Trying to stop another panic attack

TheEms

Sorry if this turns out to be long. I have had my head in the sand for ages about my finances which is probably why I hate talking about money so much and don't tell people when I can't afford something, I just put it on a credit card. I have built up a hideous amount of debt that makes me feel sick whenever I think about it.

Last night I decided to open all of the mail which has sat in a corner of my living room. I had been ignoring the mail pile for a while, I impulsively left my job in November with no other job to go to. My job was making me depressed and consequently ill and I was about to look at being signed off with stress so I decided to leave before my notice period changed from 1 week to 3 months! After that I had been doing limited temping work as there was a lack of temping jobs. I had hardly any money to tide me over and I started only paying certain credit cards every month and defaulting on payments until I had some more money. I have 4 credit cards.

I started doing anything I could to make ends meet until I could find a permanent job. I have be selling things on eBay, I tried to get a couple of retail jobs to help (however the temping paid more and the retail hours made the job availability limited), I was doing car boot sales and I even took jobs cleaning and ironing.

I now have a permanent job and I have my first full monthly salary going into my account at the end of this month and so I decided to open my mail. This went hand in hand with a full blown panic attack, lots of crying and a call to my sister. I guess this is what everyone calls the "light bulb moment" and I decided that I now need to get my situation under control. I have hit a really bad situation with one of my credit cards and the rest were either just past due or due before my next payday.

I called all of my credit card lenders today. I told 3 of the 4 that I would be able to pay them on my payday and then the BAD credit card has agreed for me to have a repayment plan to clear the debt. I need advice as to how I can become debt free, I seem to always have been in debt for the last 15 years and I can't seem to manage my money which means I spend more than I earn with little to show for the debt.

This is my current state of affairs as it stands (possibly too much detail?):

Owing:
Credit Card 1 (Barclaycard) - £9,284.08 (18.9% interest)
Credit Card 2 (Debenhams) - £3,185.15 (interest TBC now that this is with debt recovery unit)
Credit Card 3 (House of Fraser) - £1,256.95 (31.0%)
Credit Card 4 (Bank of Scotland) - £2,536.69 (27.95%)
Overdraft on main account - £1,800 (charged at £1/day)
Overdraft on secondary account - £300 (charged at £1/day)
Loan from my sister - £1,200 (no interest)

Income:
I earn £27,500 a year. I am yet to see what this translates to properly as a monthly after tax take home, but an online calculator tells me it will be close to £1,822.27

Monthly Outgoings:
Mortgage - £512.62
Council Tax - £88
TV Licence - £12.12
Electricity - £87
Mobile Phone - £40
Factoring fees - £60
Broadband - £30.73
Travel - £64
Food - £200
Account Fees - £62
CC repayments - £840 (minimum payments although this month I have to pay £988.75 to get up to date)

This stretches my budget so I will also be continuing my eBay selling and car boot sales to try and make up the difference.

I am still massively angry at myself for getting into this situation. I am trying to move on and stop beating myself up so I can start to pay off my debt and hopefully down the line be debt free. I will be scouring all the tips on this forum, but wanted to get my situation down. It is horrible to see it all laid out and I'm not sure the best way to start, any advice would be good!

mum2one

didnt want to read and run, but just a quick thought - youve done the hardest step and that is facing upto the debt.

The account with the DCA - generally will be 0%

It might be worth contacting stepchange - help with a budget and a repayment plan to make everything affordable xx

redpete

TheEms wrote: »

... state of affairs as it stands (possibly too much detail?):

Probably not enough detail. If you use the recommended SOA tool it prompts for a full expenditure. Do you never spend on going out for an evening, never buy clothes, or pay for a haircut. ..
Even if that is your full expenditure it isn't stretching your budget, it breaks it. I reckon it shows £2000 outgoings on £1800 income. You need to contact the likes of Stepchange to best understand your options.
The mobile phone costs more than it should for someone in your situation, any opportunity to change the contract?

Kitten868

Please speak to stepchange. They will give you advice as to how to pay this back at a rate you can afford. SO no need to take on more credit.
Your credit cards are horrific for interest. Stepchange may be able to arrange your creditors to freeze interest. You'll get a fixed picture of how long it'll take to fix this and you'll get piece of mind knowing this is all in hand. Plus any eBay money/extras can go towards paying your sister back
You can do this x

anna_1977

Hi, I would recommend completing the SOA that is on this site, you seem to have items such as insurance & water missing.
I would also, like other suggest contacting Stepchange and trying to sort out a plan with them, maybe a DMP?
Good luck

TheEms

Thank you for all the feedback. In terms of things missing form my expenditure, Water is in my Council Tax, Buildings Insurance is in the Factoring Fees and I don't have contents, I generally don't buy clothes anymore as I can't afford it and I cut my own hair (which looks crap but most people are nice enough to call it edgy!). My boyfriend has zero debt and earns very little so we don't tend to go out and when we do it comes out of weekly food money. My phone contract still has just over a year left on it before I can cut it down to sim only.

I am going to contact StepChange, If they can help with freezing the interest and help me work out what to pay off first etc that would be great.

I am really lucky that my sister is in no rush to be paid back and we have a plan for renting out my flat over the summer (I live in Edinburgh and lots of people do this for the festival) and living with her. The money from this should more than cover what I owe her and leave me some extra to pay down some debt.

Thanks for the advice, I'm off to find contact details for StepChange!

Kitten868

You are doing the best thing. Even if they just tell you to stay as you are you will know you're on the right track. You're getting tailor made debt advice.
Let us know how you get on xxxx

TheEms

Thank you so much to everyone for their responses.

My situation currently is, for those interested or in a similar positions, I have contacted StepChange and I completed their debt remedy tool which gave me a recommendation of putting me on a DMP (debt management plan).

Before I can proceed with this I need to open a basic bank account and have my first full pay for the month. This means that my DMP will not be in place for about 4 weeks so I will need to make payments for this month (where I can) and then they can take over management for me. StepChange have advised me for this month that if I can't afford any payments to make at least a bit of a payment.

Thanks again for the help and support. I have now mentioned all of this help to a friend who I know also could use some advice!

:j

Kitten868

Brilliant. Well done you. There's a fantastic dmp support thread on here. Please go on it and see if there's any tips on there for you. I know some people like to make just token payments (£1) on the last pay before the dmp starts for an emergency fund. I have no experience of this so please go over to the thread xxxx

sourcrates

Don't pay anything till your arrangement is up and running, you need a bit of an emergency fund, in fact it would of been best to wait a few months and save a bit of cash up first.

People often rush into DMP's without saving up for any emergencies then panic when they happen.

Nothing will happen if you don't pay for 3/4 months.

TheEms

Thanks Sourcrates, I have already defaulted on a credit card and this makes me very nervous.

I have also just posted in the credit card forum that my work want to put me onto their credit card account so I can charge petrol and office supplies without getting petty cash every time, however I now am feeling panicked that this means I will get credit checked which I will fail. Do I need to have the humiliating conversation with my boss?