Stuck in debt

ryanm8655

I’d do an SOA in the first instance and post it for advice.

I know it’s hard, I didn’t even used to bother checking my bank account out of anxiety back in the day. In fact I had no idea what my total debt was until I sat down and worked it all out. It’s a critical step to take though so get it done and then you can figure out a plan to get out of it.

By the sounds of things you’re in London and your partner doesn’t work at the moment?

First thing I’d do is open a new bank account, as said. And get your wages etc. Paid into that one.

Depending on the SOA a DMP might be the solution.

Naomim

Remember, if you are going to open a new bank account - don't use one that has links to your old one. ie banks that are owned by the same group.

matthewharmon102

Hi All,

Thanks for the useful replies. I was able to get some additional help from NatWest in that they suspended my Credit card payments for 3 months and have agreed to suspend for an additional 3 months. it has given me a little breathing room, but I am aware that the inevitable will happen. I have found that 2 of my credit card companies (Tesco and Barclaycard) are frequently reducing my limit. I have managed to get some fixed payments in place for 2 of the cards to try and chip away at it. I do now see that when my monthly salary goes in, my bank balance goes into the black, then the rent and bills go out and I end up back into my overdraft. I guess it's better to end up back where i was then in a worse position.

Things with my own company haven't improved. I am still waiting for Companies house to strike it off, but as I received an objection I am now in limbo as to what's happening. I spoke to an advisor, but to get them involved, I am looking at around £5,000, something I can't afford right now. It is a waiting game as my strike-off has been suspended, rather than rejected.

I have made some positive changes in other areas. I received a small cash bonus from work, which helped pay back a sizeable chunk of my overdraft. I tried to negotiate with EE to change my plan, but they seemed unwilling to budge, so I switched both mine and my partners phone to a sim-only plan from Vodafone, which has saved around £10 a month. My Virgin Media bill has also gone down by £15 a month by negotiating a renewal deal with them. I Found out that my workplace offers a Microsoft software scheme, so I now have free access to Microsoft office (something I used to pay for annually) so that has saved around £80 over the year. As I said, I have now been making some fixed payments to my credit cards, instead of the minimum. Barclaycard is the biggest so far at £250 a month, but it also has the highest interest rate, so reducing this one as a priority made sense to me. The Tesco card is still interest free, so i pay a fixed £40 a month off of that. Of my 2 NatWest cards, 1 card will have its payment break end this month and will cost around £80 a month, the other is on a payment break for another 3 months, and I pay back the interest charged to keep the balance steady.

I have found that for the last 12 months I have been on an emergency tax code off and on, but I have no idea why. I have been advised that completing a self-assessment may help as I technically have two employers (my own company that is being struck off, and my full-time job). Maybe this will yield some savings.


I have seen my credit score improve too, its somewhere in the average section now. I was hoping to try and transfer some of my existing debt to interest-free cards or take a debt consolidation loan, not sure what is available and if these are a good option?

fatbelly

0% balance transfer credit cards are definitely available

https://www.moneysavingexpert.com/credit-cards/best-0-credit-cards/

but be careful about consolidation loans. If you want to post a statement of affairs we can be more helpful. If meeting the minimum payments is a problem then 0% cards are not the answer.

matthewharmon102

Hi all,

I wanted to post an update here.

I soon realised no amount of balance transfers or consolidation loans would help. Not owning a house and having no assets meant I couldn't get anywhere near the amount needed.

I sat down with my actual spending, and with all the interest-free extensions ending and my payments increasing, I realised I was in an extremely poor position. it hit me like a bolt of lightning that what I thought I spent and what I actually spent were hugely different. I did some research and was referred to 2 different debt management companies, PayPlan and Step Change.

I spoke to both, went through my budgets, and decided to go with Step Change with a debt management plan. The biggest thing for me was to tell my partner, who knew some things, but not the scale of the problem. It took a long time, but we both agreed that it was time for a change. We have a budget now, agreed with Step Change and from September I will be making the regular payments to them, with a hope to be debt-free in 5-7 years.

I wanted to post the update because i think many people are like me. I feel that now i understand where my money goes, and if i could give advice to anyone, it would be to make a budget, know where your money goes and keep on top of it. Things can spiral so quickly and admitting you need help can prevent things escalating. I am still scared to look at my bank balance, I think it's some sort of financial anxiety, but ultimately i feel more confident that my problem is finally being resolved

rigare11a

Hi Matthew, 

 Well done for the bold moves and as your partner is on board I am sure you will smash it. I have found some really good advice and tips in peoples debt free diaries. It gives you some motivation that the small savings start to add up and make a difference to your motivation. 

I did some little things like collecting up all the coins in various pots from around the house, and changing old currency left from holidays. It also made me realise how flippant I had been with money and its value. 

I have used Stepchange in the past and they were really supportive, I am glad you have engaged with them and I hope you find the same level of support from them. 

Good luck 

Rigarella