I am terrified

Alayne_

Hello…
after receiving a wake up call when HSBC refused a consolidation loan I found this forum. Spoke with a company that helps with dmp and was suggested dmp. Won’t use this company as they are paid and will contact Step Change. 

But first a bit of a story. i am in my 30s. Divorced 3 years ago. After the divorce my only debt was HSBC loan. Cost of living and much smaller salary made me relies on credit cards. Every unexpected expense- credit cards or Lendable loan. 

I changed my job almost two years ago and had to start driving to get to work. As it was old car - more expenses on credit. 

Last month the car completely broke down to the state it was irreparable. I got a bit newer one (9 year old) on hire purchase as it was necessity. 

As I got to the point again this month that I have very little money left this month I started looking at debt consolidation loan to pay longer but less monthly. Computer said no and I ended up talking with a Debt Advice company (a paid one) and it was a wake up call. I can’t keep pay credit with another credits… he suggested dmp but I am terrified of not making payments, of cancelling dd. And I am terrified Step Change will say it isn’t an option for me. 

My current situation is: 

Loan HSBC 7691.43 333.43 monthly

Loan Lendable 1660.04 110.75 monthly

Creditspring 500 83 monthly 

Credit cards 

Barclays -814  800 limit monthly 50

Aqua -1685.99 limit 1700 monthly 80

Capital one -1248. 12 limit 1250 monthly 60

Zable -987.63 limit 1000 monthly 40 

Hsbc overdraft 

-900 150 limit 

Total monthly payments 757.18 

Car hire purchase 5450 monthly 158

Phone 38 

953.18

Vodafone 28 

Total 981.18 

Salary 2250 

After credit 1268.82 

Rent 900

Insurance 73 

I am left with 295.82 a month. i spent about 150-180 on fuel each month. 

I got no money left to live on. That’s why I rely more and more on credit. It actually is making me sick in my stomach, I am stressed to the point I am losing my hair. Plus I have a stressful job and I shouldn’t declare bankruptcy or have IVA because of the job. 

I don’t know what to do… I can things next month and use lest of my overdraft to live. But it will buy me one month. I know I need to set up a bank account with a different bank to get my wages in, which probably I will need few weeks for my work to change it. I am afraid if I don’t pay HSBC they will block my cards and I will have nothing to leave on. 

I will contact step change asap. Should I start dmp straight away? Wait? I don’t know what to do… 

Misslayed

Well done for getting this far and posting here. I’m not in a position to be able to give you advice, but there are several very experienced, knowledgeable and non-judgmental folk here who will be able to offer you guidance. Some have been in your position so really understand. 

ManyWays

StepChange and other good debt advisers look at your numbers the other way around. They start with your income, then deduct the essential bills, rent, council tax, energy, mobiles, broadband, car finance etc, then look at your expenses, which isn't just outgoings like groceries and petrol that happen every month but also car costs, clothes, xmas, entertainment, that are more erratic, taking an annual amount and diving by 12 . Then that shows what money you have left for your non priority debts. 

It very probably is going to be a DMP. Trying filling in this calculator with realistic amounts for your expenses and see what it says https://www.stoozing.com/soa.php  Knowing these numbers will be a help if you decide to talk to StepChange or go for a DIY version. 

Grumpelstiltskin

Do not rush into a DMP until you are 200% sure you are doing the correct thing.

The worse thing you can do is start a DMP too soon, stop paying all your unsecured debts, wait for them to default and save as much as you can towards an emergency fund, you will need this as you will have no access to credit.

Complete a honest SOA and let us look at your full situation.

Rob5342

There's absolutely no need to be terrified, there is always a solution and the reality of the solution is usually nowhere near as bad as what people fear. Usually the worst thing that happens is that your credit report is harmed while you go through the solution, but that can be a positive thing too as it makes you live within a budget.

I'd suggesting creating a statement of affairs, that's similar to what you have posted but is more detailed in terms of your expenses etc. Once you've done that then people can advise on the best solution.

Be careful with Stepchange, they often advise going straight into a DMP but it's usually better to stop paying everything and wait for defaults before you start one. It's very unintuitive, but that's better for your credit report in the long term, gives you a chance to save up an emergency fund before you start, and increases the chances of being able to settle debts with reduces payment offers.

Alayne_

Thank you all. 

So the best thing would be to not pay anything next month? 

I can’t lose the car, it’s the hire purchase contract but I am registered keeper, is it a possibility? 

I’ll set up new bank account ASAP and inform my work but probably the December wage will be paid into a new one, I am worrying HSBC will block my account, is it possible? 

Should I inform my lenders that I am working on solution before I stop paying? I’ve never missed any payment in my life… 

i will create SOA after work when I can spend more time on it. At what point I contact Stepchange then? 

Grumpelstiltskin

Pay your car, but don't pay any of the unsecured debts.

Do not contact any of your creditors, all they will do is try and get you to pay them. 

Don't answer any phone calls from them, block their numbers, ignore any texts and E Mails just open and read any letters you receive.

Forget Stepchange until your debts have defaulted. , it will take some months, nothing moves fast in debt collection.

In the meantime save as much as you can into an emergency fund, you will need this.

The main thing is don't panic what ever crops up, keep posting on here.

Alayne_

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary	Amount(£)
Total monthly income	2,250
Monthly expenses (incl. HP & secured loans)	1,947
Available for debt repayments	303
UNsecured debt repayments	624.1
Amount short for making debt repayments	-321.1

Personal Balance Sheet Summary	Amount(£)
Total Assets (things you own)	5,400
Total Secured & HP Debt	-5,400
Total Unsecured Debt	-14,773.21
Net Assets	-14,773.21

Household Information

Number of adults in household	1
Number of children in household
Number of cars owned	1

Income, Expense, Debt & Asset Details

Income	Amount(£)
Monthly income after tax	2250
Partners monthly income	0
Benefits	0
Other income	0
Total monthly income	2250

Expenses	Amount(£)
Mortgage	0
Secured/HP loan payments	158
Rent	900
Management charge (leasehold property)	0
Council tax	0
Electricity	0
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.	300
Clothing	30
Petrol/diesel	180
Road tax	3
Car Insurance	73
Car maintenance (including MOT)	50
Car Parking	0
Other travel	0
Childcare/nursery	0
Other child related expenses	0
Medical (prescriptions, dentists, opticians etc.)	20
Pet Insurance/Vet bills	0
Buildings Insurance	0
Contents Insurance	0
Life Assurance	0
Other Insurance	73
Presents (birthday, christmas etc.)	20
Haircuts	0
Entertainment	30
Holiday	0
Emergency Fund	50
Total monthly expenses	1947

Secured & HP Debt Description	Debt(£)	Monthly(£)	APR(%)
Mortgage	0	(0)	0
Hire Purchase (HP) Debt	5400	(158)	0
Secured & HP Debt totals	5400	-	-

Unsecured Debt Description	Debt(£)	Monthly(£)	APR(%)
Hsbc	7691.43	333.4	0
Lendable	1660.04	110.7	0
Aqua	1685.99	70	0
Hsbc overdraft	1500	50	0
Zable	987.63	0	0
Capital one	1248.12	60	0
Unsecured Debt totals	14773.21	624.0999999999999	-

Asset Description	Value (£)
Cash	0
House Value (Gross)	0
Shares and bonds	0
Car(s)	5400
Other assets (e.g. endowments, jewellery etc)	0
Total Assets	5400

Alayne_

I am not sure if I should put car as an asset. 

Should I pay in December my unsecured debt in case HSBC would block my account? 

Is it a possibility that someone will knock on my door while I don’t pay? 

Grumpelstiltskin

You need the interest rates on your debts.

You are showing £50 in an emergency fund and yet not showing any savings.

No council tax?

No water rates? 

Which country do you live in?

Are you claiming mileage from your job?

How many people are we looking at, are you on your own?

Just a  few questions.

fatbelly

Alayne_ said:

I am not sure if I should put car as an asset. 

Should I pay in December my unsecured debt in case HSBC would block my account? 

Is it a possibility that someone will knock on my door while I don’t pay? 

No one will be knocking on your door. Just save the letters into a pile for now.

You need a bank account with someone other than HSBC, for your income and essential dds. You will be waving goodbye to HSBC and their loan and overdraft will eventually go in a dmp.

On hp your car isn't an asset until the final payment is made. I agree with the others. This is your priority debt. Stop paying the nonpriorities.

Have you read this?

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps-to-take-are-here-please-read-then-ask-questions#latest