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Does default change how I should tackle large debt?
JJBrighton27
Posts: 9 Forumite
Hi everyone,
I love the support you give everyone in this community and I've been following passively for years. I'm in quite a spot of bother and I could use some advice on how to start being proactive.
Over the last 5 years or so due to a bad relationship, covid and then unfortunately succumbing to a large gambling habit I've ended up in £21k worth of debt. I earn a good salary at 59k and for a while was trying to manage this myself to avoid the longest term impacts on my credit file (such as defaults)
Unfortunately due to a misunderstanding that I have accepted is largely my fault I have now defaulted on one of my credit cards and that is now apparently on my credit file for the next 6 years. I had the money to keep paying this off but wasn't receiving letters and unfortunately the ombudsman had sided with the provider. I was gutted at the time but I've moved on.
My question is now that this is the case, does this change how I should tackle my debt? Should I now be thinking about IVA's or larger scale projects? That's my first question.
Secondly should I tackle different debts different ways? I have one overdraft, large credit card debt and a few unfortunate recent payday type loans where frankly I was pretty surprised I got accepted for.
I am doing what I need to budget wise, and am in programs for the gambling alongside gamstop and other things so I just want to know how I should start thinking about tackling this debt problem?
Hopefully this is enough detail to kick things off with, any support or advice would be amazing.
I love the support you give everyone in this community and I've been following passively for years. I'm in quite a spot of bother and I could use some advice on how to start being proactive.
Over the last 5 years or so due to a bad relationship, covid and then unfortunately succumbing to a large gambling habit I've ended up in £21k worth of debt. I earn a good salary at 59k and for a while was trying to manage this myself to avoid the longest term impacts on my credit file (such as defaults)
Unfortunately due to a misunderstanding that I have accepted is largely my fault I have now defaulted on one of my credit cards and that is now apparently on my credit file for the next 6 years. I had the money to keep paying this off but wasn't receiving letters and unfortunately the ombudsman had sided with the provider. I was gutted at the time but I've moved on.
My question is now that this is the case, does this change how I should tackle my debt? Should I now be thinking about IVA's or larger scale projects? That's my first question.
Secondly should I tackle different debts different ways? I have one overdraft, large credit card debt and a few unfortunate recent payday type loans where frankly I was pretty surprised I got accepted for.
I am doing what I need to budget wise, and am in programs for the gambling alongside gamstop and other things so I just want to know how I should start thinking about tackling this debt problem?
Hopefully this is enough detail to kick things off with, any support or advice would be amazing.
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Comments
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Ok, first off, IVA `s were designed for homeowners who owed many tens of 1000`s of pounds, and can`t go bankrupt, if that`s not you, you should not look at an IVA.
How you tackle your debt is mainly down to how much disposable income you have, and whether you own property or not, add to the mix that defaulted debt will usually be sold to 3rd parties, who may be willing to take settlement offers on such debts, means that there are a lot of variables in this game.
If you can meet min payments comfortably with what you earn, I see no reason for a debt solution, however if its becoming unaffordable, perhaps debt management might be needed.
Completing a statement of affairs (SOA) will help determine your next move, click on the stoozing link in my signature, fill it in as best you can, don`t guess, be as accurate as possible, click "format for MSE" and post it on this thread.
That way you will get the best advice.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]Monthly Income Details[/b]Monthly income after tax................ 3400Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 3400[/b][b]Monthly Expense Details[/b]Mortgage................................ 0Secured/HP loan repayments.............. 0Rent.................................... 825Management charge (leasehold property).. 0Council tax............................. 140Electricity............................. 140Gas..................................... 0Oil..................................... 0Water rates............................. 40Telephone (land line)................... 0Mobile phone............................ 35TV Licence.............................. 0Satellite/Cable TV...................... 0Internet Services....................... 38Groceries etc. ......................... 200Clothing................................ 0Petrol/diesel........................... 0Road tax................................ 0Car Insurance........................... 0Car maintenance (including MOT)......... 0Car parking............................. 0Other travel............................ 40Childcare/nursery....................... 0Other child related expenses............ 0Medical (prescriptions, dentist etc).... 0Pet insurance/vet bills................. 18Buildings insurance..................... 0Contents insurance...................... 0Life assurance ......................... 0Other insurance......................... 0Presents (birthday, christmas etc)...... 30Haircuts................................ 15Entertainment........................... 150Holiday................................. 250Emergency fund.......................... 0[b]Total monthly expenses.................. 1921[/b][b]Assets[/b]Cash.................................... 0House value (Gross)..................... 0Shares and bonds........................ 0Car(s).................................. 0Other assets............................ 0[b]Total Assets............................ 0[/b][b]No Secured nor Hire Purchase Debts[/b][b]Unsecured Debts[/b]Description....................Debt......Monthly...APRHalifax Overdraft..............1500......0.........0Halifax Credit Card............5234......184.......29.31CapitalOne Card................1035......100.......0Credit Spring..................833.......200.......NaNFernovo Payday.................920.......80........NaNMr Lender Payday...............1500......502.......NaNNatwest Credit Card............3797......180.......NaNZopa Credit Card...............500.......0.........0Aqua Credit Card...............1172......30........0Virgin Credit Card.............6100......65........0CapitalOne Card................298.......45........0[b]Total unsecured debts..........22889.....1386......- [/b][b]Monthly Budget Summary[/b]Total monthly income.................... 3,400Expenses (including HP & secured debts). 1,921Available for debt repayments........... 1,479Monthly UNsecured debt repayments....... 1,386[b]Amount left after debt repayments....... 93[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 0Total HP & Secured debt................. -0Total Unsecured debt.................... -22,889[b]Net Assets.............................. -22,889[/b][i]Created using the SOA calculator at www.stoozing.com.Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]0
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Just done this, thank you for the support and advice so far.sourcrates said:Ok, first off, IVA `s were designed for homeowners who owed many tens of 1000`s of pounds, and can`t go bankrupt, if that`s not you, you should not look at an IVA.
How you tackle your debt is mainly down to how much disposable income you have, and whether you own property or not, add to the mix that defaulted debt will usually be sold to 3rd parties, who may be willing to take settlement offers on such debts, means that there are a lot of variables in this game.
If you can meet min payments comfortably with what you earn, I see no reason for a debt solution, however if its becoming unaffordable, perhaps debt management might be needed.
Completing a statement of affairs (SOA) will help determine your next move, click on the stoozing link in my signature, fill it in as best you can, don`t guess, be as accurate as possible, click "format for MSE" and post it on this thread.
That way you will get the best advice.0 -
Also just to say I messed this up a little, please allow around 100 for holiday and moved 50 more to entertainment and another 50 or so to groceries.JJBrighton27 said:[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]Monthly Income Details[/b]Monthly income after tax................ 3400Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 3400[/b][b]Monthly Expense Details[/b]Mortgage................................ 0Secured/HP loan repayments.............. 0Rent.................................... 825Management charge (leasehold property).. 0Council tax............................. 140Electricity............................. 140Gas..................................... 0Oil..................................... 0Water rates............................. 40Telephone (land line)................... 0Mobile phone............................ 35TV Licence.............................. 0Satellite/Cable TV...................... 0Internet Services....................... 38Groceries etc. ......................... 200Clothing................................ 0Petrol/diesel........................... 0Road tax................................ 0Car Insurance........................... 0Car maintenance (including MOT)......... 0Car parking............................. 0Other travel............................ 40Childcare/nursery....................... 0Other child related expenses............ 0Medical (prescriptions, dentist etc).... 0Pet insurance/vet bills................. 18Buildings insurance..................... 0Contents insurance...................... 0Life assurance ......................... 0Other insurance......................... 0Presents (birthday, christmas etc)...... 30Haircuts................................ 15Entertainment........................... 150Holiday................................. 250Emergency fund.......................... 0[b]Total monthly expenses.................. 1921[/b][b]Assets[/b]Cash.................................... 0House value (Gross)..................... 0Shares and bonds........................ 0Car(s).................................. 0Other assets............................ 0[b]Total Assets............................ 0[/b][b]No Secured nor Hire Purchase Debts[/b][b]Unsecured Debts[/b]Description....................Debt......Monthly...APRHalifax Overdraft..............1500......0.........0Halifax Credit Card............5234......184.......29.31CapitalOne Card................1035......100.......0Credit Spring..................833.......200.......NaNFernovo Payday.................920.......80........NaNMr Lender Payday...............1500......502.......NaNNatwest Credit Card............3797......180.......NaNZopa Credit Card...............500.......0.........0Aqua Credit Card...............1172......30........0Virgin Credit Card.............6100......65........0CapitalOne Card................298.......45........0[b]Total unsecured debts..........22889.....1386......- [/b][b]Monthly Budget Summary[/b]Total monthly income.................... 3,400Expenses (including HP & secured debts). 1,921Available for debt repayments........... 1,479Monthly UNsecured debt repayments....... 1,386[b]Amount left after debt repayments....... 93[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 0Total HP & Secured debt................. -0Total Unsecured debt.................... -22,889[b]Net Assets.............................. -22,889[/b][i]Created using the SOA calculator at www.stoozing.com.Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]0 -
What fees/interest comes with the overdraft?
Are you paying the minimum payments to the cards?
What card is defaulted?0 -
No interest or fees currently on the overdraft.TheSpectator said:What fees/interest comes with the overdraft?
Are you paying the minimum payments to the cards?
What card is defaulted?
I've missed a few payments on the cards currently as things have come to a head. Any credit card i've put 0 for is because I've got an agreed payment plan with them.
The Zopa card is defaulted and I'm unsure what to do with it.
The payday loans I'm unsure on percentages but know how many payments I would need to make if I was to hit them.0 -
You need to check all three credit records to see if you have Arrangement to Pay (AP) markers against those cards that you have marked as 0%. Those can potentially damage your credit record for longer than a default.
Do you really have £93 left over at the end of the month? If not, you need to work where your budget. If you have that, then you need to clear the smaller CAP1 and Zopa cards ASAP, so your credit record start to clear again in 6 years.
With respect to the other debts, can you come back when you know which accounts have AP markers against them.
I'd add that you really need to reduce your entertainment and holiday budget this year, so you can get a handle on these accounts.
And find some cheaper contents insurance, you really can't afford to do without it.If you've have not made a mistake, you've made nothing0 -
What is the easiest way to find those AP markers? I'm happy to do that.0
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Get your free statutory credit report from each of the main three credit reference agencies.JJBrighton27 said:What is the easiest way to find those AP markers? I'm happy to do that.
You can apply on their various websites:
Experian | Credit Scores, Reports & Credit Comparison
Equifax UK | Credit Scores and Credit Reports
Credit Score & Credit Reports at Intuit Credit Karma™ UKI’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
That's a good point. It's completely counter intuitive but talking to the creditor and arranging a payment plan can be a lot worse for you in the long run than getting a default can be.RAS said:You need to check all three credit records to see if you have Arrangement to Pay (AP) markers against those cards that you have marked as 0%. Those can potentially damage your credit record for longer than a default.
Lots of those credit cars have 0% interest listed, when do those 0% deals end.0
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