I’m in a right old mess - any advice appreciated

RAS

dabear1 said:

And to answer your questions:

The groceries are for two people and a dog.

The insurances are for my phone and laptop is probably not essential.

and I don’t really have many other subscriptions. Phone unfortunately has over a year left on it as it was a 3 year contract.

thanks again

In which case you halve the amount you report as your personal food cost, or report for two people and include your brother's income.

Some of the accounts for which you've not re-imbursed your brother are priority debts. Definitely CT and insurance. Query utilities. So they need to be paid before you start paying creditors.

enthusiasticsaver

dabear1 said:

enthusiasticsaver said:

You have to stop using credit cards to top up your income as this is digging you into a bigger hole.  Read the thread on First steps and it will tell you there what to do.  Basically you should stop making credit card repayments and wait for them to default.  Save for emergencies in the meantime.  This process is not quick and they can take months to default you. They may sell them on and in time you can do a self managed DMP or contact stepchange and get them to deal with it.  Don't rush this step until the defaults have happened. Then they should stop the interest charges. 

You can write or email and tell them to only contact you via email and make them remove phone numbers from their records.  Emphasise the affect this has on your mental health.  They won't turn up at your house. 

I would open a new bank account for the universal credit and earnings from your new job. You should have a separate business account for self employment as that should be kept apart from personal finances. You will obviously have to muddle through on the overdraft until the new account is up and running and you have a decent budget. Going forward you will not be able to use credit so emergency savings are crucial.  £300 sounds a lot for groceries for just one person so see if you can make savings there. Once the mobile is out of contract go sim only.  Can you cancel any subscriptions? You don't mention a vehicle and that insurance is high for buildings and contents.  Do you use price comparison sites? What insurances  are they?

You have a massive advantage in that you own your house and your brother is paying utilities.  The debt is not huge and once you sort your income out hopefully you can deal with this  relatively quickly. 

Thanks so much for the reply - you have made me feel better already. I wish I had dealt with this months ago but it is what it is.

I actually already have another bank account with a different bank (zero balance) but essentially I have no money to put into it yet?

Currently all the current debt repayments are done on direct debit. Do I just cancel them immediately or wait until just before each one is due? I have never missed a payment in my life so this feels scary.

In terms of the current overdraft, what would happen to that? I guess they just keep taking the charges out of the remaining balance? 

Also, what about the loan, and buy now pay later debts? Do I treat those the same as the credit cards and just cancel the direct debits?

Apologies if I’m asking any silly questions.

Firstly there are no silly questions.  If you are new to this forum you may not have read many threads but we see this all the time and it is daunting to cancel direct debits and actively default when in the past you have been accustomed to pay these above even your living expenses like rent or food or utilities.  Believe me the sky will not fall in when you miss repayments.  You will get letters and maybe phone calls if they have your number but you can contact them and tell them to contact you through whatever channel you prefer.  Your aim is to get the default and interest stopped.  This is because defaults stay on your credit record for 6 years so the sooner they go on then the sooner they fall off. Most of them take a while though.  Do not make arrangements to pay as these stay on your record longer. 

If you already have another bank account you can arrange for your universal credit to go in there and then the overdraft on your existing account can be included in the DMP when you start it up.  The overdraft may take longer to default and you may have to write and tell them you are unable to repay due to your circumstances and explain you will eventually be doing a DMP.  I would wait until you have your income going into your new account first though before you tell them anything. The charges will continue to be added to the overdraft until the account defaults. You also need to default on the loans and BNPL debts. Cancel the direct debits on all of them immediately. 

zcrat41

Do you have children? Whats to stop you getting a full time 40 hr per week job then doing 20 hours per week on your business? I dont think you can afford to aet your business up tje way you are. 

dabear1

Firstly thank you to everyone for your amazing advice and sorry for the late reply! 

re: the job, I’ve only just started and think this will work for now.

One question I have is about direct debits… So far, I’ve cancelled them both in my banking app and from the creditor side. However, there’s one due on Monday where there is no option to cancel it within the credit card app? I have done it from the bank side (and it says successfully cancelled), but within the credit card app it still says my direct debit is due to take on 12th (Monday) and then shows my bank account details. I’m worried they are still going to take it, even though I have cancelled it in my banking app?

When I cancelled, it showed the following message: “If you are cancelling a Direct Debit up to 6 days before the payment, it may still show on your account on the day it was due to be debited. We will reject this payment and your balance will be corrected the following day, there is no need to contact us. It is important that you tell the company that the Direct Debit has been cancelled as they may set up a new Direct Debit if they are not expecting the payments to stop.”

any ideas?

thanks

stu12345_2

it may appear as if it's left your account eg your balance will drop, but at end of day your balance should go back up once the money has been put back in

sourcrates

Or just withdraw or transfer the money and it will fail anyway.

dabear1

Thank you

So, this morning I’ve gone back into my online banking and the direct debit has returned to the ‘active’ list.

I’ve cancelled it again. This time it asked that because the payment has been requested, do I want to stop the payment and cancel, or cancel from the following payment onwards. Obviously I selected the first option.

How is it possible that the DD has returned to active? I am worried they are going to take the money. If they do so it will leave me with nothing until I’m paid.

sourcrates

See my post above, take the money out of the account and it removes the problem.

You have had 48 hours of inaction, if you don`t move the money it may well be paid out.

Can`t be much clearer than that.

dabear1

Ok thanks, I just didn’t understand how they can reinstate an already cancelled dd when I haven’t given them permission to do so. But thanks for clarifying. I just get so anxious about all this.

Andyjflet

dabear1 said:

Ok thanks, I just didn’t understand how they can reinstate an already cancelled dd when I haven’t given them permission to do so. But thanks for clarifying. I just get so anxious about all this.

Stop flapping, take the cash out and put it in an envelope in a drawer.