Searching for the light in this long tunnel of debt

CaramelCarousel

Good morning all

As I write this I am just under £40k in debt. I am 26 years old and feel like my life is such a mess. I bought a house with my OH in January 2018 and things have spiralled out of control since then. My outstanding is below as of this morning.

Unsecured loan: £3400 - £156 minimum (118 Money)
Unsecured loan: £2700 - £123 minimum (Bamboo Loans)
Unsecured loan: £16654 - £362 minimum (Zopa)
Unsecured loan: £4980 - £145 minimum (Halifax)
Unsecured loan: £1990 - £199 minimum (Satsuma Loans)
Credit Card: £172 outstanding (Capital One)
Credit Card: £1655 oustanding (Barclaycard)
Credit Card: £1455 outstanding (Halifax)
Very Catalogue: £3500 - payments vary from £150 onwards

Each loan was to pretty much cancel out existing credit, that did not turn out the end result. Unfortunately since I was 20 receiving my first credit card, I had been impulsively buying since then and as life goes on, have got worse. My pay is £2555 after tax so after my share of food, bills and mortgage payments, plus the above, I have about £150/200 left and no options of any borrowing. I do have about £600 available to use on credit cards but this will then defeat the object of this post.

This is nobody's fault but my own and I just feel nothing but deeply ashamed to be in the situation I am in. I barely sleep as I worry about money and if anything goes up the wall, what would happen afterwards. This is very much affecting my mental health which is another long road I have just begun, I don't want to get too much into that yet as it but I must admit thoughts of choosing to live in this mess or not at all. I am getting help for that, hence this post and trying to get this resolved.

Writing this to you all I am hoping will be the kick start I need. I have not missed a payment in 6 years of having debt against my name but I feel I will soon if things carry on. I have contacted StepChange and about to fill in my application pack to send off to begin the long journey.

Are there any other recommendations anyone else would make?

CC

twiggy86

I couldn't just read and run. I wanted to say what a brilliant step you've taken by owning up to this. You are not alone, as you will see if you read other's diaries. Have you got a plan on how to help yourself clear these debts? Are there any ways that you can reduce your outgoings, such as reducing any of the bills? I'd work out which of your debts you want to attack first - either go with the highest interest or the lowest balance, so that you can get one ticked off.

Good luck.

CaramelCarousel

Thank you Twiggy86. Right now all I can think of is going into a DMP. I feel this is the best way to tackle the debts. I don't want to look into bankruptcy at the age of 26.

In terms of reducing bills, over the last six months I have reduced my car insurance, mortgage (by £240) and have just froze gym membership which will free up a tad more. We are a lot more frugal with our food shop now and this is benefitting us a lot. My phone contract is £60 but this ends in a few months and will then go on a sim only contract thus reducing it a lot more.

I can tick off the Capital One credit card as that has £172 outstanding, but would this not be worthwhile before going into my DMP?

NeverendingDMP

If you think you are going for a dmp you may as well keep aside the money you would have paid to have an energency fund and use it to create and practice on a true budget. Also id be tempted to overestimate each of your budget categories a little so you can build a little surplus each month and have a whoops i didnt think of that fund..
Does your OH know about your debts and a planned DMP. It would affect your credit for 6 years and this would affect any mortgage applications. You can easily renew any fixed rates etc with your current provider but it would make it harder to shop around. Good luck x

MidsHollie

Hi Caramel,
Have you considered doing an SOA? It really helped me understand my monthly outgoings and more importantly my annual outgoings which I just wasn’t planning and budgeting for. It’s great that you already have made some savings through your monthly expenses.
Take a deep breath, consider your options. You have a good income, you can get this sorted