In need of advice please \ Josh

joshsmith11

[FONT=&quot]Ok, firstly I have read a lot of threads on this forum and I don't think my situation is that bad in comparison to others. However, I am now suffering from depression and would like some advice on how to proceed with my life and finances.

I am a 24 year old male, currently living at home with my parents. Around 8 months ago I suffered from rage and lost a substantial (to me) amount of money gambling. The gambling situation is now firmly under control and I will never make the same mistakes again. In order for me to see ends meat and to pay my bills, I took out multiple loans.

I am in full time employment (having been with the same company for nearly 3 years) and currently earn a net pay of £1,171.99 (after NI, tax and company pension) - I don’t have any money saved or tied up elsewhere.

My next month’s payments look as below and this is the basis for month upon month;[/FONT]

• [FONT=&quot]£100 board to my parents - ongoing[/FONT]
• [FONT=&quot]£50 phone contract until - January 2017[/FONT]
• [FONT=&quot]£145 car finance - (3 years left)[/FONT]
• [FONT=&quot]£70 Car insurance - until September 2017[/FONT]
• [FONT=&quot]£100 petrol - ongoing[/FONT]
• [FONT=&quot]£3 p/m – car tax[/FONT]
• [FONT=&quot]£250 paying girlfriend back for holidays/money lent - £2,000 outstanding[/FONT]
• [FONT=&quot]Football subs £25 p/m[/FONT]

In addition to the above I also need to pay £100 to my mum (money owed). Also I have a lot of birthdays and Christmas plus other miscellaneous which also cause outgoings.
[FONT=&quot]
My debts are as follows:[/FONT]

• [FONT=&quot]HSBC 1 - 12 monthly payments left of £84.15. (£993.70 outstanding). [/FONT]
• [FONT=&quot]HSBC 2 - 12 monthly payments left of £161.82. (£1,925.80 outstanding).[/FONT]
• [FONT=&quot]Zopa 1 - 36 monthly payments left of £40.74. (£1,466.64 outstanding).[/FONT]
• [FONT=&quot]Zopa 2 - 31 monthly payments left of £39.70. (£1,190.00 outstanding).[/FONT]
• [FONT=&quot]Rate Setter - 30 monthly payments of £54.47. (£1,493.39 left outstanding).[/FONT]

[FONT=&quot]I appreciate this was my own doing and I have nobody other than myself to blame but I am really struggling with uncharacteristic mood swings due to this and it is getting me down.
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[FONT=&quot]I also have been in a relationship with my girlfriend for over 3 years now and we are desperate to save to buy our own place, her finances are much better than mine. She currently has deposit saved of over 6k and also comes out with £500 a month saving money.[/FONT]
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I don't want to seek doctor’s advice as I don't want this to affect my work life or anything.[/FONT]
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[FONT=&quot]I have also been asked to interview for a new job at a big company with a large pay increase. However, with this obviously comes with the risk of meeting the probation period targets ect.[/FONT]
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[FONT=&quot]Is it worth looking into setting up an IVA or should I stick to my payments and suffer the consequences of my actions for the next couple of years? If I was to take out additional support/advise, would this ruin my credit history of ever getting a mortgage with my partner? Would I have to declare this on all future correspondence such as job offers or anything to do with payments such as insurance companies?

I would be grateful to hear some advice on how to proceed with this and also seeing the bigger picture as to regards to future plans.

Thanks,
Josh.[/FONT]

AnnieG

If you are suffering, please see a doctor. Your work life is more likely to suffer if you leave it and things get worse. Your doctor won't tell your employer, you literally have nothing to lose by getting medical help if you need it.

sourcrates

Hi josh,

An IVA is not the way to go, as you don't have enough debt really, although there is no minimum amount, there are a lot of fees associated with an IVA, this only really makes them suitable if you owe a lot of money.

Your best bet might be a debt management plan, or even a debt relief order.
Have a look on the stepchange website, they have a debt tool where you enter your details, and it gives you a possible solution, give it a go, see what they recommend.

anna_1977

I know this is probably out of the question but is there anyway your GF could use some of her savings to at least the 3 debts that are not HSBC?
If you want to get a mortgage with her then you don't want to be on any DMP or allow your credit file to be screwed. If she is willing to help you could then get rid of the 2 HSBC quicker making over payments where possible.

With regards to outgoings, in Jan go on a SIM only plan for your phone, voafone have one for about £17 per mth at the moment with unlimited calls/texts and far bit of data

EssexHebridean

Aww Josh - first up well done for coming and asking for help - that's the toughest bit dealt with.

There are only a very few occupations where seeing your Doctor for advice on dealing with depression could have repercussions - and even there more often than not it would simply be a note on file and nothing more. I assume you don't routinely handle firearms or explosives for your job? As you live with parents I presume also you're not in the armed forces? However putting things on a formal basis like this is not right for everyone - believe me I know this - but don't be putting off seeing your Dr if you feel it would help in your case because of a misconception that it would get reported back to your employer.

Practicalities then...The biggie in your routine outgoings is your car finance - what is the deal with this - if you hand the car back now do you stop paying? Is it a loan, or an HP deal? (Ie do you own the car, or does the finance company). That car insurance bill is horrendous - have you checked out whether it can be reduced any? Read Martin's guide on bringing costs down and follow it to the letter and just see if anyone can beat what you're paying. If the car is owned by you, then (you're going to hate me for this) consider selling it - I'm guessing it's not all that old? Look into whether your essential travel can be done more cheaply by using public transport. If not there is a lot to be said for an old banger that will serve to get you about AND will be cheaper on insurance!

Look at the agreements for your loans - and find out whether you are allowed to pay them back early. If so, I suggest the first port of call is a serious chat with your girlfriend where you ask her whether she will be OK with you reducing your payments to her to £50 a month for the time being - throw the extra £200 at the debts. It looks to me as though the HSBC ones aren't on horrendous interest rates, whereas the Rate Setter one looks awful? If so target that first. Use the Snowball calculator that is linked to from the sticky post at the top to work out what your best course of action is on these.

Agree that SIM only for your phone is a good call - you're also going to need to talk nicely to your Mum and put off paying her for the time being too I suspect.

I'd suggest putting yourself together a proper Statement of Affairs (Again, link in the post at the top), and also keeping a spending diary so you can see what else you're spending on - that really helps to sort out what you HAVE to spend, from what you WANT to.

Good luck!

enthusiasticsaver

If you want a mortgage in the foreseeable future then neither an IVA nor a DMP is the way to go. It will trash your credit record. Your outgoing are low except for your car/debt so I would suggest you continue with the payments. Your salary only just covers your outgoing so with hardly anything spare as you probably know. Is your girlfriend willing to let you suspend payments to her on the understanding it goes towards paying your debts off so you can start afresh? Go sim only in January and put the £250 and £40 from your phone towards getting rid of one of the debts initially and target one at a time. The highest interest rate first.

Undoubtedly your depression is due to your debt situation and feelings of hopelessness. You show you are lacking confidence re going for a new job but obviously a higher wage can only help you deal with the debts. I think if you had a plan to deal with them and a sense that you can get out of this then you would feel better. Your girlfriend obviously knows you have money problems and should not be booking holidays. If she wants you to get your own place then you both need to recognise your debts are a joint problem. She obviously is more financially secure than you but if she is pushing you to spend money you don't have this is not helping you. You are only 24 and providing you take out no more debt all this will be gone in less than 2 years if you snowball - ie as each loan falls due then put the payment towards another debt.

Smodlet

There is no shame in asking for help. Often, it is the smartest, bravest thing a person can do, if one of the most difficult.

As EssexHebridean says, you have done the hard bit. If you post up an SoA (Statement of Affairs) you will be amazed at the things you can save money on. After a while, it becomes second nature to always check if you could buy things you really need more cheaply. Discovering the liberation once you distinguish between needs and wants, financially speaking, is also a revelation. It is not about going without things (except for material things you don't really need) It is about gaining the means to achieve your goals, such as a deposit for a house.

One hears about "giving up" smoking (you're probably far too smart ever to have done that) Take it from one who knows: You are not giving up anything: You are gaining freer lungs, better breathing, more energy, taste buds that are actually awake.

Money saving is not about self-deprivation, ultimately; it is about self-liberation.

HTH and good luck.

Pixie5740

I've done some quick calculations using the figures you've given above, even though you acknowledge that you haven't included all your outgoings in your OP, and you've got more going out than you've got coming in. You'd be all right if you weren't paying for this holiday. Does your girlfriend know the full extent of your financial situation? A problem shared is a problem halved and all that.

Even if just for yourself it would be useful to put together a statement of affairs to work out exactly where your money is going rather than just "miscellaneous outgoings" therefore allowing you to budget effectively for those things that might not occur every month but that you know you'll need to pay for at some point.

EssexHebridean

Further question on the new job - do you actually want the job, or do you feel that you *should* want the job due to the situation with debts? It makes no odds to whether you should attend the interview (you should) but makes all the difference in the world to whether you should accept the job should it be offered.

Sanctioned_Parts_List

Hi and well done for posting!

By my reckoning, ignoring the £100 you owe your Mum, you've left £48 plus change per month for everything else not included in your list above.

Your single biggest payment bar none is to your girlfriend. While this is very honorable of you, and probably the right thing to do morally, it makes the least sense financially: you're effectively prioritising an interest-free debt over several interest-bearing ones. This means you're delaying your ability to make real headway with your expensive debts for about another 8 months (and will be poorer by 8 months interest in the process.)

I have no doubt that your girlfriend would not be too happy to release any more savings to clear your current debts; but she should consider letting you defer repaying the £2000 you owe her until after your interest-bearing debts are done, or making a gift of it. Should you become a family, this will amount to the same thing, anyway.

That will free up a good chunk of money with which to attack other debts, in descending order of interest, as per the snowball calculator.

Using monthly repayment as a guide to interest rate and some fag-packet maths, I worked out that if you started immediately, you could be free of interest-bearing debts in roughly 14 months (plus 3 more to pay your g/f back - 17 months) whereas if you paid your g/f back first, it would take 22 months.

Given your present debt servicing rate (i.e. potential savings rate), without losing the phone or the car, is over half your salary, that 5 months difference is the difference between having no savings, or having £3000+ savings. Might be worth a chat...

tealady

Hi
Just a thought re birthdays (and the dreaded C word the December 25th one that is).
Last year I made an agreement with family and friend that we would exchange cards only and quite a few people admitted it was a relief to do so. I am now gearing up to suggesting ecards, not because I am a cheapskate (I am) but because I just hate the hassle of finding and buying cards (even online).
Try suggesting to all that you exchange cards only this year, you may be suprised at the response.
HTH