Sinking..

Tamar7

So here's my current conundrum. I have a £17708 loan £376pm, £2500 credit card debt, a £1000 overdraft that charges me daily,...oddly they charge daily for an arranged overdraft...but not for an unarranged? I have a £2000 credits card and £500 credit card and a £500 over draft in another account. I earn £1900 per month and my costs are £1700pm with debts, rent (485all in) a car £203pm (honestly cannot afford an old fix up so had to go finance as live in village with only occasional bus...to far to walk, ride to work) petrol, food, I have two cats. I also spent a long time building my credit rating back up and have maintained good to excellent...owning a home one day is a very remote prob never going to dream and I'm getting to the point where every month I'm worse off..increasingly resorting to my credit cards and now I prob won't make it to the end of the month I tried consolidating and adding to my loan but was refused...I don't know what to do to sort things out😞

uphillstruggler

Hi Tamar7,

I've been there. It's not a good place to be. Prioritise important things such as food and rent. I was the same - I tried to meet payments for years and years and I wish to anything I had defaulted on non-priority debts much earlier instead of fighting to pay them off when I didn't have the financial capacity to do so.

Fill out a statement of affairs (SOA) so people can see where your spending is going. I'd also suggest contacting your lenders to tell them you are unable to meet the current payments and ask for some sort of alleviation. Bear in mind that this could have ramifications for getting credit in the short-term future. Have a word with StepChange or another advisor. You're definitely not alone.

Forget the credit rating. It's made up anyway and won't stop you from getting that home some day - provided you deal with things now.

You'll be great! Hold on in there.
US

WhenIam64

I have a £17708 loan

What was the loan for?

car £203pm

Is this running costs or finance costs? If it is the second, what loan is outstanding.

Fill out a statement of affairs (SOA)

Helps a lot if you do.

enthusiasticsaver

Consolidation makes things worse so it is a good thing you were refused. I assume the loan was a consolidation loan unless you have an asset worth £18k and obviously that did not sort your problems out. You may need some sort of DMP now you owe approx. £25k and presumably do not earn much more than that in a year. I am ignoring the car as I assume you lease that or have done some sort of HP deal with it.

Post an soa up but with a fairly substantial shortfall I do not see how you can get out of this without a DMP.

Willing2Learn

Hi Tamar7,

I agree with the others, in that a consolidation loan is unlikely to solve your problems if you have not first addressed the fundamental weaknesses in your day-to-day budgeting.

We really need to see your Statement of Affairs (SOA), if we are to give any meaningful advice, support and guidance. Please complete your SOA, format for MSE and then copy & paste it up here.

Tamar7

Thanks guys, I do really appreciate any advice, I am feeling pretty gloomy about it all this week after having some other bad news, so am probably blowing it out of proportion.

SO heres my SOA... although its not all that comprehensive

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0 unless you count the one on finance

Monthly Income Details
Monthly income after tax................ 1950 or there abouts
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1950

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 203
Rent.................................... 485 (all inclusive for one room and we massively overpaid electric so not paying till next year now)
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25 (inc insurance, have just reduced this from a £30 a month contract, yay me!)
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 7.99
Groceries etc. ......................... 120 (inc food for packed lunch and cat food)
Clothing................................ 0 Depends on whats left after debts/bills etc)
Petrol/diesel........................... 120 (I do live 25 miles from work)
Road tax................................ 0 I haven't had my car long enough but I know these rates have changed and gone up alot??)
Car Insurance........................... 38.13
Car maintenance (including MOT)......... 0
Car parking............................. 40
Other travel............................ 40 (budget for visiting family etc, I try to limit this for cost cutting)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 9
Pet insurance/vet bills................. 22.98
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10 (i try to budget to £10 but as a manager of a team its expected that I contribute so is often more
Haircuts................................ 0 (I do my own)
Entertainment........................... 0 (depends on whats left over)
Holiday................................. 0(many moons ago I went on a budget rail trip to italy, but now holidays consist of staying home)
Emergency fund.......................... 0
Total monthly expenses.................. 1121.1


Assets hahahahahahahhaha......no
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 12000....(203)......0
Total secured & HP debts...... 12000

Unsecured Debt
Description....................Debt......Monthly...APR
credit card....................1920......45........16
credit cards...................500.......30........16
loan...........................17703.....376.......6.7
Total unsecured debts..........20123.....451......


Monthly Budget Summary
Total monthly income.................... 1,950
Expenses (including HP & secured debts). 1,121.1
Available for debt repayments........... 828.9
Monthly UNsecured debt repayments....... 451
Amount left after debt repayments....... 377.9
Overdraft fees....................................50

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -12,000
Total Unsecured debt.................... -20,123
Net Assets.............................. -32,123



I went to debt advice service and have just had a chat with some chap who said he was from national debt line.... his email says debt wise tho???? any who, he recommended an IVA, which on the one hand sounds sensible (my credit rating voice is screaming, but what use is a rating when you're too poor to buy anything anyway) on the other hand I want to make absolutely sure its the right thing and the chap is legit etc

I've had a depressing week so far so my brain is just focusing on all this constantly and driving me slightly mad... I'm 39, I have a good wage, I've always had a job since I was 16, including whilst I was a student and all i have to show for it, is a rented room, two cats, I've had to give up my masters studies and one emergency and I'm screwed financially..

getmore4less

Rent a room walking distance from work.

Do a SOA based on that and see how much better things will look.

Tamar7

Unfortunately the reason I live so far from work is the massive increase in rent, here i have all inclusive for 485, in town where I work average prices are double that if not more.. honestly it ridiculous as you get half the space for twice the price.. Plus I hate early morning so if could save myself an hour more in bed I would..

savingholmes

Hi Tamar - is moving house an option to follow up on getmore4less suggestion above?

Can you get any better CC rates - £50 interest / fees on your overdraft each month is a lot - as are many of the other rates you are paying. Before you go down an IVA route - it would be worth seeing if you could reduce your interest payments and pay more off the principal debt. Hope that helps.

SH

Happier_Me

What's happening to the £320 or so a month your SOA says you have left over? If you're spending it and then some (because you state you're relying on cards) then your SOA isn't accurate.

Go through the last three months of your bank and credit card statements and find that missing cash. I suspect your spending it on various forms of entertainment and non esentials. If that's the case then one option would be to cut these right back and throw more money at your most expensive debts to reduce overdraft and interest. Then start snowballing the rest. You will eventually get 0% credit card offers to reduce interest further. This option means you pay every penny back whilst trying to minimise how much is wasted on interest along the way. But you don't have any assets, so there are other options, which will mean you pay less back - but all these options will trash your credit rating. Only you can decide if that's a problem for you.

To work out the best way to fix this, I think you need know exactly where all your money is going and what you're prepared to give up lifestyle wise.

Bored

That is a very expensive car. I don't know much about hire purchase agreements, but is there any way to get out of it? My car is very reliable despite my sizable commute and I bought it for £2000.