Need help with debt and credit cards, really don’t know where to start and what to do!

Bandmartian65

Hi, 

I’ve come here just for some advice and help with how to manage my finances. I’ve made some really poor financial decisions which has left me with multiple credit cards, high out goings with small not much disposable income and I’m really trying to rectify this anyway I can. I’m trying to avoid going through the IVA route or DMP if possible. Any advice would be great!

The situation is as follows: 

Capital one credit card - £1300 limit, £1260 used, minimum payments are around £75 a month with 30.34% interest

Aqua credit card - £1400 limit, £1370 used, minimum payments are around £87 a month with 40.45% interest

Virgin money credit card - £500 limit, £470 used, minimum payments are £25 with 26.49% interest

Zopa credit card- £250 limit, £220 used, minimum payments are £13 with 39.6% interest 

I also have a creation finance account that I’m making repayments for, I had my phone stolen and got the phone aiming to clear it all before the buy now pay later interest free period ran out but didn’t manage to. 

My repayment every month is £101.93 

I also have really high outgoings mainly because of mobile phone contracts I took out. These are as follows: 

Sky- £100 (made up of 3 credit agreements on a 36 month contract no air time. I stupidly gifted an ex Apple products)

O2- £160 (made up of two devices that are on credit agreements for 36 month contract no air time)

EE- £120 (made up of three devices that are on credit agreements for 36 month contract no airtime. These were phones that I got for my brothers who unfortunately have passed away now but the credit agreement was taken out in my name)

I’m 25 and really don’t know where to even start with these. I’ve made some really reckless financial decisions and mistakes that I wish I could undo but I can’t. I’ve tried to get a balance transfer card and I’m not eligible, same with any type of loans. Any advice would be extremely helpful.

I earn £1700 a month and I’m also looking for a new job to try and make more money or a job on the side outside of my working hours. I pay £300 a month in rent as I still live at home, so I’m really trying to get this all sorted so I can try and get some savings of some sort as i don’t have any. I don’t have a car or anything else, and all my expenses outside of the credit cards and the phone contracts come out to around £500.

Thank you in advance; any help will be greatly appreciated as I don’t have any family who could help me at all or give me advice on how to tackle this. 

sourcrates

First basic, and best advise to anyone who can`t afford their non essential debts is to just stop paying them.

The phone contracts especially, let them default, they will be sold to debt buyers, and in 8/9 months time they may start collection activity on them, same for the cards, let them all default, and once your in a better place financially, start a debt management plan, either with a free debt charity, or do it yourself.

Don`t struggle paying for non essential stuff like this, its silly and makes no sense whatsoever.

Brie

Can you fill out a statement of accounts (SOA, see the link below) so that we have a better picture of what's happening? Then we'll be more able to advise once you paste it back here.

Do any of your cards have a 0% balance transfer offer? Do you clear any in full each month?? All very helpful info.

I would assume your £300 rent per month includes all the usual bills for water, utilities so that would make things easier for all concerned.

If you are living at home is there any way your parents (presumably) would take on making payments for your brothers' phone contracts? A suggestion only - defaulting on the lot as sourcrates has suggested might be the best way forward.

Have you checked your credit reports for anything else that might be lurking?????

Rob5342

As Brie says, posting a statement of affairs will help people understand your overall position.

How did you end up with 8 mobile phone contracts and what has happened to all the phones?

ManyWays

Never ever take out a phone contract for anyone else again. Say No if you are asked . (And if they were not actually for other people, you just sold them to raise a bit of cash and are too embarrassed to say so, never ever do that again either.)

You have to stop using the cards completely. If you are living at home and do not have a car, you should be able to do this. The debt payments and mobile payments only come to about 700? plus 300 for rent. you should be able to live on the rest of your wages.

Set up a monthly direct debit for the current minimums rounded up to the nearest £10. And for Zopa pay £60 a month. It will be gone in a few months. Then start overpaying Aqua more.

When a phone contract ends, shift that payment to the Aqua card.

It is going to be a boring couple of years but things will start improving.

Time2Go_25

Just to say sorry for your loss, to have three brothers pass away at your age is a real tragedy. I hope you are able to sort out your finances.

Bandmartian65

https://forums.moneysavingexpert.com/discussion/comment/81905554#Comment_81905554

Thank you for your advice, unfortunately my parents taking over paying my brothers phone contracts has already been discussed and the answer is no. They said it was my arrangement with them so they aren’t getting involved. here is a statement of my accounts

RAS

ACan you double check your SOA? Do you owe 1.4k or £14k to Aqua?

Avoid an IVA at all costs as it's not suitable and at you age you could well end up paying back the whole sum and the IP fees which could exceed what you owe on cards.

You need to weigh up whether you are prepared to have a boring couple of years or are happy to trash your credit rating for 6 years, have a life and some savings?

You can look at reducing the cost of Satellite and cable TV.

Which might help fund items missing from you SOA. At the very least clothing needs to cover 2 pairs of shoes, undies and socks for the year divided by 12.

You need haircuts? Or at least toiletries. And do you never give a present? Maybe go through the last 3 months statements and allocate each spend to a category?

I'd suggest you amend the list phone contracts, deals and add where the physical phone is and the end date of the contract.

Do you have any opportunity to pick up a bit of extra work? Not easy I know in the current climate and it needs to be within easy reach of your existing home or work. Even if irregular, you could start using it to create an emergency fund.

If you round up the payments as ManyWays suggests, you might see a slight improvement in credit rating. And then be able to get a transfer deal for part of the Aqua card?