losing the battle with credit card debt

crazydebtman

hi all.
This started about a year ago.
i got a credit card cuz i was skint. amex. they gave me £5300 limit even though i was unemployed. i spent about £2000 and thought "what the hell am i doing?!"
i heard about free balance transfers and applied for another credit card expecting a similar limit so i could transfer the balance and slowly pay off.
the card i got was an egg and only had £500 limit. so i kept that and maxed it out in the meantime. i then applied for another one hoping to be able to transfer the balance but again was only £700.again maxed it. i got desperate and applied again, this time getting £2000 limit.
i was stupid and thought there was no point transfering because.... no reason just stupid.

now i have:
amex £5300 (+ £200 charges)
hsbc £2000
egg £500
barclaycard £500
a&l £800
a&l bank account £400 overdraft
natwest £100 overdraft

total debt £9300

i'm 22. i still have no income. i have told my mother-in-law , but not my mother. she is quite well off and had offered to help me out.

if she did just pay them off for me and i pay her back, is it that simple? or will the money she gives me get taxed and stuff?

can i declare bankruptcy?

please help. my mind is going the wrong way and the depression is wrecking me.

thanks

Steve1981

as far as i understand anyone can pay anyones debt for them as long as they are given permission from the debt holder.

I'd suggest that you cut them up so you cant use them anymore and contact each company and see if you can extend any 0% offers or if they can freeze interest or come up with a repayment plan.

having no source of income is really going to be the problem point when it comes to either paying the companies back or the mother-in-law, so maybe trying really hard to get some form of employment would go a long way towards easing you stresses.

declaring bankrupt i would really save for a last resort, whilst your situation is far from ideal yo udo have options and i think it would be wise to pursue them before taking the plunge.

you have done the hard part in coming to terms with this - it might not be a bad idea to think about telling your mum too - if she knows she might understand and then that will be another stress relieved (but again I wouldn't just plunge in and tell her without really giving it some serious thought

S

viking30

Hi,
Not being funny here, so please dont be offended. I was just wondering how you got so many cards with no income and unemployed?
Cheers and hope you get it all sorted.

jonesMUFCforever

viking30 wrote: »

Hi,
Not being funny here, so please dont be offended. I was just wondering how you got so many cards with no income and unemployed?
Cheers and hope you get it all sorted.

I was wondering this as well - what did OP put down as income?

crazydebtman

when i applied for the cards i just put self employed and they didnt question me at all.

i am not a bum who just sits at home doing nothing. i have had loads of problems in finding work. first, a football injury made me stop doin my joinery apprenticeship and it has gone from bad to worse since then.

my mum is so supportive usually but i cant bring myself to tell her. my mind is all over the place and i cant even concentrate on aything for longer than 5 minutes without having the deep horrible feeling distract me.

what about an iva. could i get one with my "small" debt?

thanks guys, just to know someone is listening is helping

viking30

I understand what your saying about your Mum but honestly I'd give her the full details if were you. I'm sure once its out in the open you will feel a little better. If one of my kids were feeling like you, then i'd want to know even if i were not in a position to help. A trouble shared and all that..
Cheers

CLAPTON

The most important thing you can do is to sort out your income.
Are you receiving JSA or any disability allowance?
What about casual or parttime jobs .. bar work, or supermarket etc...

Then stop using the cards completely.. OK it wont make the debts go down but it will stop the situation getting worse.

Presumably, if you live at home you're out going are very low so even a modestly paid job or JSA would be sufficient to live on.

Once you have some sort of income stream then it becomes possible to start working on the debts.

HeadInSand_2

crazydebtman wrote: »

hi all.
This started about a year ago.
i got a credit card cuz i was skint. amex. they gave me £5300 limit even though i was unemployed. i spent about £2000 and thought "what the hell am i doing?!"
i heard about free balance transfers and applied for another credit card expecting a similar limit so i could transfer the balance and slowly pay off.
the card i got was an egg and only had £500 limit. so i kept that and maxed it out in the meantime. i then applied for another one hoping to be able to transfer the balance but again was only £700.again maxed it. i got desperate and applied again, this time getting £2000 limit.
i was stupid and thought there was no point transfering because.... no reason just stupid.

now i have:
amex £5300 (+ £200 charges)
hsbc £2000
egg £500
barclaycard £500
a&l £800
a&l bank account £400 overdraft
natwest £100 overdraft

total debt £9300

i'm 22. i still have no income. i have told my mother-in-law , but not my mother. she is quite well off and had offered to help me out.

if she did just pay them off for me and i pay her back, is it that simple? or will the money she gives me get taxed and stuff?

can i declare bankruptcy?

please help. my mind is going the wrong way and the depression is wrecking me.

thanks

Surely that's a no brainer then..? Borrow it from your MiL and then pay her back, interest free. How on earth would it be taxable, there's no paper trail for a start - it's just a loan between family members.

twists_and_turns

You've got a couple of options to deal with your debt and financial situation.

I think there are two issues. 1) The debt and 2) A plan of action regarding future income

The Debt:
You've got two options here. You can either work out a way to pay off the debt, or you could declare bankruptcy / iva.

By declaring bankruptcy, or going down an iva route (or even a Debt Management Plan with your creditors) will destroy your credit rating for quite some time until you have sorted the situation out.

If you want to keep your credit rating intact, then you can start working towards paying the credit card debts off. If you are in the fortunate position that a family member can pay off the debt, then you could do that, or if you want to manage the debt yourself then you need to prioritise the higher interest cards first.

Which ever route you go down, you need to consider your income. Paying off any debt heavily relies on income. Basic state benefits barely cover general living costs, let alone luxury spending or paying off debts.

You really need a steady stream of income in order to deal with debt.
As Clapton suggested, even getting part time work will go a lot further towards paying off the debts, and pave the way for full time work.

Debt can seem quite scary, but when you start working towards dealing with it, then it becomes far more manageable.

There's loads of great people on these boards that will be able to point you in the right direction.

nearlyrich

I am going to move this thread to the DFW board as you will probably get a lot of help and advice there....

zx2011

Everyone has an annual exemption of £3000 for Inheritance Tax. It can also be carry forward so if not used in the previous year it can be up to £6000.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/InheritanceTaxEstatesAndTrusts/DG_10010612