Numerous Loans taken by Inexperienced Idiot - Advice Appreciated

AndyD1978

Hi Folks, 
I feel a bit of a fraud coming on here because I haven't used this site in years.

I'll give you the background of the whole sorry story, but essentially I'm looking for some help and guidance please. 

In 2019 my mum passed away suddenly. I lived at home with her and was pretty much used to paying keep each month and my phone bill etc. 
After the funeral I applied to take on the tenancy of our home, which was a council house, then I quickly applied to purchase under the right to buy scheme. Luck shined on me because I inherited mums tenancy privileges which meant my house was valued at £95,000 and I got a mortgage for £33,000 (now down to £27,000). 

I was going along just fine until a 'friend' railroaded me into a holiday which cost £2,000 which I should never have taken, this was followed by a series of ill-judged purchases, redecorating the house and some other issues and before I know it I had a credit card maxed out at £1,700. I took a loan out to pay the credit card which I squandered and now I find myself in a really rubbish position of having 5 individual loans AND the credit card bill hanging over me. My total debt is around £7,500. 

Without going into too much detail, a long-lost family member appeared a few months ago and promised they would leave a substantial sum to me which would clear everything, but it turns out that could be just lies. I'm surely due a break in luck. 

If I'm honest I'm really embarrassed and angry with myself I've got into this scenario. I've got a steady job that pays £1,700 per month with promotion coming up again, I've a mortgage that is only £180 per month, yet I'm drowning in this debt. 

Consolidation? I'm not even sure what that is, remortgage the house? I honestly don't know which way to turn.

Thanks in advance. 

fatbelly

You've got a steady job, low housing costs and £7500 is not a lot of debt. This should be do-able.

Pop over to the debt-free wannabe board and post a statement of affairs

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

elsien

I would suggest as a starting point heading over the the debt free wannabe bit of the forum.
There is a link on there to complete a statement of affairs which will show your income, debts and budget. That will allow people to give you feedback on the best way to get out of your debt situation.
Consolidation loans (they basically combine your smaller loans into one bigger loan) are generally not advised because unless you are very careful with your budget and outgoings then you end up running up the credit cards again plus the loan so owing even more. 

There will be an answer, so don’t panic. 

[Deleted User]

AndyD1978 said:

Consolidation? I'm not even sure what that is, remortgage the house? 

You've already tried that. It's not for you. You need to pay off the debts the old fashioned way - with your own money.

Make a budget, stop over spending and use your disposable income to reduce your debt.

diystarter7

Be strict with your spending and to reduce unnecessary spending and at the same time earn more money, get a second job or do overtime.  You will start seeing the rewards pretty quickly.

MrFrugalFever

Head over to Debt Free section and start changing your mindset and spending habits. With a good income and low mortgage, controlling your spending will have that relatively small debt gone in no time. Good luck and hopefully see you on the Debt Free board!

MalMonroe

Hi, I just want to say that I agree with fatbelly, above. Your debt isn't high and if you manage to get a grip on your finances now, you should be able to manage.

Also going to the debt free wannabe board would be very sensible.

Even though your Mum died three years ago, it's reasonable to think that you were overwhelmed by what happened at the time and by the fact that you were left in total control of everything and you weren't used to it. But please don't beat yourself up about what happened after your loss.

You took an expensive holiday at a time when you were vulnerable but I don't think you should blame anyone (yourself or your friend) for that, your friend may have thought that you needed some cheering up and that you could afford it, and from the outside looking in, I don't think it would be strange for anyone to think that. Be kind to yourself, you suffered a great loss, very suddenly and unexpectedly and it must have knocked you for six for a long time. Don't underestimate the effects of grief.

Try not to feel too embarrassed either, there are many of us on this forum who have been in similar positions, myself included. Except my debt was twice yours and my income less than half yours. So you are not in as bad a position as you may have thought. 

If you need someone to talk to about your debt, you could do worse than contact one of the free debt help agencies - I used StepChange - https://www.stepchange.org/  -  and found them to be very understanding, kind and non-judgemental. There's also Citizens Advice and National Debtline. They'll ask you to make a list of your incomings and outgoings and that really is the place to start. 

I was a bit taken aback when I read this bit of your post "a long-lost family member appeared a few months ago and promised they would leave a substantial sum to me which would clear everything, but it turns out that could be just lies. I'm surely due a break in luck."  Whether they have lied or not, you can't just wait for someone to die so that your luck will change! 

You can change your own life around to ensure that your luck changes. You have a job, a good income with a promotion coming up and the ability to budget. All you have to do is sit down and work out what you spend and what you have coming in and you will be able to figure things out. You have been through a very difficult and rough patch. But you can do this. You really can. 

Maskface

I know it seems overwhelming but honestly that's not a lot of debt. Mine was nearer £17,000. I finally cleared it late last year and am now debt free. Contact Stepchange which you can Google for free debt advice because they may be able to find you a way forward. 

AndyD1978

Thank you MalMonroe, this reply really struck home with me and it is very much appreciated, as is everyone else who took the time to reply. After re-reading my post, it did sound a bit grim my part about waiting for someone to die to fix my debt problems, so I better explain a bit more. Just before Christmas I made contact with my estranged father who I hadn't seen for 25 + years. He isn't really a nice guy, but I wanted to make peace with him as he's 76. After a month or two of awkward small talk, meeting in the pub for a pint to find we have nothing in common, I was on the verge of walking away. But then in February he took ill in the street and was subsequently diagnosed with a brain tumour which is unfortunately terminal. 
I went with him to the consultant to support him and he was told he had around 4 months to live. My stance is we are never going to be 'best mates' or have a loving 'dad and lad' relationship, but at the same time I won't let him face this alone as I'm his only blood relative. 
He mentioned a month or two ago that he would leave everything he had to me which included his savings. I told him, genuinely, I wasn't interested in his money, I'm sticking with him because its the right thing to do as a son to father. 

Yes, his savings would solve all of my problem. it has crossed my mind, but even if the man had nothing in the bank I'd still stick with him. 

Apologies, I've gone off on a big massive tangent and feel like I'm in a counselling session! 

Cheers again for the advice

AndyD1978

A huge thank you to everyone who took the time and effort to reply. Without sounding like a cliche, it really made me feel a lot better to realise that my debt isn't such a mountain as I thought. 
I've made some immediate changes, cancelled stuff I don't really need, only small stuff like Netflix, Amazon Prime etc. 

One of my bad habits I've developed since lockdown was being too quick to order stuff to be delivered, beers, takeaways, shopping. That can be stopped as well. 

Thanks again everyone  

MrFrugalFever

AndyD1978 said:

A huge thank you to everyone who took the time and effort to reply. Without sounding like a cliche, it really made me feel a lot better to realise that my debt isn't such a mountain as I thought. 
I've made some immediate changes, cancelled stuff I don't really need, only small stuff like Netflix, Amazon Prime etc. 

One of my bad habits I've developed since lockdown was being too quick to order stuff to be delivered, beers, takeaways, shopping. That can be stopped as well. 

Thanks again everyone  

Just remember now you’ve recognised you have an issue and are at the start of the journey, there’s a challenge ahead. It’s a small mountain you still have to climb but remember you will be able to come down the other side, part of that climbing phase will seriously test your resolve and self discipline. 

Sorry to hear of your father.