I am swamped in debt- HELP!

wanttogetmylifetogether

hi guys,

happy holidays!

I  am a long time lurker in the forums, but decided this is the day i sort my ish out- this will be a long one, so setttle in. 


I am a homeowner, in negative equity (bought in 2020), in a fixed rate until feb 2027. Payments are high - didnt have a great score, but on my previous earnings it was manageable. I have always has on the high side of debt, (ADHD + rubbish saver) but when i lost my dad and step mum last year, the already high payments went higher. I work in car sales and having a big chunk of time off = no commission= spending more on credit cards etc = withdrawing money on one card to pay the others minimum, missing payments/ payday loans etc. (please do not judge i was in a tough place.

fast forwards to now, I am dealing with the grief better, im back to work however, due to cozzy livs, no one is really buying cars which means my once net pay of £3000+ PCM is now £1900 ish. I see things getting better next year but i need to deal with this now. What has prompted this is i was having a read through the forums and advice was given to let everything default and then make offers etc etc. 1) i didnt have any money to save to make those and 2) i forgot about the payday loan which now they are taking court proceedings on (moneyboat.co.uk) - the letter came in the post yesterday. 

I called step change, went through the budget and they said I have £25 a month left over - thats with £170 for food (live alone - no partner or kids) petrol etc. with no debt payments. 

I have 7 creditors - all defaulted and most with debt collectors totalling £33,000. I have just won a irresponsible lending claim with aqua, £1100 so that needs to come off but still owe them £999. 

They advised me IVA is not an option due to low amount of payment and im a home owner, we spoke about selling the property but after fees etc I haven't got the money to move, let alone the credit score to get rental ( and no guarantor as my dad isn't around any longer) 

in short, could any of you lovely people help offer your words of wisdom, i dont want this feeling  going into 2025 and I want to make 2024 the year I sort myself out. I would like to think soon i will settle down and start a family as the clock is ticking - age wise - but who wants to get involved with someone with this much debt. 

if you made it to this point well done!

Thank you in advance. 

MattMattMattUK

Can you post a full SOA?
https://www.lemonfool.co.uk/financecalculators/soa.php

fatbelly

Somewhere in there you said there was a court claim. If it's at 30-day pre-action stage then

https://debtcamel.co.uk/letter-before-claim-ccj/

If it's at claim stage then

https://legalbeagles.info/forums/forum/legal-forums/court-claims-and-issues/received-a-court-claim

Ps. Don't think about selling the house because of nonpriority debt

wanttogetmylifetogether

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

Household Information[/b]

Number of adults in household........... 1

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

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

Monthly Income Details[/b]

Monthly income after tax................ 1956

Partners monthly income after tax....... 0

Benefits................................ 0

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

Total monthly income.................... 1956[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 635

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

Rent.................................... 470

Management charge (leasehold property).. 0

Council tax............................. 224

Electricity............................. 50

Gas..................................... 80

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

Water rates............................. 40

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

Mobile phone............................ 45

TV Licence.............................. 14

Satellite/Cable TV...................... 51

Internet Services....................... 0

Groceries etc. ......................... 175

Clothing................................ 0

Petrol/diesel........................... 80

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................. 28

Buildings insurance..................... 0

Contents insurance...................... 5

Life assurance ......................... 8

Other insurance......................... 9

Presents (birthday, christmas etc)...... 0

Haircuts................................ 0

Entertainment........................... 0

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

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

Total monthly expenses.................. 1914[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 125000

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

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

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

Total Assets............................ 125000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 135000...(635)......4.1[b]

Total secured & HP debts...... 135000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Aqua...........................999.......0.........0

Fluid..........................3000......0.........0

Creation.......................1700......0.........0

Capital one ...................1750......0.........0

Oplo...........................5000......0.........0

Zopa...........................13000.....0.........0

Virgin.........................1750......0.........0

Barclaycard....................700.......0.........0[b]

Total unsecured debts..........27899.....0.........-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 1,956

Expenses (including HP & secured debts). 1,914

Available for debt repayments........... 42

Monthly UNsecured debt repayments....... 0[b]

Amount left after debt repayments....... 42[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 125,000

Total HP & Secured debt................. -135,000

Total Unsecured debt.................... -27,899[b]

Net Assets.............................. -37,899[/b]

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

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





****** please note 
*company car 
*shared ownership house - hence rent and mortgage 
*no APR - as all defaulted 


money boat payday loan- I forgot - don’t know the amount as I don’t have the other letters but I assume around 1000- orginal £350 with interest 700. Plus court fees I guess 1000

fatbelly

Council tax seems very high for a single adult. Something going on there?

wanttogetmylifetogether

fatbelly said:

Council tax seems very high for a single adult. Something going on there?

I am behind on payments and thats the increased payment to stop it going to court. 


Rent is also higher as I have 2500 in rent arrears, so paying off another 50 a month 

TheAble

Change of job or additional job maybe to get your income up? Also the usual superfluous expenses can be cut (satellite, mobile). No need for buildings insurance?

fatbelly

wanttogetmylifetogether said:

fatbelly said:

Council tax seems very high for a single adult. Something going on there?

I am behind on payments and thats the increased payment to stop it going to court. 


Rent is also higher as I have 2500 in rent arrears, so paying off another 50 a month 

Those are both priority debts so it is right to pay them preferentially.

if you are considering insolvency then you can stop paying the council tax.

It would be a calculated risk but with 10k negative equity you could consider bankruptcy. The only problem would be if house prices rose sharply in the 3 years they have to deal with it

MrFrugalFever

Sorry to hear of your loss.

I'm unsure as to why you would have been advised NOT to consider an IVA, this is generally for people in your situation (especially home owners).

How does your company show the company car, is it fed in as 'income' then taken out as tax on your payslip due to being an active demonstrator or is it a fixed monthly payment via credit sale as just your car? If the latter, they'll check Insolvency register and you will no longer be eligible. Factor this in if a car is required. In most cases if going the Bankruptcy/IVA route you'll be able to keep a car up to market value of £3,000 I believe.

As your pay is variable, an IVA could be worse for you because bumper months will be treated like windfalls.

There's definitely a route out for you but not without consequence. The other thing that may need to be checked/considered for insolvency - depending on which manufacturer you represent, may exclude you from selling finance or proposing and managing finance proposals at least.

Have you tried self-managing these debts first by writing to all creditors (non-priority debts) and offering token monthly gestures? 

Whichever route you decide, try to build up an emergency fund of at least £1,000.

NeverendingDMP

Your new budget doesn't have much wiggle room so please try and use free activities to keep you busy and keep your morale up. Parks, museums, walks, library's for books, papers, change of scene and the good old mse forums as they will give you better ideas than me.  If you get a month with commission if things have gone well then I think it's okay to have a mini treat as well as saving some or paying to debts. 
And find any way to warn cashback on your spends, loyalty points at supermarkets, good to go bags possibly if they are decent near you. 

Andyjflet

Morning and well done for posting, I too am a car salesman, and yes its been tough when that basic isnt supported by walk ins and phone enquiries, the good news is, as you know, there is still something you can do about it. From a professional point of view, I'm 55 and been selling all my life, my earnings were £64k last year.

1. Can you move to another dealer for a higher basic? I went to £25k at a dealer group and now £35k basic as a sales manager. GSM is £50k basic.
2. Can you use your time to upsell Gap and Gard on all deals? Are you honestly talking to all customers about it.
3. I did extra days in the office when I was in debt, I worked event weekends even though I was rota off.
4. Can you get a promotion in the area to sales manager and increase the basic?
5. Change your selling style to increase your conversion rate?

I followed the Dave Ramsey Baby steps and got out of debt. 

The market is picking up so I think this year will be better for sure!