Urgent help needed on debts of over £34,000

salstero

Hi, I really need some advice as I'm stuck in a dead end and don't know what to do. I have spoken to a number of government run debt charities (CCCS, debtfreedirect, national debt helpline etc) and still feel confused.

I have a number of large unsecured debts totalling £34,600 (and rising).

Currently I have:

£9,200 on HSBC credit card (min payment £215/mth),
£5,900 on Egg Credit Card (min payment £120/mth),
£7,200 on a Virgin credit card (min payment £160/mth),

this means I have a total of £22,300 on credit cards alone. :eek:

In addition to this I also have a car on HP with an o/s balance of £6,300 (I pay £193/mth) and an Intelligent Finance loan with an o/s balance of £6,000 (I pay £149/mth).

I bring home £1,400 (after tax) and have moved back home with my parents to help with my living expenses. I have previously owned my own property and then sold up and moved into rented to try to lessen the burden. This didn't work and just made my debt spiral further out of control. I am now 30 years old, living back at home with my parents and can never see that I will be fnancially stable enough to move out any time in the near future. I feel I am at rock bottom. I can't sleep and just feel miserable because I don't know what to do or where to turn for help.

I have considered IVA's (this would be my final final option and a route I do not want to go down), debt consolidation, writing to my creditors etc etc. I understand the system and regularly read moneysavingexpert.com advice. I regularly purchase my Equifax report and have a score in the 'excellent' category (I have never missed a payment in my life and I'm just about managing to pay the min payments each month, but this means I still have to use my credit cards to live on as I have no disposable income left at the end of each month).

Last week I applied for a loan of £17,000 through Lombard Direct (thinking I could pay off the higher interest credit cards and then spread the remaining £5,300 over lower rate balance transfer onto my empty Barclaycard), however, I was refused for the loan, before I'd even given them my financial information! I have received a letter which does not shed any light on why I was rejected so I have purchased my Experian report (still waiting for it to arrive) to see if I can find anything on there. I have never been rejected for credit before and this has scared me more than anything.:eek:

If I continue as I am, my debt will keep increasing and I will shortly be unable to make the minimum payments so I desperately need some advice. I have been trying to call my local CAB office for the past 2 weeks, but there is no answer! Can anyone please help or offer advice??

Thank you so much for taking the time to read this.

incesticde

Welcome to the board!

The 1st step is the hardest and you've done that.,

The next step is to post an soa so people can look at areas to cut spending, aprs on the cards is also very important

Bunnyinthelights

Hi Salstero,
Welcome to the board-
What in paticular are you confused about with the charity debt help companies?

They are a great source of help and Ithink your only real option to be honest.

Blackcat_4

You were possibly refused credit because:

a) you are not on the electoral register at your parents house
b) you have moved address to many times in the proceeding three years
c) lenders software highlight your debt to income ratio as high.
d) banks are more cautious with borrowings these days because they cannot 'offset' the loan with another bank.

Scarlett.1974

Did any of the charities mention bankruptcy? Obviously I'm not actually recommending it to you, but to me it does seem like a solution that you should maybe give some thought to.

What did the charities say and recommend for you? What about it was confusing for you?

van22663

Hi there,
Sorry to hear about your troubles, dont get too down, you will got lots of help on here.
I am in a similar situation with lots of credit cards and you were possibly refused credit because you have lots of other cards, that happened to me. I too spoke to CCCS and found them really helpful, but in the end I approached each credit card individually and set up an arrangement with them. I went through an income and expenditure form with CCCS and they sent me a copy which made it much easier to deal with the credit card companies. Every card company with the exception of Barclaycard agreed to me paying a very small amount each month by direct debit, some as low as £2, and they froze the interest which is a massive help. Initially, it is set up for 6 to 12 months but it will affect your credit scoring, that is unavoidable. I had to go down this route because I have a huge mortgage and that must be priority. As you are now living back at home, you may not need to do this, is there any way you can get extra money with a part time job or selling stuff on ebay.
Must admit, if I had the option of selling up and moving back home, I would have done just that and really got my head down for 12 months and cleared the lot. It may not be the best move to get more credit but could you do balance transfers on any cards, be careful of applying for too much at once because that will leave footprints and affect your credit file again.
Probably havent told you anything that you dont already know, but lots of luck and keep your chin up. Best wishes.

salstero

Hi Everyone!

Thanks for the words of encouragement, it's really nice to know that there are people out there you can talk to. :beer:

The reason I'm confused is because I don't know if my debt means I only have one option - the IVA route (which I REALLY don't want to go down) - or whether there is still other options for me to try first.

I have also spoken to my works Bupa debt advisor (they give free confidential help) and he thinks I still have chance to sort this out without taking such drastic action as the IVA or even debt management programmes. BUT he says, it's really tight.

I'm just trying to get as much advice as possible so that I make the right decisions as I don't want to do anything knee-jerk, yet I don't want to bury my head in the sand any longer.

My SOA each month is:

IF loan - £150.00 (think the interest is 8.9% - I've been paying this loan off now for 4 years and have 3 years left on it)
Virgin CC - £160 (I'm estimating this as I have literally been paying around £15/mth on a 0% interest rate, but this came to an end yesterday and I need to call them to see if there is anything they can do as it will jump to 17.9%. I have £1,600 space left on the card)
HSBC - £215 (I called them and asked them to reduce the interest, they did it from 18.9% to 15.9%. I have £800 space left on the card)
Egg - £120 (paying 17.9% - they will not reduce this. I have £100 space on this card)
Car - £193 (at a rate of 8%. I cannot sell the car, give it back or really do anything about this one as I will lose the £5,500 deposit plus all the money I've paid for a year and a half on it. My parents paid the deposit so they would KILL me. I have 2 and a half years left to pay. O/s balance is £6,000)
Car insurance - £63.00
Broadband - £9.99
Rent to parents - £100 (that is all I pay, I don't pay them for food or anything - feel REALLY bad about that one!)
Phone - £25.00
Contact lenses - £22.00 (I have called them today to stop receiving these for a while and will try and wear glasses more)
Storage - £52.00 (I have all my stuff from when I sold up and moved home stored here as there is no-where else to keep it. I am going to try and sell some of it off and then beg friends and family to store the rest for me!)
Petrol - £250.00 (Impossible to reduce as I work far away!)

I make that as £838.00 debt repayments (inc car) and £521.99 for the rest.

This doesn't take into account the following sundries:

Lunch - £15/wk
Socialising - I haven't got a clue, at least £150/mth! I am trying to stay in more but it's so hard as I'm single, living with parents (I need a life, just cheap ways to do things!)
Toiletries / haircuts - probably about £50 / mth
Clothes - about £50.00/mth (I was spending much more!)

Think that's everything.... Phew. I feel a bit sick, now looking back over it.

I have a Barclaycard c/c with nothing on it. I called them today to see if I could increase the limit and ask what APR they would do for a balance transfer. They said it's been increased to £4,950 and I can have 6.9% for the life of the balance. I will defo do this, but I'm trying to work out which card to transfer it from so that I leave myself in the bestpossible situation...

I'm thinking I should speak to Virgin and see what offers they have, then if it's good, transfer the Virgin balance over to the Barclaycard (leaving £2274 on the Virgin card) and the Egg balance onto the Virgin card at the new balance transfer rate (assuming it's lower!). Then I would have the Egg card free to transfer money from my HSBC card onto if they have any deals....

It all sounds good in theory, but I'm worried that I will still be over-spending each month. I need to be able to live within my means (£1,400 I bring home) and not need to spend ANYTHING on the credit cards.

I have been looking for an additional job, but not having much luck at the mo! I am also considering car boot sale for old junk to raise some cash.

What do you guys think?? Do I sound just crazy!?!

Thanks again for all your help x

getting-sorted-sarah

Hi Salstero!

Why is your car insurance so high? Anything you can do there?
Lunch - make it at home - save yourself £780 a year - woohoo!
Clothes and haircuts - you can skim these a bit - are you male? If so you can get a haircut for under a tenner, and I bet you have loads of nice clothes!

Try using www.spendingdiary.com to get a clearer picture of where your cash is all going. Especially the socialising - look at what you've been spending, set a budget, and stick to it!

Lots of luck.

salstero

I'm not too sure about the car insurance to be honest (I'm terrible and have NO idea about that kind of thing!!). I didn't even realise it was high, I'd thought it was quite a good deal as I shopped around when I took it out but I guess that was a year and a half ago and I should maybe try again...

Do they do a credit check on you though?? I had a credit check for the loan I was refused last week and am scared about having another one done anytime soon...

Yeah, the lunch thing is defo something I can reduce and I will have to bite the bullet (literally!) and have nasty sandwiches from home

I am really making a conscious effort to reduce toiletries, but as I'm a girl, I seem to go through shampoo / conditioner, make-up etc at the speed of lightning! I will REALLY REALLY try to use little amounts.;)

Thanks for the spending diary. I'm gonna have acrack at that. I've already filled in the budget worksheet off this site and tried to track my c/cds on the 'shuffle worksheet'.

I'm so pleased I've started to try. I feel a tiny bit better and may even get a couple of hours sleep tonight! :T

Thanks again.