Please help - debt advice needed!

SquiddlyDiddly123

I've recently discovered that my husband (OH) has around £6,000 in debts from 9 different sources (mixture of an overdraft, various credit cards and numerous payday loans) which has accumulated over the last few years due to a combination of a hidden gambling addiction and depression. My OH continues to miss payments because he just can't afford them and, naturally, his credit record is horrendous!

I'm particularly really worried about some large final lump-sum payday payments that are due soon.

I've always been financially savvy and so discovering this, and living with it, is really stressful. It has impacted our relationship, my finances and mental health and I just don't know what to do next to help get us out of this situation as quickly as possible.

We have since done the following:
1. Set up a weekly/monthly budget & payment plan (an excel document - nothing formal)
2. OH has self-excluded himself from the gambling websites he uses
3. Myself and other family members have helped pay off the most urgent outstanding payday loans
4. I have access to my OH's internet banking to manage payments and monitor his spending activity
5. I have called the payday lenders he has outstanding loans with to try and re-negotiate payment terms and/or interest rates however none of them will speak to me as I'm not the account holder

I have so many questions, such as:
1. Is there anything else we can do?
2. What help is available to us in terms of consolidating the debts or anything else that may be helpful?
3. Do payday lenders not have some sort of responsibility towards their customers? I'm so angry at how reckless they, and their lending criteria, are

I realise that £6,000 probably isn't a completely ridiculous amount of money and we'll get there in the end but I'm currently feeling very out of my depth.

Any advise would be greatly appreciated - thank you!

WannabeFree

First of well done for standing by him and helping.

Secondly I really can recommend GA for help for DH over the gambling. I tried so many times to stop and lasted only a few weeks/months before it crept back in and I ended up in an even worse situation. This time GA has been my life changer and I'm nearly 14 months bet free.

Now onto the debt. DH needs to set up a basic bank account elsewhere. Not connected to anywhere he has debts too. Get his salary/income paid in here.

Set up a budget or call one of the FREE debt charities for help with setting up an agreement to repay at what he can afford.

mitch2509

There is also software that can be installed to help prevent him being able to get onto online sites, I think it's called K9 but there are others.

SquiddlyDiddly123

Can anyone tell me whether we should consider a DMP? Is this the same as, or different to an IVA?

WannabeFree

It is different. Someone who can explain better than me will be along soon I'm sure.

However like I said one of the free debt charities will help and give advice on which route is best to take.

National_Debtline

Hi there and welcome to the forum


There's some good advice above, and I would second WannabeFree in suggesting your husband seeks some specialist help with the gambling. He'll need this to be under control in order to make any debt advice effective.


Another very important step is to withdraw the continuous payment authority (CPA) he gave the payday loans. That is the permission he gave them to help themselves to money out of his bank account. He can do that verbally by contacting his bank, but it is a good idea to follow that up with a letter to the bank and payday loan companies. You can find a factsheet on payday loans here https://www.nationaldebtline.org/EW/factsheets/Pages/payday-loans/payday-loan-debt.aspx, it includes links to sample letters.


To work out whether a DMP or a different debt option is appropriate your husband will need to complete a statement of affairs (SOA). That shows income, outgoings and what is available for the debts. If you post it back on here we can give you further advice. You'll find a SOA here http://www.stoozing.com/calculator/soa.php, just click the format for MSE button before posting.


Best wishes


Susie
@natdebtline

SquiddlyDiddly123

Hi Suzie,

Please see below.

At first sight, it seems very manageable however my OH has numerous missed payments from various lenders and so we're fire fighting these overdue payments as well as the new monthly ones that keep coming in.

A couple of things to note:
1. His outgoings are low because I'm paying for our monthly car/household commitments so that he can focus most of his income on paying the debts off
2. Obviously, the payments to family members aren't a priority (they obviously agree) and can be prioritised accordingly
3. A few of the payday loans have their final lump-sum payments due within the next two months (one is for £800 for example - I'm really worried about where we're going to find the money for this in particular!)
4. I don't know the APR of the loans below right now, sorry

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1200
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1200

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 8
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
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......................... 20
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 403


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
Overdraft......................300.......0.........0
Credit card 1..................1800......60........0
Credit card 2..................580.......55........0
Family member 3................2000......0.........0
Family member 2................700.......100.......0
Family member 1................600.......100.......0
Payday loan 3..................800.......99........0
Payday loan 2..................800.......200.......0
Payday loan 1..................400.......125.......0
Credit card 3..................180.......135.......0
Total unsecured debts..........8160......874.......-


Monthly Budget Summary
Total monthly income.................... 1,200
Expenses (including HP & secured debts). 403
Available for debt repayments........... 797
Monthly UNsecured debt repayments....... 874
Amount short for making debt repayments. -77

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -8,160
Net Assets.............................. -8,160

mitch2509

Speak to step change or one if the other debt charities as they might suggest a dmp and could possibly halt the interest.

Grumpelstiltskin

2 people only one income?

The SOA is not sustainable, No TV Licence?

Never buy a present?

No car expenses? No car insurances?

Take time and redo the SOA correctly.

National_Debtline

Hi there again


The first thing I would check is if you are happy to be paying the lion's share of the bills? If you are that is fine, but bear in mind the only expectation is that you split household bills proportionally, based on how much each of you earns.


You mention family members don't need to be prioritised but you have shown monthly payments of £100 per month on two of them. Do those payments need to be maintained?


Either way it's looking like your husband will have the option of negotiating reduced payment plans and a freeze on interest himself, or entering in a debt management (DMP). In a DMP a company will do all the negotiating for him and he will just need to make a monthly payment. Don't use a fee charging company as one of the free debt advice agencies will be able to arrange one without any charges.


I'd advise contacting one of the debt advice agencies next so you can talk through these options in more detail. I hope all goes well.


Susie
@natdebtline

SquiddlyDiddly123

Grumps - please take the time to read my notes before the SOA.

Susie - thank you for coming back to me. The £100 payments don't have to be maintained if there are other more urgent payments due in that month.
Could you please tell me:
1. Do payday lenders have a responsibility to freeze interest and/or agree to a reduced payment plan? Or is it their own decision? (I'm just wondering how I broach the subject with them)
2. Because we're married, do I have a responsibility towards paying these debts?