My light-bulb moment, need help

mrfoxy

Hello everyone,

I recently had my ‘light-bulb’ moment in life. I’m looking for a bit of advice. I feel so ashamed and so embarrassed by my situation.

Here’s a little bit about me:

I’m 32 and in £6,175 worth of debt.

I have mental health problems, in particular depression, generalised anxiety, social anxiety and OCD and I’ve suffered with them since I was around 14 years of age. I’ve had help at some points in my life with these problems by professionals but I’ve never really managed to combat them properly. Recently, I figured that it was my mental health problems that got me into debt. I go through spells where I like to spend a lot of money then suddenly crash and realise what have I done. I am currently under Healthy Minds for one-to-one therapy with a psychological well-being practitioner. I’m hoping I can get the help I need now, which I’ve sorely needed for most of my adult life.

Part of my light-bulb moment has been realising that I’m heading in the wrong direction in life, as well as recognising my bad levels of debt and mental health. I am currently working in a supermarket. I’ve been in the same job for 14 years. I started this job as a student and I have a little bit of education. A*, B’s and C’s at GCSE level. I have an AVCE in ICT which doesn’t really count for much in terms of applying for University, as it is no longer a recognised course. I have A levels in English and Media Studies. I’m talking about my education as I want to go back into education when I get myself sorted because I know it will enhance my career prospects.

So onto the debt:

I have made the decision to cut the cards up and STOP SPENDING.

My credit card debt is mostly clothes, holidays, overspending on nights outs. Sort of supplying an income I’m not really getting from work. I’m currently looking to change jobs as a means of perhaps paying off the debt but obviously my anxiety is really getting in the way. I don’t have many skills other than customer service skills. I know applying for a new job is really stressful and it could be good/bad for my situation. So currently I’m focusing on getting myself better to be honest.

I’m currently considering some options with regards to the debt.

Pay it off with balance transfers between HSBC and Barclays (the two cards I own) over 40 months or so. This would mean obviously using the balance transfer offers and then moving between the two cards. I will incur fees but it seems cheaper at the moment than any consolidation loan.

Looking into another way of perhaps just writing off the debt. I honestly have no idea what to do in terms of this but it’s something I’d consider. It would mean I’d have no access to any credit for the foreseeable future but it would mean I’d start at day zero I guess and then I can move forward with my life and gain some inner peace.


I am currently living with my partner but our relationship has become strained recently. I am supported by my partner financially but obviously if we did leave each other, I could be in a real sticky situation. I could go back to my Mum’s house but she’s also on a really low income. When we moved out in 2015, my partner promised to look after me. Now I feel foolish because I didn't look after myself. I didn't tackle my mental health problems, instead chose to drown myself with alcohol etc and forget about building a life for myself.

I’m getting help now with my mental well-being and now I need to sort my debt problem so I can move forward with my life.

These are the bills I pay-

Incomings: Roughly £840 (can change with overtime)
Rent: £280
Broadband/Internet/Sky - £86 (contract runs out in May)
Union: £12.60
Personal phone bill: £15
Credit card bill: £150

Leaving: 296.40

This amount after bills could change if we split or I go back home. I’d probably be left with £100 a month to myself, possibly even less. So it's important for me to tackle my debt head on now incase of any eventualities.

Any help/advice etc is very welcome. Thank you...

sourcrates

Hi,


Your debt is not massive in the grand scheme of things, but then again neither is your income, i`m glad you are receiving help for your mental health problems, that`s a good start, as is cutting up those cards.


Your SOA looks a little sparse to me, no food bills, utilities, there's lots missing from it, you don`t have much in the way of disposable income either, increasing your income would help, as would moving back home, in a financial sense at least, if the payments become unaffordable, your options are either a debt management plan, or possibly a debt relief order if all else fails.

mrfoxy

Our house costs £375 each to run. I pay £280 but I've shouldered the broadband/sky/satellite bill of £86. As far as food goes, my partner is paying for the food as they earn considerably more than me. So it's very much teamwork at the moment because of my debts and illness. But I can't help but thinking if I didn't have that credit card bill, I'd be able to pay for half of the food. Does that make sense?

Here's the housting costs breakdown. We rent privately:

Rent - £525 per month
Gas/Electricity etc- £81 per month
Council Tax - £110 per month
Water Rates - £35 per month

Divide this by 2 people and it's £375.50 each per month.

Silver_Queen

Your income is below minimum wage so I assume that you work part time? Can you extend your hours to work full time?

mrfoxy

My hourly rate is 9.87 at the moment. I could work 30 hours a week instead of 23. This would give me around an extra £200 income. But as stated in my post, my mental well-being isn’t so great at the moment. I’m doing well though work wise, as I’ve barely had any sickness despite being overwhelmed in the past 2-3 years.

Looking at a new job or study is something I’m going to have to do eventually. I know that for sure. But I’m guessing for now I should probably persist with paying the debt off rather than wiping it off with a debt order.

zippygeorgeandben

I won't offer any advice but just wish you luck in the future.

mrfoxy

Your advice would be very welcome.

Craig1981

i think what you are doing to stop spending is correct - the total debt is (in my opinion) too low for bankruptcy and you will probably have more than £50 surplus income if you sty where you are and definatley more if you move back in with your family, and that will mean not qualifying for a DRO (gain, my opinion on what i have read)

do not do a consolidation loan - this is the worst type of credit you can do. if you have the means for balance transfers at 0% for a couple of years, that would be your best best

other than that, what you have done by cutting up cards is a start - make sure you paying however more than the minimum due on the higher of the APR cards. if the APR is the same, then tackle higher payments on the larger balance

Craig1981

the only other option, if you are not worried bout your credit history and accounts, is to ask the card companies to freeze the accounts (technically closing them) and come to payment arrangements with them directly.
your credit file may show these accounts as defaulted, but, will stop you getting other credit as well, and save on interest

theoretica

How long to work, for people who can choose, needs thought - if you are working less you not only earn less, but also have more time to spend money. I imagine that the Christmas season will have lots of opportunities to pick up more hours and make a good dent in the debt.


You mention an interest in more education for better career prospects. If this is your reason for studying I suggest you work on a specific and strategic plan - what to study, what prospects you want opened, how else you might get there. What can you fit in physically and mentally part time around the hours you currently work?

Fireflyaway

The main thing is you have realized what needs changing and are ready to do it.
I'd recommend looking into dave Ramsey and his snowball method. You list all your debts then pay minimum on everything expect the smallest. Tackle the smallest with everything you have spare. Then move into the next. The idea is it's motivating so you want to keep it up. Your debt isn't that massive and you have spare income so it's really doable. Think how important your credit history is. If not much then maybe arranging smaller repayments on your credit cards will help. I did that and although it messed up my credit history i managed just fine. A good credit score isn't a measure of sucess!
Re your job. Don't underestimate your skills. Customer service can be used in so many different fields and actually few people do it really well. I started in retail and then moved into local government in a call centre and worked my way up.
You mention IT. You could look to get an entry level helpdesk role. That will involve customer service. You can then get your certification in your spare time and move up the ladder.