Aged 50, in debt and unsure

baileysonice72

I need to drastically take control of my finances. 

My partner and I have completely separate financial arrangements and commitments. I am not on the mortgage nor do I pay for any household bills apart from food shopping. I pay my own mobile phone bill, car tax, car insurance, fuel. I have always just earnt enough money to cover all my outgoings with very little disposable income, but that's ok because I know no different.

I have chipped away for years at paying my debts off and I am now down to around £20k

I currently have a DMP with StepChange for a credit card which has £1200 on it and I pay £35 per month. This has been in place since 2023

I then have 2 payment plans in place with Lowell and I pay £40 a month (£20 each) and this has been in place since 2019. According to their system it'll be paid back in 2052. These 2 debts amount to just under £10k

The above 3 are manageable.

I have taken out recently 2 loans amounting to around £8,500 with extremely high interest because they were the only lenders I could go to. I wanted to pay off some loans which had even higher APR's
Oakbrook loan monthly payment of £120 and Lendable monthly payment of £180 so £300 monthly.

I have just contacted them last week to ask for some breathing space and both have given me 45 days and so this month I have not got to pay the £300 

I then have 2 credit cards one has £340 on and the other £775 on. 
Both of these are 34.9%

Because I have a DMP in place already am I right in thinking I can't ask for another.

Andyjflet

On the face of it this looks to be a never ending cycle of debt, you also cant borrow your way out of debt, complete the SOA form listed in the headings and then report back.

Unless you drastically improve your income then others may suggest a self managed DMP, or to stop paying your consumer debt and then follow the process to get back on track. Anyway, you're just about surviving and one bill away from disaster. 

Other will be along shortly I'm sure.

baileysonice72

I am absolutely sick to the back teeth of being in debt, if I could turn back the clock I would have made better choices but I cannot erase the past but I just want to be able to live better. I only have myself to blame that I know but I just need to find a way out because it is bringing me down. I feel anxious and extremely low right now.

I have just logged into my experian report and it shows 2 defaults. 
One of them being the £1200 credit card
The other being one of the Lowell payments however it is showing as a £0 balance because it says the debt has been sold on to another company (which is correct because it was Creation)
But the other debt is not showing?

I keep reading about debts coming off of credit reports after 6 years, so if that is the case do I still carry on paying them?

RAS

Please fill out that SOA. And work out what you originally spent that £20k on? Why were the debts you paid off with these expensive loans not in the DMP with Stepchange?

Part of what you, and we if you share, need to work out is whether your low income actually supports the living costs you are paying? Or are you spending money on your share of joint enterprises like holidays, for example? I don't see clothes, medical and dental or presents in you list of spends.

Given the very high rates you have been paying, it also sounds as if you should have stopped paying all consumer debts some years ago. That would have led to defaults and halted charges and interest on them all, allowing everything you paid to reduce the total debt rather than fund your creditors?

Maybe that's what you need to do now? The SOA will help find out.

NeverendingDMP

Is there a reason you have a dmp with step change and separate agreements with Lowell. I'm guessing you also have other debts on top of  step change and Lowell and that's why you have taken out new loans. Ideally step change would have got all your debts, put them in one dmp and then you would have made a payment you can afford easily to allow you to continue without needing more credit (or paying interest).  First things first do you feel comfortable having a go at the soa or even just writing a list of all the debts/overdrafts so there's a starting point to offer you advise. No judgement from us here at all but if you write a full list we can offer some help as I think I you have got in a muddle and only put something on a dmp if the company has defaulted you. It's just gonna get messy and you will end up owing all over at shocking rates of interests. 

NeverendingDMP

And yes you still pay after the six years if a balance is outstanding but there are things everyone will advise you about as well called CCA requests, getting a dmp for all the debts with a charity or running the dmp yourself. Lots of options but to start with a list of all the debts and a soa will get some good advice from everyone here. 

baileysonice72

I am not very tech savvy so don’t know how to complete the form you’re asking?

Up until February 2019 I was in full time employment on minimum wage and just managed my every day spending & debts.
I then became self employed in March 2019 but then Covid hit in 2020 and I couldn’t continue my cleaning business due to lockdown laws. I got adhoc part time jobs and then this was when it started to spiral.

I had 2 loans with Creation that were being paid for every month up until 2019. Due to employment changes I approached them and asked to make reduced payments as I was struggling to pay. They put me on a plan and then 6 months later I had a letter from Lowell saying my accounts were now with them and so I have continued to pay them the reduced cost.

The credit card was on a 0% and then I’m told that they have sold the company and whilst I can remain a customer my APR is now at 39.9% there was £2k on it and I couldn’t afford the payment. I then approached stepchange in 2023 and they took this on as a DMP

I owed my parents £15k and I’ve been paying it back for years. Then my father passed away and without going into detail my mother following a family feud demanded the money back. The balance was £8k hence why I’ve just taken these 2 loans out because I had nowhere else to turn. 

sourcrates

I`m guessing stepchange don`t know about the other debts, as they would have insisted they be included in your plan.

But then why do a DMP with just one debt in it? makes no sense whatsoever.

A basic first step here is to draw a line in the sand, no more borrowing, default on all your non essential debts, and then DMP the lot of them, that`s the only option that makes any sense to me.

You then have an affordable monthly amount going to each account, so the heat is then switched firmly off.

Make sure you budget correctly, include money for an emergency fund, and see how things are in a years time.

NeverendingDMP

If you can't make the soa work on the computer try to write a list at home. The upside of sharing is we have all discovered the hard way all the things  we forgot to include on our first few attempts so we can help you out. 

 I second sourcrates with the idea of stopping paying all of them and only paying an amount you can manage that's split between them all when you are ready, been defaulted by everyone and have made a plan. 

ManyWays

I am a bit confused. You said you took 2 loans to clear even more expensive loans, but you have also cleared the debt to your mum? Or was that cleared a while back by the more expensive loans?

baileysonice72

I don’t know how to reply to a specific comment so In answer to sourcrates im not sure what you mean about only only having one debt in the DMP. Lowell took my account over in 2019 and I was/am paying a reduced rate. The stepchange DMP was created in 2023 as that was the only ‘debt’ I was struggling with to pay