payment-authority-from-your-card-issuer-%28sole-name%29.aspx). Good Luck,


Laura
@natdebtline

twiggy86

I would definitely post an SOA so that you can see where you're spending. I earn less than you (obviously don't know how your spending/bills compare to me) but I've managed to pay off nearly £8k in about 15 months with a little bit of focus and hard work. So I wouldn't think on first glance that IVA, bankruptcy etc is necessary (obviously this is based on limited facts).
The main thing that I would say I've learnt is that the little bits spent here and there (e.g. sandwich or bottle of drink from the shop, takeaways etc) really add up but equally the little bits paid of your debt also add up and can help make a dent!
Good luck.

greensalad

You're pretty much the same as me. 24 (nearly 25) with £11k.

Do you earn well? If so, then it's all about just keeping yourself in line and paying them down.

Things you can do:

- Keep a budget and stick to it. I put a weekly socialising/fun budget on a prepaid Mastercard and when it's gone it's gone. (It gets topped up Thursday and I'm already out! NSD's for me!)
- Shop around for good deals to transfer debt to. The key is TRANSFER. Close after transferring. I've just moved my current account to First Direct because they offer better OD interest terms

I would focus on setting out your monthly budget in the following order:

- Immediate obligations (bills, rent, travel etc)
- How much can you really survive off per week? (Groceries, socialising, beauty and medical etc)
- Leftover is debt repayment money

So let's say you spend £850 a month on rent and bills, £200 a month on groceries and socialising, you'd have £900 leftover for debt repayment. That means you can pay down pretty quickly!

You are nowhere near needing bankruptcy as long as you can meet your minimums.

I'd personally focus my attention on getting the payday loan companies out of your hair. Work out your minimums on the other debts, and then throw all your debt budget at payday loans. Close them down. With your salary, you should be able to do a frugal month/few months and get them gone.

After that, I'd focus attention on your highest-interest remaining debt. See if you can shift it to 0%.

Another point with owing your family, could you draw up a plan, sit down and show them what you're doing? And give them regular reports. They may be OK to stay off your back if they look at the impact you're making on other areas.

The key for me with debt repayment has been having a clear picture. I was very afraid of the numbers when I started. Then I started to revel in the numbers. I can't tell you how many hours I've spent tweaking my spreadsheet to watch how it snowballs through my debt repayment. Just this morning I worked out that if I sold X things I put on eBay then I could push my debt repayment over into a week earlier! Get everything laid out in front of you and you'll feel less worried.

enthusiasticsaver

Good news is that on your salary the debt should be manageable. I am assuming this was incurred from when you were out of work?


I would not go the DMP route but do as others have suggested. Post a soa and take advice on reducing outgoings as much as possible. If you have a take home pay of £1950 and rent is £680 I am assuming that you probably have a reasonable amount left over once your essential bills are paid? By essential I mean food, utilities, travel to work costs and a small amount of spending money. Snowball the rest to your debts. I cannot stress the following enough. DO NOT CONSOLIDATE. It is rarely the answer.


Whatever you have left over after the essential outgoings are gone allocate to your debts - preferably the most expensive first (payday loans?) and speak to your family members who you owe money to and come to a manageable arrangement hopefully interest free. Sadly if you are being declined for credit you are unlikely to get a 0% card to balance transfer the Barclaycard to so after the payday loans have gone that should be your next target. In a few months time when you are straighter you may then get a new card you could move the debt over to reduce the interest.


The main lesson is to budget and do not use credit cards and this forum is great for that. Save for things you need and want and think about where every penny you spend goes. Look for economies - packed lunch, coffee out only once a week and cook rather than takeaways. You are young and the debt is manageable relative to your income so you should get on top of this relatively quickly. Good luck.

dktreesea

I don't think you would be able to consolidate if you had outstanding payday loans. It's a good idea to get rid of the Wonga and Quickquid loans asap, even if it means living on £3 a day for a month. The interest on that Quickquid loan is accruing at over £6 a day (0.80% daily rate).


Short term pain for long term gain is the way to go with payday loans. It only means living like a pauper for a couple of months at the most but it will be worth it just to see the back of those two loans.


How about joining a thread like
Pay ALL your debt off by Xmas 2016!
Sorry, not sure how to post this as a link. It's fun to see the debt going down and other people's journeys can be quite inspirational too.


Don't go down the IVA route. With your kind of income you may not be able to anyway. And you'll ruin your credit rating forever. If instead you dump the payday loans as soon as you get paid, then start to make small overpayments on both credit cards, at least you'll be able to breathe and see your way through to paying off s/o's family.


Have you got any stuff that you could put on ebay or even sell off at a car boot? Even if all you got is £100, that would fund a couple of grocery shops over the month at Lidl or Aldi.