Debt got too big handle

fl123

Hello everyone. I am not the brightest person when it comes to my finances and have made some very bad decisions. I was a compulsive gambler, and every single wage I got went into gambling. I got help for this and self-excluded myself. Then I discovered crypto and options trading, which I didn't see as gambling, but it turned out to be. After now loosing another 15k, and having just 10£ left to my name, I called it quits, emailed the broker and explained to them that this whole thing to me is like gambling and I had a gambling addiction - maybe they will find some pity on me and at least refund my rent money.

I don't know what to do and what options I have, but here is my SOA and if you have any suggestions on how I can tackle this, it would be much appreciated.

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

Monthly Income Details[/b]
Monthly income after tax................ 4000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 4000[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 500
Management charge (leasehold property).. 0
Council tax............................. 50
Electricity............................. 120
Gas..................................... 80
Oil..................................... 0
Water rates............................. 5
Telephone (land line)................... 0
Mobile phone............................ 15
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 8
Groceries etc. ......................... 200
Clothing................................ 10
Petrol/diesel........................... 50
Road tax................................ 0
Car Insurance........................... 30
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..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 1068[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 0[/b]
[b]
No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
HSBC Overdraft.................2493......0.........0
HSBC Credit Card...............3060......0.........0
PayPal Credit..................195.......0.........0
Other .........................17000.....0.........0
Lending Stream.................600.......0.........0
AMEX...........................6800......0.........0
HSBC Loan......................7051......0.........0
L2G............................2870......0.........0[b]
Total unsecured debts..........40069.....0.........-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 4,000
Expenses (including HP & secured debts). 1,068
Available for debt repayments........... 2,932
Monthly UNsecured debt repayments....... 0[b]
Amount left after debt repayments....... 2,932[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -40,069[b]
Net Assets.............................. -40,069[/b]

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

The 17k for others are payments from previous employer, I worked in sales and they paid out a bonus which I need to give back because I was let go and should not have received it, but the gambler in me when seeing that money thought that I could "invest" it, and make more, then pay back without any problems.

RAS

Hi, you really do need to include the APRs and minimum payments for each of the debts. Where is the 10K that you are "down to"?

Assuming you've got a new job?

Would your ex-employer accept a lump sum and then a monthly payment?

Beyond that, it not much ore than 18 months net income, so should be possible to clear over time.

Do you actually need a car? If so, you need to budget for parking.

You need:
haircuts 
health (dentist etc)
emergency fund
contents insurance

then something towards entertainments and holidays, if only to keep you occupied; it'll be a lot cheaper than gambling.

Brie

@RAS - I think the OP meant they have only a tenner left, not 10K.

Anyways - first off well done for making a call on what is obviously a big problem for you.  You should be pleased with that. 

I'm not sure the broker will be too willing to help but they may feel it necessary given that what you have described of yourself you should be considered vulnerable and they should have been careful in screening you before taking on your business.  

And I agree with RAS about giving some more detail about the debts.  That said when you next get paid I'd suggest you get rid of the paypal debt first.  It's small so easy to deal with and will give you a bit of a boost as one thing is off your list.  Then it's a case of tackling things in a snowball/avalanche fashion - highest interest item gets the most ££ thrown at it while ensuring you pay at least the minimum on the rest.  

In my opinion your ex employer should be at the bottom of the payback list (they will probably disagree) as they are the ones that paid you in error so they should wait til you are able to due justice to what they are asking for.  I would be tempted to write to them (not ring) and suggest that if you make a token payment of £10 a month for the next year you will then be able to review the situation on how to get their money back to them.  Suggest also that as the error was on their side they should be willing to write off a portion (again they will likely disagree).

Good luck with this - it's going to take time and will power but you've at least made a start which is grand.

fl123

Thank you to both of you for replying, I really appreciate it. @RAS I wish it was 10k, but unfortunately its just a tenner.  I do have a new job, that's where the 4k in net income is coming from, was lucky to find a quick one fast. I don't own a car, I use my flatmate's car, so don't pay for anything else except for petrol when I use it and insurance, since he added me on his policy.

Haven't been to a dentist in ages, or to a doctor. Hope at least this part stays like this, maybe i'm being to optimistic. My hair, I cut it myself, doesn't always look nice but saves some money. For the past couple of months, my entertainment has been youtube and an occasional pirated movie ( online .. I know its not the best thing ).

Regarding the debts, those are the exact values I have to pay. No interest on any of them as all of them defaulted months, or even 1-2 years ago. I had been a compulsive gambler before becoming a compulsive "trader" ( read gambler again ). The HSBC account is just sitting there overdrawn, HSBC have been understanding with this and haven't charged any fees. I don't think I've had money to send towards any of the debts for the past year, it well came in, then went out again on me trying to win big ( silly me ).

i@Brie , I'll try to get in touch with my ex-employer and see what they come back with. I assume they can't just take me to court immediately if I talk to them.

Thank you again for your input !

killerpeaty

Forgive me if I've missed it, but have you sold your cryptoassets then? While there has been a big fall, I haven't heard of many going pop. There should be some money there even if it's only 20% of what you've put in.

Also, £4k is a very round number. Almost like a gross salary instead of a net salary (or take home pay).

fl123

killerpeaty said:

Forgive me if I've missed it, but have you sold your cryptoassets then? While there has been a big fall, I haven't heard of many going pop. There should be some money there even if it's only 20% of what you've put in.

Also, £4k is a very round number. Almost like a gross salary instead of a net salary (or take home pay).

Hi killerpeaty ! I approximated the value to 4000£ net per month, as it fluctuates around this value. For example, for May I had 3978£ and in April I had 4054£. I apologise if I was not clear with that.

I unfortunately do not hold crypto, except for a couple that plummted so much in value that they are worth under 50£ combined. I traded crypto as well, just like with spread betting most of the time. I will sell the crypto and pay some of that PayPal credit, after fees, may get around 30£ but good enough.

Throughmyfingers

Just popping by with little advice but some support.  I got into a mess with payday loans a few years ago and online gambling, its so easy to start chasing losses and I really sympathise with your situation.  I unsubscribed from all accounts and deleted my accounts and tried to go cold turkey.

As other posters have said, look at your interest rates and start tackling the highest first, I do try to chip away at small values too. I know that isn’t the best approach technically but its important to keep motivated.

x

fl123

Thank you very much for sharing your experience, I really appreciate it !

RAS

Sorry for the howler earlier; wish I had understood correctly! And thanks for the explanations.

Have you sought support for your gambling/trading. I remember realising long ago that my stockbroker landlord was really just a legitimate gambler. You're probably fine most of the time but there may be the odd temptation once money starts coming back in? 

Given the situation with your defaults, I'd suggest clearing Paypal, as a lot of people seem to have problems with them. Then put together a more realistic SOA; one that allows you to buy more than just knickers and socks for example. OK, you may not need them right now but having a little stash is worthwhile, as is having a little capital to spend when there is a sale selling stuff you really would buy anyway (when I was skint it was shoes and boots as I couldn't afford full price). 

At which point, assign a little bit to each of your other creditors, and pay off about 80% of the rest to your ex-employer, paid by standing order a few days after you are paid. Hopefully, they will realise that going to court wouldn't get it back faster, and they'll pay ball.

If you can trust yourself, put the money you're not paying into an account which you need to wait to access. If there is a card, maybe give it to someone to keep or freeze it. Or ensure you can't use a hole in the wall or on-line and have to go into a branch. That's your emergency fund if any of your creditors start to get anxious. Something to appease them until the employer debt is cleared.

On the tenner front, it might not be on your immediate radar but there is an old style money-saving forum on MSE. We're used to helping people turn what's in the cupboard and a few purchases into a week's meals. 

In your situation a pack of 60 pasta is 5 meals, or 4 meals and two pasta salads. Yellow sticker veggies (and meat if it's available), an onion and a tin of tomatoes or passata. That makes sauce for three or four days; freeze a couple if you don't ant them immediately. There are other more interesting options as well.

fl123

RAS said:

Sorry for the howler earlier; wish I had understood correctly! And thanks for the explanations.

Have you sought support for your gambling/trading. I remember realising long ago that my stockbroker landlord was really just a legitimate gambler. You're probably fine most of the time but there may be the odd temptation once money starts coming back in? 

Given the situation with your defaults, I'd suggest clearing Paypal, as a lot of people seem to have problems with them. Then put together a more realistic SOA; one that allows you to buy more than just knickers and socks for example. OK, you may not need them right now but having a little stash is worthwhile, as is having a little capital to spend when there is a sale selling stuff you really would buy anyway (when I was skint it was shoes and boots as I couldn't afford full price). 

At which point, assign a little bit to each of your other creditors, and pay off about 80% of the rest to your ex-employer, paid by standing order a few days after you are paid. Hopefully, they will realise that going to court wouldn't get it back faster, and they'll pay ball.

If you can trust yourself, put the money you're not paying into an account which you need to wait to access. If there is a card, maybe give it to someone to keep or freeze it. Or ensure you can't use a hole in the wall or on-line and have to go into a branch. That's your emergency fund if any of your creditors start to get anxious. Something to appease them until the employer debt is cleared.

On the tenner front, it might not be on your immediate radar but there is an old style money-saving forum on MSE. We're used to helping people turn what's in the cupboard and a few purchases into a week's meals. 

In your situation a pack of 60 pasta is 5 meals, or 4 meals and two pasta salads. Yellow sticker veggies (and meat if it's available), an onion and a tin of tomatoes or passata. That makes sauce for three or four days; freeze a couple if you don't ant them immediately. There are other more interesting options as well.

Thank you very much, I like the pasta idea, and I actually enjoy a good tomato sauce pasta with some tuna flakes sprinkled in ( cheap Aldi one is very tasty ). Today I even cooked myself a chicken liver stew for under 3£, so rather proud of myself . I was born quite poor and sometimes this can be an advantage, as I learned how to cook tasty food ( at least its tasty for me ) ,with less.

For normal gambling, I registered 4 years ago on Gamstop and have an unlimited self-exclusion, so normal gambling is out of the picture. I have even attended GA meetings but had stopped as I was no longer gambling, until I got the rush from trading. I now installed Gamban, which I received for free with the help from Gamcare after talking to them online. It blocks trading websites as well. Also I've been reffered by Gamcare for the CBT treatment, and should be receiving a call from them in a couple of days. I've explained to the broker about my situation and got my account cancelled as well and asked them to never allow me to open an account even if I insist to. They confirmed that they will not. I'm tired of being left with nothing because of loosing everything in a day or 2 after I get the salary in, so I'm confident I will no longer be doing this.

Unrelated to my debt, I felt I need to do something to make me feel better mentally and stop feeling like a loser. I wrote an email to Boris Johnson, Keir Starmer and the Minister of Digital ( who handles Gambling legislation ) highlighting the easy access for compulsive gamblers to day trading and spread betting and the fact that since the FCA regulates this industry, even though it is defined by law as gambling, it doesn't require companies offering such products to have a duty of care towards their clients mental health or asses their trading patterns, which may be the patterns of a compulsive gambler ( such as chasing losses ). Don't know if it anyone would even read what I wrote, but with the cost of living crisis and more and more day traders appearing each day, I hope that no others that have been in my situation relapse like me, or even worse, I hope that this doesn't cause more problem to become addicted to gambling (trading).

I will start concentrating on myself as well, and that will lead to a more realistic SOA, as I am being honest in what I wrote there, since I have not spent any money on myself, as everything was being "invested" and lost. Last pair of shoes I bought was a year ago, last pair of jeans, around the same time.

I have started thinking about another option as well, although not sure if its right for me to think of this. I plan on checking with my current employer if it will be ok, as I know some people in HR that could advise confidentially based on company policies. What I am thinking of is maybe bankruptcy. I paid last month around 2500£ income tax, adding to this another 2000£ left after necesities, that would be around 4500£ per month that could go towards debts, as I understood that if someone is bankrupt there is not income tax payable for the year, if the job isn't changed. With numbers such as these, I could be debt free in under a year, and to be fair, my credit score is so bad that I don't see any difference between being bankrupt and having all of the defaults I have. Does this sound right, or am I just being silly ?

Throughmyfingers

I cant offer much on the bankruptcy front but i think there are some threads on here relating to this and different debt consolidation options which might be worth a read.

On the immediate money front, have you looked to maybe see if you have anything you can sell thats no longer in use. Marketplace can have a quick turnaround especially on weekends.  I also do prol1fic surveys and i have easiley racked up £20 in a week as some of them pay quite well. I try to do them on my breaks at work rather than online shopping 😂