Newbie Drowning in Debt

Bambi678

I started getting into debt by getting my first store card at M&S 30 years ago - it was never explained to me what debt was, or how easy it was to get into it… i just saw it as i was getting stuff for free!

It wasn't that bad all those years ago, and 25 years ago I managed to get on the property ladder & get a car on finance. All achievable and within my means.

I then got with my now husband, and that where the bad luck started (financially not love!). We went to purchase a property, and with the sale of my flat, the amount of money i was making covered the deposit, cleared my car finance and was paying for our wedding. As well as having a little bit left over for a nice shopping spree one day. However, the management company went bust, i ended up loosing over £35k on the flat, had to find £8k for the deposit on the house and of course cover the cost of the wedding. Hubby to be had no savings as we were reliant on the money from the flat. The house sale went through despite the flat sale going pear shaped.

In hindsight we should've pulled out of the house and postponed the wedding, but as i was moving over 200 miles and had been made redundant i was in essence homeless and jobless so still went ahead as the banks back then weren't as vigilant or compliant. I thought a fresh start in a new home, a new married life and a new job.. it will all be fine.

So, on that basis, I started married life with the car finance debt, the debt on the flat as i ended up selling that at a loss, and half of the house deposit and wedding bills… that was 22years ago… I have never recovered… and i'm ashamed to say, that i now owe more that my gross annual salary.. currently debt stands at £43.5k (that's without what i owe a family member).

I follow all the advice (budget planner, switch to 0% credit cards, get loans on a low interest rate etc) but I can't ever seem to get out of the whole, just falling in deeper & deeper….

I am contemplating arranging a DMP, but I'm worried that it will affect my job & my hubby's finances…

I can cover the minimum monthly payments - but i don't have much to play with each month.

To add to it, i have a teen who is full time at college and can't get a job because of his age so I am supplementing his spends as his dad refuses to. This can be in excess of £200 a month, so this literally leaves me with nothing.

Most months, i am spending on the credit card for our weekly shop…

I know i need to be more open, and refuse my teen his spends, but i don't think that would make that much of a difference. My debt outgoings are £1225 per month (minimum payment), my share of the joint bills is £1175. This leaves me with approx £225 a month which my son is pretty much having.. anything i want, goes on cards.

Please help! What would you do (bearing in mind my job)? I know what my biggest problem is - I am not a worrier, and look at the positive for everything.. so despite how much i owe, i am not letting it get to me!

Exodi

I think for the (fantastic) people to help you that frequent this board, you'll need to give a bit more detail.

Filling our a statement of affairs https://www.lemonfool.co.uk/financecalculators/soa.php would be a great start as important details (such as your income, details of the debts, etc) are missing from your post.

Likewise what is your husbands situation? You post this as if you're on your own to deal with this (or does he have his own debt to deal with)?

If you're able to work together on this, it might be better to post a household SoA with your joint income and joint debts.

From the few details you have given, it sounds like a DMP may be the outcome, but I wouldn't want to say for certain without knowing the particulars.

Would you say all the debts stem from the negative equity on the flat + wedding from 22 years ago, or is there other spending to address?

Brie

You have my sympathies about your M&S card. When we took one out (buying a sofa in a sale) we asked what the APR was and the woman signing people up for finance just looked at us blankly as she had no idea about credit cards at all.

I agree that it's best to start with the SOA. Do try to be accurate using actual figures from your bank statements etc rather than guessing how much you might spend on electric/food/council tax. When you post it back here some of us will ask questions or comment about what you have put on it. If you are not including some expenses because your OH pays them then say so. Or if you're only showing 50% or whatever.

An early comment - this may be a great time for your son to learn financial responsibility. You might talk to him in general about the situation and let him know that all he'll be getting is £X per month and no more. If he needs more he'll need to find it himself - depending on his age and abilities summer is a great time to earn a bit even if it's just £10 every other week mowing a neighbour's lawn.

And most importantly - well done for deciding to do something about this. Your debt is sufficient to be of concern but believe me some of us have been in much worse situations and lived to tell the tale. Not surprisingly my M&S sofa on sale for about £2k escalated til we maxxed the card at £16k!! And that was just one of a few cards I was juggling!!! It took a few years but we're in a much better place now!

ManyWays

I am contemplating arranging a DMP, but I'm worried that it will affect my job

What is your job? A lot more people worry about this than would actually have a problem

Sunbakedscobble

Getting a DMP was the best phone call I ever made. That call saved my life. I am now 4.5 years in, 2 payments left then jobs done paid off 34k of debt.

My debt started the same way...around the same time. A Dorothy Perkins store card. Then moved to credit cards. The budget planner I did with my DMP organiser was amazing. It allowed me to live. My debt minimum payments were at a similar level to yours. With budget planning my DMP was agree at around the 650 mark. Suddenly I had 600 pounds "spare" each month. Which I looked after wisely.

My company were never told anything about my DMP..not sure why they would ever be. I had to change my bank account I got paid into but that was easy.

Honestly go for it. You won't regret it

honeybee1234

How old is your son, as if he's 16 then he can get a part-time job unless there are other circumstances excluding this?

PM22

It's not easy restricting spending on kids, especially if they're used to it….

MEM62

This leaves me with approx £225 a month which my son is pretty much having.. anything i want, goes on cards.

Both parts of that sentence absolutely need to change - particularly the second part. If you are in a hole you have to stop digging.

Fill in an SoA and the guys and girls here will give you some great guidance. One other point, what is your husbands situation. You should be addressing this a couple - not as an individual.

MasterG83

Post your SOA and then we can look at the full picture and advise from there.

Firstly, stop using debt to fund your life. Sell items, cut back but stop digging a bigger hole.

This is the start of your debt free journey and you can look forward to a debt free life in the months or years to come.