Advice would be most welcome

NewbieJD

Hi,

I can answer those.

Council tax is the standard band level for my area, spread over 12 months. 

I can look at changing energy as the contract is due to end in a couple of months

That salary is normal, it is possible to earn above 200, but that all depends on how things are when the lockdown ends. I could potentially increase it to an extra 600, but that does depend on the financial success of the business on a month by month basis.

I'm torn between going down the DMP route or just tackle this myself. I believe I'd have more flexibility over how I tackle each one if I went my way, however, I know DMP could help reduce the costs a little and make it more affordable.

Thank you for your input.

[Deleted User]

The PayPal debt will disappear after a while of them sending you letters. They really do nothing else apart from that.
And when I say this I mean the proper PayPal, not some branded PayPal credit card or loan.

monetxchange

Excellent advice on here already. As has been said, consolidation is not a good idea. It's just taking on more debt - borrowing off Peter to pay Paul, and then many end up stacking up debt with Paul again too! Recently saw someone here refer to getting a consolidation loan making them "debt free" - important to learn early on that you can't borrow your way out of debt.

What's the root cause of the debt? Just overspending? Buying things? Not looking for an explanation and not criticising in any way, it's just helpful to see how you can budget to avoid spending triggers. Have you bought lots of "things" that could now be sold? Auction sites have been busier over lockdown. Do you spend on lifestyle things like eating out? If so, it's important to reduce then right down, but allow a little enjoyment money in the budget so you don't feel deprived and give up.

It's always good to continually ensure you're on the best bill tariffs by checking comparison sites. Is there any scope to increasing income elsewhere? Overtime or evening job delivering stuff? Online surveys?

Well done on taking the first step. You're in the best place for advice!

NewbieJD

Deleted_User said:

The PayPal debt will disappear after a while of them sending you letters. They really do nothing else apart from that.
And when I say this I mean the proper PayPal, not some branded PayPal credit card or loan.

Yeah it's neither a credit card or a loan.

NewbieJD

monetxchange said:

Excellent advice on here already. As has been said, consolidation is not a good idea. It's just taking on more debt - borrowing off Peter to pay Paul, and then many end up stacking up debt with Paul again too! Recently saw someone here refer to getting a consolidation loan making them "debt free" - important to learn early on that you can't borrow your way out of debt.

What's the root cause of the debt? Just overspending? Buying things? Not looking for an explanation and not criticising in any way, it's just helpful to see how you can budget to avoid spending triggers. Have you bought lots of "things" that could now be sold? Auction sites have been busier over lockdown. Do you spend on lifestyle things like eating out? If so, it's important to reduce then right down, but allow a little enjoyment money in the budget so you don't feel deprived and give up.

It's always good to continually ensure you're on the best bill tariffs by checking comparison sites. Is there any scope to increasing income elsewhere? Overtime or evening job delivering stuff? Online surveys?

Well done on taking the first step. You're in the best place for advice!

Mostly spent on consumables, psn games and microtransactions, and some gambling (which I've stopped, but clearly escalated the problem). Harsh questions should be asked, that will only help with the reality of the situation and put my mind in the right place to tackle this. I made my bed, I need to lay in at, but some good advice and can a long way. Thus far, that advice has been incredible.

I will aim to pick up an evening job where possible and try to increase my income by an extra £100-200 a month. I'm also reading a few financial books, watching some Youtube videos, and taken up a free online course on household budgeting etc.

monetxchange

Dave Ramsey is a good one to watch for inspiration (though some of his views are a bit conventional). 

What has really helped me is saving month to month for the big things that come up one or twice a year - MOT, Christmas, car insurance etc. Plus having a separate spending account for day to days like groceries and petrol separate from my bills DD account really helps. Then there's no way of accidentally overspending. 

Most of us on here have been there. You've accepted it now, and there's no reason to beat yourself up over past mistakes forever. Have you completely knocked the gambling on the head, self excluded with Gamstop etc?

Naomim

monetxchange said:

What has really helped me is saving month to month for the big things that come up one or twice a year - MOT, Christmas, car insurance etc. Plus having a separate spending account for day to days like groceries and petrol separate from my bills DD account really helps. Then there's no way of accidentally overspending. 

This is what I have done.  Taken the annual bills and split them by 12 so I budget for the year rather than trying to find the cost in one go and splitting what I'm saving for budgeting to another account and not my day to day spending account.

I agree about not consolidating either. Unless you really look at what your overspending is on at a micro level, you wont ever break it. I estimate a good £10k+ of my debt is actually from money transfers.  Borrowing on the credit card to clear the overdraft but still finding myself at the end of the overdraft. Until I scrutinised my spending I couldn't understand why it never changed.  When I had my LBM in November, all I could think about was that a DMP was going to be the way out but now 6 months on, I'm glad I decided to give myself a few months to tackle it myself first and then decide if I needed a DMP. As it turns out I don't and I am in a much better position financially and mentally without so much anxiety following me wondering how I'd buy the kids clothes etc.

Keep looking at it all, keep posting. It looks like you have really taken some great strides already to address this.

Naomim

JayRitchie

Your biggest problem here is the interest rates. Try the debt advice charities as noted above - anything which can get the loans so you are just paying the capital amounts will save you. Also - if you are stuck with high interest rates you need to try to do anything to pay off the balances quickly - so additional jobs are a huge benefit.

zippygeorgeandben

Yes agree with Naomim here; keep looking at it, keep posting etc.
I know I gave you advice in a previous post but I was in the same boat; thinking of consolidating debts and not dealing with my situation (my 'story' is actually pinned to the top of the loan board as it has been a long journey for me out of debt) so believe me when I say, I know your mindset!
BUT, if you keep posting on here, taking the advice on board (don't take things personally) and attack it with gusto and relish, then you will be able to sort it out.  
Just don't go quiet

enthusiasticsaver

Please do not consolidate and definitely do not add the debts to your mortgage, even assuming they would agree to that. 
I think a DMP would be the best step as apart from reducing groceries which look high for one person and the cable tv the rest does not look too bad.  Your debt in proportion to income is high though and I think those overdrafts are probably charging more than you think now as most are around 40%. You should double check that. 
If you go down the DMP route the interest will be frozen, you will have leeway in your budget to save for annual expenses like xmas, holidays, insurances and repairs to your house etc.  As you say if you have £500- £600 each month spare the debt would be cleared in about 4 years. Contacting stepchange might be helpful to see what they suggest.