Help! Options?!

Beautiful-Moose

So basically I think this is what they call rock bottom........

All payments are up to date on every account I owe money for. However my Barclaycard debt is killing me. It stands at £16k. I pay £375 a month as the minimum payment but can't afford to pay any more than the minimum payments on this card. I also pay £240 a month for a loan that has a year and a half left on it, have a £500 overdraft which I live in every month and a Natwest card which is a closed down account so I can't use the card and I pay £45 a month on that.

I am thinking of contacting Barclaycard and telling them I can't afford to pay them anymore and give them a much lower payment each month, close the account down like I did with Natwest and just keep paying them until the debt is gone. I know it will trash my credit file but if it means I can live again and not make myself sick and upset with worry everyday then so be it. Is this even a real option for me?

DD265

Could you post a statement of affairs? That's really the best starting point and then posters will be able to give you some great advice!

http://www.stoozing.com/calculator/soa.php

sourcrates

Beautiful-Moose wrote: »

So basically I think this is what they call rock bottom........

All payments are up to date on every account I owe money for. However my Barclaycard debt is killing me. It stands at £16k. I pay £375 a month as the minimum payment but can't afford to pay any more than the minimum payments on this card. I also pay £240 a month for a loan that has a year and a half left on it, have a £500 overdraft which I live in every month and a Natwest card which is a closed down account so I can't use the card and I pay £45 a month on that.

I am thinking of contacting Barclaycard and telling them I can't afford to pay them anymore and give them a much lower payment each month, close the account down like I did with Natwest and just keep paying them until the debt is gone. I know it will trash my credit file but if it means I can live again and not make myself sick and upset with worry everyday then so be it. Is this even a real option for me?

You can do exactly what suits your circumstances, but you should post an SOA first as a starting point.

Beautiful-Moose

This is just my side of things in our house........

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................ 1740
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1740

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 624
Management charge (leasehold property).. 0
Council tax............................. 64
Electricity............................. 20
Gas..................................... 15
Oil..................................... 0
Water rates............................. 13
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 50
Petrol/diesel........................... 40
Road tax................................ 14
Car Insurance........................... 50
Car maintenance (including MOT)......... 0
Car parking............................. 45
Other travel............................ 150
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 24
Entertainment........................... 50
Holiday................................. 25
Emergency fund.......................... 25
Total monthly expenses.................. 1472


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
CC1............................16000.....375.......16.9
Loan...........................6461......240.......0
CC2............................1775......45........18.9
Overdraft......................500.......25........0
Store Account..................600.......35........0
Total unsecured debts..........25336.....720.......-


Monthly Budget Summary
Total monthly income.................... 1,740
Expenses (including HP & secured debts). 1,472
Available for debt repayments........... 268
Monthly UNsecured debt repayments....... 720
Amount short for making debt repayments. -452

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -25,336
Net Assets.............................. -23,336

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

National_Debtline

Hi Beautiful Moose,


I have put some comments in red to assist with your SOA and some other negotiation information below.

Beautiful-Moose wrote: »

This is just my side of things in our house........

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................ 1740
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1740

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 624
Management charge (leasehold property).. 0
Council tax............................. 64
Electricity............................. 20
Gas..................................... 15
Oil..................................... 0
Water rates............................. 13
Telephone (land line)................... 0
Mobile phone............................ 50 - this is high, when possible you should try and reduce this.
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 50 - could this be reduced at all?
Petrol/diesel........................... 40
Road tax................................ 14
Car Insurance........................... 50
Car maintenance (including MOT)......... 0
Car parking............................. 45
Other travel............................ 150 - what does this cover? Is there anyway to economise the travel costs and only use the car or other?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 24 - is this every month or more than 1 visit? Can this be reduced?
Entertainment........................... 50
Holiday................................. 25
Emergency fund.......................... 25
Total monthly expenses.................. 1472


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
CC1............................16000.....375.......16.9
Loan...........................6461......240.......0
CC2............................1775......45........18.9
Overdraft......................500.......25........0
Store Account..................600.......35........0
Total unsecured debts..........25336.....720.......-


Monthly Budget Summary
Total monthly income.................... 1,740
Expenses (including HP & secured debts). 1,472
Available for debt repayments........... 268
Monthly UNsecured debt repayments....... 720
Amount short for making debt repayments. -452

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -25,336
Net Assets.............................. -23,336

Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

It is clear that the minimum payments are no longer sustainable but the debts that you have described are all non priorities, so you must approach them all in the same way (and amend any current arrangements if necessary). They will all need to get a proportional slice of your surplus and you should write to them with a budget and ask them to freeze interest and charges as standard. If they refuse then send the payment anyway and remember their enforcement options are limited to debt collectors and county court.


You will need to change banks and include the overdraft in this repayment plan, and open a new basic account with a bank you owe no other money to. A free DMP could also be an option to help you negotiate and repay.


Laura
@natdebtline

MallyGirl

Beautiful-Moose wrote: »

This is just my side of things in our house........

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................ 1740
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1740

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 624
Management charge (leasehold property).. 0
Council tax............................. 64
Electricity............................. 20
Gas..................................... 15
Oil..................................... 0
Water rates............................. 13
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150 If this is just your half then this can be reduced
Clothing................................ 50 Stop buying for a few months
Petrol/diesel........................... 40
Road tax................................ 14
Car Insurance........................... 50 If this is just your half then this is quite high
Car maintenance (including MOT)......... 0
Car parking............................. 45
Other travel............................ 150
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 24
Entertainment........................... 50 If this is just your half then this can be reduced for a bit
Holiday................................. 25
Emergency fund.......................... 25where is this going - it says zero in cash
Total monthly expenses.................. 1472


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
CC1............................16000.....375.......16.9
Loan...........................6461......240.......0What is the actual APR?
CC2............................1775......45........18.9
Overdraft......................500.......25........0What is the actual APR?
Store Account..................600.......35........0What is the actual APR?
Total unsecured debts..........25336.....720.......-


Monthly Budget Summary
Total monthly income.................... 1,740
Expenses (including HP & secured debts). 1,472
Available for debt repayments........... 268
Monthly UNsecured debt repayments....... 720
Amount short for making debt repayments. -452

Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -25,336
Net Assets.............................. -23,336

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

a few observations added in red.
Have you addressed the earnings shortfall that led to the CC spends and loan?

Beautiful-Moose

Mobile phone............................ 50 - this is high, when possible you should try and reduce this.

My contract runs out in December so until then I am stuck with this. Once I get to the end I won't upgrade my phone and opt for a cheaper option. I am guessing once my credit file is hit I won't be able to get a contract phone anyway.

Clothing................................ 50 - could this be reduced at all?

This is a rough figure and isn't an every month spend. I always try to use voucher codes and sale periods to buy any clothes so I don't pay top prices and hardly own anything designer.

Other travel............................ 150 - what does this cover? Is there anyway to economise the travel costs and only use the car or other?

I wish I could get this down but this is to cover my monthly travelcard as I live in London. I can't drive to work as I work the other side of London so it would take me longer to get there and there is no parking available at my work either so would be paying out even more to park in the area.

Haircuts................................ 24 - is this every month or more than 1 visit? Can this be reduced?

Again this isn't an every month thing. I probably go once every 3 months unless I have a special occasion coming up.

Car Insurance........................... 50 If this is just your half then this is quite high

I have managed to get a cheaper deal for next year as renewal is needed for the end of the month. This will be going down to £36 a month.

Groceries etc. ......................... 150 If this is just your half then this can be reduced

Again a rough estimate. Some months it is a lot lower than this but this also covers any lunches that I need to buy when I am out and about with work. Again I have got better at taking my own lunch everyday but sometimes my work can take me away from my office so it isn't possible to plan and take a lunch with me.

Entertainment........................... 50 If this is just your half then this can be reduced for a bit

Again happy to reduce this. Have been having my friends over to my house a lot more recently rather than paying to eat out all the time. I have also cut down on my drinking when out to save me some money. A lot of the time I will drive to wherever we are going so I have the excuse of driving to get me out of rounds etc and not pay crazy London pub prices.

I know it is not an excuse but I believe I started to get in to this mess around 8 years ago. My mum was diagnosed with cancer, my dad lost his job and my sister was at college. With both parents not working and me in a very low wage at the time I used credit cards to help them out and also used it to spend my way out of the tough time I was having. Going on weekends away, drinking, takeaways, concert tickets. When I met my partner (now Fiance) we carried on spending this way but we also used a large chunk of the credit I had available to move out.

I have been very stupid in my spending I now realise. What is making me sad is that I can't even begin to think about saving up for a wedding with the mess we are in.

I am not sure what my first steps should be this week. Do I cancel my Direct Debits to my CC1? Do I write letters to them all? What do I do?

D_M_E

If the council tax is over 10 payments, ask if they will accept payment over 12 months instead.

Would also question the car expenses - if you cannot travel to work with it, consider if you actually need one and can save the expense of having one just to basically park it up.

National_Debtline

Hello again,

The first step this week is to open a new basic bank account, with a bank you owe no other money to. Move your income into this, and all of your essential direct debits - no debts. Then, once this is done, send a hold action letter to the debts asking them to give you 30 days to get advice and consider your options - https://www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx


A first draft of a SOA is rarely the final one, so don't worry. You mentioned that some of your spending that is listed as monthly is not actually spent monthly. That is fine if you are budgeting for when you need it, but you still need to be mindful of some costs. So, for example, haircuts - listed at £24 per month - if that is what you need to budget monthly because you spend £48 every 2 months, then this is correct. But, if in reality you spend £40 every 3 months, this should be reduced to a £13 monthly budget (I hope that make sense). This would be true of things like clothes and entertainment as well.


You should then get in touch with one of the free debt charities for more advice about options that would suit you. Best of luck,


Laura
@natdebtline

theoretica

A few comments below, but I think you are right that keeping on paying as you have been is not feasible.

Beautiful-Moose wrote: »

This is just my side of things in our house........ So I assume most of the figures below are half the household total.

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................ 1740
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1740

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 624
Management charge (leasehold property).. 0
Council tax............................. 64
Electricity............................. 20
Gas..................................... 15
Oil..................................... 0
Water rates............................. 13
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150 So £300 between you? That is high.
Clothing................................ 50
Petrol/diesel........................... 40
Road tax................................ 14
Car Insurance........................... 50
Car maintenance (including MOT)......... 0
Car parking............................. 45
Other travel............................ 150 As you don't drive to work, do you really need the car?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 24
Entertainment........................... 50
Holiday................................. 25
Emergency fund.......................... 25
Total monthly expenses.................. 1472

System

Hiya,

You mention it's your side of the story - what about your other half? Do they also have debt? Is there anything that you can do together to tackle this?

Big hugs - you can get this sorted xx