Advice would be most welcome

NewbieJD

This is a big step for me, and today has been the tipping point I guess.

I've been a member for a long time, I don't post much, mostly because I don't have anything interesting to say half the time. Anyway let me begin, this may take a while.

So today I received a letter from Wescots debt collection agency, chasing me for money that I owe to Paypal. In February it was over £2200, but I was talking to Paypal at least once a week telling them what I could pay, this with up to three calls a day from them. They would put a mark next to my account to say what I'm paying. Fast forward to the end of March and that was the last call I had from them, they completely stopped. That said, I still put in what I could and have got it down to £1586. However, today a letter came through in regards to the debt. I've done plenty of research, some sounds contradicting, most seem in line with what everyone says. I just want to clarify where I stand. Should I respond to the letter or ignore it? I'm still paying in what I can without Paypal being in contact, but I don't want Wescots to become the bullies they seem to be if I'm proactively trying to sort the debt out. What can Wescot realistically do? I don't think Paypal will do much, they can see money is still going into the account. I keep seeing old posts that Paypal don't take legal action, I guess that still applies? What about Wescots will they just leave me alone?

That aside, I want to ask about looking into a DMP for all my debts. For one reason or another, my finances have completely fallen apart over the last three years, before then I was really good at saving, credit cards, loans, and finances were all paid off in good time. That resulted in a great credit rating, however, the last report has seen it drop to below the UK average by some margin. So I need to sort this out. this is my long list of debts. I need to grab them by the balls and take them down as soon as I possibly can without damaging my mental health any further.

Credit Cards

Tesco - £245

Barclays - £96

Capital one - £461

Marbles - £1706 in arrears

Santander - £3790 in arrears

Nationwide - £1500

MBNA - £5432 in arrears

Total - £13230

 

Others

Nationwide unsecured loan - £7150

Nationwide overdraft - £1200

Santander overdraft - £312

Paypal - £1586

Boiler Finance - £1750

Total £11998

Overall total: £25228

My income is around £1550 per month but can go up an extra 200-400 depending on bonuses and overtime. With that all in mind does a DMP seem like the best option, or should I tackle this without that assistance? Using the Snowball calculator, I should pay this off over 48 months if I set £600 aside. That would result in paying an additional in £5748 interest. I don't want to go down an IVA route, I want to pay this all back, it's only fair, even if some of the companies aren't fair in return. I watch a lot of finance videos, especially with the likes of Dave Ramsey, despite being American the same principles apply. I haven't seen many other options. As for companies chasing me, only Marbles keep phoning me about 5 times a day. I keep paying into all the accounts every month even though it's mostly the minimum.

I'm thinking about starting a diary on here, that will help me tackle this and finally be honest with myself by admitting I've made mistakes but I'm determined to sort them out.

Any help will be greatly received.

mcpitman

Before anyone can fully advise, a full SOA (statement of affairs) would help.

https://www.lemonfool.co.uk/financecalculators/soa.php 

Then pop it back here and no doubt people will come up with options for you.

Can you note out the arrears outstanding by account too?

NewbieJD

mcpitman said:

Before anyone can fully advise, a full SOA (statement of affairs) would help.


Then pop it back here and no doubt people will come up with options for you.

Can you note out the arrears outstanding by account too?

Thank you for replying. I believe I have now done that and it's as accuarate as I can get it.

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0[b]

Monthly Income Details[/b]
Monthly income after tax................ 1550
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 200[b]
Total monthly income.................... 1750[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 325
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 115
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 12
Telephone (land line)................... 0
Mobile phone............................ 15
TV Licence.............................. 12.5
Satellite/Cable TV...................... 73
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 15
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 18
Contents insurance...................... 0
Life assurance ......................... 12
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 892.5[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 175000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 175000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 123000...(325)......1.24[b]
Total secured & HP debts...... 123000....-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Tesco credit card..............245.......25........5.9
Barclays Credit Card...........96........5.........2.25
Capital 1 Credit Card..........461.......25........25
MBNA Credit Card...............5432......115.......20.9
Boiler Finance.................1750......75........3.5
Santander Overdraft ...........312.......0.........19.9
Nationwide Overdraft...........1200......0.........33.9
Nationwide Load................7150......183.......3.2
Paypal.........................1586......0.........0
Nationwide Credit Car..........1500......50........19.9
Santander Credit Card..........3790......120.......12.7
Marbles Credit Card............1706......86........34.95[b]
Total unsecured debts..........25228.....684.......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 1,750
Expenses (including HP & secured debts). 892.5
Available for debt repayments........... 857.5
Monthly UNsecured debt repayments....... 684[b]
Amount left after debt repayments....... 173.5[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 175,000
Total HP & Secured debt................. -123,000
Total Unsecured debt.................... -25,228[b]
Net Assets.............................. 26,772[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using Firefox browser.[/i][/font]

The arrears are.

Santander - £390 - I have spoken to them and arranged a two-month payment plan for that.

Marbles - £159

MBNA - £332

Furlough as rocked the boat a bit.

sourcrates

Hi,

Just to outline your position re-the PayPal debt, wescot are just acting on behaif of their client PayPal, they don`t own the debt, so can`t do anything except write you letters.

PayPal have never yet, to this day, ever taken anyone in this country to court for bad debt, its never happened, they simply do not bother with it at all, its something to do with them being an American company, based in luxembourg, so i would not be too bothered about that one, they may shout the loudest, but they absolutly never follow through.

As for your other debts, as your a homeowner, a debt mangement plan with one of the free to use debt charities may be your best option here.

NewbieJD

Hi Sourcrates, thank you for your advice and replying, means a lot.

I will ignore Wescots and continue paying in what I can to Paypal.

I've set up an account through National Debtline, filled all the information out and will give them a call tomorrow and go from there.

Gareth2020

Further advance your property for debt consolidation to help cover the debt. Have you spoke to any of the banks about debt consolidation. I worked in a bank and even those riddled with debt with thousands could still consolidate maybe not all of it but some, even getting some transfered to a zero % credit card could make the minimum payment count that but extra when interest won't be added on.

Equally, for my mental state of mind I would try and clear a few of the smaller things and get them off the list and closed like barclays and Tesco. Aside from paying it off your credit score should improve slightly with these accounts marked as paid and settled. 
But definitely do speak to the bank, its in the banks interest at this point to try and help you consolidate their debt and make it achievble for you to pay

Andyjflet

Please look up Dave Ramsey and the baby steps, listen to the podcasts and you tube. 

sourcrates

Consolidation of debt is a really bad idea, and on MSE we do not recommend that as an option.

zippygeorgeandben

OH my word - some absolute terrible advice from Gareth2020 - ignore this.  Like sourcrates says, it's a REALLY bad idea.  It works in a very very few number of cases but for the sizeable majority it doesn't.  It just makes your debt journey ALOT longer.  People see the 'Ooo it cuts down my monthly payments' but it just means you're going to be in debt for a longer period and you don't tackle the reason you got into this in the first place.

NewbieJD

zippygeorgeandben said:

OH my word - some absolute terrible advice from Gareth2020 - ignore this.  Like sourcrates says, it's a REALLY bad idea.  It works in a very very few number of cases but for the sizeable majority it doesn't.  It just makes your debt journey ALOT longer.  People see the 'Ooo it cuts down my monthly payments' but it just means you're going to be in debt for a longer period and you don't tackle the reason you got into this in the first place.

Great, thank you for clearing that up. It's great to have people that are helpful and looking out for one another on here.

mcpitman

As others have said terrible advice to consolidate into your mortgage (rarely "works" as it doesn't address the debt cause).

Couple of queries from me....
You live on your own - is the council Tax on single person discount?
Gas & Elec @80 p/m for a single occupant is quite high, you might be able to save something there
Is the salary your "normal" income or "Covid-19" income?
The extra income of £200, is that realistic to earn more there?

Let us know how you get one with National Debtline etc. If anything I would throw extra money at the arrears and get those cleared, then tackle the CapOne and Marbles card first (cap one as you will have a sense of achievement of getting rid of one of them, Marbles because the APR is eyewatering).

Good luck, start of a journey for you, don't give up!