Over 30K in unsecured debt SOA

zippygeorgeandben

dfw2019 wrote: »

They let you switch over to direct debit when you are close to paying it off so that you don't overpay out of your earnings (apparently HMRC only reports to them once a year on how much you've paid out of earnings).

Yes this is correct to others who have queried it. They calculated I would have reached £0.00 with six months to go so it went to a DD instead.

theoretica

dfw2019 wrote: »

Sorry I think I am being confusing re. the take home pay and student loans. The 5544 is the amount I take home before the deduction (it used to be less when the loan was taken out of my wages). From last month it is taken as a DD which I presume I can cancel similar to any other DD.

You can cancel it, but they say they will then return to taking it out of your wages. Might be better to try calling them up and changing the date to after payday.

enthusiasticsaver

dfw2019 wrote: »

Yes, it was definitely a last resort to give up the pension contributions. I plan to start them again as soon as I've paid off the very high interest loans.

I've looked a little into the payday loans refunds. I've probably paid in excess of £10K in interest over the years so it would be amazing if I could get some of that back. I'm just not sure if it counts as 'irresponsible' if I could afford the repayments if it wasn't for my gambling (although the last couple of PDLs have been genuinely unaffordable even without the gambling). I've sent off a couple of emails though and will see what comes back.

Thanks for the advice & support!

The fact that you are unable to access reasonable interest rate through the normal sources indicates you are over extended so the PDL companies should have considered this depending on which lending was taken out when. Even on the not exorbitant soa you have posted above you are obviously struggling as you have a £1000 shortfall and you are not gambling now. Claim from these sharks as you have nothing to lose.


Why not start a diary or I can move this thread to the diaries section so we can cheer you on as you start to get your finances on an even keel?

JayRitchie

dfw2019 wrote: »

Yes I enjoy my job and don't plan to move anytime soon.

Sorry I think I am being confusing re. the take home pay and student loans. The 5544 is the amount I take home before the deduction (it used to be less when the loan was taken out of my wages). From last month it is taken as a DD which I presume I can cancel similar to any other DD.

I need to pay for the hotels for the weddings but that can be done nearer the time (in a couple of months).

Thanks so much for all your help. It's great how helpful & supportive people on here are, especially when it was my own stupidity that got me into this mess!

Yes it is DC.

Cool. You are in a pretty strange situation. Not an outrageous amount of debt compared with disposable income but horrible interest rates and no savings/ emergency funds made more challenging by not having any more borrowing capacity.

For all its likely to cost you a fortune in interest and lost pension contributions (not paying into your pension for a year loses about £15k for the gain of £3k of after tax income for example) you are young enough to get out of this probably with no long term effects. Plus you get to practice budgeting!

Normally my view is to forgo pretty much everything to reduce the debt as fast as possible for a period of time. I'm not sure I'd quite recommend this in your case from the information as I've interpreted it. Priorities should be health, preserving and developing your career and doing well in your job.

With that in mind I don't think you should look for any savings from stopping the counselling. If the sessions become less frequent save the money in a jar in case of future need. Oh, and don't skip lunch! A bread roll with cheap filling really doesnt cost enough to change anything.

My concerns - more than the amount of interest you may end up paying - are that you do something which comes up in a credit search which may be harmful to employment or raise a flag, or have some setback which you cant afford to fund. Life has a habit of kicking us when we are down.

So you need to make sure you can make the payments on debts and cover emergency spend. How much of an emergency fund do you need? Well, luckily you dont have a car. On the other hand no contents insurance and a very low clothes budget. I think you need need enough to fund a complete set of work clothes in a short space of time (so not assuming sales prices) and cope with a domestic issue such a plumber costs for water leakage.

Also you have two trips to fund - best to have a good idea of how much hotels, drinks, social meals etc will cost in advance and not hope for the best. If you are in a destination hotel the prices can be horrible.

With that in mind I'd build an emergency fund - maybe £2.5k? - before accelerating debt payments much. By the time you've had the wedding costs I'd guess that will take about 4-5 months or so. If things look a bit cheaper whack off the two small credit cards as it makes the whole thing easier to follow. Keep the emergency fund separate to your main bank account or any banks you owe money to.

For the size of the emergency fund I'm assuming that you have good sick pay policy at work and an extended notice period.

The Zopa loan finishes in three months which frees up some cash to throw at the 118 loan. Once that has gone you start to attack the remainder, and check any benefits from bonuses etc.

You immediate crisis is finding £1k or so to pay the payday loan this month. I would risk not paying the student loans DD (I doubt the implications are particularly severe in the scheme of things). Any other way to raise money? Do you have a flashy city boy bike you could sell?

Given there are a few weeks to go I think you might have to swallow your pride and tell a very solvent friend or relative about the situation to get a loan - the benefit of paying is too great not to try.

My computer is near the end of its life and I cant get excel to work at the moment. I'm being thrifty by not replacing until absolutely necessary. I can tell by looking at the number that you'll pay a horrible amount of interest, but that you should be pretty near the end in a years time. In the scheme of life its really not that bad although I'm sure it seems so at times and will continue to do so.

JayRitchie

enthusiasticsaver wrote: »

Why not start a diary or I can move this thread to the diaries section so we can cheer you on as you start to get your finances on an even keel?

Please do this. There are loads of young professionals with worrying levels of debt. Many wouldn't wish to post but I know when I've pointed people at threads they've found it really valuable learning from case studies.

First_Trouble

Firstly, let me say well done to getting control of your addiction. It takes a lot of courage and resilience to do that.

Secondly, in relation to your grocery budget, I would definitely recommend shopping at Aldi or Lidl. I have halved my grocery bill by switching to Aldi.
Here are some tips which I found really helped me when I was trying to get my food spending under control.
- Batch cook as much as possible and freeze in individual portions.
- Make full use of your freezer
- Do stock takes of fridge/freezer/cupboards and shop from them.
- Take the 'Brand Challenge'. If you regularly buy brands, buy shop brand. If buy shop brand, buy basic. If you like the new product keep it, if not keep your usual product.
- Meal plan
- Always use a shopping list and never shop hungry

There is also a grocery challenge thread with recipes etc, which may help with more inspiring cheap meals.

Good luck with your journey!

dfw2019

JayRitchie wrote: »

Cool. You are in a pretty strange situation. Not an outrageous amount of debt compared with disposable income but horrible interest rates and no savings/ emergency funds made more challenging by not having any more borrowing capacity.

For all its likely to cost you a fortune in interest and lost pension contributions (not paying into your pension for a year loses about £15k for the gain of £3k of after tax income for example) you are young enough to get out of this probably with no long term effects. Plus you get to practice budgeting!

Normally my view is to forgo pretty much everything to reduce the debt as fast as possible for a period of time. I'm not sure I'd quite recommend this in your case from the information as I've interpreted it. Priorities should be health, preserving and developing your career and doing well in your job.

With that in mind I don't think you should look for any savings from stopping the counselling. If the sessions become less frequent save the money in a jar in case of future need. Oh, and don't skip lunch! A bread roll with cheap filling really doesnt cost enough to change anything.

My concerns - more than the amount of interest you may end up paying - are that you do something which comes up in a credit search which may be harmful to employment or raise a flag, or have some setback which you cant afford to fund. Life has a habit of kicking us when we are down.

So you need to make sure you can make the payments on debts and cover emergency spend. How much of an emergency fund do you need? Well, luckily you dont have a car. On the other hand no contents insurance and a very low clothes budget. I think you need need enough to fund a complete set of work clothes in a short space of time (so not assuming sales prices) and cope with a domestic issue such a plumber costs for water leakage.

Also you have two trips to fund - best to have a good idea of how much hotels, drinks, social meals etc will cost in advance and not hope for the best. If you are in a destination hotel the prices can be horrible.

With that in mind I'd build an emergency fund - maybe £2.5k? - before accelerating debt payments much. By the time you've had the wedding costs I'd guess that will take about 4-5 months or so. If things look a bit cheaper whack off the two small credit cards as it makes the whole thing easier to follow. Keep the emergency fund separate to your main bank account or any banks you owe money to.

For the size of the emergency fund I'm assuming that you have good sick pay policy at work and an extended notice period.

The Zopa loan finishes in three months which frees up some cash to throw at the 118 loan. Once that has gone you start to attack the remainder, and check any benefits from bonuses etc.

You immediate crisis is finding £1k or so to pay the payday loan this month. I would risk not paying the student loans DD (I doubt the implications are particularly severe in the scheme of things). Any other way to raise money? Do you have a flashy city boy bike you could sell?

Given there are a few weeks to go I think you might have to swallow your pride and tell a very solvent friend or relative about the situation to get a loan - the benefit of paying is too great not to try.

My computer is near the end of its life and I cant get excel to work at the moment. I'm being thrifty by not replacing until absolutely necessary. I can tell by looking at the number that you'll pay a horrible amount of interest, but that you should be pretty near the end in a years time. In the scheme of life its really not that bad although I'm sure it seems so at times and will continue to do so.

Thank you, really appreciate this. I hadn't noticed that the Zopa loan was going to drop off in a couple of months so that's a really nice bonus.

Hadn't considered an emergency fund to be honest, just thought I would put everything into paying off the debt to start with but it does make sense.

I was thinking about approaching work for an advance but I think because of the industry I work in my employer might be concerned if I suggest I am having financial problems. I will see if I can borrow from family for this month.

dfw2019

enthusiasticsaver wrote: »

The fact that you are unable to access reasonable interest rate through the normal sources indicates you are over extended so the PDL companies should have considered this depending on which lending was taken out when. Even on the not exorbitant soa you have posted above you are obviously struggling as you have a £1000 shortfall and you are not gambling now. Claim from these sharks as you have nothing to lose.


Why not start a diary or I can move this thread to the diaries section so we can cheer you on as you start to get your finances on an even keel?

Thanks! I have put in some refund claims. Can you move this over to diaries so that I can post updates?

JayRitchie

dfw2019 wrote: »

Hadn't considered an emergency fund to be honest, just thought I would put everything into paying off the debt to start with but it does make sense.

I was thinking about approaching work for an advance but I think because of the industry I work in my employer might be concerned if I suggest I am having financial problems. I will see if I can borrow from family for this month.

Emergency fund - I'm not always convinced by them but if you have no borrowing capacity you should really have a decent amount put away. Probably (and hopefully!) be a complete waste of money but the risks are too great not to have one.

I wouldn't ask your employer for an advance under any circumstances. Just not worth it. You need to keep a clean reputation and not be seen as 'drama'.

JayRitchie

dfw2019 wrote: »

Thanks! I have put in some refund claims. Can you move this over to diaries so that I can post updates?

How are you getting on?