Advice needed before I lose my mind!

Welshie28

Hi all, new to this site and help/advice is very much needed.. It'll be a long one (I warn you).
Back in 2012 I was very much debt free, however I am now £22,000 in debt which is scary to say the least.
HSBC Loan - £16000 (£520pm)
Hitachi Loan - £5000 (£181pm)
My Brother - £1000 (£100pm
I currently live with my parents, brother and my 1 year old, not only do I need to move out soon due to lack of space but I have this debt around my neck which I don't believe I will ever be rid of. I come from a family where I spend like my mum has done in the past and where my dad saves and saves and knows about my debt but doesn't know how bad it actually is. I am SO ashamed for getting in to this situation & don't know where to turn.. Hence why I'm here. I've read up on DMP's and IVA's but am to scared to talk to anyone, the fact an IVA runs for 5 years puts me off as I only have 30 months left on my debt, and a DMP puts me off as that would last much longer also. However, I really do need to start renting a place (have no option) but is there even a chance I can do that while being in all of this debt? I've never missed a payment or even had a late payment so this is why it's scary for me to now be asking for some advice. I currently owe £500 in payday loans and my car insurance is due next month which is also £500, the only way I can possibly afford either of them is to either contact hsbc to ask them for a repayment break for 2 months or to miss the loan payment completely? Does anyone have any advice on this? Below is my income and expenditure:
Income from job - £850pm
Income from tax credits - £830pm
Total - £1680pm

Hsbc loan - £520pm
Hitachi loan - £181pm
Brother - £100pm
Childcare - £270pm
Phone bill - £50pm
Lodge - £120pm
Petrol - 160pm
Food & baby supplies - £50pm
Payday loans - £60pm
As you can see, my outgoings are ridiculous! I honestly have no idea how I will cope with this for another 30 months.
Regarding the repayment breaks from hsbc for 2 months, does anyone believe they will allow this if I tell them I need a break due to having to pay car insurance etc?

Any advice or help will be very much appreciated. I really am at my wits end

elsien

Without wanting to sound unsympathetic, if you've managed to pick up this level of debt while living at home, being able to afford to rent with all the additional costs doesn't sound very realistic just at the moment.
What were the loans for, initially? Specific items or ongoing monthly overspending?
On first sight, your outgoings might not be correct, as there's nothing in there for clothes, birthdays/christmas, any social activities, car maintenance etc.
Try doing a fuller SOA which might help to show where your money is really going as opposed to where you think it might be. If that makes sense.
Also do you have APRs for the loans, and is there any possibility of shifting any of it onto an interest free credit card for a bit? (Only if you don't spend any more on the card, obviously.)

matchboxfull

Can you pay the car insurance in monthly installments? This will incur an apr, but a lot of people do this. Paying insurance annually can wait until you're in a better financial position.

With regards to the other issues, it would be helpful if you could post an soa. Hopefully somebody will be along with a link in a minute (I'm on a tablet).

elsien

Bumping for more suggestions.

Kitten868

What is this debt for? I don't know what could cost £22k in 3 years. Is it a car? If so sell it!
Moving out is definitely a good motivator. Could you qualify for council housing where you are?
Adding payday loans to this is not going to work. You will be in this situation over and over.
I reckon you should buy the car insurance monthly too so you can factor it in monthly in your budget easier. Pay off the payday loan this month with cash and don't get one again.
You can get out of this but it'll take time

fatbelly

'I only have 30 months left on my debt' - 30 months and it's all paid?

Your income is £1680 per month - have you included child benefit?

Your outgoings are not ridiculous at

Brother - £100pm
Childcare - £270pm
Phone bill - £50pm
Lodge - £120pm
Petrol - 160pm
Food & baby supplies - £50pm

Total £750 but nothing for car tax, insurance, maintenance; clothes

On your figures your monthly payments are affordable:

Payday loans - £60pm
Hsbc loan - £520pm
Hitachi loan - £181pm

Total £761

If you move into your own accommodation before the debts are paid off then you will of course pick up more expense: rent, council tax, tv licence, elec, water, gas. In fact you could end up with very little surplus income and you would be in DMP or maybe DRO (debts <20k, surplus<50 per month, car < £1000) territory. So there's still a way forward if that's what you need to do.

A credit check may not too good already as you have a lot of borrowing relative to income and the payday lenders will also show. You won't get a default until you miss 3-6 payments on the loan but one miss will show as a late payment.

For the immediate problem of car insurance have you checked Martin's guide and do you have Quidco/Topcashback accounts to buy it through? You may be surprised by how low you can get it. You could easily get £50-60 cashback which might equal 2 months instalments.

http://www.moneysavingexpert.com/car-insurance/

http://www.quidco.com

http://www.topcashback.co.uk

Welshie28

No, not for a car though I wish it was. Stupidly overspending, paying off other debts then taking out more & I have now learnt my lesson due to barely sleeping or eating through worry. I've been so stupid! I'm unsure where I'd even start with council housing to be honest. I don't qualify for housing benefit either.

Welshie28

Kitten868 wrote: »

What is this debt for? I don't know what could cost £22k in 3 years. Is it a car? If so sell it!
Moving out is definitely a good motivator. Could you qualify for council housing where you are?
Adding payday loans to this is not going to work. You will be in this situation over and over.
I reckon you should buy the car insurance monthly too so you can factor it in monthly in your budget easier. Pay off the payday loan this month with cash and don't get one again.
You can get out of this but it'll take time

No, not for a car though I wish it was. Stupidly overspending, paying off other debts then taking out more & I have now learnt my lesson due to barely sleeping or eating through worry. I've been so stupid! I'm unsure where I'd even start with council housing to be honest. I don't qualify for housing benefit either.

Welshie28

fatbelly wrote: »

'I only have 30 months left on my debt' - 30 months and it's all paid?

Your income is £1680 per month - have you included child benefit?

Your outgoings are not ridiculous at

Brother - £100pm
Childcare - £270pm
Phone bill - £50pm
Lodge - £120pm
Petrol - 160pm
Food & baby supplies - £50pm

Total £750 but nothing for car tax, insurance, maintenance; clothes

On your figures your monthly payments are affordable:

Payday loans - £60pm
Hsbc loan - £520pm
Hitachi loan - £181pm

Total £761

If you move into your own accommodation before the debts are paid off then you will of course pick up more expense: rent, council tax, tv licence, elec, water, gas. In fact you could end up with very little surplus income and you would be in DMP or maybe DRO (debts <20k, surplus<50 per month, car < £1000) territory. So there's still a way forward if that's what you need to do.

A credit check may not too good already as you have a lot of borrowing relative to income and the payday lenders will also show. You won't get a default until you miss 3-6 payments on the loan but one miss will show as a late payment.

For the immediate problem of car insurance have you checked Martin's guide and do you have Quidco/Topcashback accounts to buy it through? You may be surprised by how low you can get it. You could easily get £50-60 cashback which might equal 2 months instalments.

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Yes, child benefit is included in my monthly income. I also just looked on the car insurance link which was very helpful, thank you. In regards to car tax, I pay that 6 monthly at £80, insurance was paid off in full last year at £500 however would be £50pm monthly this year I believe. Maintenance for the car is not often so I'd say £100-£150 a year as for clothes around £20pm. Living with my parents is obviously a help however I can't stay here much longer due to lack of space, my little boy is 19 months old and needs his own bedroom. I struggle to live on what I live on as I also help my partner out from time to time with food, part rent etc. He has struggled for over a year to find any work due to his location and lack of public transport.

fatbelly

Welshie28 wrote: »

Yes, child benefit is included in my monthly income. I also just looked on the car insurance link which was very helpful, thank you. In regards to car tax, I pay that 6 monthly at £80, insurance was paid off in full last year at £500 however would be £50pm monthly this year I believe. Maintenance for the car is not often so I'd say £100-£150 a year as for clothes around £20pm. Living with my parents is obviously a help however I can't stay here much longer due to lack of space, my little boy is 19 months old and needs his own bedroom. I struggle to live on what I live on as I also help my partner out from time to time with food, part rent etc. He has struggled for over a year to find any work due to his location and lack of public transport.

Your renewal quote is not likely to be the cheapest option.

Sounds like you're moving out.

Maybe do a full statement of affairs when you get in your new place and remember to include all those bits. You can also pay road tax monthly now.

Teacher2

I think you should come clean to your parents about your level of debt and ask for their help in getting you solvent. You cannot afford to move elsewhere for the mean time so maybe they could let you live rent free for a while as long as all of your saving goes towards paying off the debt. Perhaps your brother would agree to defer his repayment until he was last in the queue? And, perhaps take the odd amount off in lieu of birthday and Christmas presents?

As for needing more space for your child, you simply cannot afford an independent place while you owe so much. Moving out would add exponentially to your costs as others have pointed out above.

Can/does the child's father contribute towards his keep? Perhaps he could take responsibility for the childcare costs of £270 a month while you used that sum to repay what's due on other loans?

I certainly agree with the commenter who suggested shopping around for car insurance and going over to monthly payments. And with paying off the payday loan first and never taking out another one.

My advice is to swallow your pride and come clean to as many sympathetic people as you can and get them on board to help you sort yourself out.

Good luck.