Can somebody give me a little advice about 15k worth of debt?

DavidCroche

I would really appreciate a little advice on my current situation. I'll try be brief.

I found my mum dead in her flat 6 months ago and went into shock which lasted for a good 5 months. I'm seeing a therapist and thankfully have not succumb to depression. I was left with the funeral bill (region of £3k) and a couple months after the funeral my car brokedown. I went to buy another car in desperation for £1k and didn't test drive it. Yep. Car broke down pretty quickly and place refused to refund my money and I was physically threatened by a couple of meatheads when I went there to ask for it back in person.

What happened after that is a bit of a blur. I took complete advantage of my lack of credit and let the banks give me as much money as they saw fit. This amounted in a 4k overdraft with Lloyds, a £5k loan with Lloyds, and a £6k loan with Zopa. Not sure what I even spent the money on, but I have no assets to show from it apart from £1500 car and a £1000 motorbike. I think I was planning to kill myself on the motorbike 'accidentally'. Again, thankfully, I have sorted this out mentally through therapy.

Obviously this has left me in a grim position financially. I have spoke to step change and am now paying around £250 a month to my creditors. It will take about 6 years to pay. I spoke to Lloyds and they said after 6 months of £90/month they will seek a default. Now I just feel there is no real way to get out of this without a black mark on my credit file. I simply cannot afford to pay the money back at the rate they are asking for it. And yes, I will be selling the motorbike and potentially downgrading the car (if that's even possible).. but even then.. £15k is a lot of money to owe. That's not even taking into account the amount of interest being added.

As you can imagine, during this incredibly emotionally challenging time, my first thought is - forget this planet, I want out. I am going to move to SA with my 6 month girlfriend for a few months next year, but it's just a way to escape reality for a while.

I'm also working hard on building a software business and I KNOW I will be a much better position financially. The sensible thing to do, at least for me, is to stall my creditors as much as possible and then pay them off when I'm in a better position.

I guess my question is - what will happen if I just don't pay a thing and take the default and have them seek a CCJ or try to force bankruptcy? I will be quitting my job next year so I'm thinking of filing for bankruptcy then and having the whole thing wiped.

Any thoughts? I'm on the edge of something I'm not sure I know how to handle. I just need space for a while.

Arleen

I would strongly recommend posting this on debt free wannabe board, as its full of people who went through similar struggles. You can find it with this linky: http://forums.moneysavingexpert.com/forumdisplay.php?f=76

DavidCroche

Thanks, will do!

CakeCrusader

Hi, David.

You've been, and you're still going through, a really crappy time and I really do think you're being too hard on yourself. Your credit rating really isn't that important, it just allows you to get more credit, and it's more important to the world and to your other half that you're still around because you really so sound like a great bloke who's had more than his share of bad times, and you'll leave a massive hole in people's lives if you're not around.

A black hole on your credit file isn't a terrible thing, and it's not going to cause a dampener on the rest of your life. I got into a 'spot of bother' about 10 years ago after being diagnosed with MS and having to leave my job (to top it off my son's father didn't think I was grateful for his maintenance so stopped paying, which made things worse). I ended up with 4 CCJ's (I've paid them now but I'm stuck with 2 on my credit file until next year, the other goes the year after), a credit card that I couldn't pay, bailiffs at my door because I couldn't pay my council tax and so on. It's taken time but I've cleared these but I still have the defaults showing. I managed to get a credit card 4 years ago (it's with a 'poor credit' company so the interest rate is eye watering), I got a job, then my own bank gave me another credit card with a lower interest rate, and I've just been approved for a 0% balance transfer for the eye watering card. I didn't miss having a very poor credit rating, it just put a halt to getting more credit which wasn't a bad thing. What I'm trying to say is that there's always a way to get through things, so please don't give up. The world is a better place with you in it and your life is worth so much more than 15K.

ashp_2

Sorry to hear about your mother and situation that followed.

It's good that you are facing this issue it's important you don't bury your head in the sand as many do. There will be light at the end of the tunnel. Your credit rating is not worth more than your life.

I don't think you should stop paying if it's avoidable. You will be glad you stuck with it in the long run. I'm sure there will be someone who can provide much better info and there are many companies/charity's out there that can provide good advice for you.

CakeCrusader

You know, creditors can often freeze interest. Have you been to the CAB to see if they can give you some advice and speak to your creditors? I'm not clued up on this, but they used to be able to negotiate a freeze

DavidCroche

Thank you for helping put this into perspective!

Some days I feel fine, almost guilty that I feel ok about her, and then I can be sobbing for half a week contemplating awful thoughts. You're right, my life is worth more than £15k + interest!

I think my main focus right now should be on earning more money, not on paying more money to my creditors. I might just take the CCJs and be done with it.

Thing is, I'm moving house soon (into my GFs) and wondering if I should give my creditors my new address? I mean I imagine I need to know about CCJs to answer them so as to not get into legal trouble? They have my mobile, but I thought they would send a letter.

CakeCrusader

Are you still seeing someone for support, David? Thoughts and feeling do pass, but it's hard to wait for them to go when you're feeling really low. http://www.samaritans.org/ We all need someone to chat too when things get overwhelming, and these guys will listen.

Creditors have rules regarding how they chase people who are vulnerable so it may be helpful if you went to the CAB and asked them for help.

Fireflyaway

Sorry to hear you have been having a tough time. It can take a long while to deal with grief and running up debt is quite common in such circumstances. You are definitely not alone. £15k might seem a ridiculous amount but really its not that bad and can be sorted. It need not hold you back either. I entered into a repayment plan via payplan. Its not an iva just a repayment plan so doesn't show on my credit file. Worse case scenario is your credit score will be messed up for a few years ( mine was terrible as all my accounts defaulted!) but that doesn't mean your life will be messed up. There are always multiple solutions to things. Ensure you have enough to live on and then offer what you can afford. Don't be pushed into 'agreeing' to something unaffordable or restrictive.
Things might seem bad now but once you have a plan arranged it will be a weight off your mind. All this stuff is still recent and you are probably still dealing with shock as well as grief. Corny but its true that with time you will start to feel better. Debt is nothing to be ashamed of either so don't feel bad about it.

PixelPound

Well you are talking to StepChange which is free debt advise (always go for free rather than the charging ones who are in it to make money rather than help firstly), and you said you have been having therapy. You may also want to seek free legal advice from CAB, to be aware of your options.

You definitely should tell LLoyds and your other creditors of your vulnerable status (you can always send proof of the Therapist you are seeing, or copy of prescription if on medication if they need proof). At the very least it means they handle you differently rather than the bog standard way. The last thing you need is more stress from a call-centre worker saying "well if you don't pay it off in 6 months, it will get marked as default on your file". By law they have to have methods for handling vulnerable customers
Really its about openness, by telling people everything they can help you best. If CAB or a solicitor know everything, they can help. Similarly with StepChange. The key thing is to not struggle in silence, and not be too proud to ask for help. If you feel unable to talk to creditors, then you can authorise someone like at StepChange or CAB to talk on your behalf.

This is just my opinion, not advice as I'm not qualified to give advice.