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Debt Help Please
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LP121
Posts: 18 Forumite
Hello All,
I have been in debt for many years. After talking to StepChange, they have told me that my debts are affordable, to stick to a budget and keep pushing on. I thought I would post here for a bit more advice. After I pay off the minimums each month I am left with a bit of cash, but I feel like I'm in an endless loop at the moment, I'm struggling to see a way out.
I have been in debt for many years. After talking to StepChange, they have told me that my debts are affordable, to stick to a budget and keep pushing on. I thought I would post here for a bit more advice. After I pay off the minimums each month I am left with a bit of cash, but I feel like I'm in an endless loop at the moment, I'm struggling to see a way out.
[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]
Monthly Income Details[/b]
Monthly income after tax................ 1900
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 1900[/b][b]
Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 725.7100000000002
Rent.................................... 150
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 100
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
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)...... 20
Haircuts................................ 30
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Gym..................................... 40
Spotify................................. 17[b]
Total monthly expenses.................. 1242.71[/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]
Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0<
PayPal Credit..................5744.32..(225)......24.9<
Drafty.........................545.5....(58.59)....89.7<
118118.........................1285.2...(85.68)....60.18<
Finio..........................878.9....(82.04)....69.9<
Lendable.......................1190.88..(80.32)....29.42<
Tech Finance...................700......(100)......0<
Salary Finance.................564.41...(94.08)....24.9[b]
Total secured & HP debts...... 10909.21..-.........- [/b]
[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Mum............................4700......290.......0
Friend.........................300.......300.......0[b]
Total unsecured debts..........5000......590.......- [/b]
[b]
Monthly Budget Summary[/b]
Total monthly income.................... 1,900
Expenses (including HP & secured debts). 1,242.71
Available for debt repayments........... 657.29
Monthly UNsecured debt repayments....... 590[b]
Amount left after debt repayments....... 67.29[/b]
[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 0
Total HP & Secured debt................. -10,909.21
Total Unsecured debt.................... -5,000[b]
Net Assets.............................. -15,909.21[/b]
[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
0
Comments
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well done for posting up the SOA - see above for comments in bold as usual...LP121 said:Hello All,
I have been in debt for many years. After talking to StepChange, they have told me that my debts are affordable, to stick to a budget and keep pushing on. I thought I would post here for a bit more advice. After I pay off the minimums each month I am left with a bit of cash, but I feel like I'm in an endless loop at the moment, I'm struggling to see a way out.[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]
Can you confirm the makeup of your household? Number of adults/children is useful when assessing budgets.Monthly Income Details[/b]Monthly income after tax................ 1900Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 1900[/b][b]Monthly Expense Details[/b]Mortgage................................ 0Secured/HP loan repayments.............. 725.7100000000002 What is this for and what is it secured on?Rent.................................... 150Management charge (leasehold property).. 0Council tax............................. 0Electricity............................. 100 You're going to need to explain a bit about your living arrangements I think - very low rent, no council tax and a rather high electric bill in comparison suggests something not entirely straightforward!Gas..................................... 0Oil..................................... 0Water rates............................. 0Telephone (land line)................... 0Mobile phone............................ 60 If this is just for one phone then that's exorbitant! diarise when the contract ends and then switch to a £10 a month (at most!) SIM only deal.TV Licence.............................. 0Satellite/Cable TV...................... 0Internet Services....................... 0Groceries etc. ......................... 100 This is fairly ow, even for a single person these days. does it definitely cover all your spending?Clothing................................ 0 not realistic - even if only "socks and pants" we all need to buy clothes occasionally.Petrol/diesel........................... 0Road tax................................ 0Car Insurance........................... 0Car maintenance (including MOT)......... 0Car parking............................. 0Other travel............................ 0 So you don't run a car, and you never use any other form of non-free travel?Childcare/nursery....................... 0Other child related expenses............ 0Medical (prescriptions, dentist etc).... 0Pet insurance/vet bills................. 0Buildings insurance..................... 0Contents insurance...................... 0Life assurance ......................... 0Other insurance......................... 0Presents (birthday, christmas etc)...... 20Haircuts................................ 30Entertainment........................... 0 This likely isn't realistic either - you never go anywhere at all? Not even a coffee with a pal here and there?Holiday................................. 0 You never go away at all, not even a weekend visiting friends or family?Emergency fund.......................... 0 You need something here, even if only a token figure each month. It's what will "rescue" you in you drop your mobile phone down a hole, or even suddenly and unexpectedly need to replace something like a pair of winter boots.Gym..................................... 40Spotify................................. 17[b]Total monthly expenses.................. 1242.71[/b][b]Assets[/b]Cash.................................... 0House value (Gross)..................... 0Shares and bonds........................ 0Car(s).................................. 0Other assets............................ 0[b]Total Assets............................ 0[/b][b]Secured & HP Debts[/b]Description....................Debt......Monthly...APRMortgage...................... 0........(0)........0<PayPal Credit..................5744.32..(225)......24.9<Drafty.........................545.5....(58.59)....89.7< That interest rate is hideous - this is priority 1.118118.........................1285.2...(85.68)....60.18< Still pretty hideous - priority 3Finio..........................878.9....(82.04)....69.9< Also hideous - priority 2Lendable.......................1190.88..(80.32)....29.42<Tech Finance...................700......(100)......0<Salary Finance.................564.41...(94.08)....24.9[b]Total secured & HP debts...... 10909.21..-.........- [/b] This section isn't correct - most of those debts aren't going to be secured, if any?[b]Unsecured Debts[/b]Description....................Debt......Monthly...APRMum............................4700......290.......0Friend.........................300.......300.......0 So this one is now clear/ Or will be after one more payment?[b]Total unsecured debts..........5000......590.......- [/b][b]Monthly Budget Summary[/b]Total monthly income.................... 1,900Expenses (including HP & secured debts). 1,242.71Available for debt repayments........... 657.29Monthly UNsecured debt repayments....... 590[b]Amount left after debt repayments....... 67.29 OK - this is good - do you actually have anything left each month though?[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 0Total HP & Secured debt................. -10,909.21Total Unsecured debt.................... -5,000[b]Net Assets.............................. -15,909.21[/b][i]Created using the SOA calculator at www.LemonFool.co.uk.Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
I'm going to assume that all your debt is unsecured. I'm also going to assume we can ignore your apparent monthly surplus as once your budget is adjusted to include missing stuff that will be used up.
Your payment to pay back your friend will be finished once one more payment is made I think - which frees up £300 a month immediately. That £300 gets paid straight to the debt with the highest interest rate (and let's be honest - you've got some shockers there!) so if your case that will be the revolting bunch at Drafty getting that initially. Once that's cleared down (2 months) then the £300, PLUS the £58.59 you were already paying Drafty goes to the nasty pieces of work at Finio. That will likely take you3 months to clear, at which stage you will be transferring the £358.59 PLUS the £82.04 you were paying Finio to the money grabbing wretches at 118118 ...which you will then clear in around another 3 months....do you get the picture (both about how to tackle the debt, AND about my contempt for the payday loan companies? Each time you clear a debt, tell the company concerned that you wish to close your account with them, please, if it is something where an account would stay open as an available line of credit for you.
In the interim, you need to stop using the likes of PayPal credit - you won't be able to close the account there as there will obviously be a balance for some time to come, so you'll need to use willpower to avoid the temptation to spend. If you are needing to pay for something using PayPal for the time being, it's needing covering from money you have available for that spend, or you simply can't afford the thing - it really is that simple. Does the Paypal credit debt relate to anything tangible that you could sell to pay off against some of the debt, perhaps?
You are likely to never again be in such a good place in relation to disposable income, so you must tackle both the debt and also learning to budget now - particularly if you ever wish to try to be in a position to own your own place to live.
I would agree with Stepchange, you are in a position to clear this debt with some hard work and careful budgeting - it won't be fun, and it will take some time, but with luck you will emerge at the other side debt free and in a far better position to stay that way in to the future. there is nothing quite like a hard slog of debt clearing to make you vow never to put yourself back in that position again!🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her1 -
That's a decent income, and it appears you live cheaply (living with family?)
If you could re-work that soa so that the debts are in the right place, and check that the expenses are correct, then this is do-able0 -
@EssexHebridean Thank you. I think the £725 is telling me how much of my monthly income instantly goes to minimum payments to creditors. They are all unsecured, my mistake. I appreciate my sheet is a bit confusing, let me explain. Currently live with my mother (I am 24, but been in this spiral since I was 19), who asks for next to nothing per month '150'. The 100 electricity is the monthly charge cost for my electric (COMPANY) car, I do not own it / pay insurance etc. Groceries is correct as I just pick up a few bits for work lunch etc. Clothing I suppose I do, it's difficult to put a number against it monthly though, I suppose £15 a month, over the year, maybe accurate. Entertainment, yes I do occasionally have a drink or something else, not too often, again difficult to put a number against but 40 would probably be close. Holiday, same thing. Emergency Fund, point noted. I will make a savings pot and begin this now. Thank you for the advice on the individual debts. Without going into too much detail... Gambling problem, which I am receiving help for. Hence accepting anything I could get. After one more 300 payment (next week), I will have another 300 per month cash, correct, which as you say is a good start to knocking the highest rates first, and then carry on. I have made a few mistakes and tend to use Google Sheets to keep track on incoming / outgoing money, but I usually have 100/200 spare per month. For years I have been paying minimums, getting nowhere, saving some money but then end up spending it. This time I'm prepared to save next to nothing. Throw everything I can at the debt, and just crack this once and for all.0
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I have had another go, updated version below. I think it's now telling me that I'm in the minus but this is due to adding cost for clothing, holidays, etc, that doesn't happen every month.Monthly Income DetailsMonthly income after tax................ 1900Total monthly income.................... 1900Monthly Expense DetailsMortgage................................ 0Secured/HP loan repayments.............. 0Rent.................................... 150Management charge (leasehold property).. 0Council tax............................. 0Electricity............................. 100Gas..................................... 0Oil..................................... 0Water rates............................. 0Telephone (land line)................... 0Mobile phone............................ 58TV Licence.............................. 0Satellite/Cable TV...................... 0Internet Services....................... 0Groceries etc. ......................... 100Clothing................................ 15Petrol/diesel........................... 0Road tax................................ 0Car Insurance........................... 0Car maintenance (including MOT)......... 0Car parking............................. 0Other travel............................ 0Childcare/nursery....................... 0Other child related expenses............ 0Medical (prescriptions, dentist etc).... 0Pet insurance/vet bills................. 0Buildings insurance..................... 0Contents insurance...................... 0Life assurance ......................... 0Other insurance......................... 0Presents (birthday, christmas etc)...... 20Haircuts................................ 30Entertainment........................... 40Holiday................................. 25Emergency fund.......................... 20Spotify................................. 17Gym..................................... 40[b]Total monthly expenses.................. 615AssetsTotal Assets............................ 0
Unsecured DebtsDescription....................Debt......Monthly...APRMum............................4700......290.......0Friend.........................300.......300.......0PayPal Credit..................5744......225.......24.9Drafty.........................545.......59........89.7Salary Finance.................564.......94........24.9Tech Finance...................700.......100.......0Finio..........................878.......82........69.9Lendable.......................1190......80........29.42118118.........................1285......86........60.18Total unsecured debts..........15906.....1316......Monthly Budget SummaryTotal monthly income.................... 1,900Expenses (including HP & secured debts). 615Available for debt repayments........... 1,285Monthly UNsecured debt repayments....... 1,316Amount short for making debt repayments. -31Personal Balance Sheet SummaryTotal assets (things you own)........... 0Total HP & Secured debt................. -0Total Unsecured debt.................... -15,906Net Assets.............................. -15,9060 -
OK, so you've added £150 of "optional spending" and are now in a negative budget situation. So you cut your coat according to your cloth, and wrinkle out that extra from the budget. Nothing to stop you taking an extra 2 weeks between hair cuts, or cutting back on entertainment, or find some way to reduce that very high phone cost.
And nothing to stop you reallocating £15 extra for clothes from the holiday fund if necessary.
Do you need Spotify, the gym, can cut the phone bill?
Next month you can at least kill the debt to your friend, and then reallocate to tackle drafty.
Meantime go over to the Boost your Income thread, use the reduced section in the supermarket to keep your groceries down etc. Every tenner will help when you've got this sort of APR to deal with.
And audit your clothes so you know what works with what, if one item would make things work better, hunt the chazzers for that and that alone. If it's undersize, oversize, not being worn, do a car boot sale.
If you've have not made a mistake, you've made nothing0 -
I agree with all the above - the quicker you can blitz those extortionately high interest rated debts, the faster your progress will be. Good luck0
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Can mum and friend miss out for a few months while you clear Drafty, Finio and 118118?
Then things will look a lot better0 -
If it makes you feel any better, if I completed one of those SOA’s about 3 years ago it would look remarkably similar to yours, probably slightly worse actually.
I’m now completely debt free, managed to save for a house deposit and now sitting in my own home.
I achieved this by the same methods as you’ve been advised. Tackle those debts with the highest interest first and work through them. How flexible is the money owed to mum? Could you ask for a 6-month hiatus to use the 290 towards debt which carries interest?
Make sure you are entirely realistic about your SOA. When I was in your position I would too often focus on an optimistic view rather than reality. You also cannot suppress yourself too much. You will get told on here to cut back on x, y and z - they are all totally right. However, if you do and you start to lose enjoyment, you’ll turn back to gambling to “win an extra 20 quid to be able to go out”. The rest will be history. Make sure you are cutting your cloth accordingly, but you do not cut back too far. Even if this means 1 extra month of repayments, it will be worth it.
Secondly, have you contacted the payday lenders to complaint about potential unaffordable lending? There will undoubtedly be some level of unaffordable lending. Even if they initially reject your claim, do take it to the Ombudsman if you believe it may have a case - I had at least 3 upheld by the Ombudsman. It’ll take you 15 minutes to draft a letter to each and potentially save you hundreds in interests.
Also do this for any previous loans which you have already paid off. They’ll refund you if your claim is accurate and you can then use that to repay the debt.
This will also help you in the future as you will have adverse information removed from your credit file if your claim is accurate.
Use CheckMyFile (30 days free) to pull your credit report and download a copy. You can use this to refresh your memory of any loans you’ve previously held. Secondly, you can use this to supply as evidence of unaffordable lending.
And last but most importantly, stop the gambling for good. My debt was caused by this too. You will never solve your debt problems without solving this first. I get the message you are receiving help, but again, I had said that more times than I can recall when I was in the mindset of seeking help (usually straight after spending my entire wage), only to then come up with a masterplan to win it all back the next day.
It’s a terrible illness with terrible consequences. It will certainly not solve your problems.
You clearly have a good job for your age, you have a lot to be positive about and you will no doubt one day be sitting here writing a message like I am today.
Hope this helps.3 -
@No19v87 Thanks for your comment, maybe you are me from the futureNo19v87 said:If it makes you feel any better, if I completed one of those SOA’s about 3 years ago it would look remarkably similar to yours, probably slightly worse actually.
I’m now completely debt free, managed to save for a house deposit and now sitting in my own home.
I achieved this by the same methods as you’ve been advised. Tackle those debts with the highest interest first and work through them. How flexible is the money owed to mum? Could you ask for a 6-month hiatus to use the 290 towards debt which carries interest?
Make sure you are entirely realistic about your SOA. When I was in your position I would too often focus on an optimistic view rather than reality. You also cannot suppress yourself too much. You will get told on here to cut back on x, y and z - they are all totally right. However, if you do and you start to lose enjoyment, you’ll turn back to gambling to “win an extra 20 quid to be able to go out”. The rest will be history. Make sure you are cutting your cloth accordingly, but you do not cut back too far. Even if this means 1 extra month of repayments, it will be worth it.
Secondly, have you contacted the payday lenders to complaint about potential unaffordable lending? There will undoubtedly be some level of unaffordable lending. Even if they initially reject your claim, do take it to the Ombudsman if you believe it may have a case - I had at least 3 upheld by the Ombudsman. It’ll take you 15 minutes to draft a letter to each and potentially save you hundreds in interests.
Also do this for any previous loans which you have already paid off. They’ll refund you if your claim is accurate and you can then use that to repay the debt.
This will also help you in the future as you will have adverse information removed from your credit file if your claim is accurate.
Use CheckMyFile (30 days free) to pull your credit report and download a copy. You can use this to refresh your memory of any loans you’ve previously held. Secondly, you can use this to supply as evidence of unaffordable lending.
And last but most importantly, stop the gambling for good. My debt was caused by this too. You will never solve your debt problems without solving this first. I get the message you are receiving help, but again, I had said that more times than I can recall when I was in the mindset of seeking help (usually straight after spending my entire wage), only to then come up with a masterplan to win it all back the next day.
It’s a terrible illness with terrible consequences. It will certainly not solve your problems.
You clearly have a good job for your age, you have a lot to be positive about and you will no doubt one day be sitting here writing a message like I am today.
Hope this helps.
I have not contacted any lenders. I'm not too sure how to go about this. Would you be able to direct me to a website that could help me through the steps of doing this? And are there disadvantages if I am refused? Yes - The gambling must stop, I have accepted that I will always have this hidden (terrible) attribute of being a compulsive gambler and cannot let me guard down. 0 -
No problem at all. Here’s a couple of links which outline the process:LP121 said:
@No19v87 Thanks for your comment, maybe you are me from the futureNo19v87 said:If it makes you feel any better, if I completed one of those SOA’s about 3 years ago it would look remarkably similar to yours, probably slightly worse actually.
I’m now completely debt free, managed to save for a house deposit and now sitting in my own home.
I achieved this by the same methods as you’ve been advised. Tackle those debts with the highest interest first and work through them. How flexible is the money owed to mum? Could you ask for a 6-month hiatus to use the 290 towards debt which carries interest?
Make sure you are entirely realistic about your SOA. When I was in your position I would too often focus on an optimistic view rather than reality. You also cannot suppress yourself too much. You will get told on here to cut back on x, y and z - they are all totally right. However, if you do and you start to lose enjoyment, you’ll turn back to gambling to “win an extra 20 quid to be able to go out”. The rest will be history. Make sure you are cutting your cloth accordingly, but you do not cut back too far. Even if this means 1 extra month of repayments, it will be worth it.
Secondly, have you contacted the payday lenders to complaint about potential unaffordable lending? There will undoubtedly be some level of unaffordable lending. Even if they initially reject your claim, do take it to the Ombudsman if you believe it may have a case - I had at least 3 upheld by the Ombudsman. It’ll take you 15 minutes to draft a letter to each and potentially save you hundreds in interests.
Also do this for any previous loans which you have already paid off. They’ll refund you if your claim is accurate and you can then use that to repay the debt.
This will also help you in the future as you will have adverse information removed from your credit file if your claim is accurate.
Use CheckMyFile (30 days free) to pull your credit report and download a copy. You can use this to refresh your memory of any loans you’ve previously held. Secondly, you can use this to supply as evidence of unaffordable lending.
And last but most importantly, stop the gambling for good. My debt was caused by this too. You will never solve your debt problems without solving this first. I get the message you are receiving help, but again, I had said that more times than I can recall when I was in the mindset of seeking help (usually straight after spending my entire wage), only to then come up with a masterplan to win it all back the next day.
It’s a terrible illness with terrible consequences. It will certainly not solve your problems.
You clearly have a good job for your age, you have a lot to be positive about and you will no doubt one day be sitting here writing a message like I am today.
Hope this helps. I have not contacted any lenders. I'm not too sure how to go about this. Would you be able to direct me to a website that could help me through the steps of doing this? And are there disadvantages if I am refused? Yes - The gambling must stop, I have accepted that I will always have this hidden (terrible) attribute of being a compulsive gambler and cannot let me guard down.
https://www.citizensadvice.org.uk/debt-and-money/borrowing-money/types-of-borrowing/loans/Letter-to-complain-about-a-payday-loan/
https://www.financial-ombudsman.org.uk/businesses/complaints-deal/consumer-credit/unaffordable-lending
https://debtcamel.co.uk/payday-loan-refunds/
When I drafted mine and sent them off, I worked on the basis that even one refund coming forward would make it worth my time.
You’ll probably find the older the loan, the more likely it will be successful. Lenders tightened up significantly after watching the collapse of Wonga, QuickQuid and others following significant irresponsible lending claims.
There are no real disadvantages, the worst outcome is they say no and the Ombudsman agrees with them and you’ve wasted a couple of hours of your time. The only other thing they will potentially do is refuse you any future finance, which wouldn’t exactly be a disadvantage in your case.0
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