Debt is destroying my life - please guide me.

HopeHopeHope

Hi everyone,

It’s taken me a incredible amount of courage to post this.

Ever since covid made me lose my business I have been spiralling into debt and my mental health is worrying, I cannot see the light at the end of the tunnel for the first time in my life….

Before I go into this, please understand I KNOW the debt is not high in comparison and can be resolved in a decent time scale.

For what ever reason, I cannot make my brain understand this.  Please can you lovely people advise me.


Here is a SOA completed on Lemonfool (brilliant by the way)

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

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 1

Number of cars owned.................... 0[b]

Monthly Income Details[/b]

Monthly income after tax................ 1600

Partners monthly income after tax....... 1400

Benefits................................ 50

Other income............................ 0[b]

Total monthly income.................... 3050[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 520

Secured/HP loan repayments.............. 0

Rent.................................... 520

Management charge (leasehold property).. 0

Council tax............................. 111

Electricity............................. 100

Gas..................................... 100

Oil..................................... 0

Water rates............................. 32

Telephone (land line)................... 0

Mobile phone............................ 50

TV Licence.............................. 13.25

Satellite/Cable TV...................... 20

Internet Services....................... 30

Groceries etc. ......................... 250

Clothing................................ 50

Petrol/diesel........................... 100

Road tax................................ 19

Car Insurance........................... 60

Car maintenance (including MOT)......... 20

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 450

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 20

Pet insurance/vet bills................. 20

Buildings insurance..................... 20

Contents insurance...................... 25

Life assurance ......................... 0

Other insurance......................... 48

Presents (birthday, christmas etc)...... 50

Haircuts................................ 20

Entertainment........................... 40

Holiday................................. 0

Emergency fund.......................... 0[b]

Total monthly expenses.................. 2688.25[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 350000

Shares and bonds........................ 0

Car(s).................................. 0

Other assets............................ 0[b]

Total Assets............................ 350000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 165000...(520)......1.43[b]

Total secured & HP debts...... 165000....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Car hire.......................6402......223.......0

Lloyds Loan....................3320......86........0

Virgin Credit Card.............3000......45........0

Drafty.........................950.......0.........0

Moneyboat .....................1050......335.......0

Betterborrow...................1558......80........0

Monzo  overdraft ..............1050......30........0

Capital One....................200.......22........0[b]

Total unsecured debts..........17530.....821.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,050

Expenses (including HP & secured debts). 2,688.25

Available for debt repayments........... 361.75

Monthly UNsecured debt repayments....... 821[b]

Amount short for making debt repayments. -459.25[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 350,000

Total HP & Secured debt................. -165,000

Total Unsecured debt.................... -17,530[b]

Net Assets.............................. 167,470[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

The car has 2 years remaining.

Both Moneyboat and Drafty loans I cancelled the Agreement and I have until the 11th this Month to pay them back…. Yes I panicked as I really didn’t want them showing on my credit file. I won’t be able to pay them in full. What happens here, does anyone know? 

Yes, I own a house that has around £200,000 equity in it. And this debt is relatively small in comparison.

I cannot get anymore credit because I was stupid and applied for everything and anything.

I currently have no late payments or defaults. 

All debts are in my name, not my partners.

I considered a secured loan, then read here… maybe it still makes sense?


We are due to remortgage in June and will just go directly onto The loyalty mortgage our provider offers.

I am petrified someone’s going to turn up at the door demanding this debt….

I would also love the best way of not ending up with negative reports on my credit report (I’m sure this is not possible)

  

Thanks everyone 

CRANKY40

You've put in £520 for mortgage and £520 for rent. Is this correct?

Brie

first few thoughts - maybe you need to cut out the entertainment and the presents.  Or have those things but have them home based/ home made.

what's the "other insurance" at £48?  is it essential?

and clothing at £50.  Ok kids need stuff as do adults but maybe take a break for a few months.  Ask grandparents/family buy practical items for Christmas, not silly things that no one actually needs.

Over £60 on tv license, satellite, internet.  What's not essential?  Easiest one to drop quickly is the TV license but you need to ensure you are never watching live TV or anything on BBC iPlayer.  Not even recording live things.  I suggest that as it would be an instant result whereas I expect that the other 2 are on contract.  

Talk to your creditors and let them know you need a break.  Some will be willing to stop interest accruing for a bit. Others may not.

I think there is much to be gained from getting rid of just one debt.  It will give you a boost - so the Capital One that is £200 would be first on my list to nuke.  

Well done for making a start.  The first step is the hardest!!!

HopeHopeHope

CRANKY40 said:

You've put in £520 for mortgage and £520 for rent. Is this correct?

No, I made a mistake and can’t see how to edit the post 😄

It is £520 for the mortgage. Not rent.

CRANKY40

HopeHopeHope said:

CRANKY40 said:

You've put in £520 for mortgage and £520 for rent. Is this correct?

No, I made a mistake and can’t see how to edit the post 😄

It is £520 for the mortgage. Not rent.

There's a little cog wheel at the top right of your post, unless being new stops you from using it. If you click on that you can edit your post but it makes your whole SOA wrong though as rather than being -459 each mon th you should have £60 left over I think. 

HopeHopeHope

CRANKY40 said:

HopeHopeHope said:

CRANKY40 said:

You've put in £520 for mortgage and £520 for rent. Is this correct?

No, I made a mistake and can’t see how to edit the post 😄

It is £520 for the mortgage. Not rent.

There's a little cog wheel at the top right of your post, unless being new stops you from using it. If you click on that you can edit your post but it makes your whole SOA wrong though as rather than being -459 each mon th you should have £60 left over I think. 

Hey,

There’s no COG.

And you are correct. I was very confused when it said -459.

£60 seems correct. 

theoretica

I think you might want to see if you can get a new agreement with drafty and moneybox - having those accounts running normally will be a smoother way of proceeding than cancelling them but not having the money to pay them back.  

HopeHopeHope

theoretica said:

I think you might want to see if you can get a new agreement with drafty and moneybox - having those accounts running normally will be a smoother way of proceeding than cancelling them but not having the money to pay them back.  

Thanks,

How would a new agreement work? Would they listen to what I can afford?

enthusiasticsaver

You haven’t put the interest rates in and I know quite a few of those lenders have high rates. 

A secured loan is the last thing you should consider. Never convert unsecured debt into secured. 

Even though you have a small surplus it is not enough to sort this out. I am afraid having debts with Drafty, Moneyboat and Betterborrow which are essentially payday loans will already have affected your credit report. If you are in such a big hole that you are resorting to using them then a DMP may be the answer which means defaulting so the interest and charges stop. You also need to stop using and applying for credit. Speak to stepchange.