Tackling £31,000 of Debt

tigergambit

I'm not sure how realistic your SOA is but you need to prepare a second one you could show to creditors including all the items you would have to pay if you were living independently (council tax, utilities, insurances etc etc). This will also give you a better idea of your future choices.

Next you need to take a hard look at how you reached this situation. Draw up a calendar of what the credit you have, when/ how you obtained it and why. You can probably consider some affordability complaints (I'm not too sure how you go about these but others will advise).

You then need to think about your future and come up with a 6 year plan. How would you move in with your girlfriend? Do you intend to rent or buy? What are your realistic career prospects and earnings? Can you knuckle down to a minimal lifestyle in order to pay off the debts fully or is defaulting a better option? Lots to think about.

A few things you must do:
Tell your parents and partner. As Emmia says, they WILL find out.
Keep paying HMRC. You really do not want to fall foul of them.
Keep calm. You can turn this around but you need to draw up a plan you can stick to. 

Well done on taking the first step to fixing this.

ManyWays

The combination of an addiction and living at home with parents, so very low bills may make it hard to win affordability complaints, but that Lendable loan is at such a horrendous rate (I guess it may have been the last debt?)  that it is well worth a try. Also a complaint to NatWest about all those loans, they should surely have stopped by the third one and wondered what was going on. I think you may need to send both to the ombudsman when they are rejected.

saajan_12

Are you sure on some of these: 

Auriel1198 said:

Here is some information I have compiled. Thanks for reading.

Debts:	Amount:	Interest:	Amount I’m Paying A Month:
2) PayPal	£138.65	0% APR	£138.65
10) Lendable Loan	£9,346.77	48.90% APR	£191.75

Paypal - are you paying this in full, so it will be zero next month, or do you still spend on this? 

Lendable loan - is gathering more interest each month than you're paying off - is that balance really growing? 

Auriel1198 said:

Car maintenance (including MOT)......... 0

Car parking............................. 0

Other travel............................ 0

Presents (birthday, christmas etc)...... 200

Haircuts................................ 40

Entertainment........................... 100

Holiday................................. 100

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Is this accurate:
* you don't spend anything on other local travel, maintenance etc?
* you save £100 a month on a holiday - if so, where are those savings ?
* you spend £200 a month on presents - who are these for, and is this the expectation? 

How long are you able and happy to live at home? This could be a great opportunity while costs are low, to tighten your belt on some of the presents and make a real dent in the debts, to clear in the next 2-3 years. But that depends on some of the exact numbers and questions above - if it doesnt' quite work and you end up adding to the debt because its too tight, that could be worse. 

Auriel1198

Hi there everyone. Sorry I’ll clear some things up.
Firstly, we’d be looking to rent together next year sometime. 

Secondly, I mistakenly thought presents was a one time thing, not each month. So £200 a year.
I meant my £100 holiday goes towards little trips away.
The PayPal payment is a pay in 3 and finishes next month (one payment to go)
The lendable loan is for £5000 but they add on the interest for the total repayment. I understand I should definitely tackle this first. 

Should I continue making minimums to my other debts, and if I have some spare at the end of the month, should I put it towards the Lendable loan? 

I’m ready to take action. 

Emmia

Auriel1198 said:

Hi there everyone. Sorry I’ll clear some things up.
Firstly, we’d be looking to rent together next year sometime. 

Secondly, I mistakenly thought presents was a one time thing, not each month. So £200 a year.
I meant my £100 holiday goes towards little trips away.
The PayPal payment is a pay in 3 and finishes next month (one payment to go)
The lendable loan is for £5000 but they add on the interest for the total repayment. I understand I should definitely tackle this first. 

Should I continue making minimums to my other debts, and if I have some spare at the end of the month, should I put it towards the Lendable loan? 

I’m ready to take action. 

I'd also say that some of your expenditure is on the basis of very round numbers - really you need to sit down with your bank / credit card statements and look at what you're actually spending... It's astonishing how easy it is for small expenses (a coffee here, a chocolate bar there etc.) to add up.

If you're really serious about renting together, you need to come clean on your financial situation - could you afford a deposit or the rent in your current position, plus defaulting (which is an option to tackle debt) will affect your credit file and financial reference checks that will be done if you're renting...

Your OH will find out that you're on a sticky wicket financially via this route, so I'd really advise you come clean well before that.

RAS

I agree with Emmia. You need to tell your GF sooner rather than later. Firstly, there's the huge matter of trust; if you lie by omission about this, why should she trust you about anything else. And there the risk she assumes that when you can't afford things, you are actually spending money on someone else. 

And discuss with her whether she's happy to take a flask of coffee and a Lidl pain au raisin for a walk rather than holing up in Cafe Nero, in exchange for you clearing half this debt in the next year.

You still need to interrogate those statements so you have a good idea what you've actually spent money on in the last 6 months. And find the missing Santander APR.

Good news about PayPal and the presents. Right now I'd suggest that clearing the Barclays is priority. For once, I'd say leave the card open.

Barclays may offer an 0% deal sometime in the next few months onto which you could switch some of the more costly credit card debt. 

With loans you need to read the T&Cs to work out the rules. Are there any early redemption penalties? Can you make additional payments? Do those reduce the monthly cost or the term? Etc.

You also need to put something in for car maintenance even if it's MOT, oil, wipers and new tyres every other year. And for parking, even if only occasionally.

Medical and dental needs to cover a prescription and a filling. Reduce it once you've got that stashed in your budgeting account (where monthly contributions to irregular spends go). 

Being self employed, the absence of an emergency fund is scary. Get ill, go on holiday and your income could reduce below the amount you need to cover the minimums. So £1000 in an ISA is essential. Start with £100 for 6 months then halve. Then you can start breathing but you need a full month's spends before you start renting.

If we seem a bit neurotic about budgets etc, learn to do it well and you can transfer the skill to your future renting with GF. You sit down together, work out your costs (both ask parents for clues) and work out what needs to be in place before you move. Look at what you need to live independently. Not just income but assets.

BF and I started with a mattress, bean bag, stereo and some kitchen gear. The cooker and hoover came from mates and a colleague had a unit "sofa" he wanted rid of.   BF's parents moved so he got two bed bases, another mattress, a desk and two large rugs. We bought incredibly cheap chairs, a table and some units at an auction (cheap as chazzer or FB market place).

If that's not your style, you need to work together to start sourcing at least cleaning and kitchen gear and household linen. Maybe a microwave or air fryer?

tigergambit

Auriel1198 said:

Hi there everyone. Sorry I’ll clear some things up.
Firstly, we’d be looking to rent together next year sometime. 

Secondly, I mistakenly thought presents was a one time thing, not each month. So £200 a year.
I meant my £100 holiday goes towards little trips away.
The PayPal payment is a pay in 3 and finishes next month (one payment to go)
The lendable loan is for £5000 but they add on the interest for the total repayment. I understand I should definitely tackle this first. 

Should I continue making minimums to my other debts, and if I have some spare at the end of the month, should I put it towards the Lendable loan? 

I’m ready to take action. 

@Auriel1198

A few questions (there are no wrong answers):

Do you feel the need to pay off all the debt or do you want to pay as little as possible? In other words are you content to consider a Debt Management Plan with the associated Advantages and Disadvantages?

Do you intend to buy a property in the next 7 years?

Is your partner employed or self-employed?

What sector do you work in - is it seasonal? (To give us an idea of further earning potential)

Can you increase your hours or get a second job (without damaging MH)? (This would help if you don't want to do a DMP)

I agree with ManyWays that the NatWest loans look irresponsible on the surface. I think you will find that the Lendable interest is subject to you not paying it off early, so this should be a priority if you are not going down the DMP route. 

Auriel1198

RAS said:

I agree with Emmia. You need to tell your GF sooner rather than later. Firstly, there's the huge matter of trust; if you lie by omission about this, why should she trust you about anything else. And there the risk she assumes that when you can't afford things, you are actually spending money on someone else. 

And discuss with her whether she's happy to take a flask of coffee and a Lidl pain au raisin for a walk rather than holing up in Cafe Nero, in exchange for you clearing half this debt in the next year.

You still need to interrogate those statements so you have a good idea what you've actually spent money on in the last 6 months. And find the missing Santander APR.

Good news about PayPal and the presents. Right now I'd suggest that clearing the Barclays is priority. For once, I'd say leave the card open.

Barclays may offer an 0% deal sometime in the next few months onto which you could switch some of the more costly credit card debt. 

With loans you need to read the T&Cs to work out the rules. Are there any early redemption penalties? Can you make additional payments? Do those reduce the monthly cost or the term? Etc.

You also need to put something in for car maintenance even if it's MOT, oil, wipers and new tyres every other year. And for parking, even if only occasionally.

Medical and dental needs to cover a prescription and a filling. Reduce it once you've got that stashed in your budgeting account (where monthly contributions to irregular spends go). 

Being self employed, the absence of an emergency fund is scary. Get ill, go on holiday and your income could reduce below the amount you need to cover the minimums. So £1000 in an ISA is essential. Start with £100 for 6 months then halve. Then you can start breathing but you need a full month's spends before you start renting.

If we seem a bit neurotic about budgets etc, learn to do it well and you can transfer the skill to your future renting with GF. You sit down together, work out your costs (both ask parents for clues) and work out what needs to be in place before you move. Look at what you need to live independently. Not just income but assets.

BF and I started with a mattress, bean bag, stereo and some kitchen gear. The cooker and hoover came from mates and a colleague had a unit "sofa" he wanted rid of.   BF's parents moved so he got two bed bases, another mattress, a desk and two large rugs. We bought incredibly cheap chairs, a table and some units at an auction (cheap as chazzer or FB market place).

If that's not your style, you need to work together to start sourcing at least cleaning and kitchen gear and household linen. Maybe a microwave or air fryer?

Thank you for your comment. I really really want to be honest and come forward about my situation. I’ve been terrified of the repercussions but I can’t take the coward’s way out forever by hiding it. I just wanted to see how much I could handle on my own. But as you say, she needs to know and I understand that.
As to all your other points I’ll take them all on board. I’ll try and redo my SOA which more exact figures and look into some things to clear up. My GF already lives alone and rents thus has some items and such already, plus I have quite a lot of things from my previous rent a couple of years ago. I moved back to my parents after a break up and took a lot of stuff with me. 

Auriel1198

tigergambit said:

Auriel1198 said:

Hi there everyone. Sorry I’ll clear some things up.
Firstly, we’d be looking to rent together next year sometime. 

Secondly, I mistakenly thought presents was a one time thing, not each month. So £200 a year.
I meant my £100 holiday goes towards little trips away.
The PayPal payment is a pay in 3 and finishes next month (one payment to go)
The lendable loan is for £5000 but they add on the interest for the total repayment. I understand I should definitely tackle this first. 

Should I continue making minimums to my other debts, and if I have some spare at the end of the month, should I put it towards the Lendable loan? 

I’m ready to take action. 

@Auriel1198

A few questions (there are no wrong answers):

Do you feel the need to pay off all the debt or do you want to pay as little as possible? In other words are you content to consider a Debt Management Plan with the associated Advantages and Disadvantages?

Do you intend to buy a property in the next 7 years?

Is your partner employed or self-employed?

What sector do you work in - is it seasonal? (To give us an idea of further earning potential)

Can you increase your hours or get a second job (without damaging MH)? (This would help if you don't want to do a DMP)

I agree with ManyWays that the NatWest loans look irresponsible on the surface. I think you will find that the Lendable interest is subject to you not paying it off early, so this should be a priority if you are not going down the DMP route. 

So. I ideally want to create a sensible balance with my budget on how to tackle my debt whilst possibly being able to move out next year.
I don’t intend to buy a property at this time in 6/7 years. I don’t think I could afford it.
My partner is fully employed.
I work as a gardener. It’s my own business. But I work all year round however I did see a slight dip in work around winter. I have decided to do some more advertising for more work and potentially look at a part time job on the side to help cover things.
And yes, those loans were incredibly irresponsible and I understand that. But thankfully I have managed to learn why I did what I did. I was really struggling and honestly didn’t care about my future for a long time. It’s just a horrible reminder to me of how I was not only 4 months ago. I just want to start moving forward in the best way I can. 

tigergambit

Auriel1198 said:

tigergambit said:

Auriel1198 said:

Hi there everyone. Sorry I’ll clear some things up.
Firstly, we’d be looking to rent together next year sometime. 

Secondly, I mistakenly thought presents was a one time thing, not each month. So £200 a year.
I meant my £100 holiday goes towards little trips away.
The PayPal payment is a pay in 3 and finishes next month (one payment to go)
The lendable loan is for £5000 but they add on the interest for the total repayment. I understand I should definitely tackle this first. 

Should I continue making minimums to my other debts, and if I have some spare at the end of the month, should I put it towards the Lendable loan? 

I’m ready to take action. 

@Auriel1198

A few questions (there are no wrong answers):

Do you feel the need to pay off all the debt or do you want to pay as little as possible? In other words are you content to consider a Debt Management Plan with the associated Advantages and Disadvantages?

Do you intend to buy a property in the next 7 years?

Is your partner employed or self-employed?

What sector do you work in - is it seasonal? (To give us an idea of further earning potential)

Can you increase your hours or get a second job (without damaging MH)? (This would help if you don't want to do a DMP)

I agree with ManyWays that the NatWest loans look irresponsible on the surface. I think you will find that the Lendable interest is subject to you not paying it off early, so this should be a priority if you are not going down the DMP route. 

So. I ideally want to create a sensible balance with my budget on how to tackle my debt whilst possibly being able to move out next year.
I don’t intend to buy a property at this time in 6/7 years. I don’t think I could afford it.
My partner is fully employed.
I work as a gardener. It’s my own business. But I work all year round however I did see a slight dip in work around winter. I have decided to do some more advertising for more work and potentially look at a part time job on the side to help cover things.
And yes, those loans were incredibly irresponsible and I understand that. But thankfully I have managed to learn why I did what I did. I was really struggling and honestly didn’t care about my future for a long time. It’s just a horrible reminder to me of how I was not only 4 months ago. I just want to start moving forward in the best way I can. 

No, no, I meant that NatWest's granting of multiple loans was irresponsible. They have a duty of care towards you which they appear to have ignored.

In your circumstances you may be eligible for a DRO - I don't know what the rules are but others could advise.

You should certainly consider a Debt Management Plan. Start by making affordability complaints to NatWest and Lendable and whilst waiting for those stop payments to debts 5 to 10. Use the first month's surplus to settle debts 1 to 3. You then sit back for 3 months plus and wait for defaults during which time you save the money you would have been paying into an ISA. 

You also need to draw up two SOA s during this period. One based on your actual life and one based on living with your GF. Be realistic on the first and give yourself plenty of wiggle room. Your aim with the second one is to minimise the surplus whilst still telling a plausible story. So you need to use your winter income but your summer work expenses (fuel, vehicle and equipment maintenance etc etc). Again, nobody expects you to live like a monk but it is important that you get this right as this is your next move in the game. This will be the first chapter of a story you are going to build for your creditors over the coming years, so start as low as possible surplus wise. 

So every month you then put the difference in the two SOA s into your ISA. After two to three years you will have a decent lump sum to start looking at settlement options.

Alternatively you could batten down the hatches on your social life, stay living with mum and dad and try to pay off everything, but I think that if that was possible you'd already be doing so.

A DMP is a long game, but it is a game where you can make the rules work to your advantage. 

Apologies for the misunderstanding.

TG