Spiralling with my debt

mb1981

So here goes, I’m new here and have read a few threads. So starting off I’m fully maxed out on 4 credit cards ie can’t afford minimum payments, so this week stupid me has been trying to sort it but during this i applied to step change for a dmp and also breathing space, then they said i would have to add on my personal loan for my car and this is where i started to spiral. 

I can’t sleep with worry my car would get repossessed and it send me into full moderate to severe depression, it’s all I think about day and night. So I then panicked and cancelled the breathing space and dmp and tried to go back to original creditors, so during discussion they said cancel the plan and we can see what we can do our end, so for past 2 days trying things that way, not realising that I’m not getting anywhere I panic again and start making payments which I can’t afford!!  Then I think I have it sorted and realised nope I have only made it worse, sitting crying whilst writing this. 

I owe £4700 on Marks & Spencer’s balance transfer card 
£6200 on hsbc balance transfer card 
3200 on vanquish 
£1200 on marbles 
£11600 personal car loan Sainsbury’s 

im now panicking how im going to live as i have been signed off sick and don’t know when or how long till i can return due to disabilities im on sick pay statutory and get pip which step change want to use the pip to pay off my debts and can’t afford to do that!!! 

I don’t know what to do I’m sick with stress and worry as well as ME and depression but need a way out. 

I can’t lose my car as I won’t be able to get around and or get another job as I live in the country with  no public transport near. 

Please please help or advise me what to do. Should I try a different debt charity ??? X

Misslayed

There are some very knowledgeable, helpful and supportive people on this board, one of them will be along soon to advise you. Some have been in your position and come through it. You've taken the first step by posting here. 

stu12345_2

first of all we need to see your total income and outgoings, someone will post a link for you to fill in and post.
it seems your debts are not even defaulted, so you are very early in the debt collection process. nothing bad can happen as it's all consumer debts .
 your car loan is a personal bank loan, not hp, hire purchase, so your car is very very safe.

let's get those rent, gas, mortgage , council tax, water bills sorted first, as for your loans, credit cards, well to put it politely they can all take a back seat, they are not important or in a rush to be paid back in any form of hurry at all .

creditors know that, they also know it can be many many months or even years before they exhaust their helping towards your repayment ability.

you have been watching and thinking about TV shows about balliffs etc, that doesn't really happen for consumer loans.

some folk go to £1 a month for many many months to creditors when they are in a temp set back, and the creditors just have to take it if that's all you have.

it's a nice sunny weekend, so you relax, nothing bad can happen, you are just like many others with loans etc , problems always have a solution, be it a shorter term, then a long term, let's sort out things short term first
 even if it means cancelling all direct debits for debts, then giving them a £1 a month for a while.

so don't leave yourself short to live on by trying to pay more than you can afford, cos creditors are in no hurry at all.

RAS

OK, I'm up early as I have to leave shortly, so please excuse the short and pointed reply. Please stop panicking. Breathe, long and slow and try to sleep.

Starting point, we need to clarify whether that car loan is unsecured debt or secured? HP, PCP or a standard loan? Can you look out the paperwork? Once you understand the legal situation, we can discuss options but that doesn't mean you have to pay the other debts meantime.

But mainly, you don't have any money, so you can't pay these debts. The sky won't fall in and you need to stabilise your health so you can get to work. Pay for the roof over your head, CT, and food. Essential transport. If worst come to worst, delay utilities for a month.

A DMP is an informal arrangement. The debt charities like to make sure that all unsecured debts are included but there is no law saying they have to be. It's just what the charities have agreed with the industry. 

If you choose an insolvency arrangement like an IVA it has legally to include all the unsecured debt and allowed car values are low.

You can manage your own "DMP" without including all debts if necessary, etc. So please cancel all the remaining direct debits except the personal loan and relax. You will get some texts etc, but remember, these accounts are managed by an autodialler and a computer programme, not a person. No one cares about your non-payment. 

It would be really help if you could do a Statement of Affairs over the weekend, if possible. But the priority is eat, relax and sleep.

stu12345_2

if you need some massive relief right now then get those credit cards and a big pair of scissors and cut through them into many pieces, you don't want them or need them.

the companies can swivel and the joy of cutting them up is always priceless.

  so is not paying creditors or paying a tiny token payment is also priceless knowing that the money you do have is going to priority bills and food shopping and even saving up some sort of emergency savings fund is also a great feeling and stress relief.


and log onto bank and press cancel for those loans, credit card direct debits, such a great stress relief also.

I'm up early as I'm off to the seaside, I've been dealing with my creditors for 2 years now and nothing bad has ever happened , I still have a car and a roof over my head and some money for fun.

fatbelly

Here you go.

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

Well done for cancelling the dmp/breathing space. Far too soon for that. Stepchange need to take a look at themselves.

If the car loan IS a personal loan, you will NOT lose the car. If it is HP, PCP or almost any other sort of finance, you could, so please check paperwork before you post the soa

Oh, and stop talking to your creditors. That is only going to make you more stressed.

NeverendingDMP

Some excellent advice so far. Only popping on to say deep breaths, take five minutes to yourself to relax and this bit is easier said that done but try not to panic. Food, house etc all come first, credit cards are way down the line. The SOA is a good idea. People will kindly comment on it and give advice on any budgets that need to be upped or could be cut down (none of us wrote a perfect soa the first time we did it!!) and then in time you will have a plan. And welcome to the forum. I hope you managed to get some sleep 

stymied

Cancel the direct debits to your credit cards so they can’t take any more money you can’t afford.

sourcrates

Ok, some good advice above, my take on it is this.

Stop paying these -

£4700 on Marks & Spencer’s balance transfer card 
£6200 on hsbc balance transfer card 
3200 on vanquish 
£1200 on marbles 

Keep paying this -

£11600 personal car loan Sainsbury’s 

Problem sorted.

Too easy I hear you say? well no actually, not at all, your issue is your outgoings exceed your income, so to reverse that trend is the logical approach to this, the credit cards are all non priority, non essential debts, so if you find yourself unable to pay them, then so be it.

I assume you need your car for work etc, so the car loan just became an essential debt, that you should keep on paying as per normal, along with your rent/mortgage/CT utility bills etc etc.

So what will happen to the credit card debts I hear you say? 

Your card providers will go through the standard collection process with you, they will write/call you etc to see why you have stopped paying, you can engage with them if you wish, but its best to just go cold turkey, ignore anything except a letter before action (more on that later), the debts will just be assigned to collectors or sold on to 3rd party companies.

When you have got yourself in a much better financial position, you can start to re-engage with whoever owns the debts at that time, and set up affordable payment arrangements, even if its just a token payment, nothing daft is going to happen, you are getting yourself all worked up for nothing, it can all be sorted extremely easily.

The very worst case scenario to most folk is legal action, the court orders you to pay what is owed according to your budget, if that`s a quid a month, then its a quid a month, absolutely nothing to worry about.

mb1981

Thank you very much after a few hours sleep, I have cancel direct debits and spoke to the creditors myself to say I can’t afford they have put payment breaks on my account for 60 days then I can follow the given advice from above to manage my own dmp payments. Thank you so much for your help it has relieved my stress ever so much. 

enthusiasticsaver

I would cancel them all except for the car finance until you are clear what type of finance it is.  Don't go through stepchange.  If you only have 4 cards then you only need to tell 4 creditors how much you will pay them.  Save up for emergencies from the money you are not making in monthly credit card repayments and wait for them to default you so the interest stops. In the meantime continue with the car loan if it is HP or leased PCP.  If it is an unsecured personal loan you can default on that too as they do not hold the car as security. From the look of it is a personal loan which means you can default on it and include it on a  DMP through stepchange if you prefer.