Please help!!!

laineybugz · 1 April 2006 at 7:54PM

Hello everyone!!

I'm hoping you can help a damsel in distress. I'm going to try keep my situation as short but informative as possible.

Right here it goes...A little insight info to start off with: I'm 22, living at home and am working in a job that pays after tax about £1400 of which I have about £400 left after paying rent, travel and other debts to dispose of on lunch, going out, clothes etc.

My debts are listed below and I am hoping to get rid of them asap or in the most benefcial way possible as in two months time I shall be leaving my current job to do something I have wanted to do for a long time but unfortunately will have to take a massive salary cut as a result(I'm talking close to a £10k cut!!!) and in addition to this I'm appling to go to university part-time starting in October.The job change and going to university all tie in with each other btw. So I'm going to have to face the fact that I will not won't have as much disposable income anymore.

Ok so my debts are:

Yes Car Credit financed car- £261pm to pay over 4 years, I have 33months to left to pay off(interest rate is 19.9% so I'm going to end up paying £12528 :eek: )

Barclaycard-£2255.19
HOF store card-£816.99
Debenhams store card-£305.34
Topshop card-£375.96
Capital One Card-£373.59

I tried getting a consolidation loan but didn't get accepted but one of the commpanies offered me their debt management programme which I went for so I pay £100 to the company and they distribute it to the card companies listed above. I have since foundout that a percentage of that £100 they keep for admin purposes or something.

Anyway my other outgoings every month are:

Car Insurance-£60pm
Rent-£200
Travel-£160

I really need advice on how I can go about getting rid off these debts, especially the car debt seeing as I'm goignt ot be on considerably less money in months time. I have tried to get loans before but kept getting declined probably coz I have a realy bad credit rating and there's probably also laods of searches on my credit file. Are the loan companies that do good loans for really bad credit???? An idea I had was if I got a loan for £12000 to pay over 5 years I could pay off my car early(I asked for a resettlement figure which is £7132!!!) so that I own it then sell it and use the money I get for it towards paying off the £12000 loan but my car is a Foat Punto so I probably won't get more than £3000 for it if that. Yes Car Credit said I can't give the car back which I guess is understandable. Does anyone know if I can maybe ask for them to reduce my payments??On the other hand I don't know whether I should keep up with the payments for the remaining 33 months then at leats at the end of it the car is mine.

I have tried for loans, credit cards, finance n other stuff and always get declined even when I wanted to open a current account with another bank:(

I'm really scared that in 2 months time I'm going to have £150-£200 left to live on for the whole month after paying my debts. My mum isn't in a position to help me as shes waiting to go into hospital for a knee replacement so will be and has been out of work for a long time.

I haven't even thought of how I'm going to fund my uni fees!!!But I'm not going to let that put me off. I'm going to at least apply first.

I really hope you can help me or provide me with advice on how I can deal with all of this or what options I have available to me.

Lainey

roswell · 1 April 2006 at 8:13PM

can i just question why you have a car and pay for "Travel" as well .. isnt this paying twice for the same service?

Alleycat · 1 April 2006 at 8:26PM

Looking at the situation with the info you have posted so far, there should be just over £600 per month spare for food, toiletries, spending money etc. It would help if you could break this down further if poss! Somewhere you are massively overspending and you need to identify this and sort it out.

My immediate thought would be to ditch this company you are currently using as you can't be paying much off your debts each month on just £100 (especially with the commission they are taking off). Your money could be much better spent getting rid of the store cards that don't have massive balances.

I reckon your living costs on top of what you have listed can't be more than £200 per month, you just need to work at them. With the spare £400 that would clear Top Shop in one month, Debenhams in another month, Capital One the month after etc. Obviously you should address the cards with the highest interest rates first, so you need to find out what they are. Also do you know if this company you are with have managed to get your interest rates frozen? That would have a bearing on your plan of attack.

Bloke_with_a_simple_life · 1 April 2006 at 10:44PM

Unfortunately, maybe you cannot afford to give up your job at the moment?

I question if you really know what you want to do. If you are doing something you have always wanted to do it appears that you have not thought about the impacts of this enough before getting this amount of debt built up which you were servicing on your very good income.

Have you really planned this financially and emotionally? You appear not have had made any provisions to account for your cut in earnings, e.g. by trying to live on the income you would have in 2 months time and saving the rest!

Instead of making this big jump this year, why not put it off 2 years and:
1. Keep your current job
2. Get a part time job
3. Cut back on lifestyle stuff and spending (these will stop when you are at University, so start getting use to it now and see if you like it and can live with it!)
4. Use the extra income to repay all your debts.
5. Once all debts are paid off, start putting a contingency fund together.
6. Only get the new job & uni place when you have paid off your debts and have some savings built up.

Sorry for sounding negative - negative and realistic are sometimes the same!

spaghetti_monster · 1 April 2006 at 11:47PM

Hi there!

I agree pretty much with the above post - think really carefully about what you really want, also get some good ideas/advice about how to manage your finances (right here!) and balance this with what you want to do with your life.

Then debts I'm trying to clear (which I've had since student days) are mainly due to paying for courses/tuition/stuff to do with my career. In the past when I've had a windfall (and even if not!) I did have the thought "shall I pay off that debt????" but instantly thought "NO! I shall buy xyz" and always justified it in my head that I really really needed it for what I wanted to do with my life.

Now, I don't know if I exactly regret any of those decisions but I do now realise that I could have managed the financial side a whole lot better ie. waited to buy something, researched credit options better, been a bit more patient. I would probably be a lot better off today!

shellabear · 2 April 2006 at 12:23AM

Don't know much about this company...apart from that they are green and yellow and are ripping a lot of people off. Is it HP? If so you will be able to give the car back to them when you have reached half way. After 24 months you can give them the car and walk away owing them nothing but also not having a car. The details will be on your HP agreement and the benefits are that it will not mess up your credit rating any more than it is already (sorry if that sounds harsh).
BUT you will then be able to save up for an older car that you could pay cash for. I agree that you should wait a while but maybe this could be a year. Don't want you to lose your motivation. It's very positive that you want to go to uni and you are at the right age to do it.
Good Luck in what you decide.

equine_induced_poverty · 2 April 2006 at 1:06AM

Stay with the better paid job, cut down on any luxuries, take advice on paying off your loans and consider doing the Open University or similar for a year or two. This will get time off your course when you do go to uni, ie 2 yrs instead of 3, and so you leave with less student debt.
Good luck.

nomoneytoday · 2 April 2006 at 10:24AM

Since you are living at home and earning £1400 a month net, your loans are affordable. Maybe look at where your wages are actually going? A sandwiches at lunch time at £3 a day is £100 a month, a bottle of wine on a friday evening is another £40 ish....

dudleyboy · 2 April 2006 at 11:52AM

hi Lainey. some excellent suggestions have been made so far. other than the salary (i wish i was on that when i was 22! - don't give it up so willingly!) your position sounds similiar to mine 6 years ago.

open uni can prove more expensive - when you add up the total cost of modules, exams, etc (at least it was in my case which is why i've not chosen that route)

if the new job is related to your course, will the pay increase significantly after you are qualified? is the new job a condition of being accepted on the course?

is it your first degree or a post grad? this will effect ur funding opportunities.

i detect a sense of urgency. why? you've got a well paid job at the moment which you could use to clear your debts. could you not delay it for a year or so and tackle your debts first? then you can commence study debt-free and tackle just your student debt afterwards rather than everything else too? (this is what i have done and tho it's taken me 5 years i'm pleased i did)

I haven't even thought of how I'm going to fund my uni fees!!!But I'm not going to let that put me off.

well it should! - just as it should if the money was being spent on a holiday or anything else. can you afford to do it or will it just result in you sinking further into debt?

You'll need to post a full SOA listing your actual expenditure on this and that... so we can see where money can be saved. The next step will be to prepare a debt-reduction plan, a savings plan (for that rainy day) and a budget. It takes some discipline to stick to but you know what your goal is and that will provide you with all the motivation you need.

i can appreciate you're feeling a bit overwhelmed with decisions and considerations at the moment as i've had to consider the same things myself.
Your debts aren't as great as mine were and you should easily be able to pay these off in the next 12 months, on your current salary, as well as put a grand or so into savings too! Just think how great it will be to start the course next year with all this debt behind you and a fresh start ahead!

Well done for posting and best of luck! :T :beer:

laineybugz · 3 April 2006 at 11:49AM

Thank you for the suggestions, advice and tips so far everyone, I really appreciate them.I'm going to try answer everyone's questions then at the end add some minor but important details that I missed out in my first post.

roswell: I work in London so I have to use the bus, train and tube to get to work. The car is to get around at weekends and during the week to.

Alleycat:I'm not sure if my interst rates have been frozen by my debt management company but they did send me a letter to sign so that I would cancel all my Payment Protections.

Bloke with a ..& alex w: I have already handed in my notice and I could actually get a job paying the same if not more(as a Fashion PA or similar) but I want to get a job that's directly realted to Buying/Merchandising so that I'm gaining relevant experience whilst studying(killing two birds with one stone). My degree will be in Fashion Management. I wish I could put of my degree for another two years but because it's a 4 year part time degree I feel that I would have missed out on jumping on my career ladder early to work my way up sooner.

shellabear: I have rung up Yes Car Credit again and asked them abut terminating my agreement. They said I should write to them about it and they'll send me all the details on what I have to pay etc. I worked out that I have about 10 months left to pay in installments to equal half of the payable balance so things are ookng on the bright side. Although I also read there are non cancelablle insurances that I'll still have to pay for :mad: Oh well I guess I'll be better off paying that 10months plus insurance than parting with £261pm for another 3 years.Thanks for the encouragement

equine_induced_poverty: I'm not sure if they do my course-Fashion Management through Open University plus it will lok better for my career having studied at London College of Fashion.

nomoneytoday:I'm definately going to cut down on buying or going out for lunch at work. I sometimes spent £10 a day a day on lunch but the other day I went to Costco with mummy dearest and stocked up on stuff to make my own lunch everyday, so lets hope I save!

dudleyboy: I'm very grateful for being on the salary I'm on at my age even though I'm meant to be on more as my role is two jobs in one, anyway thats a whole other story. My new job will be related to my course and is kind off a condiation of being accepted on the course as they want to see you have industry experience. My open day is later this afternoon so I'm hoping to ask whether you can be doing anything related to fashion or does it have to be specific. This will be quite important beacuse I could get a job as a Fashion PA/Administrator and still earn what I'm on now or maybe even a bit more and this way I can afford to pay off my debts quicker and not have so little to live on OR I get a job as a buyers/merchandisers admin assistant and get paid considerably less(like 10k less than what I'm on) but get the relevant experiance to what I want to do i my career. I suppose an option could be to do the Fashion PA/Administartor job until I have cleared my debts then move to the buyers/merchandisers assistant job.By then being on a lower salary may not be so much of a big deal. I know it's bad I haven't thought of how I'm going to fund my uni fees but my course £895 per year which will if I put my mind to easy to save up for throughout each year of my course.

I am indeed feeling overwhelmed, I'm hoping I get to ask a lot of questions at my open day this afternoon and speak to some people who can give me advice on the whole job front. The urgency issue you're detecting is spot on, I feel like I should have started this degree a year or two ago but I didn't know about it. My friend is at uni full time doing a similar degree and is in her second year. At least if I start my degree this year I wont be that far behind. What is an SOA?I shall post one once I know what it is.

Other monthly outgoings I forgot were, 6 £89 installments for dental treatment I had done. I also pay and extra £50 rent as my mum's waiting to go into hospital and isn't working. I think most of money goes on eating at work, lunch times out and drinks after work. It's so hard to give hese up when there's leaving do's and the like to go to.

Thanks again to everyone for your help so far. I actually feel a lot better having posted on here. I'm off to get ready for my open day now and I'm going to fax off my letter to Yes Car Credit. Slowley but surely I'm hoping I'm on the road to debt recovery

Bloke_with_a_simple_life · 3 April 2006 at 10:32PM

Hello Lainey..

SOA = Statement of Affairs...

Basically, all your:

- income ,

- out goings - Everything... travel, food, clothes, essentials, luxuries, drinks, nights out

- liabilities (Interest Rate, Minimum Payments, length of loan...

- any savings (!)

For an example ... take a look at the first entry in this thread http://forums.moneysavingexpert.com/showthread.html?t=175389 )

In short... I think your problem is that you cannot handle:
1. your expenditure &

2. a need to have it all ? (car, regular nights outs, not saying "no" to nights out, giving up your job.)

You have a good income and, to be honest, your position is not exactly unrecoverable in a hort period of time - but your use of a Debt Management company is, I think, may be seen by yourself as an easy way out of facing reality and writing the cheques etc your self..

The fact that you don't know what the interest rates are on the loans with your Debt Management company indicates to me you are not paying attention to the important things.

You also say "I know it's bad I haven't thought of how I'm going to fund my uni fees but my course £895 per year which will if I put my mind to easy to save up for throughout each year of my course" - how can you SAVE up to pay the fees with all these debts and only a part-time job to repay it all???? If you cannot cope repaying everything with a full time job, I find it impossible to understand how you can repay, SAVE (i.e. put money aside) with even less money. By the looks of things, you haven't exactly saved up for anything to date, so what is going to change when you are at Uni?

The debts won't disappear when your at University... I think they will just get bigger and more complicated to sort out. I genuinely think you should put it off a year, and start to straighten out your finances and your lifestyle with a new just as well paid job, which is relevant to the course you want to do, it will be better for you all round and make Uni more fun and enjoyable.

Sorry if it sounds harsh - but I don't think you have quite got it yet!

Good luck!

Please help!!!

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