Debts piled up, no payments made this year - HELP

PoorGuyNextDoor

Hi there. Iv been here in the past (just got 2 year badge yet barely posted)
My debts have mounted up. Now iv just taken out a payday loan in September which i havnt paid back. So I think iv done away with every aspect of borrowing I can use.

I owe a total of £49,952.
This is made up of
Payday loans - £1,461
Bank loans x 5 totalling -
£4,100
£4,100
£12,500
£8,200
£3,006

2 x credit cards -
£4,200
£3,200

Finance on car ( that I no longer even have :mad: - £8,653

total is £49,952 - as above :eek:

So where do I start? Iv not made payments on any of these loans or credit cards in a year. The finance is recent as I only just got rid 2 months ago and stopped paying monthly payments for a car not worth repairing...
The payday loans are not shouting too loud...yet.

Whats my first move regarding paying things off? Start with the payday loans, then the finance, banks last?

My outgoings for everything comes to £2,100 pcm. This is living myself. Might be able to reduce this by half if i move in with my partner next year ( so far thats the plan for when my lease is up)

Income wise it varies. I am a sole trader and in my wost month in the last 12 i had net income of £2,000. Best month was £6,000. It varies so much it can make it harder to budget. i need to get a month or two ahead of the bills to make it all easier. im determinded to pay these off and rebuild my credit rating. Im in scotland if that makes any difference.


What do you lot recommend I do next? Save up for F&F settlement offers? Iv seen posted elsewhere on MSE that most would accept 75% of money owed as a settlement figure, is that likely?

Thanks for any advice, time to sort it out once and for all.

sourcrates

Hi,

Any reason you cannot go bankrupt ?

PoorGuyNextDoor

I can’t go bankrupt or have my debt struggles public knowledge due to my career. I’m also a director which i can’t be if I’m bankrupt so need to look at ways to get it paid off/payment plans agreed

Unicorn_cottage

Why have you not been paying?

-taff

Your figure is out, the total of what you've posted is 48959.
Ring up Stepchange and see what they advise...you could do a DMP, and I'm not sure about an IVA...

PoorGuyNextDoor

Is a dmp public knowledge?

Iv not been paying as I was off work November last year till July so first pay wasn’t till end of August .
Slowly getting back on my feet I’m now looking to be making payments and get this all dealt with once and for all.

Iv got zero emergency fund so I assume building that up should be my first priority

LMCD

hi

have you looked at snowballing before?

its a good tool to show what should be paid first.

Are the creditors still charging interest to you? Asking them to halt any further interest and they will ask for a SOA to do this.

But its a start to solving your debt. Best wishes

MrsOli

I would take the one you owe least on and pay it off - snowball method.
I too have a lot of debt. I know it can be overwhelming knowing where to start.
Filing bankruptcy is such a last resort - I'm surprised people suggest it so easily. It has huge ramifications.

Unicorn_cottage

There seems a lot more to this story than you are letting on - maybe you are just wanting to hide your identity. I assume you had no contact with your creditors whilst you were off work? I assume you have now had additional charges and defaults against each debt. I make the assumption that you were ill but that is only a guess. I would call 1 of the debt charities and have an OPEN discussion with them regarding your situation so they can give you the best advice.

PoorGuyNextDoor

I was ill I told the banks when I went off I’d just have to get back in touch when I was back working which i am away to do next week.
No interest is being charged. Defaults on them id assume as get letters now and then saying so.

Ideally il clear the payday loan ones in the next few months then I can start looking at the bigger debts. I’m familiar with snowballing what’s best though pay off highest interest one first(if there isn’t any being added) or the smallest figure?

Iv been searching all over these forums and reading some other diaries. It seems an obvious money saving idea is to move into my other half’s house as they own it outright I’d just have to pay towards the bills( I reckon 600 pcm instead of the 1,600 I’m paying right now)
The other 400 is cost of my car and the 100 which makes 2,100 expenses pcm is just misc expenses that always seem to pop up, parking, buses etc now and then.

Determined to stay away from bankruptcy. I know Iv got a lot of work ahead and a long road. I can and will do it though, by the time I hit 30 it could all be gone.

LMCD

Work out what you can afford to pay to them all.. for example if you had £100 to spread across ten debts, offer to pay £1 pound to each debt of bar one, the lowest amount owed; pay £90 to that. Then in no time that's gone... then to the next if you google whats the cost. It will give you a debt calc and you put in the amounts owed, how much your minimum payment to each one is and will show you the best order of tackling them.

If you do this and have a plan you then know what to write to the companies with an offer and state that you have several other debts, and that you are clearing them.

Some may offer the repayment plan with a reduced balance. Any offer of payment is better than none.

Moving in with your partner will defo help you dent it, but if you did, be sure to not be lax in trying to tackle your debt as the disposable income would be of more benefit to chip away and also slowly save.

Also to consider is your debt and then being at that address.. check out if it will affect their rating and credit under that address.

Best wishes.