I'm Starting To Panic

MadisonAvenue

Hi all,

As the title suggests, I'm starting to panic about my current situation.

Last month, I was fired from my job in telemarketing/sales (I was underperforming as I'm not a natural salesman). I've been looking for work ever since, but I've now burnt through what savings I had and am left with a £500 overdraft (currently at -£480), with £120 on one credit card and £600 on another.

I was thinking about extending my overdraft to give me a little more leeway, but I'm unsure as to why the bank would extend it given that I'm unemployed (and won't be able to pay until I get a new job).

I've never really been in this situation before, and whilst I'm doing my best to operate on a budget, I'm not 100% sure of what to do since these credit card payments will be due soon. Any advice for a stressed individual?

Silver_Queen

Go to the jobcentre and sign on for whatever benefits you are entitled to for now. It will take a while for you to actually start receiving it so the sooner you go, the better.

Sign up for agency work and don't be proud, take whatever they give you. Cleaning work, whatever. Priority is to keep afloat for now.

Inform your lenders that you're experiencing financial difficulty and ask whether they can freeze the accounts for now.

Open a bank account with a bank that you don't owe debt to so that you can get any wages or benefits paid in to that account, so that the bank can't take the money to offset on any debts.

Get some careers help from Jobcentre, they'll help you with your CV, help look for jobs etc.

Good luck!

Willing2Learn

Welcome to the forum MadisonAvenue

If it were me, I would send a letter to all three of your creditors, asking them to hold action while you seek advice.
I would then contact Stepchange for their professional and free advice.

https://www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx

Edit: And that is also good advice from Silver Queen:
To register for benefits
To register with an agency
Open a new current bank account (make sure the bank is not part of the same banking group)

sourcrates

Try to relax, its only £1200, good advice above.


A new basic bank account with a bank you have no debt with, is a must, and will allow you to retain banking services if your old OD is called in.


They are only small debts, so its not the end of the world.


Once you get work, then you can deal with them.

DCFC79

As you have payments due soon then get yourself registered with agencies. Pull out all the stops to find a job.

macman

Sell some stuff on eBay/Gumtree? I had a clearout recently of some old mobiles (many of us have a few in a drawer somewhere) and was very pleased to get £150 for them.

MadisonAvenue

sourcrates wrote: »

A new basic bank account with a bank you have no debt with, is a must, and will allow you to retain banking services if your old OD is called in.

Thanks for your answer! I'm not 100% sure what OD means, though? Also, do you know if freezing my current accounts (First Direct) will affect my credit score?

Grumpelstiltskin

MadisonAvenue wrote: »

Thanks for your answer! I'm not 100% sure what OD means, though? Also, do you know if freezing my current accounts (First Direct) will affect my credit score?

OD Is overdraft, you do realise your bank can remove your overdraft facility at any time?

This is why you are advised to open a Basic account ( no overdraft ) with a bank you don't owe any money to.

Willing2Learn

MadisonAvenue wrote: »

...do you know if freezing my current accounts (First Direct) will affect my credit score?

Yes, freezing your accounts will probably get marked on your credit file(s). This 'marker' will have a negative impact on your credit history when viewed by potential lenders.

And just so you know, lenders don't see your score. They independently score you against their criteria and policies based on the data held on your credit files(s), plus the data you submit in your credit application.

MadisonAvenue

Grumpelstiltskin wrote: »

OD Is overdraft, you do realise your bank can remove your overdraft facility at any time?

This is why you are advised to open a Basic account ( no overdraft ) with a bank you don't owe any money to.

Oh, of course! OD = overdraft. Silly me!

Does anyone have any advice for the order of paying off my debts? For instance, my rent is due soon (£450), so I'm thinking of paying the minimum on my CC to buy another month's worth of time (the outstanding balance fee would be just under £100).

I really don't see any other option aside from extending my overdraft, but between actually getting it cleared with the bank (I can't see them going for it since I'm now unemployed — although my credit rating is pretty good) and the fact they can recall it at any time, it just seems like a bad idea.

MadisonAvenue

Willing2Learn wrote: »

Yes, freezing your accounts will probably get marked on your credit file(s). This 'marker' will have a negative impact on your credit history when viewed by potential lenders.

In which case, I'm not sure if I want to freeze my accounts. I'd like to try and preserve my score as much as possible.

That being said, is there any reason to freeze the accounts? I'd still need access to a banking service...