In a bad situation, don't know what to do

libramoon175

Hi everyone,

It's pretty tough to be here, I've gotta be honest.

I've racked up a lot of debt, mostly in the form of loans, which I did to get by after I lost my job in September. I've just got a new one and I start next week, with a salary of £35K. To be honest though, I didn't have good money habits even when I was working. I never saved anything, and spent anything leftover on my own entertainment. I'm single, and 30, and don't have a mortgage, so I figured my money was my own.

I'm incredibly ashamed but mostly scared. My incomings, even with a good salary, are less than my outgoings. My rent is half of my monthly loan payment commitments. This month is going to be the toughest, as I just won't have the income to meet all my payments.I don't know what to do. Even after that when I'm getting full month's pay, I'll be around £200 short to meet my commitments.

I've posted my SOA below - hopefully the formatting comes out alright. I just don't know what to do.


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................ 2250
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2250

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 550
Management charge (leasehold property).. 0
Council tax............................. 63
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 20
Internet Services....................... 0
Groceries etc. ......................... 140
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 145
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)...... 0
Haircuts................................ 0
Entertainment........................... 400
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1353


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 1..................3000......80........21.9
Loan...........................10000.....322.......29.9
Credit card 2..................800.......0.........29.9
Loan 2.........................2000......150.......99.9
Payday Loan....................510.......283.......292
Overdraft......................700.......15........0
Parent's loan..................6000......325.......0
Total unsecured debts..........23010.....1175......-


Monthly Budget Summary
Total monthly income.................... 2,250
Expenses (including HP & secured debts). 1,353
Available for debt repayments........... 897
Monthly UNsecured debt repayments....... 1,175
Amount short for making debt repayments. -278

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -23,010
Net Assets.............................. -23,010

Created using the SOA calculator at.
Reproduced on Moneysavingexpert with permission, using other browser.

Karonher

The first thing to cut is entertainment. That will kill the deficit and give extra money to pay off the debt.

libramoon175

That's strange, because when I did my own calculations I budgeted £140 for entertainment and still came out with a monthly deficit of £200. I'll have to check my calculations.

kazwookie

Entertainment needs to be cut hard.
Can you rent soemwhere cheaper
or if you have a spare room, can you rent that out.

Get a 2nd job, part time at weekends?

libramoon175

Okay, cutting entertainment to £200, leaves me £50 over what I need each month.

libramoon175

Hi Kazwookie,

I can cut entertainment in half. This is something I have already done and brings me closer each month to making ends meet.

I rent in London so I'm already on the lowest rent pretty much that I can find. I rent with 2 other girls, and in zone 3, and I have a really good deal. renting a room isn't an option.Come February/March, I'll be in a much better position but this month at the end of January I don't know what I'm going to do or how I'll make all those payments.

thegreenone

Could you ask you parents if you could skip this month's payment?
How did you build up £18k in loans?

libramoon175

I had the 10K loan last year, and I used it to pay off 2 overdrafts and a credit card. I've basically just never been good with money at all and then when I lost my job i couldn't mask it with a good salary any more.
obviously a wake up call.

my mum really can't afford for me not to pay her this month. she struggles as well though she's very good with money she just doesn't earn that much.

On_my_way

Ok - you need to call your creditors. I promise that they will understand and won't bite your head off.

Start the conversation as "I won't be able to meet my minimum payment this month as I lost my job in September. Can we work out a repayment plan."

They will then sort out something for you. Maybe a month or two of payment holidays on all of your debts will help you out.

Plus -you need to get some extra money together. A few ideas:

* Have you got any old mobiles? Go to Mazuma or somewhere (online) and sell them. I recently got £80 for an old-ish smart phone
* Have you got any Gold that you don't need/want? I did the same and took an old 9ct chain that I never wore to the Moneyshop and got £45 for it which was enough to help me a bit before Christmas.
* Ebay?

Good luck, you can sort this.

libramoon175

On my Way - thank you.

I will call them all on monday and see if there's anything they can do.

I was also looking into a DRO. Does anyone have any experience with these? I think I would qualify, but only if they consider my payment to my parents as an expense otherwise i'd have more than £50 left over each month.

SkintTeacher

Don't be scared. You have a lot going for you with the new job. Think 'challenge' and try to make cutting stuff out fun rather than a chore. Agree entertainment budget seems huge for one (although I know London is expensive) , and is there any way of getting rid of the TV/satellite costs?

Check out some of the frugal living posts - it doesn't have to be horrific. You'd be surprised how well you can live on less!

Good luck on your journey. Loads of people on here have cleared debts like yours so you'll never walk alone!