Repaying loan arrears

AlanB1979

Deleted_User said:

AlanB1979 said:

I approached a debt advisory service but they were useless, they told me to default on the credit cards instead if trying to get a consolidation loan. 

That's good advice. Consolidation loans just kick the can down the road and people tend to end up in twice as much debt. You won't get further borrowing in your present state in any case.

You're already in arrears on your car, so defaulting on the cards will make little difference to your credit worthiness but will free up money for the essentials. And you don't have enough income to pay everything in any case.

I hear you, the idea of for the consolidation loan was more about manageability, just one payment to be made a month instead of several. I have adhd so this would be a huge help for me with regards money management. Incidentally about 50% of my credit card debt is because I had to go private to get diagnosed last year as the NHS waiting list was 2-3 yrs for just an appointment to discuss. 

EssexHebridean said:

Agree with what zx81 says above - stop paying the cards and let them default. Should happen in 3/4 months with any luck. 

Be very careful with your current budgeting - ultimately there is a lot of stuff there that you either ARE, or at least should be paying, that's not included. Does your car deal include everything that it's actually costing you, so all servicing, insurance costs, any any consumables, like tyres, wiper blades etc?  You're paying for a TV package without having a TV license - that can get VERY expensive down the line. It may be that a housemate is paying, but if that is the case make sure it won't be your turn to bear the cost next time it renews! I'd also suggest you check that grocery spend IS accurate - even assuming you eat at work some of the time, you presumably still eat some meals, have tea or coffee etc at home so be cautious that you're including ALL food spends. I'd also suggest that you urgently need to sort out the contents insurance situation - this is not one to be played about with or skimped on, really, I know £10 per month seems a lot right now but if you lose all your belongings it will seem like it would have been a very low cost indeed. Personally I'd cancel the TV package (Assuming it's not shared with other housemates) and pay for the insurance instead - if your TV goes up in flames you won't be able to watch it anyway, and with no insurance you'll not be able to replace it either. Don't assume that there is a blanket contents policy that covers everyone in th eproperty - this isn't usually how it works with house shares. Clothing also needs to be considered - at the very least a "socks & pants" budget. 

Your problem right now is that your income is too low to sustain the level of rent you're paying - and for a house share that also seems pretty high in itself. I'll be honest and say that I think you need to examoine whether your business is viable to continue trying to make a success of - I know that's tough to read, but if you lost the car by the sound of it you'd be forced to that position. Might you be able to reduce the hours you're spending on the business while still letting it tick over, and get additional work elsewhere so you can at least make ends meet?

Thanks. Regarding the car, insurance and tax is/was paid in full every year. Insurance renewal is in Feb. I have had no issues with the car recently so no other costs other than diesel which I expense as I am solely using the car for work at the min, going to suppliers etc. 

The TV licence is paid in full for the year so no further expense there until mid next year. 

Re food, the amount I put in is just about accurate but yes fluctuate on occasion but not by much. I leave most mornings at 9am and not back until after 10pm. I take a bit of fruit to have on the drive and sometimes coffee if driving to suppliers. Other than that I eat at work, I have a coffee supply there too if needed. 

As for contents insurance, this is a god idea and I will look into it. Having said that I may look to sell off some stuff like the tv, record player, bike etc to help manage debt. Ive no time to use bike or record player. I watch a bit of TV when I get home to wind down, thats about it so perhaps no need for the insurance soon enough as I may not have anything to insure! The TV package comes as part of our broadband deal, we are looking into separating this out as all we really need in the broadband. 

The socks and pants budget will be taking care of as xmas is coming up and no doubt il get a voucher I can use for this!

I do believe the business is sustainable. I am basing this on being in our new unit only two weeks and seeing an obvious increase in sales in that time. The feedback has been 1000% positive, we have had several repeat customers already, with some returning 2-3 times a week. Others have come in based on recommendations from their friends too so we are confident in what we are creating and selling and know it will get bigger in time. On top of that we have been approached by a couple of well known reviewers/influencers who review the type of food we make as we were recommended to them by several of our customers who were impressed with our food. Having spoken to others doing similar, a good review from these guys will increase footfall and sales (thats if we get a good review, I am sure we will), this is being arranged for the new year!

Also, I have indirect (through a relative) access to a couple of very high profile TV/film personalities (an MTV presenter and a Hollywood actor) who I may be able to lean on for some influence. We are looking to try and plan something for Feb/March all going well. 

While we are open since June, prior to two weeks ago we were popping up at a cafe bar so the hours were limited (5pm-9pm - Wed - Sat), as was the opportunity to sell but it was a start and helped us get some funds together to get us into our new place. If I lost the car I could get public transport to and from work, it wold be a ball ache and meaning we would have to have suppliers deliver rather than me collect from them (due to min delivery charges) but I am sure we could make it work if it came to this. 

I can't reduce the hours I work as there is nobody else to do it. I have looked into additional work but I simply do not have the time for it, I want and need to make this business work so that is why I am putting all my hours into it!

And for the rent I am paying at home, its a good deal for the area I am in. It is also a big room which I need as I use the additional space for storage for work, packaging, some equipment etc.

I am working out my pre set up expenses today (finally have a day off to catch up with admin) and hope to be able to draw down on this for a few months to manage the monthly repayments until I can start to take a small wage form the business. 

Anyways thanks all for the advice so far, lots to think about and if you have anymore advice then please send it my way!

Have a great day,