How do I get out of this?

ce91

Hi everyone,

Long story short I've gotten myself into debt that I'm struggling to see a way out. Basically when I was a student I was lured into taking a £2000 overdraft (which I totally forgot about until now, very stupid of me I know!) and 2 years ago when my Dad had cancer I used credit cards to help my Mum and Dad out as my Dad was made redundant shortly following his diagnosis and my Mum went on the sick to help care for him.
So my debt is as follows: £6000 on credit cards, £5000 on a loan and £2000 on my overdraft. The loan is £250 a month which will be fully paid by next March and I pay £230 on the credit cards which is mostly interest and I've just recently started to get charged for the overdraft which is £1 a day. I work as a nurse and get around £1600 a month (not including unsocial hours, allowances etc) and at this rate I have around £100 a week to survive on to buy food, petrol etc. I've tried applying for 0% interest cards however I've been told I've 'got too much out already'
I feel so angry at myself for getting into this situation at 25 years old, the overdraft was my own stupidity for thinking I was being handed free money at 18 years old and the credit cards I felt were my only option as my Dad was very ill and didn't receive any help financially for nearly 6 months and needed a new bed, chair, clothes etc to suit his needs.
I'm taking on nightshifts and putting any extra money for the allowance towards my credit cards and I'm planning on reducing my overdraft by £30 a month because it's all I can afford. Don't get me wrong I'm taking my debts on the chin and trying to live within my means by cutting out luxuries, missing nights out etc.

Could someone please just tell me there's a way out? I feel like I'm paying these cards and not getting anywhere!

sourcrates

Hi,

May be a good idea to give stepchange a call, looks like a debt management plan may be your way out of this ?

A statement of affairs will tell us more.

National_Debtline

Hi ce91 and welcome to MSE,


A SOA is always a good starting point because that will help you budget to live first and then budget for the debts second. It is important that you do it this way around. If that means there is not enough money for the minimum payments then you can look at your options from there. That may be to renegotiate yourself or (as sourcrates has said), look into a DMP.


A DMP allows you to make one payment to a third party company who will renegotiate with your debts for you. It is not legally binding so you should never pay a fee for this service and StepChange is one of the free providers. This would include your card, loan and overdraft and they would all be paid down together. It is important to note it will cause some damage to your credit file and being able to get credit over the next 6 years, but credit files can be rebuilt in the future. Good luck,


Laura
@natdebtline

enthusiasticsaver

I would post an soa so we can comment properly. What is the situation with your mum and dad now? Are they able to help if the money was given to them in the first place or are they not working? You seem to be doing all the right things and when the loan is repaid you will have £250 spare and as the debts reduce you will get options to move to 0% cards.

If you are unable to meet minimum payments then a dmp is probably best but on a reasonable income and as you are only 25 I would hesitate to go down that route as presumably at some point you may need a mortgage unless you are already a home owner.

EssexHebridean

Great advice already given above - I'll wait to see your SOA before offering much in the way of specific advice but relating to the costs for your Dad's needs - it's worth your Mum making enquiries as to what should have been funded from elsewhere on these bits - I'd suggest talking to MacMillan or someone similar (or your local hospice if that was who your Dad was cared for by) to see what advice they can offer on this.

The SOA is definitely the first vital step as others have said - until we know if you have a workable budget, it's impossible to be able to say what might be your best option really. Make sure when you do the SOA that you post an accurate picture of what is really happening with your money, not what you think we want to see - ie if you post that you put money aside monthly for emergency fund, car repairs etc, we WILL be asking you why there are no cash assets showing! :D Once you've established what your financial habits are now, you can then revise your plan to reflect what should be going on.

One thing I did take from your post - remember that to reduce your OD by £30 a month you'll need to pay a little over double that, once the charges are taken into account.

On_my_way

Can you get any extra shifts at work? I work at an acute trust and they use NHS professionals which pay weekly for extra shifts. I know it would be tough but one extra shift a week would give you enough to live on for food etc so you could pay off your debts quickly without needing a DMP.

ce91

Hi guys,

Thank you all so much for your replies! I was very nervous of being judged as this is the first time I've openly talked about my problem so it's very much appreciated.
My Dad is in good health, he's been in partial remission for over a year and has recently found some work. My Mum is also working too. I've been reluctant to talk to them about it as they don't earn much and they would feel very guilty that I'm in this position, the problem was that my Dad was made redundant and was told he couldn't claim benefits for 3 months after a diagnosis was given, and Macmillan were only able to sort out a disabled badge and some PIP which I think was around £80 a fortnight.
Can I just ask what an SOA is? I had a meeting at Santander for some advice and the lady was very kind, advised me to reduce my overdraft every month even if it's just by a small amount so I feel like I'm getting somewhere and we went over my direct debits. I've also joined the nurse bank so I can get in some extra shifts and I've been very frugal (no nights out, no new clothes, raiding the cupboards to make meals from scratch etc) so that's helping out with the 'heart attack' feeling at the end of the month when I've got little to no money to spend on fuel.
I'm frustrated that I'm living month to month. I am able to keep up with the bills it's just having no money to live. I've sold things on eBay, signed up to freebies sites and do some surveys to get some cash.

Anyway thanks so much guys for your advice

[Deleted User]

Hi.
Well done for putting all this 'on paper' for all to see. You not being judged at all. I don't think this is money sense I'm talking but I'm with you all the way with the 'I didn't feel I had a choice as my dad needed things etc'. As far as I'm concerned you stepped up and done what you felt was right and the best thing to do. WELL DONE !. I was reading earlier a thread about someone had accepted a lower offer for their car after an accident. Think the point was missed there... they are able to whinge about it so that means they are alive !. The debt will go.. even if it's 10 years or more... it will go.. enjoy your family and respect for that decision that put you in this situation. I'm sorry I am no help with advice but you should be proud of yourself too.

Chandelier.

Hi,

SOA means statement of affairs aka a budget calculator where you input your income/outcome and note down your debt (credit cards/loans) with their interest rates etc.

The link is as follows:- http://www.stoozing.com/calculator/soa.php

Then you can copy and paste it to here if you like for advice on where to cut back etc.

You're in quite a good position re your career as there are always shifts to pick up. Just don't put yourself under too much pressure. Also maybe look at local agencies which offer a higher rate? Or pick up the shifts on the weekend for the better enhancements. The trust here offers weekly pay however it messes up our tax on main wage.

Once you've completed the SOA it will give you a better idea where you stand financially and people here can give great tips and advice on where to cut back.

Hope this helps.

enthusiasticsaver

No way would anyone judge you for helping your parents through this difficult time. It is not as if you went mad spending on yourself. Living month to month is depressing so I can understand you feeling overwhelmed and miserable. Positives are that you have options for increasing your income though and if your debt is around £10-£15k you have started to tackle this before it gets horrendous. As you repay it you will get the option to move to 0% so I would throw as much as you can for the next year and then try again as the debt decreases.

When you say the loan is £5000 do you mean it was when you took it out? If you only have 14 payments of £250 left that makes a balance of £3500 so that is your loan balance.

If you have spending money of £100 per week to spend on food, fuel and personal expenditure that is not too bad if it is just you. Do you have an emergency savings account as putting a small amount away each month to give you a buffer may help you feel more secure?

Is it possible to move back in with your parents rent free to help you in repaying this debt or do you live at home at the moment?

Karonher

Have you looked at Mystery shopping? The fees are nowhere near what they used to be but even £50 a month could make a difference.

There are places to eat and some of the supermarkets carry them out so it would be a few pounds a time towards your food bill.