Is it hopeless?

johnsof75

I am in around £50k of  credit card debt across a number of cards. I was off work sick for a long time and eventually put onto nil pay for eighteen months. During this time I built up debt on my credit card paying my mortgage and other costs. It was stupid I now realise. I have been back in full time work for nearly two years and am earning £75k per annum, taking home around £4,300 a month. I have been paying the minimum payments each month but am struggling and the debt isn't going down. I have raised an ET against my former employer about the period I was off and been partially successful - a remedy hearing is scheduled for next month. I am told I will only get around £15-20k because I am in work. I will of course use this to pay off some of the debt but it still feels huge. I spoke to Step Change - after looking at my budget they suggest I can afford to pay around £1k a month towards my debts but with interest so high I feel I will never pay it. They suggested a debt repayment plan but I am worried that it will impact on my credit rating . I am going to speak to them again after the remedy hearing but I wondered if anyone had any suggestions. Thank you. 

enthusiasticsaver

I assume you are unable to get any 0% deals?  

Generally you will struggle to get a DMP if you are able to make minimums but if you default with the objective of getting them to freeze the accounts and stop the interest it will affect your credit rating. I personally would wait until you get the remedy hearing and in the meantime cut back as much as possible to try and  pay more than minimums.  It will go down albeit slowly at first and the more you pay off the easier it will be to get 0% deals.  There is no magic solution I am afraid.  You either have to prioritise it and pay as much off as possible to get it to an affordable amount or default, get the interest frozen and take the hit for 6 years on your credit rating. 

johnsof75

Thanks - unfortunately I'm not eligible for 0% deals. To make thing even more complicated I live in a one bedroom shared ownership flat in London which has increased in cost by £1k a month. I would have just sold it and moved somewhere cheaper but they aren't selling and I can't afford to  a loss on this as well. Just not sure what to do. I work long hours already so can't take an evening job and my budget is very tight already. Just not sure what to do. Feels hopeless

johnsof75

I am sorry if it comes across like that. I dont feel that I am a victim. I know I am responsible for building up the debt and will repay it. I have a one bedroom shared ownership flat - that now costs over £2.5k per month which I have had to pay for (including when I was sick) and can't sell. This takes up over half of my salary. I pay as much as I can off on the credit cards but with the interest being so high I am not paying much off the debt. I am spending very little on anything else but dont know what else to do - I dont have a car, holidays, dont smoke or drink. I thought there may have been someone else on here who might have experienced something similar and may have had advice to share or inspire. 

RAS

It's not hopeless, but there isn't enough information in your original post to work out what your options are.

Check the bottom sickie on the first page of the sub-forum for the Statement of Affairs. It's scary but you need to understand where your money is going and whether you can divert some more effectively.

2021rdsunshine

johnsof75 said:

I am in around £50k of  credit card debt across a number of cards. I was off work sick for a long time and eventually put onto nil pay for eighteen months. During this time I built up debt on my credit card paying my mortgage and other costs. It was stupid I now realise. I have been back in full time work for nearly two years and am earning £75k per annum, taking home around £4,300 a month. I have been paying the minimum payments each month but am struggling and the debt isn't going down. I have raised an ET against my former employer about the period I was off and been partially successful - a remedy hearing is scheduled for next month. I am told I will only get around £15-20k because I am in work. I will of course use this to pay off some of the debt but it still feels huge. I spoke to Step Change - after looking at my budget they suggest I can afford to pay around £1k a month towards my debts but with interest so high I feel I will never pay it. They suggested a debt repayment plan but I am worried that it will impact on my credit rating . I am going to speak to them again after the remedy hearing but I wondered if anyone had any suggestions. Thank you. 

Hi and welcome to the board. Your situation is not hopeless at all! I do believe that every debt problem has a solution. Like RAS mentioned before it would be helpful if you can complete a statement of  affairs so members can help you more effectively . 

It might be that a DMP it’s the way forward for you, either with Stepchange or a self managed one but your credit rating will be affected for 6 years from the date a default is applied to an account. How important is for you to have a good credit rating? 

Don’t jump into any solution without doing your research and understanding your options. Fill a SOA as recommended to start with. 

HampshireH

Uriziel said:

Removed by me as Forum team have deleted original post

Completely unacceptable post. The forums aren't here for people to attack posters. Your judgemental comments are made without taking time to understand OPs situation.

Whilst on the face of it £75k should be more than enough to live on. Many of us aren't paying £2.5k a month on a 1 bed shared ownership property which has increased by £1k per month. Possibly with bills on top.


OP take the advice of posters here to help you and not slate you.

Yes you'll need to pay the debt back but there are ways to do that

Why is your credit file so important - do you have plans in next few years which require you not to default on some of your debts? Or does your job mean you can't have a CCJ ? If it's pride and pride alone you may need to work past that to help your situation.

The SOA is the best starting point but spend some time on it. Go through your last few months bank statements to really identify where your money is going don't just pie in the sky it.

Once you can see this you'll be able to see where you may be able to reduce spend/ give you a clearer view on your next steps.

Don't rush your SOA though because if you miss stuff it won't help you see what's going where.

NeverendingDMP

Hiya no it's not hopeless.It can be hard work and feel like a slog at times but it's always doable somehow. I've a feeling it's been like that for a couple of years for you already though.
I agree with earlier posters that a SOA is a good place to start. I don't know much about ET hearings. If you were to get some money would you get it in three months,  or who knows when -just asking as that may affect how long you feel able to hold on for it order to get the debts down.? And do you need to have keep a clean credit record for your job or does it not matter. 
The SOA is the best place to start though so people can drop some some ideas. 

enthusiasticsaver

johnsof75 said:

I am sorry if it comes across like that. I dont feel that I am a victim. I know I am responsible for building up the debt and will repay it. I have a one bedroom shared ownership flat - that now costs over £2.5k per month which I have had to pay for (including when I was sick) and can't sell. This takes up over half of my salary. I pay as much as I can off on the credit cards but with the interest being so high I am not paying much off the debt. I am spending very little on anything else but dont know what else to do - I dont have a car, holidays, dont smoke or drink. I thought there may have been someone else on here who might have experienced something similar and may have had advice to share or inspire. 

This won’t help you now but when you were sick did you approach your lender to ask about reducing your mortgage? There are things they could do to help like changing to interest only, payment holidays etc. If over half your income is going on housing costs this explains why you are struggling on a fairly high income. Do you want to protect your credit rating for some reason? 

A reminder to posters this is a non judgemental forum so @Uriziel your post was not helpful and I have reported it. 

johnsof75

Thank you so much. I will complete the SOA. I suppose I thought 1) I should pay back all that I owe and 2) that my housing situation isn't good, that I probably need to move and would need good credit to do that (not that its great at the moment because of how much I owe). However, similar flats are just not selling - shared ownership isn't great. I am a civil servant so not sure if bad credit rating  would impact my employment - I dont think so but will need to check. 

I should have considered different ways of lending but to be honest panicked a bit/wasnt thinking straight. Backstory: my dad had a stroke when I was a teenager, as an only child of divorced parents I cared for him (washed, dress, fed him) - my choice not a victim. He caught Covid and after a year long battle died. At  the time I asked my employer if I could work flexibly, they said no. I had a breakdown and ended up in hospital. My fault - I should have been more resilient. I have been back  in full time employment now for nearly two years and keen to sort the situation out. I contacted step change and they said to come back after the remedy hearing in September when my situation is a bit clearer. I had hoped the settlement would cover my debt but legal advice (so expensive) is its unlikely to so I need to start making plan. Not been in this situation before so unsure of the options. 

londoner2019

It's not hopeless at all, don't worry! First step done - you've acknowledged the problem, and come here for support. Next step is the statement of affairs (be as accurate as possible, check outgoings over the last six months to a year - don't make it aspirational, you need to understand what money you have, where it's going, and what's absolutely necessary). Then you can make a plan.

There's always a way! You've got this.