Newbie...£60k in debt... light bulb is on!

OopsIdiditagain1

Hi all

I have been reading many posts over the past couple of months which have been incredibly helpful.

I have had my light bulb moment. £60k in debt (credit cards, payday loans, bank loans). Not for the first time, sadly. 

I have been able to get out of this level of debt before as a result of redundancy payouts and extremely generous family members, but regrettably I've ended up getting back into a hole.

I have reflected on where the money has gone (holidays, clothes, furniture and then when the monthly payments have been too much, using credit to buy food and fuel etc). I have also reflected on what I have or haven't done and why I'm back at square one.

Simply put, not having a realistic budget and sticking to it. I have discovered YNAB and hope this will help if I commit to using it.

I've decided a self managed DMP is the way forward. I cannot consider other insolvency proceedings for professional reasons. I don't have much income left over for a DMP but I'll have to see how it goes.

I have cancelled all direct debits and missed 2 payments on all credit cards, loans etc. I'm getting all the expected noise which I'm ignoring  and Oakbrook has already threatened a debt collector home visit! I'm hoping that's just a scare tactic.

Anyway I am sure I'll have questions along the way, so hoping I can reach out to you. No one else knows about my situation. Perhaps I can share my journey with you too.

This is the end of my journey with consumer credit and the start of a debt free life (save for the mortgage)

sourcrates

Debt collectors are powerless individuals, you treat anyone who knocks on your door as you would the Jehovah witness or the vendor selling cleaning products, no thank you and goodbye.

You are doing all the right things, ignoring creditors standard waffle is the best option.

OopsIdiditagain1

Thank you sourcrates, my plan is to ignore the doorbell if I'm home. 
I want to get to defaults ASAP and maybe a few affordability complaints. 
Natwest offered me a £10k loan in December which I deferred payment on for 3 months because I was trying to pay off short term/payday loans.
In fact the short term lenders seem to be quicker to act on the non payment - already talking of default notice and have been the least harassing.
118118 has been non stop calls and emails!

sourcrates

That`s because they are all to well aware that all, unsecured borrowing is non essential debt, and is the last to be paid when things get tough.

This is why these small debt owners are so vocal and voracious with collection activity, they want to worry you, because essentially they are more worried that you won`t pay them.

Make no mistake, you are in charge of this, no matter what these companies may have you believe.

elsien

You can write to them to tell them you won’t contact In writing only and to stop phoning you. 

OopsIdiditagain1

I probably should write to them elsein, I'm slightly wary of giving them any sort of contact.

I feel ashamed I am avoiding them and not paying, but I can't afford to play nicely anymore. I have kept up payments for the 5 years this has all been accruing but I can't do it anymore.

I owe HMRC £1800 following self assessment, but have an agreed payment plan with them.

I can't afford to lose my home (which I'm already paying over the odds for due to previous defaults which ironically will drop off my credit file next year).
But it is what it is.

I also did the stupid consolidation loan thing numerous ttimes and I can testify to anyone thinking of that route that it does not work unless your thinking and habits change. Mine didn't and I'm in the doo doo as a result 

kimwp

We can't change the past, we can only assess where we are and try to do better. A realistic budget is hard and needs good planning and adjustments and a couple of tries to get it right. My advice is to put significant buffer in your budget to start with, then you have room to increase the pots for the essentials if you have underestimated them. This will put you in a much better mindset than if you have budgeted for every penny, then had to go over your total if you underestimated anything. As time goes on, you can reduce that buffer (or save it!😃)

OopsIdiditagain1

Thank you Kim that's great advice, I will try and do that. There have been a few ad hoc/irregular costs that have arisen in the past few weeks where such a buffer and/or more money in those particular pots would have supported. So I've had to cut down in places to finance those costs. I cannot resort to credit so I have to learn to live within my means. 

ManyWays

I want to get to defaults ASAP and maybe a few affordability complaints. 
No need to delay affordability complaints until after a default, they are two totally separate processes. Why not post a list of your debts?   

kimwp

OopsIdiditagain1 said:

Thank you Kim that's great advice, I will try and do that. There have been a few ad hoc/irregular costs that have arisen in the past few weeks where such a buffer and/or more money in those particular pots would have supported. So I've had to cut down in places to finance those costs. I cannot resort to credit so I have to learn to live within my means. 

Some lessons I learned from trying to keep to a budget at:

https://forums.moneysavingexpert.com/discussion/6165746/six-month-target#latest

I was in a different situation, but there might be some useful tips in there. In the end, I found that it was best to review the "pot" for each type of spending at least every week (or just update them as you spend or commit to a spend) to have the best chance of having kept to the budget at the end of the month.

OopsIdiditagain1

Thank kimwp, I will take a read.

ManyWays, here is a list of my unsecured/non priority debts and current balances with interest/default sums added. I'm afraid it reads like a who's who of sub prime lenders. It's a reality check for sure... I'll start preparing the complaints. Natwest, Zopa and the payday lenders are all in the frame. I had taken out and paid off short term loans with TMP and TickTock as well as Fernovo only a couple of months earlier. Jaja, Vanquis and Aqua fairly recently increased limits despite being maxed out. 

Credit Cards
Aqua   £3000
Capital One   £550
Vanquis   £1000
Zopa   £1513
Onmo   £1557
118118   £4429
Jaja  £3017
Paypal  £1000

Loans
Zopa  £12420
11818  £6723
TickTock  £603
The Money Platform £589
Oakbrook  £5575
Natwest  £10164

BNPL/Store Card
Klarna   £651
Zilch  £676
Next  £755

Revolving Credit/Overdraft
Lloyds  £1000
Drafty  £3096

Other
Vet  £1500

Grand total circa £63k.

There is also £1800 owed to HMRC paying £107 a month.

For reference my income is £5670 monthly. My mortgage is £2050. Equity around £70k.  Servicing these debts was costing over £2000 a month minimum payments. The money left over was not enough to pay bills and meet other commitments so ended up in a Credit cycle. 

I have horses and dogs and between them cost around £1300 a month for care, food, insurance, vet, farrier etc etc. Some might suggest selling the horses but one is older and retired and the other has an injury which means he cannot be ridden and is worth nothing in money terms. PTS is not an option. I keep them on livery at a rate which is very good for my area. I work full time and sometimes travel for work so I need to pay someone to care for them.

I have tried doing an SOA but struggling with fitting my expenses in the categories.