Can't sleep due to debt?

Lucy_89

Hi everyone, I have been browsing these forums for a short while now and I think it's time to post to see if anyone could help me with my problem. I am sorry in advance for the rambling post, I can't think straight at the moment, any advice would be appreciated.

I have an income at the moment of £25,000 with an net monthly income of around £1,600 per year and my debt is around £27,000 in total. They are as follows:

1) TSB Credit Card - £9,000 - minimum repayment of £225 approximately
2) TSB Loan - £13,000 - repayment of £410 - around 3 years to go
3) Zopa Loan - £5,000 - repayment around £230 - around 2 years to go

In total around £865 of repayments towards unsecured debts.

My mortgage repayment is around £450, which leaves over around around £285 for all bills, including council tax, and all other bills. I have nothing left by the second week into the month, meaning that my credit card balance is going up by around £200 a month, and I am going to hit my £10,000 limit really soon and I will be over the edge and I don't know what is going to happen.

I am worried that even if I sold my house I would only make around £7,000 from equity (house prices where I am have went down since I bought it) and I wouldnt even be able to make a dent in my unsecured debts and my credit rating will be so damaged I won't be able to even rent a house and lose everything. I have never missed a payment up until this point.

The problem originated as I had to took a big pay cut from £46,000 to £25,000, and I had to ask my boyfriend to leave (no option), who contributed a lot to bills over time. I feel as though I have went from not having a worry in the world and relatively well off to a situation where I can't sustain myself unless it is on credit.

This is really affecting me now to the point where I can't sleep, therefore I can't concentrate in work and I am full of worry, and my supervisors are noticing my performance being bad and the last thing I need is to lose my job as well. I have also went to the doctor to get a sick note to see if I can have a few days off work to try and get advice to get this sorted.

Thanks for reading.

Lucy.

parsniphead

Hello Lucy and well done for posting. We all know how hard that first post is.

You will get loads of support and ideas on the thread but a good way to start is with a full and honest SOA. http://www.stoozing.com/calculator/soa.php .

The road ahead may seem a long one but as Martin says there are no debts which cant be sorted. If it makes you feel any better when i first came here i had a bigger debt than you with a smaller income. Some folks have arrived with absolutely massive debts.You can beat this Lucy.

From you post you dont seem to have places to cut. Is there any way you can up your income or perhaps take in a lodger?

You may need to go a different route of DMP.

First steps get your SOA done and take on board the well meant advise you will get.

Good luck on your journey.

[Deleted User]

My advice would be to talk to "step change" a debt charity they will talk you through your options, and please whilst easily said try not to worry too much after all its only money and not a matter of life and death. Its not a bad idea to try and get a few days off work to "reset" yourself so to speak.

CanadianDream

Hi Lucy,


I'm sorry to hear that your debt is affecting your health.


Have you thought about contacting your credit card vendor and ask if they can freeze the interest and charges?


You can also contact Step Change - a charity that offers debt advice and management plans.


Kind regards,

sourcrates

Hi Lucy,

Something needs to give here, eventually you will use up your available credit, and then what ?

You are fast approaching your lightbulb moment, the point you realise things have to change.

Parliament provide 3 regulated debt remedies, as your debt is £27,000 only an IVA and Bankrupcy would be open to you, there is also the unregulated debt management plan, which is an informal agreement.

As advised above, contact one of the debt charities and see which option would work best for you.

The time is fast approaching where you have to draw a line in the sand, stop borrowing, and start dealing with your debts.

Most of us, myself included, have been where you are now.

Lucy_89

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................ 1600
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1600

Monthly Expense Details
Mortgage................................ 461
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 40
Gas..................................... 25
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 120
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 100
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 0
Life assurance ......................... 6
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 20
Total monthly expenses.................. 937


Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 140000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 135000...(461)......1.99
Total secured & HP debts...... 135000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
TSB CC.........................9000......225.......19
TSB Loan.......................13000.....410.......7
Zopa...........................5000......230.......8
Total unsecured debts..........27000.....865.......-


Monthly Budget Summary
Total monthly income.................... 1,600
Expenses (including HP & secured debts). 937
Available for debt repayments........... 663
Monthly UNsecured debt repayments....... 865
Amount short for making debt repayments. -202

Personal Balance Sheet Summary
Total assets (things you own)........... 140,000
Total HP & Secured debt................. -135,000
Total Unsecured debt.................... -27,000
Net Assets.............................. -22,000

I am literally crying as I went through this because I feel like there is nothing at all I can cut from my budget I am already living day by day waiting for judgment day to arrive.. I feel that I am just one emergency spend away from losing control of everything

enthusiasticsaver

I am afraid that borrowing is unsustainable and very little room to cut in your budget. Is your credit score ok and are you able to move any of that £9k credit card balance on to a 0% card? Can TSB or Zopa reschedule the loan over a longer period to reduce the payments?

Can you take in a lodger for a year or so just to get a handle on the debts? Sell anything or a second job on a temporary basis?

Lots of things you can do and as you only have the three debts I think this can be sorted. Ultimately the debts are unsecured so there is very little they can do. If you can't get anywhere with moving the credit card to a 0% deal or restructure the loans to get the payments lower then write to the lenders and telling them you are experiencing financial difficulties and what can they do to help you. Also cut the cards up. The very worst thing you can do is keep adding to the debt pile. If they won't help then defaulting is the next stage. Pay the mortgage, council tax, utilities and food first. The debt payments should be reduced according to how much you can afford. You can deal with it yourself or ask step change to help. You can do this.

Cherryfudge

Hi Lucy,
You will get lots of help on here, it's coming in already. You may be able to make some savings in your grocery budget (depending on things like what shops you have in range, and if you have any special dietary needs). Have you been on the Old Style boards looking for their amazing budget recipes? Also try googling for budget recipes if you haven't already. I'd recommend the blogger Jack Monroe for her recipes and on another thread here, someone has just reminded me of this super website: http://www.cheap-family-recipes.org/index.html?opt=rcost

The other thing I noticed is your travel expenses - are they exactly £100, or is that an average? I'm assuming the travel is your commute. This is a bit of a long shot but could your hours be condensed so you don't have to travel every day?

I'll subscribe to your thread and cheer you on. Hope you get some sleep tonight.

macman

A couple of things I noticed:
Water rates: this cannot be zero if you have a mortgaged property?
Council Tax-did you apply for the single person discount when the B/F moved out?
Insurance: no need for life assurance unless you have dependents-better to spend it on some contents insurance instead.
Mobile: if you are out of contract, switch to a SIM only deal to save £10-£15 per month.
Good luck.

chevalier

you took the massive pay cut, can you go back to the previous well paying job, or get a similar one?

ani*fan

Hi there Lucy 89 :hello:

Well done for posting and welcome to the boards! This is absolutely the right place to get all the help you need. Good move.

The first piece of advice from me is...do not panic. This is all fixable. You have a job, a good income and you have no dependants. As long as you also have your health then you are in a great position to do what needs doing to get yourself sorted out.

Step 1 is that you need to get solvent and that means finding £202 this month. You need to do everything you can to find that cash and stop the CC increasing. You can sell books, cds, all kinds of stuff on music magpie and other websites. Use gumtree and fleabay, look out what you don't need, clothes, anything you can find. Have a massive clear out and sell the lot. You can also sign up for mystery shops, and a million other things to make extra cash. Make this a challenge. Check other threads on here, everyone is doing it. If you manage to raise £202 you have done extremely well. And made yourself solvent this month.

Step 2 is to try and decrease your outgoings. Your budget is to the bone already. As others have already said, if you have good credit, you need to stop the massive interest on your CC as a matter of priority and therefore reduce the monthly payment. It's costing you a fortune. Apply for 0% cards to get at least some of it transferred. Then try to get the loan terms changed to reduce the monthly payments.

Come back and let us know how you get on with these things and we'll take it from there. We have all been there, we are all behind you and you can totally fix this. Best of luck.