Stressed by debt, but have a plan. Please help me with ideas or advise.

eLdn123

First off, hello to everyone and I hope you're having a good day/night wherever you are.
I recently went back to old ways and started gambling. As expected, lost everything, but realised how much of an id..t I was, so used Gamstop to exclude me for 5 years from every gambling website in the UK and have started attending gamblers anonymous sessions. Because of this, I've gotten myself into huge debt that is causing me stress and mental health issues, even up to thinking about ending it all at one point.
Debt :

Bank Overdraft - 2500 -> maxed
Credit card 1 - 3500 -> maxed
Credit card 2 - 7000 -> maxed
Bank Loan - 12000 borrowed  -> 7300 left to pay at 200 per month
Sunny pay day loan  - 400 borrowed -> 700 left now to pay with interest added -> 133 per month 3 months in arrears
Saftey Net Credit - 710 limit -> maxed , 800 to pay as the limit was taken out
Loans 2 Go -> 1000 borrowed -> almost 4000 to pay at 233 per month -> paid for 3 months in arrears 1 month
H&T loan - 150 left to pay ( do not recall the amount borrowed but have only 2 payments left on it with no arrears )
Family and friends - total of 9000
Rent - 1500 -> will be late on it 2 weeks for the next 4 months as I won't be able to make 2 payments at the same time and I get paid my wages 2 weeks after rent due date. I have not paid the rent late for almost a year and a half until I got back to st..d old ways. I do not live by myself, but have a flat mate, who has paid the rent in advance for 4 months, but I gambled away the money he gave me, this being the reason why for 4 months I will be solely responsible for payments.
Other bills
-> mobile 65 per month ( huge mistake but in a contract that runs until Sept )
-> Food 80 per month
-> Transport and petrol 50 per month
-> Gas and electricity the flat mate is paying for 6 months as I paid for 6 months when he had issues with his job
-> Council tax exempt due to pursuing education alongside working
-> Internet and TV 66 per month ( again another big mistake but the contract runs out in April, so will be looking at cheaper alternatives and keep just the internet )

My wages are 4100 per month , but the deadline to return the funds to family and friends is approaching ( 4500 in March, 2000 in April and 2500 in May ). I have tried to discuss changing the dates, but to no avail as I have been forward with them and told them why I am in this problem, and due to them being afraid of a relapse they want their money as discussed, which I do not blame them. The friend to whom I owe 4500 may agree to split to 2500 in March and 2000 in June, but I'm still waiting for his answer which will come at the end of the week, if he agrees I will be able to pay the rent, albeit with a 2 weeks delay.
I know I've made a huge mistake and I am trying to get help for that, but I am very stressed because of the entire situation. I want to pay back everyone I owe and am even working to secure a job that pays even more.
Beside any other advice you may have , I would like to know if you believe the following would be a good plan :
1. Hope that the landlord can accept that the 2 weeks delay, if yes that takes a bit of stress of me.
2. 1st wage March -> pay 2500 to my friend and pay 1500 towards the rent ( can handle food and transport with some help as I can get from my flat mate 50-60 quid, unfortunately he can not afford more as he already paid the rent in advance )
3. 2nd wage April -> pay 2000 to my friend and pay 1500 towards the rent pay arrears on internet and phone ( 130 ) and the rest for food and transport and keep for next month
4. 3rd wage May -> pay 2500 to my friend and 1500 rent
5. 4th wage June -> pay 2000 to my friend and 1500 rent and pay arrears on internet and phone ( hopefully internet should be lower due to change of contract in April ) and the rest keep for transport and food for the month
By step 5 I've already been late on several debts, and potentially considered defaults. It will harm my credit score, but the plan would be to continue in a similar fashion.

6. 5th wage July -> pay 1000 towards credit card 1, 1000 credit card 2, 1000 ( rent + utilities -> I am approximating at a high cost ), 200 bank loan, 600 Sunny Pay day loan, 200 left for expenses

and so on until everything is clear. If am able to get a better paying job, I have asked for around 100k + bonus, and was called to the interview so I'm thinking they have budget for that, I will be able to put an extra around 1000 per month towards clearing the debts.

In the above plan I am concerned about the consequences of having arrears ( e.g IVA's or being taken to court ) if I plan on clearing them 1 by 1, am concerned about my current landlord not agreeing to 2 weeks delay and serving me a section 21 ( I am on a rolling contract as the lease expired 6 months ago and did not sign a new lease ).

I also regret getting 1000 from Loans 2 go. Having to pay back around 4000 in 18 months for a 1000 loan, that 200% interest per year, is there anything I can do about this ? The interest is outrageous and I know I signed up to that, but I was an id..t and regret it immensely and would understand to pay back 2000, or even 2500, with high interest, but the interest with them is extremely high.

I apologize for the long post but please help me with some advice and feedback as this community is extremely experienced with such issues and I believe you here have seen it all in the past.

Lemon_Tree

Hi and welcome to the boards, can I clarify, are you planning on paying nothing off the other debts whilst you pay back the friends and family loans? What would the minimum be for them all rather than going into default? I'm not sure what work you do but if you can ask for such a wage will your prospects not be affected by adverse credit ratings that defaults would bring? I don't command even half that in wages but I would certainly lose my job if my credit rating went through the floor and my career if I had to be made bankrupt. Just a general question to think about. 

enthusiasticsaver

I think that given your friends won't wait for the repayments your plan is feasible but not ideal. The priority should be rent so I think you have to say to friend 1 he will need to wait for the £2000 in June or you will be homeless. Have you not got any from this months pay you can keep back towards that? Anything you can sell? 

Re the other debts I would write to them all asking for breathing space and some of them may even agree to stop charging interest. These will incur defaults though but I don't think you have much choice given the magnitude of the debts and the urgency for repayment. You have a decent wage though and so long as you never gamble again this is sortable. The payday loans are charging extortionate interest so if they will agree to stop interest that will help. Ideally you would be repaying your friends and family at a lower rate, say £1000 a month split proportionally amongst them over 9 months then you would have some spare income to pay the bank loan, overdraft, minimum credit card payments and tackling those awful payday loans. You will need to cut out all but essentials for the next year to get on top of this. 

eLdn123

Lemon_Tree said:

Hi and welcome to the boards, can I clarify, are you planning on paying nothing off the other debts whilst you pay back the friends and family loans? What would the minimum be for them all rather than going into default? I'm not sure what work you do but if you can ask for such a wage will your prospects not be affected by adverse credit ratings that defaults would bring? I don't command even half that in wages but I would certainly lose my job if my credit rating went through the floor and my career if I had to be made bankrupt. Just a general question to think about. 

Thank you for your reply Lemon_Tree.

Regarding paying towards the other loans, I am thinking about making token payments, but this will depend on how much I will have left after paying back my friends, as they have made it clear that they want the funds back as promised, and being a foreigner to this country I am honestly afraid of burning bridges with them as I already don't have too many friends or acquaintances.

The work I do would be affected by becoming bankrupt, but not if I have bad credit as even the working in the banking industry isn't impacted by defaults, but after reading on bankruptcy I do not believe that this timeframe would be enough for creditors to request to make me bankrupt, I could be wrong, so please let me know if indeed this could be the case. I could potentially after paying back my friends change the amounts paid back to loans so that all of them included and receive a payment.

eLdn123

enthusiasticsaver said:

I think that given your friends won't wait for the repayments your plan is feasible but not ideal. The priority should be rent so I think you have to say to friend 1 he will need to wait for the £2000 in June or you will be homeless. Have you not got any from this months pay you can keep back towards that? Anything you can sell? 

Re the other debts I would write to them all asking for breathing space and some of them may even agree to stop charging interest. These will incur defaults though but I don't think you have much choice given the magnitude of the debts and the urgency for repayment. You have a decent wage though and so long as you never gamble again this is sortable. The payday loans are charging extortionate interest so if they will agree to stop interest that will help. Ideally you would be repaying your friends and family at a lower rate, say £1000 a month split proportionally amongst them over 9 months then you would have some spare income to pay the bank loan, overdraft, minimum credit card payments and tackling those awful payday loans. You will need to cut out all but essentials for the next year to get on top of this. 

Thank you for your reply enthusiasticsaver.

Writing to them is a good idea. I have received phone calls, but I have been too stressed to answer, which I know is a very bad thing to do.

I get paid for this month's work next month, and I considered that March wage, as I am paid on the 1st of the following month. The wage received this month went on gambling, as I started the steps towards recovery last week after finally realising what I had done.

Regarding assets, I unfortunately do not own any assets, except for a tv that is worth around 40 quid if I sell it. I have a company laptop, a company car, so did not need to buy assets. I could have saved all this time, but I spent money recklessly and it is time for a complete makeover. I want to better myself and become a better person and live a better life, and I'm sorry it took this huge hit to the "head" to finally realise this.

I was afraid and ashamed to post even on the forum, afraid of being judged ( " look at this guy earning a good wage and not being financially responsible ", and so on .. ), but I felt that I needed to do this on the road to recovery.

Lemon_Tree

One thing we never do is judge, we're all here for the same reasons whatever stage in our journey we're at. 

enthusiasticsaver

You have made a good start on stopping gambling. I can understand you prioritising your friends loans and as long as you don't default on rent the other debts can wait although it will be expensive in terms of high interest (unless they agree to stopping interest)  and you will ruin your credit rating. I don't think bankruptcy is necessary given you will have repaid your friends by June and can repay the other debts from July. Ask for breathing space but they will not be happy on you prioritising repaying your friends over them so may threaten you with court proceedings. As I said the ideal would be you split your money between the debts rather than go four months with no payments at all but that means you telling your friends you cannot stick to the arranged payments. Which of the options is worst for you? Incurring your friends wrath or the stress of four months with debtors hounding you? If you do decide to default then writing to keep them informed is wise. 

DCFC79

Have you spoken to the landlord re rent being a bit late ?
If you give them some warning its possible they will be ok with it than no notice

eLdn123

enthusiasticsaver said:

You have made a good start on stopping gambling. I can understand you prioritising your friends loans and as long as you don't default on rent the other debts can wait although it will be expensive in terms of high interest (unless they agree to stopping interest)  and you will ruin your credit rating. I don't think bankruptcy is necessary given you will have repaid your friends by June and can repay the other debts from July. Ask for breathing space but they will not be happy on you prioritising repaying your friends over them so may threaten you with court proceedings. As I said the ideal would be you split your money between the debts rather than go four months with no payments at all but that means you telling your friends you cannot stick to the arranged payments. Which of the options is worst for you? Incurring your friends wrath or the stress of four months with debtors hounding you? If you do decide to default then writing to keep them informed is wise. 

I would understand the creditors not being happy about this, but if I am stressed because of them hounding me, at least I'll still have friends to talk to about this. If I would go the other route, I would have happy creditors but no friends, so even though I could be wrong, I believe the decision is fairly clear for me.

Could i please receive some assistance if there are some templates to write to the creditors ? Or I can simply write and explain to them about the gambling issue and financial stress ?

eLdn123

DCFC79 said:

Have you spoken to the landlord re rent being a bit late ?
If you give them some warning its possible they will be ok with it than no notice

I have not as I am not talking with the landlord directly, but with their agent, who is currently out until Monday due to holidays. There is unfortunately no other contact, except for this one agent, as the agency itself has only 2 people employed, out of which 1 is the owner who works another job and is never available and the 2nd is the agent who is out for holidays as per the VM and Out Of Office email response.

MasterG83

Your priority is your four walls, so you need to pay rent first and council tax and then utilities etc. Then In my opinion you got to stepchange and get help, you also call a meeting with your creditors and you advise of the situation, agree a payment you can really make and then start to work on clearing this up. Good luck.