In dire need of help, time to take control of debt

Smudgeismydog

https://forums.moneysavingexpert.com/discussion/comment/82084680#Comment_82084680

If you are going to default, then it makes no difference to your credit file if it’s 6 or 9.

Start by making a list of all your debts, with the corresponding interest rates, and the date for the end of any 0% rates. This will help you to focus on priorities, and decide your next steps.

orangebees22

https://forums.moneysavingexpert.com/discussion/comment/82085172#Comment_82085172

Im still a bit lost on how this all works, and what is best. Do you think it’s better to default on the cards that are gaining interest and the Loan that has 3 years left on it (the one that is 5-6% interest) but keep repaying the 0% cards and the 0% loan?

Once I do stop paying the repayments each month. What do I do next? Do I then ask StepChange or another provider to manage a DMP for me? Do I need to wait for something first?

RAS

As we've said before, you can't get a handle on this without your partner. If they think £850 per month is acceptable and you can only afford £125, there's going to be friction.

https://forums.moneysavingexpert.com/discussion/comment/82084694#Comment_82084694

You've mentioned your partner earns less and has savings? How? Are you picking up the tab and them blithely assuming it's OK. Particularly with the wedding where you seem to be pay a lot.

Your credit record is shot and will get a bit worse. If you want it to be repaired sooner rather than later, you need to actively seek defaults as soon as possible.

They clear after 6 years, even if you don't pay off the debt. Collect arrangement to pay markers and they stay 6 years after the debt is paid off, so damage your record longer. Perverse isn't it?

You also need to get your heads (both of you) round the fact that living in London doesn't mean that the basic facts of finance don't apply. Regardless of income, if you spend more than you earn you are in do-do. If you spend less, you'll be grinning down the road. It doesn't matter what other people around you spend, you need to spend less than you earn.

Unfortunately, you've been spending a lot more than you earn, so you cannot afford to spend what you now earn on nice things. You have to spend it on what is essential and anything over goes towards the debt. Bye, bye nights put, bye bye foreign holidays, bye bye buying stuff, whether it's clothes or things for the house.

I'm not suggesting beans on toast, although there were times I couldn't afford them. As long as you are making a decent dent in your debt, you should be putting away an amount each month for nice things. Generally, holiday or VFR, clothes, ents etc.

If you want to spend what you have saved wholly on ents, that's fine. If you prefer a more expensive holiday, that's fine. But you pay for it out of money that you have saved.

Invite friends round for a meal, and they bring the wine. It doesn't have to be cordon blue, a mezze and pasta, perhaps? Macaroni cheese is dirt cheap to make. Check out freebie and cheap activities and events locally as well.

Given you are in London, you might still find a dirt cheap flight deal and cheap lodgings. Or have a friend of a friend with a nice house who'd love someone to look after pooch for a week, as long as you like dogs.

enthusiasticsaver

I think a DMP is probably best as you have assets to protect. You will also need to take a massive cut in spending so your fiance needs to know you will not have money to throw around. A little bit of me does think why are you covering wedding costs? Is this not a joint spending?

You will need to default, save for emergencies and stop using credit altogether.

Smudgeismydog

This was noted on another thread as their summary of actions to take, I thought you might find it of use.

The only thing I would add is to check your bank account is not linked to any of your debts. If it is, then you need to open a new, unconnected banks account, and manually move your salary, and relevant direction debits over (utilities, mortgage etc).

Step	Action
1	Cancel all direct debits
2	Money saved from debt payments to be put into an emergency fund
3	Wait for accounts to default
4	Submit affordability claims
5	Once outcome of affordability claims is received, wait for debt to be sold
6	Once sold, write to creditors with I&E and offer affordable monthly payment

You have the choice of either managing a DMP yourself, or using someone like Stepchange.

orangebees22

https://forums.moneysavingexpert.com/discussion/comment/82085468#Comment_82085468

Fully understand that spending needs to be stopped and I’m discussing this with my partner. The point I’m making is that I have obviously gone into debt due to my personal spending, not necessarily because of the life we were living before. I understand that this is not the life we’ll be living now due to this.

The wedding costs are split equally with some help from our families, obviously I have spent more on some of my own personal wedding costs (cosmetic work, wedding outfit etc), which I wouldn’t expect him to pay for.

orangebees22

https://forums.moneysavingexpert.com/discussion/comment/82085524#Comment_82085524

Thank you so much for this, I will cancel all my direct debits now.

Please can you advise what “submit affordability claims” means? Is this for a self managed DMP? If I went through step change (or someone else) is this the tool that I used for them to advise a plan? For example debts, income, spending etc?

I have checked and my bank account isn’t linked to any of my debts.

Rob5342

An affordability complaint is a complaint you make to a creditor over their decision to lend to you or increase your credit limit. It's something you do yourself independently of whatever DMP arrangement you have. If upheld you will often get a refund of the interest you paid, they are usually rejected initially and then you can escalate it to the FOS.

Debt camel has some details on the process:

https://debtcamel.co.uk/refunds-catalogue-credit-card/

MasterG83

The questions you are asking need to be answered by you, do a budget taking in the last 3-6 months, then you can see those categories and understand wholly where you are overspending.

Shadyocuk

You need to change your mindset , you dont have an income problem , you dont really have a debt problem , but you do have a spending problem.

According to your figures you have an income of 4000

your share of bills is including your travel is approx (1600)

your debt repayments are approx (1435)

that still leaves you with 965 per month for your share of food and entertainment and any other discretionary spending , only you know how many years it has taken for your debts to reach 56K , and how much of that is for the wedding (which I am sure you can agree was not something that you could currently afford), but it looks like your overspending goes way over 300 per month on clothes.

You have mentioned that the 850 goes into a joint account , if you decide that you are going to default on your debts , then seriously consider de-linking your finances first.