£76k of gambling debt - starting to pay off

yeahyouknow

Hi all

I currently have £76k of gambling debts - these are a mixture of credit cards, loans, payday loans and overdrafts.

All of this debt is due to gambling and enough is enough. It's an addiction and one that I'm going to fight.

December looks like every penny I have from my salary this month is going towards paying each creditor - I won't even have enough for food or transport.

I've today filled out my profile on My Money Steps so that I can record all the debt that I have as well as my spending.

I have a few questions that I'd love to get help with please:-

1. My Money Steps has recommended opening a new bank account - I've done this and I should have it later this week. I'm going to cancel/pause a few payments to certain creditors. What will happen in the 1st instance here?

2. I am going to contact each creditor explaining how I'm struggling - should I admit that I have a gambling issue or tell them I got into debt another way - what's feasible?

3. What process will the companies start taking?

Thanks
C

fatbelly

Whichever strategy you choose, if you can't keep up the contractual payments, I'd recommend cancelling ALL payments, and build up an emergency fund in an account not connected to your debts. These are all non-priority debts.

Then you treat all creditors equally - are you really able to afford a payment plan on 76k of debt, or are you looking at insolvency (bankruptcy or an IVA)?

You can tell them that you are struggling (I wouldn't bother with the reasons) and seeking advice

My Money Steps is National Debtline. ND have a sample letter here

https://www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx

All the creditors will do for a few months is write. Some will freeze interest, some sooner than others. After 3-6 months they will issue defaults and will consider selling the accounts to debt buyers.

You should aim to get your strategy under way in a similar timescale and also (in your case) get support in dealing with the underlying issues.

If you want more specific advice (about which strategy might work best) you will need to complete and post a statement of affairs

http://www.stoozing.com/calculator/soa.php

Edit: I had a look at My Money Steps as, although I know of it, and like National Debtline, I have never played with it. Unfortunately the information about bankruptcy and Debt Relief Orders is seriously out of date so it makes me wonder about relying on it too much.

January2015

Definitely cancel all the payments to creditors asap and keep it to build an emergency fund. If you are going to default on payments anyway it doesn't matter to creditors if it's December or January. It matters to you - so keep the money.

yeahyouknow

What is the point of an emergency fund? What is this to do with exactly? Sorry for my ignorance here.

My salary is near the same amount as my debt - I want to pay it all off and hopefully not go down the insolvency route. It's my intention to pay all of this back.

Thanks so much

C

sourcrates

yeahyouknow wrote: »

What is the point of an emergency fund? What is this to do with exactly? Sorry for my ignorance here.

My salary is near the same amount as my debt - I want to pay it all off and hopefully not go down the insolvency route. It's my intention to pay all of this back.

Thanks so much

C

The usual strategy is to post an SOA, without one we are only guessing at your situation.

If your salary is that high, and you think you can deal with the debts without an insolvency option, then fine.

The average person doesn't earn as much as that, most are on way less, that's why it's important for people who are entering debt management to save up an emergency fund, as once the procedure is in place, there will be no credit to fall back on, and without said fund, no cash for emergencies.

yeahyouknow

Hi - sorry I was slightly confused.

I've filled one out here:

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................ 4047
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 290
Total monthly income.................... 4337

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 770
Management charge (leasehold property).. 0
Council tax............................. 15
Electricity............................. 10
Gas..................................... 10
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 0
Mobile phone............................ 70
TV Licence.............................. 0
Satellite/Cable TV...................... 17
Internet Services....................... 0
Groceries etc. ......................... 250
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 150
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Cleaning and Toiletries................. 20
Laundry................................. 100
Parents................................. 500
Total monthly expenses.................. 2087


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................4622......180.......0
Credit Card....................4676......200.......0
Credit Card....................4527......140.......0
Loan...........................2192......137.......0
Loan...........................6950......330.......0
Loan...........................17267.....330.......0
Loan...........................8429......400.......0
Loan...........................13038.....250.......0
Loan...........................2447......370.......0
Loan...........................3020......300.......0
Payday Loan....................945.......185.......0
Payday Loan....................2592......850.......0
Overdraft......................5000......90........0
Credit Card....................205.......5.........0
Total unsecured debts..........75910.....3767......-


Monthly Budget Summary
Total monthly income.................... 4,337
Expenses (including HP & secured debts). 2,087
Available for debt repayments........... 2,250
Monthly UNsecured debt repayments....... 3,767
Amount short for making debt repayments. -1,517

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -75,910
Net Assets.............................. -75,910

enthusiasticsaver

yeahyouknow wrote: »

Hi - sorry I was slightly confused.

I've filled one out here:

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................ 4047
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 290
Total monthly income.................... 4337

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 770
Management charge (leasehold property).. 0
Council tax............................. 15
Electricity............................. 10
Gas..................................... 10
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 0
Mobile phone............................ 70 This is very high. Can you go sim only or are you tied into a contract?
TV Licence.............................. 0
Satellite/Cable TV...................... 17
Internet Services....................... 0
Groceries etc. ......................... 250 If this is for just you it is very high. We pay less than this for 2 of us. Try Lidls or Aldi.
Clothing................................ 50 Can you just use the clothes you have for now?
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 150
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50 This can be cut back
Haircuts................................ 15
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Cleaning and Toiletries................. 20
Laundry................................. 100 This should go. You can do your own at home
Parents................................. 500 What is this for? Are you repaying a debt? Can you explain the seriousness of your situation and ask if they can wait until you have sorted out the creditors below?
Total monthly expenses.................. 2087


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................4622......180.......0
Credit Card....................4676......200.......0
Credit Card....................4527......140.......0
Loan...........................2192......137.......0
Loan...........................6950......330.......0
Loan...........................17267.....330.......0
Loan...........................8429......400.......0
Loan...........................13038.....250.......0
Loan...........................2447......370.......0
Loan...........................3020......300.......0
Payday Loan....................945.......185.......0
Payday Loan....................2592......850.......0
Overdraft......................5000......90........0
Credit Card....................205.......5.........0
Total unsecured debts..........75910.....3767......-


Monthly Budget Summary
Total monthly income.................... 4,337
Expenses (including HP & secured debts). 2,087
Available for debt repayments........... 2,250
Monthly UNsecured debt repayments....... 3,767
Amount short for making debt repayments. -1,517

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -75,910
Net Assets.............................. -75,910

You haven't put any interest rates but normally you would deal with highest charging debts first, probably payday loans. You can write and tell them you will have to default and ask them to stop charging interest or contact stepchange and they may suggest dmp if you don't want to go down bankruptcy route. Your debt is high but so is your salary so with some reductions in expenditure you may be able to deal with it. With a £1500 deficit on just minimums though this will take some time. Main thing is to deal with your gambling addiction.

Ben75

Based on your SOA, if I were in your position I would default on my debt and resolve to pay it back in just over 3 years at £2k a month, but build an emergency fund up first. Your credit record would be damaged for six years after the last default but at least you'd stop paying interest and it would stop you being able to borrow any more for a while.

Priority though is to get the gambling addiction under control. Good luck whatever you decide to do

sourcrates

Ben75 wrote: »

Based on your SOA, if I were in your position I would default on my debt and resolve to pay it back in just over 3 years at £2k a month, but build an emergency fund up first. Your credit record would be damaged for six years after the last default but at least you'd stop paying interest and it would stop you being able to borrow any more for a while.

Priority though is to get the gambling addiction under control. Good luck whatever you decide to do

This is actually good advice, if your credit rating is trashed, no one will lend to you, which in your situation may help you quit the gambling.

MrsTinks

Get yourself black listed with any gambling sites or bookmakers too and register with gamblers anonymous

http://www.gambleaware.co.uk/confidential-support-and-advice/self-exclusion

and install a gambling block software: http://www.gamcare.org.uk/get-advice/what-can-you-do/blocking-software

Debt wise I'd say that trashing your credit file isn't necessarily a bad thing, it will be in the trash for 6 years but that will allow you time to pay off your debts, save a chunky deposit fr a mortgage and even time to start rebuilding your credit file. You can get credit builder cards when you have a year or two left till defaults drop off and you have paid back all the debts. That will give you time to show you can save and be trusted with credit for when you apply for a mortgage.

yeahyouknow

I really appreciate all the replies!

1. An emergency fund sounds good - my National Debtline advisor was against this though and didn't understand it. Does anyone know why please?

2. What size should the fund be? Doesn't it also mean missing payments for another few months and annoying the creditors further by ignoring them/not paying anything for a while?

Thanks
C