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Messed up to the sound of 23k worth of debt
Options
LostOnMyWay
Posts: 14 Forumite
Where to begin.
I never thought I'd be in this position so I'm sorry to add another thread, but I need to own up and unf**k my finances.
There's no point going through the details of how it all started and every knee-jerk reaction since, because the numbers don't lie and it's now killing me to the point it's affecting my health. I'm sick to the stomach with what I've got myself into, and embarrassed to even admit it here, but I'm here to own my mistakes.
I've always paid minimum off and made payments and never defaulted, but now it's all caught up on me and I just can't keep up. A bunch of loans recently taken out have caused me to jump of the edge. I don't think they should have given me the loans based on the amount of outstanding debt and credit cards in my name, so I'm wondering if I should put in a complaint for each one? Does lodging a complaint make them freeze interest in the interim?
I'm torn between three options.
1- DMP
2- Default
3- Giving up completely
I've been using the forums for a while and it seems a DMP (through a charity) wouldn't be the solution and they won't have my best interests in mind. So, would defaulting be the best idea here?
I've stopped paying a couple of loans over the last couple of days and already been bombarded with emails and text messages, all claiming to want to help. Do I just continue to ignore them as they add more interest to the debt? I'm not afraid to default as I no longer care about my credit rating. I just see it as numbers for how much debt you can get, and I'm proof of that. I just don't know what to expect from these companies, especially those payday loan pirates that have used my vulnerability to give me more debt. I know, it takes two to tango, but when you're sinking, you'll try anything to stay afloat.
This is my plan and honestly, I feel disgusting thinking about not paying on anything but I need to be in control of this. I will also start a diary on here to keep myself accountable.
Step 1 - Open a new account to move my money into, no debts are linked to (Done)
Step 2 - Stop paying the loans and the marbles credit card, but continue paying minimum on all the other cards. I don't think I can face letters from every company, but also, I want to pay my debts. (four loans I haven't paid this month)
Step 3 - Begin building an emergency fund of 3 to 6 months. I aim to put aside around 4k over that time which I will move into a high interest savings account.
Step 4- Snowball the credit cards - I think I can pay the rest of the cards in a year with a few cutbacks.
Step 5 - Pay of each default as quickly as possible
Step 6 - Never go into debt again and use excess finances to invest and live my life
Writing it down looks easier said than done.
I have added my SOA below.
Any advice would be greatly appreciated. I want to ensure I'm doing it right and not making bigger problems for myself.
I never thought I'd be in this position so I'm sorry to add another thread, but I need to own up and unf**k my finances.
There's no point going through the details of how it all started and every knee-jerk reaction since, because the numbers don't lie and it's now killing me to the point it's affecting my health. I'm sick to the stomach with what I've got myself into, and embarrassed to even admit it here, but I'm here to own my mistakes.
I've always paid minimum off and made payments and never defaulted, but now it's all caught up on me and I just can't keep up. A bunch of loans recently taken out have caused me to jump of the edge. I don't think they should have given me the loans based on the amount of outstanding debt and credit cards in my name, so I'm wondering if I should put in a complaint for each one? Does lodging a complaint make them freeze interest in the interim?
I'm torn between three options.
1- DMP
2- Default
3- Giving up completely
I've been using the forums for a while and it seems a DMP (through a charity) wouldn't be the solution and they won't have my best interests in mind. So, would defaulting be the best idea here?
I've stopped paying a couple of loans over the last couple of days and already been bombarded with emails and text messages, all claiming to want to help. Do I just continue to ignore them as they add more interest to the debt? I'm not afraid to default as I no longer care about my credit rating. I just see it as numbers for how much debt you can get, and I'm proof of that. I just don't know what to expect from these companies, especially those payday loan pirates that have used my vulnerability to give me more debt. I know, it takes two to tango, but when you're sinking, you'll try anything to stay afloat.
This is my plan and honestly, I feel disgusting thinking about not paying on anything but I need to be in control of this. I will also start a diary on here to keep myself accountable.
Step 1 - Open a new account to move my money into, no debts are linked to (Done)
Step 2 - Stop paying the loans and the marbles credit card, but continue paying minimum on all the other cards. I don't think I can face letters from every company, but also, I want to pay my debts. (four loans I haven't paid this month)
Step 3 - Begin building an emergency fund of 3 to 6 months. I aim to put aside around 4k over that time which I will move into a high interest savings account.
Step 4- Snowball the credit cards - I think I can pay the rest of the cards in a year with a few cutbacks.
Step 5 - Pay of each default as quickly as possible
Step 6 - Never go into debt again and use excess finances to invest and live my life
Writing it down looks easier said than done.
I have added my SOA below.
Statement of Affairs and Personal Balance Sheet
Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0[b]
Monthly Income Details[/b]
Monthly income after tax................ 2100
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 2100[/b][b]
Monthly Expense Details[/b]
Mortgage................................ 350
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 150
Electricity............................. 65
Gas..................................... 70
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 32
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 40
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 13.5
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 1015.5[/b]
[b]
Assets[/b]
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 500[b]
Total Assets............................ 210500[/b]
[b]
Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 107010...(350)......4.64[b]
Total secured & HP debts...... 107010....-.........- [/b]
[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Nationwide CC..................1500......35........24.9
Nationwide OD..................1200......33........39.9
Santander CC...................1034......15........0
Tesco..........................250.......25........24.9
Capital One....................450.......25........34.9
Klarna.........................997.5.....39.9......0
Monzo OD.......................250.......5.6.......39
Barclaycard....................100.......5.........28.9
Zable..........................1200......60........48.9
Zopa...........................1500......78........34.9
Fluid CC.......................650.......42........34.9
Marbles CC.....................2845.92...124.3.....34.9
Very CC........................200.......12........39.9
Very...........................1040.59...59.2......44.9
Salad Money Loan...............689.05....89.09.....79.5
Moneyboat Loan.................818.99....173.6.....288.3
Reevo Loan.....................556.75....72.25.....42.7
Quid Market Loan...............918.......153.1.....292
Updraft Loan...................4941.39...109.7.....27.99
Drafty Loan....................920.......94........96.2
Mr Lender Loan.................898.17....189.......292
Santander OD...................300.......8.........39.9[b]
Total unsecured debts..........23260.36..1447.74...- [/b]
[b]
Monthly Budget Summary[/b]
Total monthly income.................... 2,100
Expenses (including HP & secured debts). 1,015.5
Available for debt repayments........... 1,084.5
Monthly UNsecured debt repayments....... 1,447.74[b]
Amount short for making debt repayments. -363.24[/b]
[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 210,500
Total HP & Secured debt................. -107,010
Total Unsecured debt.................... -23,260.36[b]
Net Assets.............................. 80,229.64[/b]
Any advice would be greatly appreciated. I want to ensure I'm doing it right and not making bigger problems for myself.
0
Comments
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Does your partner not work? No income for them, but also no benefits or children?LostOnMyWay said:Statement of Affairs and Personal Balance SheetHousehold Information[/b]Number of adults in household........... 2Number of children in household......... 0Number of cars owned.................... 0[b]Monthly Income Details[/b]Monthly income after tax................ 2100Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 2100[/b][b]LostOnMyWay said:Monthly Expense Details[/b]Mortgage................................ 350Secured/HP loan repayments.............. 0Rent.................................... 0Management charge (leasehold property).. 0Council tax............................. 150Electricity............................. 65 - Coning into summer you can probably save 50-80 a monthGas..................................... 70 -Oil..................................... 0Water rates............................. 35 - Worth getting a water meter, will probably lower it to £25 pmTelephone (land line)................... 0Mobile phone............................ 32 - When is your contract up? SIM only in the £5-10 region is possibleTV Licence.............................. 0Satellite/Cable TV...................... 0Internet Services....................... 40 - When is your contract up, you can probably lower this to £25Groceries etc. ......................... 200 - For two people this seems on the low side, is this realistic?Clothing................................ 0Petrol/diesel........................... 0Road tax................................ 0Car Insurance........................... 0Car maintenance (including MOT)......... 0Car parking............................. 0Other travel............................ 20 Is this the only travel expenses, no car at all?Childcare/nursery....................... 0Other child related expenses............ 0Medical (prescriptions, dentist etc).... 0Pet insurance/vet bills................. 0Buildings insurance..................... 0Contents insurance...................... 0Life assurance ......................... 13.5Other insurance......................... 0Presents (birthday, christmas etc)...... 20Haircuts................................ 0Entertainment........................... 20Holiday................................. 0Emergency fund.......................... 0[b] - You should start putting money into an emergency fun as soon as you stop paying your debts, whilst you wait for them to default.Total monthly expenses.................. 1015.5[/b][b]
Just checking on this, is this account with a bank(ing group) that you do not hold any debts with, or just a new account?LostOnMyWay said:Step 1 - Open a new account to move my money into, no debts are linked to (Done)
If you are going to stop paying then you need to stop paying all apart from your mortgage. Who is your mortgage with? That will also mean your emergency fund grows much quicker.LostOnMyWay said:Step 2 - Stop paying the loans and the marbles credit card, but continue paying minimum on all the other cards. I don't think I can face letters from every company, but also, I want to pay my debts. (four loans I haven't paid this month)
Step 3 - Begin building an emergency fund of 3 to 6 months. I aim to put aside around 4k over that time which I will move into a high interest savings account.
It does not stop interest accruing, but it would be mean the interest is written off entirely if found to have made irresponsible lending. Put in affordability complaints with all your lenders, you might be luckier than you think.LostOnMyWay said:A bunch of loans recently taken out have caused me to jump of the edge. I don't think they should have given me the loans based on the amount of outstanding debt and credit cards in my name, so I'm wondering if I should put in a complaint for each one? Does lodging a complaint make them freeze interest in the interim?
When you start repayments after the defaults have hit, you need to revaluate at that point. Interest will have stopped on all of them at that point, you can then agree payments via the route you take, eg. DMP.LostOnMyWay said:
Step 4- Snowball the credit cards - I think I can pay the rest of the cards in a year with a few cutbacks.Step 5 - Pay of each default as quickly as possible
A great idea, but you need to work on the why of it, why did you do it, how can you avoid not doing it again, there is a psychological component and you have made the first step by deciding to tackle your debts, which is good, it is a journey not a single point in time.LostOnMyWay said:Step 6 - Never go into debt again and use excess finances to invest and live my life
1 -
Hey Matt thank you for responding,MattMattMattUK said:
Does your partner not work? No income for them, but also no benefits or children?LostOnMyWay said:Statement of Affairs and Personal Balance SheetHousehold Information[/b]Number of adults in household........... 2Number of children in household......... 0Number of cars owned.................... 0[b]Monthly Income Details[/b]Monthly income after tax................ 2100Partners monthly income after tax....... 0Benefits................................ 0Other income............................ 0[b]Total monthly income.................... 2100[/b][b]LostOnMyWay said:Monthly Expense Details[/b]Mortgage................................ 350Secured/HP loan repayments.............. 0Rent.................................... 0Management charge (leasehold property).. 0Council tax............................. 150Electricity............................. 65 - Coning into summer you can probably save 50-80 a monthGas..................................... 70 -Oil..................................... 0Water rates............................. 35 - Worth getting a water meter, will probably lower it to £25 pmTelephone (land line)................... 0Mobile phone............................ 32 - When is your contract up? SIM only in the £5-10 region is possibleTV Licence.............................. 0Satellite/Cable TV...................... 0Internet Services....................... 40 - When is your contract up, you can probably lower this to £25Groceries etc. ......................... 200 - For two people this seems on the low side, is this realistic?Clothing................................ 0Petrol/diesel........................... 0Road tax................................ 0Car Insurance........................... 0Car maintenance (including MOT)......... 0Car parking............................. 0Other travel............................ 20 Is this the only travel expenses, no car at all?Childcare/nursery....................... 0Other child related expenses............ 0Medical (prescriptions, dentist etc).... 0Pet insurance/vet bills................. 0Buildings insurance..................... 0Contents insurance...................... 0Life assurance ......................... 13.5Other insurance......................... 0Presents (birthday, christmas etc)...... 20Haircuts................................ 0Entertainment........................... 20Holiday................................. 0Emergency fund.......................... 0[b] - You should start putting money into an emergency fun as soon as you stop paying your debts, whilst you wait for them to default.Total monthly expenses.................. 1015.5[/b][b]
Just checking on this, is this account with a bank(ing group) that you do not hold any debts with, or just a new account?LostOnMyWay said:Step 1 - Open a new account to move my money into, no debts are linked to (Done)
If you are going to stop paying then you need to stop paying all apart from your mortgage. Who is your mortgage with? That will also mean your emergency fund grows much quicker.LostOnMyWay said:Step 2 - Stop paying the loans and the marbles credit card, but continue paying minimum on all the other cards. I don't think I can face letters from every company, but also, I want to pay my debts. (four loans I haven't paid this month)
Step 3 - Begin building an emergency fund of 3 to 6 months. I aim to put aside around 4k over that time which I will move into a high interest savings account.
It does not stop interest accruing, but it would be mean the interest is written off entirely if found to have made irresponsible lending. Put in affordability complaints with all your lenders, you might be luckier than you think.LostOnMyWay said:A bunch of loans recently taken out have caused me to jump of the edge. I don't think they should have given me the loans based on the amount of outstanding debt and credit cards in my name, so I'm wondering if I should put in a complaint for each one? Does lodging a complaint make them freeze interest in the interim?
When you start repayments after the defaults have hit, you need to revaluate at that point. Interest will have stopped on all of them at that point, you can then agree payments via the route you take, eg. DMP.LostOnMyWay said:
Step 4- Snowball the credit cards - I think I can pay the rest of the cards in a year with a few cutbacks.Step 5 - Pay of each default as quickly as possible
A great idea, but you need to work on the why of it, why did you do it, how can you avoid not doing it again, there is a psychological component and you have made the first step by deciding to tackle your debts, which is good, it is a journey not a single point in time.LostOnMyWay said:Step 6 - Never go into debt again and use excess finances to invest and live my life
She does, but she has her own debts to worry about, this is solely mine and mine alone. Her money would do little to help with my debts so I'm tackling this. We have no children and have no intention of having any.
It's a chase account, so no affiliation with anyone else.
Ok, I will do that, thank you. I was only think complaints against the recent loans.
For the last point, there is little chance I can repeat most of the issue. I have put in place restrictions and found help. I won't be going down any debt making routes again.0 -
You say your partner has her own debts but the figures for utilities you have are they the total amount or your half?
Your partner does need to contribute to the household expenses.If you go down to the woods today you better not go alone.1 -
She pays half the mortgage, home insurance, water bill (Mine is waste water bill), any additional expense over £200 for food shopping, TV License, one TV subscription.Grumpelstiltskin said:You say your partner has her own debts but the figures for utilities you have are they the total amount or your half?
Your partner does need to contribute to the household expenses.
I bring in more money than her as she's on minimum wage.0 -
Of your 3 options, "giving up" is not realistic when you have a house with equity, you have a very large number of creditors, and if you ignore them some will go for a CCJ.I agree with @MattMattMattUK that going for affordability complaints with most of the lenders is a good idea.
Tesco, Cap One, Monzo OD, Barclaycard, Santander OD are all small, not sure its worth bothering them and Klarna you cant complain about
The payday lenders - Moneyboat, Mr Lender, Quidmarket, how many loans have you had from each of them?0 -
ManyWays said:Of your 3 options, "giving up" is not realistic when you have a house with equity, you have a very large number of creditors, and if you ignore them some will go for a CCJ.I agree with @MattMattMattUK that going for affordability complaints with most of the lenders is a good idea.
Tesco, Cap One, Monzo OD, Barclaycard, Santander OD are all small, not sure its worth bothering them and Klarna you cant complain about
The payday lenders - Moneyboat, Mr Lender, Quidmarket, how many loans have you had from each of them?
Thank you. Yes, the third option was barely on the table. Is it likely for a CCJ rather than default? This is why I'm trying to limit the potential damage but insisting I pay off the credit cards.
So Moneyboat I've used twice, Mr Lender a few times as with Quidmarke.0 -
They are also small enough that some people may clear then during the first month of defaulting on the others just to reduce the paperwork burden. I am not sure it is a route I would take, but I can see why some people feel it has a benefit.ManyWays said:Of your 3 options, "giving up" is not realistic when you have a house with equity, you have a very large number of creditors, and if you ignore them some will go for a CCJ.I agree with @ MattMattMattUK that going for affordability complaints with most of the lenders is a good idea.
Tesco, Cap One, Monzo OD, Barclaycard, Santander OD are all small, not sure its worth bothering them
Yep you are correct if it is the BNPL option, they do offer a Visa card which is regulated though.ManyWays said:and Klarna you cant complain about
There will always be a default, the default comes before the CCJ. A default usually happens in 1-3 months, a CCJ will take a lot longer, many months to a year and generally if you go into a DMP and keep up with the DMP payments the lender will not go for a CCJ. That is why the advice is to let the defaults happen, then go into a DMP after a period of time. Some lenders will still go for a CCJ, Amex are the one who always does as they do not sell debts on, but that is not one you need to worry about.LostOnMyWay said:ManyWays said:Of your 3 options, "giving up" is not realistic when you have a house with equity, you have a very large number of creditors, and if you ignore them some will go for a CCJ.I agree with @ MattMattMattUK that going for affordability complaints with most of the lenders is a good idea.
Tesco, Cap One, Monzo OD, Barclaycard, Santander OD are all small, not sure its worth bothering them and Klarna you cant complain about
The payday lenders - Moneyboat, Mr Lender, Quidmarket, how many loans have you had from each of them?
Thank you. Yes, the third option was barely on the table. Is it likely for a CCJ rather than default?
The damage is already done, you have debts you cannot keep up the repayments on, the question is how you begin to recover from that damage. As a homeowner with equity a DMP is almost certainly the best option, but others are far better at giving advice on the specifics of those.LostOnMyWay said:
This is why I'm trying to limit the potential damage but insisting I pay off the credit cards.
Another thing to consider is your (and your partner's) ability to earn more. Especially as you have not children you will have options. It was a different time and I was in my early 20s, but I worked a full time day job and another 40+ hours a week in a bar job to clear my debts, it meant I got the millstone off from around my neck in a year rather than it dragging on for years. If you and your partner worked 20 hours each a week at another job, minimum wage, bar work, shelf stacking etc. that would net you £8k+ after tax a year. That is a lot of extra headroom, allows you to clear debts quicker may well give you the funds to offer final settlements on some of the debts (lender agrees to take £2k to clear a £5k debt, rather than getting £20 a month for the next decade).1 -
I think I can pay the small ones off pretty quickly if I'm ignoring the loans, whilst building an emergency fund.MattMattMattUK said:
They are also small enough that some people may clear then during the first month of defaulting on the others just to reduce the paperwork burden. I am not sure it is a route I would take, but I can see why some people feel it has a benefit.ManyWays said:Of your 3 options, "giving up" is not realistic when you have a house with equity, you have a very large number of creditors, and if you ignore them some will go for a CCJ.I agree with @ MattMattMattUK that going for affordability complaints with most of the lenders is a good idea.
Tesco, Cap One, Monzo OD, Barclaycard, Santander OD are all small, not sure its worth bothering them
Yep you are correct if it is the BNPL option, they do offer a Visa card which is regulated though.ManyWays said:and Klarna you cant complain about
There will always be a default, the default comes before the CCJ. A default usually happens in 1-3 months, a CCJ will take a lot longer, many months to a year and generally if you go into a DMP and keep up with the DMP payments the lender will not go for a CCJ. That is why the advice is to let the defaults happen, then go into a DMP after a period of time. Some lenders will still go for a CCJ, Amex are the one who always does as they do not sell debts on, but that is not one you need to worry about.LostOnMyWay said:ManyWays said:Of your 3 options, "giving up" is not realistic when you have a house with equity, you have a very large number of creditors, and if you ignore them some will go for a CCJ.I agree with @ MattMattMattUK that going for affordability complaints with most of the lenders is a good idea.
Tesco, Cap One, Monzo OD, Barclaycard, Santander OD are all small, not sure its worth bothering them and Klarna you cant complain about
The payday lenders - Moneyboat, Mr Lender, Quidmarket, how many loans have you had from each of them?
Thank you. Yes, the third option was barely on the table. Is it likely for a CCJ rather than default?
The damage is already done, you have debts you cannot keep up the repayments on, the question is how you begin to recover from that damage. As a homeowner with equity a DMP is almost certainly the best option, but others are far better at giving advice on the specifics of those.LostOnMyWay said:
This is why I'm trying to limit the potential damage but insisting I pay off the credit cards.
Another thing to consider is your (and your partner's) ability to earn more. Especially as you have not children you will have options. It was a different time and I was in my early 20s, but I worked a full time day job and another 40+ hours a week in a bar job to clear my debts, it meant I got the millstone off from around my neck in a year rather than it dragging on for years. If you and your partner worked 20 hours each a week at another job, minimum wage, bar work, shelf stacking etc. that would net you £8k+ after tax a year. That is a lot of extra headroom, allows you to clear debts quicker may well give you the funds to offer final settlements on some of the debts (lender agrees to take £2k to clear a £5k debt, rather than getting £20 a month for the next decade).
Sorry to ask, is that a DMP through someone like stepchange, or if I do it myself and talk to the lenders or whoever takes over the default? I see you say others may be better at giving advice on the DMP so if anyone was able to, I would be very grateful.
We have looked at additional work, our current hours aren't set so can be difficult, I am picking up some additional hours so hopefully that will help. Anything over my usual income will go straight to paying things off.
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