Help me help my son....£11,000 in debt.

niccol

My son has just filled us in about the debt he is in. I knew he overspends and has fallen into the trap of borrowing more to get himself out of a hole in the past. He is now in so deep he cant get out and thats where i would like some advice please. Im banging my head in frustration trying to find help for him, he is burying his head in the sand.

He has a £9000 (thereabouts maybe a bit less) loan with Abbey £2000 overdraft. He is two months payments behind with car insurance, mobile phone contracts and loan payments. Insurance have given him til Monday to pay £380 or they cancel it. He has spoken with Abbey in depth and they wont help, infact staff member told him to change to Electron account which he has so no overdraft facility again, paying back other bit at a time and said look for a loan to consolidate from the back of the papers and try not to pay more than 20%!
Income approx £1100 per month
Outgoings £150 loan
£ 70 car insurance
£160 rent
£100 petrol and car expenses
£300 phone contracts
£100 food and work expenses

What do i do? His dad says if we help him out with the immediate stuff he will do it again like he has before and he wont learn, that this will be a good lesson to him. Oh yes and he is going to have maintenance payments to find next month (unplanned baby, found out 3 wks after splitting up with g/f).

He has been a complete idiot overspending, having what he wants when he wants and now will pay the price for it. The biggest pain being the mobile phone contracts that he is tied in to for 18months.

Hope someone can help me.

Rikki

He needs to find the money to pay his car insurance. If he can't get to work he is going to get into even worse trouble.

tomstickland

Well the outgoings are £880, and income is £1100 per month, leaving £220.
£11,000/220 is 4 years of payments if you ignore interest (probably increase time by 50%).

The phone contracts are a big problem.

A lot depends on how serious he is about sorting it. For example, if he got a job nearby, could sell car, get rid of insurance, car expenses, pay off some debt with car sale cash.

Imagine that by some drastic measures he frees up £650 per month to pay back debts and fetches, say, £2K for the car. £9,000/650 is 13 months, allow for interest, it might be cleared within 2 years.

Maybe you could agree to back date all the rent until he's cleared the debts.

tealady

The best advice i can give you is to practice tough love. He needs help yes, so suggest he puts up an SOA or contacts a FREE debt management organization (eg CCCS). However from the brief details you gave £300 of phone contracts per month seem astronomical, is there any way he can cancel these (please don't say he took out a cashback deal!)

Cousin_I.T.

I'd suggest you have a talk, with OH present, and lay it out for him. How close does he live to his work place? Can he sell the car etc. Maybe think walking or buy a bike with his car sold. The other thing, I know he'll hate it and you might not like the idea either, but get him to move back home till he gets himself sorted out! If he realises things are so bad the embarrassment factor of moving home, might make him think in future. If he doesn't except your advice, I think you need to leave him to sink or swim, it's tough love.

niccol

My head says tough love my heart feels guilty about thinking it. If i went behind hubbies back and got a £11K loan for him (i only earn £12K p/t) it would cause a problem as we are just about to change our fixed rate mortgage deal and i would have to declare it.

He works an hour away so needs his car, contracts with work vary from place to place so would be a nightmare if he had to give it up. He has put a lot of work into gaining his apprenticeship it would be a shame to lose his job and he has got prospects there. Car prob only wpwrth £1500 anyway.
Phone contracts not totally sure about. Think he's just greedy wanting the newest poshest one as it comes out and too feeble to say no when a good sales assistant talks him round.

Thanks guys for prompt replies, think maybe he has to go to CAB and let them sort him out. Enough is enough now.

asp746

well, he's taken the first step. personally being a mother i would help him out. there woud be a stern no strings hold conversation ie be blunt about how his predicament is impacting on you. I would also put everything in writing as a 'contract' and get him to sign it. its impossible to avoid you living under the same roof so i think you have a good chance of not being taken advantage of.

the banks make my blood boil....why do they give young single men loans of 9k...its irresponsible. i would get ccs involved tho to try and reduce the payments if meeting them is going to leave him short. I find on these boards people live on next to nothing so to pay all their debts off but i think there should be some slack to 'have a life'.

good luck let us know how you get on.

Cheery_Daff

Welcome niccol

On the plus side, he's realised what a pickle he's in and has told you about it. I'm inclined to think he won't learn as quickly if you help him out too much. And I would CERTAINLY advise against taking out a loan yourself. What would happen if he couldn't pay the money back at any point? Where would that leave you? And don't keep things from your husband, not something as serious as this

I think people are right, sit and have a chat with him - he certainly needs to do something about the phone! Again, being positive, his rent isn't much (is that to you?)

No more advice from me really, just saying hello, good luck with being supportive, but I'd say keep the support emotional and practical, not financial. He'll have to learn to be more responsible with a baby to pay for/ look after

Spirit_2

I am sure the tough love bit is necessary, but it must be hard to do. Is there any scope for you to help (perhaps with the car insurance arrears) but only if he does something to sort this out himself as well.

Is there opportunity for him to work overtime, or additionally an evening/weekend job. It may not instantly appeal to him but he needs more money and he could organise this very quickly.

Another possibility to give him an injection of cash is for him to EBay some of his possessions.

Good luck

James240

Tough Love is the way forward.

your son has approximatley the same amount of debt that i had when i first started and ive managed to clear mine in two years. It is acheivable but he needs to set his mind to it and stick to it.

James

Rikki

James240 wrote: »

Tough Love is the way forward.

your son has approximatley the same amount of debt that i had when i first started and ive managed to clear mine in two years. It is acheivable but he needs to set his mind to it and stick to it.

James

You've said the importent message. HE needs to set HIS mind to it.

Maybe you help him with his car insurance so he can get to work. The rest he's on his own as james240 says.

If he thinks he can come to you all the time he will never learn.