Tackling £31,000 of Debt

Auriel1198

tigergambit said:

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

Ah, I see. Thank you sorry I didn’t quite understand. I have an appointment with the business debt helpline later today so I’m going to speak to them and see what they say too. I really appreciate everyone’s help. I can see that even though it may be a struggle I can get through this, which gives me hope.
i’ll have to see what my options are and how to proceed. With DMPs and DROs, I would’ve thought they’d significantly impact being able to apply to rent somewhere. But I guess it depends on the agents/landlords? 

As I said, this is a rough plan for next year, so it may be that I can knuckle down and tackle as much of my debt as I can before then. I’ll definitely be making inquires to my creditors (the larger debts) about how I could move forward. As you say, it is quite frightening being self employed without a savings fund but I have to start somewhere so I shall take your advice on. 
Many thanks once again. 

tigergambit

Auriel1198 said:

Ah, I see. Thank you sorry I didn’t quite understand. I have an appointment with the business debt helpline later today so I’m going to speak to them and see what they say too. I really appreciate everyone’s help. I can see that even though it may be a struggle I can get through this, which gives me hope.
i’ll have to see what my options are and how to proceed. With DMPs and DROs, I would’ve thought they’d significantly impact being able to apply to rent somewhere. But I guess it depends on the agents/landlords? 

As I said, this is a rough plan for next year, so it may be that I can knuckle down and tackle as much of my debt as I can before then. I’ll definitely be making inquires to my creditors (the larger debts) about how I could move forward. As you say, it is quite frightening being self employed without a savings fund but I have to start somewhere so I shall take your advice on. 
Many thanks once again. 

Well done on the business helpline. Take advice from as many sources as you can. You have plenty of time and absolutely no need to rush. The whole debt industry runs unbelieveably slowly.

ManyWays

Another source of debt advice could be Perennial https://perennial.org.uk/ways-we-help/debt-advice/ - they help people involved in gardening/horticulture and have a very good reputation. 

RAS

I'd add that bankruptcy, IVA and DRO are all forms of insolvency, which are recorded on the  Public Register. Costs about £6 for anyone to check so often part of rental  checks.

A DMP is an informal solutions. It is obvious from your credit records but EAs and LLs can only see them with your explicit approval. Most likely they'll want salary information, and maybe bank statements. 

syedsherazahmed237

Hi there,
First of all, well done for being open about your situation — it takes a lot of courage to face debt honestly, especially after going through such a difficult period. It’s great to hear you’re sober and working on your mental health that’s a massive step forward and something to be proud of.

With your income and relatively low living costs, you’re in a good position to start making real progress. You might want to reach out to a free UK debt charity such as Step Change, National Debt line, or Christians Against Poverty  they can help you review your budget, explore options like a Debt Management Plan (DMP), or even get interest frozen in some cases.

Auriel1198

Hi everyone,

An update:

I have spoken to my partner and my family about my situation and they were all fantastic. It was a bit sad for them of course but as they know I've been working so hard to change things for the better they're very happy. I've done quite a lot: I've managed to quite considerably raise my income by working more (my business is thriving), I've reached over 9 months sober, I've got my debt to around £23,000 now and have completely paid off HMRC and am preparing for this tax year's payment already, I've knocked out all the small debts and am snowballing into my credit cards and the odd bit sent to the awful Lendable loan. I've learnt SO much over the past 6 months and I've been budgeting and saving whilst tackling this debt. My partner has said I can take all the time I need to sort my debts before we move in as she's happy and comfortable with our set-up at the moment. I'm very lucky to have her and her support. It's very clear that my poor decisions with money all stemmed from my addictions and mental health issues. Now I've dealt with those, it's showing. I still have the two credit cards and the four loans but I'm managing it well (in my opinion) and I have an emergency fund with a good cash buffer in case I'm ill or something.

Anyways, thanks for the help to everyone. I may require some more assistance at some point but I feel in control now and that's the main thing! :)

Smudgeismydog

How lovely to hear from you, and to read such a positive post

Very well done

AntoMac

Wow, you’ve knocked £8K off in a few months. Very well done

in_need_of_direction

make sure to put the tax money somewhere it’ll earn interest until it will need paid. You’ve made great progress, well done.