£15k debt, no income until May - best course of action to take here?

help2getdebt3

Hi there

Owing to some stupid overspending when I was in my early-mid twenties, and then constantly dipping into other sources of finance to avoid sticking to a budget, I've now found myself in £15,179.09 worth of debt, split between credit cards, overdraft, a PayPal Credit account and a couple of nasty payday loans:

American Express: £2,139.73
CapitalOne: £199.12
Castle Community Bank: £3,207.48
Lloyds overdraft: £1,960
M&S Credit Card: £3,996.95
Finio: £454.97
Vanquis: £600
Zopa: £504.60
PayPal Credit: £1,048.81
QuidMarket: £291.21
TheMoneyPlatform: £562.89
CashASAP: £213.33

Total: £15,179.09

I got myself into a terrible habit of making payments and even making overpayments on payday, and then taking out more lines of credit to fund holidays, nights out etc. This has left me with no savings and a £15,000 debt.

At the time, I was earning £48,000 (worked out at around £2,750 a month), and able to keep up with repayments. However, in February my employer was acquired by a new company and I lost my job. I received PILON for a month and a half's work, as I actually had only been with them for a year, and I used this to make my last set of payments on the above debts in February.

Thankfully, I've now found a new job, at £45,000 with a £5,000 end-of-year discretionary bonus, which I'll be beginning on 20 April. However, owing to this late start (I tried to have this moved, but was told it wouldn't be possible), it means I won't be receiving my next regular paycheque until 25 May. In the meantime, I'll be unable to make payments on March and April's due dates - I have around £1,000 cash leftover from my PILON, but I need to use that to live on.

I'm currently unsure what the best action is to take. Once back in work, I plan to follow the snowball method to get everything listed paid off over the next year or two. However, I'm concerned that not making payments on 12 (!!) debts for two months is going to be disastrous. 

Any advice on how to keep afloat for the next two months and tips for paying it down are appreciated.

Grumpelstiltskin

Are  you sill using the Lloyds account as your current account?

help2getdebt3

Grumpelstiltskin said:

Are  you sill using the Lloyds account as your current account?

No, I have a Starling account I use for payments and transfers to avoid anything getting sucked up by paying for the overdraft.

Just as a note on the above, I reached out to TheMoneyPlatform who moved the outstanding balance to May, which is one less thing to worry about before then.

help2getdebt3

Also, I was incorrect in my quoted figure from TheMoneyPlatform - I owe £187.63, not £562.89. £375 of small mercies, taking my debt down to £14,803.83(!)

Grumpelstiltskin

OK You have realized Lloyds could have grabbed your money to clear the overdraft.

RAS

I'm no expert, but when can you start a UC claim, even if you close it down when you start work? Won't get money in time to help soon but might get a payment in early May? 

With respect to managing the budget, I'd suggest researching the cheapest option for getting to and from work and putting aside that money now, with a bit extra.

Then look at accommodation. With respect to food, research food banks, community food stores, langar and try to devise cheap and quick menus. 

With respect to the debts, AP markers damage your credit record longer than defaults. So I'd only consider contacting creditors and asking forbearance if you they agreed not to mark your credit file. 

The exception is the Community Bank, if they are a credit union. They tend to be more difficult in some ways but may well be more amenable if you speak to them before SHTF but don't over promise. 

help2getdebt3

RAS said:

I'm no expert, but when can you start a UC claim, even if you close it down when you start work? Won't get money in time to help soon but might get a payment in early May? 

With respect to managing the budget, I'd suggest researching the cheapest option for getting to and from work and putting aside that money now, with a bit extra.

Then look at accommodation. With respect to food, research food banks, community food stores, langar and try to devise cheap and quick menus. 

With respect to the debts, AP markers damage your credit record longer than defaults. So I'd only consider contacting creditors and asking forbearance if you they agreed not to mark your credit file. 

The exception is the Community Bank, if they are a credit union. They tend to be more difficult in some ways but may well be more amenable if you speak to them before SHTF but don't over promise. 

Thank you so much for this advice. A friend mentioned about UC so I went on and was approved for an advance of £393.45 which I'll get on Thursday. That's going to be a huge help.

Have taken note of all your other tips. Accommodation I'm thankfully sorted for, I rent from a friend who owns our house and he has been v v understanding about it all.

Noted about debts, thanks for that. The Community Bank is a credit union, I tried to call them today but didn't get through so left an email, hopefully will hear back tomorrow.

ManyWays

Have you used any of the payday lenders QuidMarket, TheMoneyPlatform, CashASAP or any other lenders several times? If you have, I suggest making an affordability complaint now, some of these lenders will reduce balance or offer low cash refunds if you no longer owe anything very easily to stop you going to the Ombudsman. A goodwill offer of £100 may not be the best you could get but a few of them could help if you are in a fix?

help2getdebt3

ManyWays said:

Have you used any of the payday lenders QuidMarket, TheMoneyPlatform, CashASAP or any other lenders several times? If you have, I suggest making an affordability complaint now, some of these lenders will reduce balance or offer low cash refunds if you no longer owe anything very easily to stop you going to the Ombudsman. A goodwill offer of £100 may not be the best you could get but a few of them could help if you are in a fix?

I've used them a couple of times over the past year or so, yes. How do I go about making affordability complaints?

Also, I had this email off QuidMarket:

"I can therefore confirm I have placed your account on a 60-day hold. We will not contact you for this period unless we are required to send you a regulatory notice.

Your credit file will reflect that although you are not making payments to us, you are in communication with us, and we have an agreement in place."

Is this an arrangement to pay? I understand these are awful for your credit history?

help2getdebt3

Just updating here for my own record:

QuidMarket: put account on hold for 60 days
Castle Community Bank: have told me to cancel direct debit and will put my account on hold from 7 April, said they were unable to extended payment terms but offered to set up an arrangement to pay to clear the balance once I'm back in work

help2getdebt3

Have now submitted affordability complaints thanks to Debtcamel's template against the following:

1) Fernovo
2) FundOurselves
3) Money Boat
4) Savvy
5) Lending Stream
6) Tick Tock loans
7) QuidMarket
8) MyFinanceClub
9) MrLender
10) The Money Platform

The fact I've used 10 providers, most of whom multiple times, since 2023 is not hugely embarrassing for me but also shows that this lending was simply unaffordable.

So far I've had acknowledgements from Tick Tock and FundOurselves.