Debt advice needed, feeling scared. SOA posted

mica2

HI all. First post on MSE.
I have been sliding further and further into a mess and I need help. It all began when I quit a stressful job a few years ago and ended up in a low paid job surviving on my credit card to get by. I also have an art business and as work was picking up I was planning on paying off my credit card with each commission, but my job situation meant this was not possible as I wasn't earning enough so I ended up using the money I made instead of paying off my card.
I also have been in an emotionally abusive relationship which has played a part in my spending habits: treats to make myself feel better and holidays after going through a traumatic few breakups. I am free now but the debt is something worrying me a lot. I can't believe how much it has spiralled so quickly.
I have switched some of the debt to a 0% balance transfer but there is still a huge amount accumulating interest on my other cards. I also have a different job now which pays more but now I have a long commute and have to pay £146 a month on travel. I live in London, have a shared ownership flat but am worried that I can no longer afford to live here. I also have over £800 to pay in rent/service charges even though I've never missed a payment (they have screwed us over with maintenance charges) but I cannot afford to pay it off at all. I am currently struggling to survive and have to use my credit card to afford my travelcard.
I want to be able to work out a budget that leaves me with enough money to live on and not having to keep relying on my credit card. I shop at Aldi and plan my weekly meals so I'm not sure where else I can reduce my spending. I have joined a sports group and it costs me about £15 each week to go but I really don't want to give it up or my gym as they are helping me with depression and getting me over the trauma I've been through (I can't go into detail what happened but it has been the worst time of my life). I currently pay my mortgage to my mum as she helped me purchase my flat share so I might be able to hold off paying her if it means I can cut down some debt. I also have a huge tax bill I'm paying off monthly (as I wasn't expecting it so hadn't saved) plus monthly counselling.
Any advice welcome but please be gentle.
Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1415.6
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1415.6

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 514.58
Management charge (leasehold property).. 0
Council tax............................. 82.67
Electricity............................. 30.36
Gas..................................... 0
Oil..................................... 0
Water rates............................. 16
Telephone (land line)................... 0
Mobile phone............................ 12
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 25.7
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 146
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 6.41
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 60
Holiday................................. 0
Emergency fund.......................... 0
Gym..................................... 20
Counselling............................. 90
Mortgage payment to mum................. 100
Self assesment Tax payments............. 100
Total monthly expenses.................. 1353.72


Assets
Cash.................................... 0
House value (Gross)..................... 35000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 35000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................10420.....219.......11.9
Barclaycard....................4184.74...130.......17.43
Post Office CCard..............2235......0.........0
Lloyds credit card.............1680.43...31.77.....10.94
Total unsecured debts..........18520.17..380.77....-


Monthly Budget Summary
Total monthly income.................... 1,415.6
Expenses (including HP & secured debts). 1,353.72
Available for debt repayments........... 61.88
Monthly UNsecured debt repayments....... 380.77
Amount short for making debt repayments. -318.89

Personal Balance Sheet Summary
Total assets (things you own)........... 35,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -18,520.17
Net Assets.............................. 16,479.83

Wimbrel

More qualified people will be along soon with better advice than I can give but I wanted to say congratulations on taking the first step towards sorting this out. It can and it will get better and there will be plenty of support along the journey.

chevalier

Welcome to the boards. My comments are in blue.

mica2 wrote: »

HI all. First post on MSE.
I
Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1415.6
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1415.6Any way of upping this via selling on ebay, selling broken gold, doing surveys, getting second job?

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 514.58 i take it this is rent for the bit of the property you don't own with the mortgage?
Management charge (leasehold property).. 0
Council tax............................. 82.67 have you asked to pay this over 12 months, would even out your monthly costs a bit.
Electricity............................. 30.36
Gas..................................... 0
Oil..................................... 0
Water rates............................. 16
Telephone (land line)................... 0
Mobile phone............................ 12
TV Licence.............................. 0 no tv? also i gather if you watch net flicks or something now you need a tv licence
Satellite/Cable TV...................... 0
Internet Services....................... 25.7 this seems pretty high unless it is a bundle with a mobile phone or phone?
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 146 do work do that loan thing where they take it out of your salary over a year, so you can pay for your travel up front?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 6.41
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 60 maybe just for now this has to go and you use your gym membership more?
Holiday................................. 0
Emergency fund.......................... 0
Gym..................................... 20
Counseling............................. 90 I take it you can't getting this on the NHS as being a victim of crime? ie abusive relationship?
Mortgage payment to mum................. 100
Self assesment Tax payments............. 100
Total monthly expenses.................. 1353.72


Assets
Cash.................................... 0
House value (Gross)..................... 35000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 35000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................10420.....219.......11.9
Barclaycard....................4184.74...130.......17.43
Post Office CCard..............2235......0.........0
Lloyds credit card.............1680.43...31.77.....10.94
Total unsecured debts..........18520.17..380.77....-

any chance you can get barclay card onto a zero balance?
Monthly Budget Summary
Total monthly income.................... 1,415.6
Expenses (including HP & secured debts). 1,353.72
Available for debt repayments........... 61.88 :j
Monthly UNsecured debt repayments....... 380.77
Amount short for making debt repayments. -318.89

Personal Balance Sheet Summary
Total assets (things you own)........... 35,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -18,520.17
Net Assets.............................. 16,479.83

the good news is that you do have a small surplus after all income and expenditure have been planned in. I note you have no car costs and am assuming you don't have one. I am concerned you have no buildings insurance. How does that work as I thought you had to have it for most lenders to grant you a mortgage.

The fact that you do have a surplus means that you could do a Debt Management Plan (DMP) from a non fee paying company such as Stepchange /Payplan. you would still pay off your debts but the interest and charges may be frozen so that it is easier to do with less money.

If you go on to the Stepchange website they have a debt remedy tool which gives you an indication of what might be your best solution.

good luck
chev

ani*fan

Hi there :hello:

Welcome to the board! You have made the most important step in asking for help.

At first glance, you seem to have missed out from your soa your £15 per week sports group and your £800 debt for rent and maintenance charges. When is your tax bill paid up, or is this an ongoing expense? Like chev, I'm also concerned that you have no buildings insurance. Also, you have missed out a monthly payment for the post office credit card. All of these things need to be added so we can know what's what with your budget.

Trying to find £318.89 a month to survive cannot be easy and your budget looks mostly quite trim to me. I'm guessing £318.89 is roughly how much the cards are increasing by every month. You need to get them all on 0% as fast as you can. Yes you could go to step change if you want, or you could also try to deal with it yourself. I'd say do whatever works for you and whatever you feel most comfortable with. Step change has worked for lots and lots of people on here who all say the relief is enormous after they've contacted them.

If you want to try and figure it out yourself, I'd give yourself a time frame and review your progress often. You need to see any changes you make having an impact and the first thing is to stop the debt from increasing and get yourself solvent. That is step number one.

A few ideas to start off. Do you have things to sell? Are you familiar with eBay and gumtree? Get rid of all your clutter by selling it on, as fast as you can, for the most amount of cash you can. You need to make up the deficit you need for bill payments really quickly.

Can you get a second job? One evening or weekend day a week?Something that gets you out and about might help with your low mood.

You need a free counsellor. There are some around who will see you weekly, if that's how often you go. Do some research online, I know it will be a shock to change but you can't afford this right now.

You need to cancel you entertainment budget. You can't afford it but there are loads of things to do for free. Again, check online what's happening locally in your area.

Cancel the gym. The reason it helps is because of feel good endorphins from exercise. You can get the same feeling from walking, for free. Even better, get a bike from free cycle and start cycling to work. Would that be possible? How far is it? Your travel pass expense is a killer and without it you would be in a much stronger position.

Does your mum know your position? What would happen if you had a 3 month break from paying her? Speak to her about it, she might be ok with that.

If you made all of these changes, then you would be solvent and have money to overpay the cards. It looks pretty difficult, but I would say don't forget the power of the snowball. Once you're solvent, once the cards are on 0% and once you have made some changes that you will need to stick with, things start to get better almost immediately.

Let us know how you go. Best of luck.

AFx

[Deleted User]

chevalier wrote: »

also I gather if you watch net flicks or something now you need a TV licence

No you don't.

A TV Licence is only required for watching/recording live broadcasts, and catch-up from the BBC.

Other catch-up services (ITV Player, All4, etc.) and other on demand services, such as Netflix, do not require a licence.

ETA: Question mica2.

Why aren't you making any payments on the Post Office CC?

mica2

Hi all, Thank you for your incredible help.
Just wrote a huge reply which got deleted!! So forgive the blunt style..
Anyway, to explain a few things:
Buildings insurance is done through the housing association yearly, I can't remember how much I think around £25.

I omitted the £800 I owe them as I wanted to find out how much I could afford to pay them back.

I have only just opened the Post Office card and have yet to receive a bill.

The travelcard scheme I hadn't thought of but think I can do that, great suggestion.

I wish I could cycle to work but it is just too far and not a nice route. I just thought though I could cancel my gym membership and buy a second hand indoor cycle trainer so I can do workouts still on my bike.

The second job is a good idea, although I don't know what as I don't want to do something that'll just depress me more. I am looking into something that pays £30 for a saturday running around for an event that is fun and would get me out meeting new people. I also have a few paintings I can try to push for sales.

The sports group £15 a week is included in the entertainment budget.

Counselling: I was seeing a free counsellor but they abandoned me and I didn't hear from them for weeks and got fed up waiting. So found my own. I shopped around for a cheaper one but none were as helpful as this one and I think it's worth paying the extra if it helps my mental health. I'm not tied to seeing so can go as and when I need. It's really helped seeing him.

If I go through Step change, is it something that means I would end up with a mark on my credit score for 6 months? Really don't want that.

the last thing is the Barclaycard. I want to transfer the full balance to 0% but now I already have 3 cards and each new card only has a small 0% limit, is there a limit to how many new cards I can apply for? Or is there a way of transferring that much money to 0%?

[Deleted User]

mica2 wrote: »

I have only just opened the Post Office card and have yet to receive a bill.

£2235 spent, before the first bill arrives.

Is it a BT?

Pixie5740

No you don't get a "mark on your credit score for 6 months" using Step Change or one of the other debt charities. You don't have a universal credit score and none of the scores made up by the credit reference agencies are used by lenders. If you go for a debt solution such as a DMP then when you default your accounts those defaults will remain on your credit files for 6 years.

There isn't much to cut from your SOA (I completely understand wanting to keep the counselling going) and it sounds as though there are a couple of things missing from the SOA so unless you can increase your income by over £300 a month you're just fiddling around with the cutlery. You might need to look at a DMP, DRO, IVA or bankruptcy depending on your circumstances. Step Change have an online debt remedy tool you can plug some numbers in to find out.

mica2

Thanks. I will get in touch with Step change then. I was thinking first I want to find out if there's a way of transeferring the £4k from my credit card to 0% balance transfer? I managed to transfer £2.5k tot he post office card but should I just keep applying for new cards or is there one with such a limit?

mica2

Also I was contacted yesterday by an employment agency that they have a job for me. It's nearer to home and I'd be able to cycle to work and it's more money so i could pay off everything quicker! Could be a better solution