Debts piled up, no payments made this year - HELP

dealer_wins

Tiny bit of life advise! Only move in with your other half if you truly love her and would do that if you had zero debt!!

Fireflyaway

You have completed part of the journey already : knowing what you owe to who and deciding to tackle it.
I'd recommend checking out dave ramseys snowball method. Have a look at the debt free screams on his YouTube channel. There are people who have paid off tens of thousands. It's really inspirational.
Separate accounts for debt payments and day to day living will help and definitely do a written budget. See where you can make savings.
When I was in your situation I contacted payplan. I did a debt management plan which won't be made public. You make 1 payment to payplan and they in turn pay your creditors.
My tip would be don't use all your spare income for debt repayments. Something will come up at some point so allow some wiggle room. If you do income and expenditure say your food budget is a bit more than it is so you have extra for emergency.

PoorGuyNextDoor

Hi guys thanks for the replies and advice, i take it all on board.
I’m at my OHs/vice versa most of the week anyway so paying two properties is a waste. My expenses will fall massively if I move in with her which it looks very likely will happen in january.

I might go down the payplan route so it keeps it to the one payment for me making it simple. Will the endless amounts of letters I get stop once I’m paying through payplan and making a dent in these debts?

I read through an old diary on here that was 115k paid off in 6 years, inspiration for me I must say! And makes my 50k look a walk in the park even though I know it won’t be.

I just wonder how much freedom il have once all my wages are mine and I’m living well within my means. These forums really are a life saver, can’t believe they’re free!

Might start up my own diary to keep track of things, likely starting with my new budget once living with my OH and I know how much realistic payments will be! Thanks for all your help so far guys I’m extremely grateful.

shteca

I just posted a thread detailing my situation right now. I am in a very similar situation but just a tiny bit ahead in my realisations, I know how it feels! Its frightening and overwhelming.
I too am self employed, have very varying levels of income and struggle with high repayments on loans every month.
The first thing I did back in May was STOP SPENDING! I logged into my bank account online and went through every payment over the last two years and wrote it down and categorised it. Then work out where your money is going. What I found is, I spent every month what I was earning on a good month. You need to be doing it the other way round. Spend what you make on a bad month. For you that will be the £2,000 / £1,400 after taxes etc. That means "beans and rice" no eating out, no going out.
I discovered a guy called Dave Ramsey. Absolutely changed my life, look him up on YouTube.
He teaches to do the "debt Snowball" list your debts smallest to largest and pay off the smallest one AS QUICKLY AS YOU CAN and then work on to the next one.
Do not look to bankruptcy you can do it. You have a good salary and can get through it in three years but it needs 100% commitment.

PoorGuyNextDoor

Overwhelming but small steps il soon get going and work it down. The £2,000 is net and that’s when I have a slow month I think. It’s kinda guesswork as I’m not long back at work.
Iv looked into Dave Ramsey and snowballing. Looks like il get them all to agree to keep interest frozen and ageee to taking small payments each month until I can afford to make it my priority debt and get them cleared quickier.

The couple of payday loans have to be my priority at the minute, I’m aiming to have them gone by the end of February.

Do you think there will be any negotiation with the car finance company? It was a small deposit i paid on it, so high interest(which is what most of that money due back is!!) The car is long gone. I was going to leave them till last although I suspect they will be the ones putting me under the most pressure to get it paid.

3 years is the aim and that’s what I was going for. Dividing 50k by 36 months still requires 1,388 pcm paid to them which is do able if I knuckle down and live well within my means!

The old sayings about living on noodles/beans on toast etc to save money, one of the wealthiest people I know lives off of that sort of meals 5 nights a week with the weekend being bigger meals...not nessesarily a bad habit to get into as I need to widen the gap as much as possible here,
Maximise income and shrink the outgoings as much as possible at the same time. A good month to me from now on will simply be anything paid off the debts just so I know that they are decreasing!

tallyhoh

Just a word of warning about moving in with your partner. If you do have problems with debt, any joint finances will affect your partner as well. Please keep all your finances totally separate.

BabyStepper

I'm glad someone mentioned the difficulties of moving in with your partner when in this much debt. Debt causes a huge strain, and learning to live with someone is also a strain. Put these 2 things together and life might get very tricky indeed. Don't make the move purely for financial reasons. And spending most of the time at each others' houses is not the same as living together.

In your position I would get my finances in order a bit first, prove that I could afford to live on my own and pay the debt down, and then make the decision to move in together. Saving money should be a happy by product of living together. At the moment you make it sound as though you need to do it in order to get out of financial difficulty.

Good luck!

PoorGuyNextDoor

Iv lived with a previous partner before so I know what I'm letting myself in for. Its not purely down to financial reasons I'm planning on moving in but I mentioned it as it would definitely help and is a bonus to go with the enjoyment of living together.
My lease is up soon and the property is likely going to be sold so if its not moving in with her id need to find somewhere else. Which wouldnt be easy with my poor credit rating.

Iv been reading up on Dave Ramseys snowballing effect aswel as reading rich dad poor dad to try and change my perspective of money. My expenses iv managed to minimise since going off work so im into a frugal living habit now. My main outgoing is actually my food as im a bit of a foodie it can mount up. I have however at least started taking packed lunches everyday instead of dropping a few pounds a time in the local bakers.

Im away to get in touch with all my creditors via letter so will wait and see if they are all happy freezing interest. Will i say theyre all getting £1 pcm etc with one getting £££ till its paid off then onto the next or will i just offer the low payment per month and say il pay them more when i can ?
My statement of affairs is hard with varying income and an uncertain future where il be living.
Going to join the millionaire challenge, pay off as much as you can in 2019 and frugal living so im always on a budget and keeping track.

Thanks for the replies and to those of you who sent me a private message its much appreciated.

PoorGuyNextDoor

Iv lived with a previous partner before so I know what I'm letting myself in for. Its not purely down to financial reasons I'm planning on moving in but I mentioned it as it would definitely help and is a bonus to go with the enjoyment of living together.
My lease is up soon and the property is likely going to be sold so if its not moving in with her id need to find somewhere else. Which wouldnt be easy with my poor credit rating.

Iv been reading up on Dave Ramseys snowballing effect aswel as reading rich dad poor dad to try and change my perspective of money. My expenses iv managed to minimise since going off work so im into a frugal living habit now. My main outgoing is actually my food as im a bit of a foodie it can mount up. I have however at least started taking packed lunches everyday instead of dropping a few pounds a time in the local bakers.

Im away to get in touch with all my creditors via letter so will wait and see if they are all happy freezing interest. Will i say theyre all getting £1 pcm etc with one getting £££ till its paid off then onto the next or will i just offer the low payment per month and say il pay them more when i can ?
My statement of affairs is hard with varying income and an uncertain future where il be living.
Going to join the millionaire challenge, pay off as much as you can in 2019 and frugal living so im always on a budget and keeping track.

Thanks for the replies and to those of you who sent me a private message its much appreciated.

Unicorn_cottage

Ooooo will have a look at the millionaire challenge - good luck with everything PoorGuy!