Lightbulb goes on...

protector

HI folks.
I had the lightbulb moment today after HSBC tried to hard-sell me into debt consolidation that, in reality, I don't need. They are refusing to budge on one of their mistakes though so I'm up against it. This is what turned on the lightbulb. I know I am capable of dragging myself out of this stupid situation with enough hard work and the right approach, hence this thread...

So, here's the state of affairs.



Monthly Incomings:

My salary - £2,400*

* However, this is an estimate. I work for myself as a draughtsman and they pay is decent, but unfortunately work has been a tad dry recently, largely my fault, but things are looking up.
A drawing fetches between £400 and £900 and takes between a day and we week to complete (pay not necessarily in line with time), on average one would take 2 days working at a good pace. All income is entirely subject to work coming in (which it seems to be) completion (working dawn-'til-dusk and a little either side if the need arises) and prompt payment by cheque. Clearance times may be an issue, but I might be able to work some kind of cash-for-cheque arrangement with someone.

Unfortunately this is also largely unprovable as I've been really off the mark and have no records to speak of. This will be another problem to face when I turn to the Inland Revenue to get my work/business above board (nothing more underhand than failing to register – I have no desire to add non-payment of taxes to the list of things I've got wrong financially – I'll have to take my slap on the wrist and be straight from there)


Total - £2,400.00



Monthly Outgoings:

Mortgage/Rent - £0 (living at home right now, my folks know I'm in a mess financially, so they are not asking for rent - something I'll be paying once in the black I think)
Phone - £15 (pay-as-you-go so not concrete)

There's nothing else regular, and pretty much all other outgoings are for leisure; and for the purposes of debt repayment, all leisure activities are on hold until I'm at least approaching the black.


Debts:
HSBC Graduate Current Account Overdraft* Balance £1,016.24 (Limit £1,500) at 18.8% APR
HSBC Graduate Personal Loan** Balance £1,934.60 at 4.1% APR flat rate. 14 month term extended to 16 months. 3 months to go.
Owed to Friend £500***
Owed to Parents £500
Owed to Brother £20****


* After a (somewhat unfunny) comedy of errors and being completely misinformed by the bank, this overdraft facility is to be closed completely as of the 21st of September.


** Due to HSBC making a stupid mistake and refusing to budge on it, this is now considered 3 payments in arrears. There were 2 arrears payments which were put onto an extension of the loan period as part of a “reage” (spelling? Pronounced re-age I think – hard to tell over the phone) plan. After the bank returned a payment on the 3rd of this month despite there being sufficient cleared funds to cover it (the stupid mistake), they are considering the 'reage' plan broken by me unless I can get funds in the account in time to meet the overdraft facility closure on the 21st of September.


*** There is a bit more I owe her but it isn't urgent and to be honest I'm not 100% on the amount either. I'll ask her what the full amount is, but her main aim was to help me out of a tight spot before the incidents that happened in points * and ** above.
EDIT...
I almost wish I hadn't asked. More than I thought.
For my share of a few things we bought together which is the "bit more I owe her" it comes to roughly £1200.
That is on top of the £500 I mentioned earlier.

She's just told me things will be fine for a while if I can give her around £150 to £200 to be cleared in her bank account by the 18th September.
She needs £100 from me fairly quickly, and a further £50 by the 18th, after that she will have been paid so the pressure comes off then - I just need to make sure I don't drag her down into trouble with her own bank for having the kindness and trust to help me out.
END OF EDIT

**** The guide did say include “everything you can think of”



So here's the state of play right now. (Trying to make it as “nutshell” as possible)


I'm losing my £1,500 overdraft facility on 21st of September.
I have a returned payment to my loan account still unpaid despite funds currently in the account (and there at the time the payment was due)
The options offered by the bank are to consolidate (taking a mark on my record with Experian and spending much more money through interest; or to have enough cleared funds in the account to cover the overdraft (basically get the current account in the black) before the overdraft closes on the 21st.
If I can manage the latter, the 'reage' plan they had set up will be reinstated and it should be plain sailing from that point onwards.

Truth be told the bank have been trying the hard-sell on me to consolidate with them, something I really do not want to do if I can avoid it.


Things become slightly complicated at this point...
I have some of friend's money in the account as available balance right now. That was the funds intended to pay the loan standing order at the start of this month. I've been told that there is no payment due until the 1st of November now, so despite my protestations, that one is considered as in arrears now.
The plan had been to make the payment that they returned (I made it, but they still returned it for reasons unknown to me – they still insist I didn't pay the funds in on time despite the bit of paper I have that says it was paid in plenty of time), and use the month of breathing room to get the account towards (or into) the black, pay off my more pressing social debts (specifically to “friend” so she can pay bills and so on) and carry on as normal from that point.
Now the overdraft facility is being removed (despite assurances it wasn't going to be before I made the plans I just briefly explained) I'm left with just over 2 weeks to clear the entire balance or make alternative plans.


For work I'm trying to finish before and after making this post, I'm due a payment of approximately £250 in the next day or so, which I will be splitting between Friend and Overdraft, she has to have money from me this week.
After that I have 3 basic choices.


Leave the rest of her money in my current account and use it to clear the overdraft (she's ok with this and said it is her preferred choice so long as I get other money to her this week)


Withdraw all her money from my account, return it to her and get her out of the picture for the time being.


Plan C (for Consolidate, or maybe some other workable scheme – be it the HSBC consolidation, another loan entirely or some other approach)


Ideally I would like to avoid the “debt consolidation” they are offering me as I don't need the extra negative mark on my credit record, I'm sure things look bad enough there as it is and I don't plan on making it any worse.
Right now though, I don't have the opportunity to check my records or the funds with which to do so.


Time is of the essence at first and my main priority is to clear the overdraft in good time.


Any advice with regards to a game plan for the very short term (overdraft) and/or alternative solutions for the overall picture would be greatly appreciated.
Alternatively a large gift of cash, winning lottery numbers for any of this week's draws, or some other silver bullet would be graciously accepted.


Thanks a million, now I'll just put together a signature and I'll be all set – work starts at about 2000hrs tonight and will carry on until I fall asleep or finish this drawing.

protector

Okay, I've just edited the original post to include some extra information.

Again - help/advice appreciated.

GettingThingsDone

hi protector - welcome to dfw! quite a long post and i haven't quite digested it properly, so i can't comment too much.

sounds like you need pay your friend at least the minimum she needs at the moment. all may not be lost with the bank - a carefully constructed letter may recover the situation there; somebody may be able to help you put one together. also, i don't think you get a black mark against you for taking a consolidation loan - even so, probably not a good idea anyway

gtd

protector

The guy giving me that hard sell earlier did say that my credit record (might have said "score") would be affected if I took the consolidation route he was trying to get me to sign up to today.
He only gave it a throwaway mention and seemed to try and slip it by unnoticed but mentioned (obligation to mention it I think) as he was talking very quickly. It pricked my ears up though.

If someone could help construct a letter that would be great.
All not lost how though? You mean with regards to the overdraft limit? If there is some way to keep it and go with my original plan to repay all my debts I think it would certainly be the best route from my point of view.


Oh - and for the record I just got a target to aim for.
I have dreams of sailing around the world - way out of all reason at the moment but I can start small - I've seen a boat I want and as of now I'm saving up for it!
I won't be buying anything until my finances are a nice deep black, but it certainly gives a bit of an extra spur to things when aiming for something higher than zero debt.

protector

Oh, and thank you for the welcome.
I know it is a long one (I can be a bit long winded at times) so digest in your own time.

Friend is priority #1 for me right now. Once she's past her next payday things become much easier though. Somehow it makes things much easier to deal with having someone tighten their belt alongside yours - especially when they are doing it without any actual need to (other than a good friendship that is).

She's a good'un.

GettingThingsDone

just off to bed, but thought i would let you know all debts/credit cards etc go onto your credit report - nothing special about the consolidation. it literally just lists all of your outstanding balances and whether you have missed any payments. its definitely worth getting it, just for future reference.

Jacks_xxx

Honey, you are in nowhere near a bad enough way to be talking about consolidation.

In my opinion as a very experienced debtor.

Have you played with the snowball at www.whatsthecost.co.uk? You give it all the details of your debts and it gives you a payment plan, how much it's going to cost you, and how long it'll take.

But my first suggestion is to gather all your financial stuff together and get yourself down the Citizens Advice Bureau. They can help you with the snarl up with your bank - and blow me down if the bank won't stop the hard sell once they see you've been clued up enough to get help!

Come clean with the tax people, and then work your !!!! off to pay your debts a la the Snowballs plan.

Simple huh? :rotfl:

Love Jacks xxx

(Who owed £90,000 just over a year ago, and whose debts didn't really seem to start going down until she stopped consolidating!)

protector

GettingThingsDone
So it would affect my record no more than getting a personal loan elsewhere and using that to pay off the overdraft and the loan?
Is there some kind of mark or note that gets made with regards to specific kinds of consolidation (I'm really new to all this).
Hopefully this will all be moot anyway as I (again) am pulling out all the stops to avoid this becoming a consolidation issue - I'd just like to know all I can before time in case it does come down to that.


Jacks
Thanks for that reply. I'm really not eager to consolidate if I can at all help it, and though I knew already it shouldn't be an option, that opening line really made me smile.

I've seen people mention snowballs on here but not used the site. I'll have a play when I knock the work in the head later on. I'm just talking things through with Friend right now and taking the odd quick skive to check on this thread.

I really don't have much financial stuff other than bank statements and the odd letter. There's the phone conversations but I'd have to recount them and (because this only became something resembling a serious issue this morning and I never thought to do it before then) I don't have records of times, dates and names from the calls.

I'll get down to the CAB this week if I can but what exactly should I take since I'm record-less with work stuff?


On the tax front - debating whether to come clean now or after the overdraft is paid off and I'm back on track. I really can't face the prospect of adding even more on top of this nonsense right now when things seem to critical from where I sit. Afterwards fine - I've done it wrong and am due a wrist-slapping, I'm not going to avoid that (not worth the risk of trying I don't think) - just questioning the sense in postponing the inevitable for a while.

Ideas?

Jacks_xxx

Hi again sweetie,

Re the CAB: Just take whatever paperwork you've got, statements and loan agreements etc - a print out of your SOA from here ,and then just tell them everything you've told us.

They can totally help and you'll be straight in no time because your numbers are relatively small in relation to your potential earnings.

And I forgot to say before - deffo look after your "friend" she sounds like a good 'un.

Love Jacks xxx

Adrasteia01

I think you really need to sort out the tax situation, and do a bit of research on how they'll react. I've heard of people going to jail for tax evasion or getting fined. That's not to scare you, but you really need to sort it out instead of putting it off. Note: I don't know much about the tax situation in the UK, so things could be different there.

protector

Don't think you could scare me about tax to be honest - I'd sooner deal with an aggressive bank than the Inland Revenue. Horrible bunch - institutionalised theft! (I really dislike tax despite the benefits it brings when not wasted)
That's another issue though...

I really do want to get this all (tax included) sorted soon. Any put off would only be until next month at the latest. Ideally I'd sort it now, but with things the way they are I'm really unsure I could handle a demand for immediate payment right now.
Will look into their likely reaction though - might make a difference.
Maybe mention that down at Citizen's Advice too.

I think a fine is pretty much inevitable. I just hope it isn't a huge figure - shouldn't be - but like you say, I'll look into it.