Desperate for change

GeoffSpar

Hi all,

I am posting this in the hope for a little encouragement.

I don't even feel that I can go into all the detail of how much debt I am in but I know it's about 60K+. I have a good job earning really good money. A house with a decent amount of equity and a good mortgage deal. But I am overdue on my credit cards, I have a CCJ and lots of loans that have now defaulted. I know I have to make a change but it feels impossible. I did a DMP illustration via StepChange's website but didn't go ahead with it. I'm scared that I will lose access to some of my bank accounts or credit cards even though I know it's pretty silly to even worry about that given the situation I'm in. My partner has no idea of my situation and I am petrified of them ever finding out.

Thanks everyone

WinterWarrior

Have you looked at Dave Ramsey? He has a really good snowball method that might help you.
if you feel able to set everything out, people may be able to offer suggestions.
good luck, you’ve made the first step. The main thing is don’t worry, it will be fixable! 

GeoffSpar

Thank you! I had a read and that feels a nice practical way to at least start tackling it.

WinterWarrior

The good thing about tackling it yourself is that you can make extra payments and get the small ones gone quite quickly. 

cybertortoise

Welcome @GeoffSpar

I started my DMP with Stepchange and they were great, encouraging me to make sure I had thought of things I didn't usually budget for. I did find that they were a bit too strict for my liking and wanted the option of paying extra amounts when I could so I dropped them and went self-managed. I found almost every company was happy to accept the budget and token payments I was doing with Stepchange. It was a pretty easy process but a bit nerve-wracking to start with making calls or sending emails.

I closed bank accounts and credit cards and found I could finally see the end, although it's still a fair way off.

Do you need access to all of your accounts? What if they closed? What would happen? If you paid off one credit card would you then use that to live and increase your debt again? Sometimes it's worth losing the use of these things to prevent temptation.

You say you earn good money, but can't afford the payments on your loans and credit cards. Where is your money going? That would be my first step, where can you cut back to increase your debt payments?

Good luck with your journey.

GeoffSpar

Thanks @cybertortoise for the reply.

I guess I worry that I pay off a card, something unexpected then happens and I need the access to the credit line and it's been taken away / closed. I agree that it's probably best to lose the use of these things tbh!

You're right, I need to cut back on what I spend even though I think I'm fairly careful. The interest on credit cards is pretty high (I'm not behind on all, but some) - e.g. 550/month from my AMEX.

I need to bite the bullet and clear a credit card and not use it again. I think that's the only way I'm going to start dealing with this mess.

WinterWarrior

Dave Ramsey (and some others) advise on saving a £1k emergency fund….this is what you fall back on if something unexpected and essential breaks down. By keeping that there you can then safely close off your cards as you pay them off, making sure you can’t slip back. 

foxgloves

Agree with @WinterWarrior. All our emergencies used to go straight on credit cards, extended loans or overdraft because we had no emergency fund. This was one of the first things we worked on putting in place when we decided we no longer wanted to live in constant debt. Longer term, money for things like car repairs, appliance replacement, etc, needs to be put aside separately because these are entirely foreseeable expenses, not emergencies as such. My partner & I kept one credit card each. They are only used for agreed planned spending to.maximise loyalty points for vouchers & are paid off in full each month. I concur that it does feel like additional security having a credit card until there is a viable emergency fund in place as long as the temptation to use it for other spending can truly be resisted.
Good luck with your debt-busting. 
F