Need advice - 27k debt

random_noise

Hi everyone,

Posting here as I am at a bit of a loss.

I have worked up approx. 30k of debt, through old CC's combined into a consolidation loan and another 0% CC which is at 0% for another 30 months.

My monthly income after tax = 2630
Bills etc = ~£1400
Loan repayment - £518 (46 repayments left)
Money on CC - £3000, Assuming I'll pay £160 a month

Leaves ~ £480 a month

Put simple this is due to extremely bad money management, holidays I couldn't afford, some crypto currency and gambling (not as though crypto isn't another form of gambling).
I haven't touched anything related to that for 3 months now and feel like I have control of this however I have left myself in a position where after loan repayments and budgeting (no leisure allowance) I only have about 4-500 left monthly, which disappears quite quickly just on extra costs for house etc.

I'm nearing my 30s, don't have kids but plan to in next few years. I haven't told my partner or parents yet, I would really like to manage and control this myself, however I think I will need to let them know but I'd like to have it under better control first to show it's improving.

I have tried stepchange and seen the option of DMP, however I will need to renew mortgage in 3 years and I'd really like to avoid the affect this will have long term on my credit.

This is really affecting my mental health quite badly and part of me just wanted to vent but also to hear some advice - please be kind, I know I have been an idiot.

fatbelly

Well you're saying there is £480 left after contractual payments and then you say you don't know where it goes.

For you own use if not also for us, you should do a statement of affairs and see if you can fill in the detail

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

enthusiasticsaver

You unfortunately seem to have  fallen into the trap of consolidating then running debt up again.  If you have not cut up the cards already I strongly suggest you  do so until this debt is repaid. 

If you have enough to sort this without a DMP I would do that although having one doesn't mean you cannot remortgage when your deal is up but you would need to stay with your current lender as  you will fail the credit check if you go elsewhere. Are you paying interest on the cards or are they on 0%? I would not necessarily say it is impossible to live on £400-£500 a month if you are careful on buying groceries and don't buy clothes/household stuff for a while.  You need to be saving for emergencies though and you do not say if you are running a car which will cost you a lot. A full soa will help.  

ManyWays

I have left myself in a position where after loan repayments and budgeting (no leisure allowance) I only have about 4-500 left monthly, which disappears quite quickly just on extra costs for house etc.
Without seeing your Statement of Affairs, we can't tell if that is just about do-able or pure fantasy. 
If you can get by without more borrowing, you could look at affordability complaints against the debts you consolidated, winning any would give you money to reduce the loans.
But if there is no realistic hope of you managing to pay the minimums without starting to use the cards again to get by, then you have to stop now and go for a DMP. 

random_noise

thanks for the comments - soa below.

I am trying to find a second job currently to attack head on but struggling to find something suitable. I think if I essentially spend 0 its possible to catch up and rectify this, just need to be strict, which is one of the reasons I need to hurry up and tell my SO.

Summary

Monthly Budget Summary	Amount(£)
Total monthly income	2,620
Monthly expenses (incl. HP & secured loans)	2,072
Available for debt repayments	548
UNsecured debt repayments	100
Amount left after debt repayments	448

Personal Balance Sheet Summary	Amount(£)
Total Assets (things you own)	200,000
Total Secured & HP Debt	-213,903
Total Unsecured Debt	-3,000
Net Assets	-16,903

Household Information

Number of adults in household	2
Number of children in household	0
Number of cars owned

Income, Expense, Debt & Asset Details

Income	Amount(£)
Monthly income after tax	2620
Partners monthly income	0
Benefits	0
Other income	0
Total monthly income	2620

Expenses	Amount(£)
Mortgage	460
Secured/HP loan payments	818
Rent	0
Management charge (leasehold property)	0
Council tax	65
Electricity	50
Gas	50
Oil	0
Water Rates	25
Telephone (land line)	0
Mobile phone	15
TV Licence	0
Satellite/Cable TV	0
Internet services	10
Groceries etc.	200
Clothing	10
Petrol/diesel	200
Road tax	15
Car Insurance	50
Car maintenance (including MOT)	20
Car Parking	0
Other travel	0
Childcare/nursery	0
Other child related expenses	0
Medical (prescriptions, dentists, opticians etc.)	0
Pet Insurance/Vet bills	0
Buildings Insurance	24
Contents Insurance	0
Life Assurance	0
Other Insurance	0
Presents (birthday, christmas etc.)	20
Haircuts	20
Entertainment	0
Holiday	0
Emergency Fund	20
Total monthly expenses	2072

Secured & HP Debt Description	Debt(£)	Monthly(£)	APR(%)
Mortgage	181000	(460)	0
Secured Debt	23000	(518)	0
Hire Purchase (HP) Debt	9903	(300)	0
Secured & HP Debt totals	213903	-	-

Unsecured Debt Description	Debt(£)	Monthly(£)	APR(%)
0% card	3000	100	0
Unsecured Debt totals	3000	100	-

Asset Description	Value (£)
Cash	0
House Value (Gross)	190000
Shares and bonds	0
Car(s)	10000
Other assets (e.g. endowments, jewellery etc)	0
Total Assets	200000

RAS

Are these your contributions to the joint household expenses? Without knowing what is me, partner or us it's difficult to comment. 

What's the secured debt?

Assume the car is HP? When will you have paid off half?

ManyWays

Loan repayment - £518 (46 repayments left)
Is this loan secured on the house, your partner would have had to sign to agree to it

TheAble

ManyWays said:

Loan repayment - £518 (46 repayments left)
Is this loan secured on the house, your partner would have had to sign to agree to it

The house may not be jointly owned

enthusiasticsaver

How did you manage to get that secured loan with that little equity?  Are you sure it is secured on the house? You may have a case for unaffordable lending.  Was that a debt consolidation loan and what interest rate are you paying?  

If you took it out over only 5 years I strongly suspect it is unsecured rather than secured.  The credit card is on track to repay within the deal period so I would continue paying £100 a month but as I say you should cut it up so you are not tempted to spend further on it. The biggest issue is the loan and the car HP.  


There is not massive wiggle room in your budget.  You are not allowing sufficient money for your car maintenance given you use £200 fuel a month.  What does your partner pay for? You do have over £450 spare though and you have a generous groceries  budget for just one (assuming your partner also pays towards this) so this is doable so long as you do not continue to overspend.  I would up the emergency saving to £50 and save more for car expenses and depending on the loan interest rate chuck everything at savings until you get to £1000 then overpay the loan.  That way you should not be tempted to borrow more which is the worst thing you can do.  You do need to tell your partner because as it stands you cannot afford to have children in a few years until that loan is paid off. 

random_noise

RAS said:

Are these your contributions to the joint household expenses? Without knowing what is me, partner or us it's difficult to comment. 

What's the secured debt?

Assume the car is HP? When will you have paid off half?

yes these are basically my half of costs, the car is all mine, that will be half paid in about 3 months time - what were you thinking related to this? ahh i accidently put secured, it's an unsecured loan as mentioned below.

ManyWays said:

Loan repayment - £518 (46 repayments left)
Is this loan secured on the house, your partner would have had to sign to agree to it

no it's an unsecured loan.enthusiasticsaver said:

How did you manage to get that secured loan with that little equity?  Are you sure it is secured on the house? You may have a case for unaffordable lending.  Was that a debt consolidation loan and what interest rate are you paying?  

If you took it out over only 5 years I strongly suspect it is unsecured rather than secured.  The credit card is on track to repay within the deal period so I would continue paying £100 a month but as I say you should cut it up so you are not tempted to spend further on it. The biggest issue is the loan and the car HP.  


There is not massive wiggle room in your budget.  You are not allowing sufficient money for your car maintenance given you use £200 fuel a month.  What does your partner pay for? You do have over £450 spare though and you have a generous groceries  budget for just one (assuming your partner also pays towards this) so this is doable so long as you do not continue to overspend.  I would up the emergency saving to £50 and save more for car expenses and depending on the loan interest rate chuck everything at savings until you get to £1000 then overpay the loan.  That way you should not be tempted to borrow more which is the worst thing you can do.  You do need to tell your partner because as it stands you cannot afford to have children in a few years until that loan is paid off. 

I am not sure how they offered me the loan, maybe as it was a consolidation loan at a reasonably high rate of 13.9%.

From my understanding I could reach out to the loans company and request removal of interest then take to the ombudsman? this would help slightly..

Yes my plan is to save a small emergency fund each month and as much of the 4/500 as possible per month to pay off the smaller debts faster. I know I need to tell my partner, I'm really worried but it's only fair they know - as you say this impacts out future.

I have played with the idea of speaking to one of my parents, but I'm scared of the judgement and I'm feeling so much shame for all this at the moment... kicking myself!!

fatbelly

A debt management plan is of no use to you as you have very little unsecured debt and it is at 0%. Just pay it off within the 0% period.

Your soa does look a bit odd. A lot of amounts are half what I would expect.

I agree with the others that the secured loan is your main problem.