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  • FIRST POST
    • jamiesmack
    • By jamiesmack 11th Sep 17, 9:33 AM
    • 23Posts
    • 2Thanks
    jamiesmack
    Need urgent debt advice and not sure where to start
    • #1
    • 11th Sep 17, 9:33 AM
    Need urgent debt advice and not sure where to start 11th Sep 17 at 9:33 AM
    Hi all,

    I don't know if this is in the right place, so please delete if its not.

    I am really struggling with credit card debt, and I dont know how to get out of it. The debt started small, and has been creeping up slowly. I have around 11000 across 3 different credit cards, and I am really struggling to make the repayments.

    My wife only thinks I have debts of around 3000 - 4000 at worst. I cant tell her the truth as our 4 yr old son passed away 12 months ago, and her mum passed away 3 months ago. I dont think she could handle this. As the repayments have crept up on our bank statement I have lied and told her I was paying extra to get them paid off quickly.

    My wife works full time, earning 21000 p/a, but I am self employed. We have just relocated to a completely new area, so I am trying to establish the business from scratch again, meaning my income is very small indeed.

    In addition to the credit card debt, I also have some hp finance on some business equipment, which I am managing to pay direct from the business account at the minute.

    I dont know where to turn with this, and feel like I cant take any more. can anyone help?
Page 1
    • worriedDan
    • By worriedDan 11th Sep 17, 9:48 AM
    • 202 Posts
    • 635 Thanks
    worriedDan
    • #2
    • 11th Sep 17, 9:48 AM
    • #2
    • 11th Sep 17, 9:48 AM
    Jamie, I am so sorry to read what you have been through. It's absolutely no wonder that finances have not been a priority, so don't beat yourself up. I can also totally understand why you have not told your wife. Ultimately, she will need to know, but I can understand why you have protected her from the full extent.

    The good news is that there will be a solution for you. In the grand scheme of things, 11k is not a huge amount of money. Have you considered contacting Stepchange for some advice?
    • jamiesmack
    • By jamiesmack 11th Sep 17, 9:52 AM
    • 23 Posts
    • 2 Thanks
    jamiesmack
    • #3
    • 11th Sep 17, 9:52 AM
    • #3
    • 11th Sep 17, 9:52 AM
    Hi Dan,

    Thank you for replying. I had looked at stepchange, but dont i need to speak to someone on the phone? I am incredibly nervous on the phone, and Im not sure it would help
    • Bewildered Banshee
    • By Bewildered Banshee 11th Sep 17, 10:24 AM
    • 31 Posts
    • 26 Thanks
    Bewildered Banshee
    • #4
    • 11th Sep 17, 10:24 AM
    • #4
    • 11th Sep 17, 10:24 AM
    Hi
    I'm so sorry to hear you've had such a bad time, and can understand you not wanting to worry your wife.

    Step change are lovely to speak to but also have an online chat facility which I used whilst trying to get the courage to speak up.

    Have you looked at transferring your c.c to a 0% card - might take some pressure off.

    There are solutions out there and realising you've got a problem is a huge step.

    I've found the help on here fantastic so don't be afraid to ask.

    Good luck.
    • worriedDan
    • By worriedDan 11th Sep 17, 10:55 AM
    • 202 Posts
    • 635 Thanks
    worriedDan
    • #5
    • 11th Sep 17, 10:55 AM
    • #5
    • 11th Sep 17, 10:55 AM
    Hi Jamie,

    They also offer a web chat facility that you could use?
    • EssexHebridean
    • By EssexHebridean 11th Sep 17, 11:07 AM
    • 8,719 Posts
    • 46,008 Thanks
    EssexHebridean
    • #6
    • 11th Sep 17, 11:07 AM
    • #6
    • 11th Sep 17, 11:07 AM
    Ahh Jamie didn't want to read and run - you've had so much to deal with. Well done for facing the situation head on and looking to get it resolved - I agree with the others that Stepchange's web chat facility is a great way forwards for you until you can get the nerve fully up to talk to them on the phone - that probably won't take as long as you think either - you've already faced the worst of it.

    Maybe think about putting yourself together an SOA (Statement of Affairs) - you'll find a link to the template we recommend in the "Sticky" post at the top of this board - fill it in as accurate as you possibly can and post it back in here and we'll be able to see if there are any areas where you might be able to make savings that you've missed, too.
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 1229.00/1035.63 (09/07/18)
    SOA Calculator for DFW newbies: Stoozing.com SOA Calculator
    • sourcrates
    • By sourcrates 11th Sep 17, 11:20 AM
    • 14,574 Posts
    • 13,717 Thanks
    sourcrates
    • #7
    • 11th Sep 17, 11:20 AM
    • #7
    • 11th Sep 17, 11:20 AM
    Hi Jamie,

    Dont carry on struggling to make the minimum payments, there really is no need to do so, there are a number of debt solutions in place to help you.

    All you have to do to access this help is to ask, its as simple as that.

    Stepchange have an online "debt remedy tool", you just punch in your details, and it spits out a solution that may suit you, most likely it will be an informal debt management plan that will suit you the best, but other options may apply as well.

    Debt affects a great many people, you are not the first, you wont be the last, the debt charities deal with this kind of thing every day, there is no judgement, most on here are, or have been, in the same place you are now.

    You have to treat it like any other problem, it needs solving, it may seem like a mountain to climb right now, but you can have a DMP up and running by next month if you wish, the solutions are available, its deciding on the right one for you, then implementing it, it really is that simple, don't carry on struggling to make payments, when all they need to do is ask for help.

    As mentioned above, a "statement of affairs" (SOA) will give us all a bit more information, and allow people to make positive suggestions on your situation :

    http://www.stoozing.com/calculator/soa.php
    Last edited by sourcrates; 11-09-2017 at 11:24 AM.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Free Legal advice see : http://legalbeagles.info/
    • jamiesmack
    • By jamiesmack 12th Dec 17, 11:38 AM
    • 23 Posts
    • 2 Thanks
    jamiesmack
    • #8
    • 12th Dec 17, 11:38 AM
    • #8
    • 12th Dec 17, 11:38 AM
    Sorry its taken so long to reply to you on the thread, Im afraid I lost my bottle for a while and buried my head in the sand.

    Can I ask a bit more about debt management plans before I do my soa? If you enter into one of these, dont the creditors just keep pursuing you for the money? Im not sure I understand the benefit of them
    • zx81
    • By zx81 12th Dec 17, 11:41 AM
    • 17,704 Posts
    • 18,826 Thanks
    zx81
    • #9
    • 12th Dec 17, 11:41 AM
    • #9
    • 12th Dec 17, 11:41 AM
    The benefit is that you will have agreed a repayment plan with them, so they don't need to keep chasing you all the time.
    • jamiesmack
    • By jamiesmack 12th Dec 17, 11:51 AM
    • 23 Posts
    • 2 Thanks
    jamiesmack
    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 1000
    Partners monthly income after tax....... 1200
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 2200


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 850
    Management charge (leasehold property).. 0
    Council tax............................. 108
    Electricity............................. 50
    Gas..................................... 50
    Oil..................................... 0
    Water rates............................. 70
    Telephone (land line)................... 30
    Mobile phone............................ 60
    TV Licence.............................. 12.25
    Satellite/Cable TV...................... 0
    Internet Services....................... 20
    Groceries etc. ......................... 400
    Clothing................................ 40
    Petrol/diesel........................... 150
    Road tax................................ 60
    Car Insurance........................... 80
    Car maintenance (including MOT)......... 20
    Car parking............................. 20
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 18
    Buildings insurance..................... 0
    Contents insurance...................... 15
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 20
    Haircuts................................ 15
    Entertainment........................... 10
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 2108.25



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 10000
    Other assets............................ 0
    Total Assets............................ 10000


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Credit Card debt tota..........17500.....0.........18.9
    Total unsecured debts..........17500.....0.........-



    Monthly Budget Summary

    Total monthly income.................... 2,200
    Expenses (including HP & secured debts). 2,108.25
    Available for debt repayments........... 91.75
    Monthly UNsecured debt repayments....... 0
    Amount left after debt repayments....... 91.75


    Personal Balance Sheet Summary
    Total assets (things you own)........... 10,000
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -17,500
    Net Assets.............................. -7,500


    Created using the SOA calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.
    • jamiesmack
    • By jamiesmack 12th Dec 17, 11:56 AM
    • 23 Posts
    • 2 Thanks
    jamiesmack
    My Income is set to rise significantly in the next 12 months, as my new business is only now getting established. Would this mean a dmp would be the best option for me, as I can then increase my repayments?
    • EssexHebridean
    • By EssexHebridean 12th Dec 17, 12:23 PM
    • 8,719 Posts
    • 46,008 Thanks
    EssexHebridean
    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 1000
    Partners monthly income after tax....... 1200
    Benefits................................ 0 There should be child benefit here, no?
    Also check what else you might be entitled to - your income is not particularly high.

    Other income............................ 0
    Total monthly income.................... 2200


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 850 That is a HUGE percentage of your monthly income. Any chance of moving to somewhere a little cheaper?
    Management charge (leasehold property).. 0
    Council tax............................. 108 If you're not paying this over 12 months already get that changed as it will help you with budgeting.
    Electricity............................. 50 This is high - go round turning everything off that doesn't need to be on, and then instigate rules about turning lights off/not leaving things on standby/not staying under the shower for hours if it's an electric one
    Gas..................................... 50 Turn the thermostat down a couple of degrees and pop jumpers on.
    Oil..................................... 0
    Water rates............................. 70 YOu're in the South West at a guess?
    You *might* be better on a meter, but investigate carefully.

    Telephone (land line)................... 30 This is high - why so much?
    Mobile phone............................ 60 [COLOR="red"This is very high - can you switch to SIM only deals?[/COLOR]
    TV Licence.............................. 12.25
    Satellite/Cable TV...................... 0
    Internet Services....................... 20 You might be able to get a cheaper deal bundled with landline costs.
    Groceries etc. ......................... 400 This is extortionate - you can halve this,
    honestly! Meal plan and shop to a list, cut out the "just popping out for milk" type shops as this means spending more than what you've gone in for, and think about switching to Aldi or Lidl.

    Clothing................................ 40
    Petrol/diesel........................... 150
    Road tax................................ 60 Do you actually pay this out monthly?
    Car Insurance........................... 80 Assume you've checked the comparison sites to make sure you're getting the best deal on this?
    Car maintenance (including MOT)......... 20 Not sure this is realistic for two cars I'm afraid - throw some of your grocery savings here.
    Car parking............................. 20 Can you cut this by parking a wee bit further out and walking?
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 18
    Buildings insurance..................... 0
    Contents insurance...................... 15 This is high - use comparison sites to find the best deal
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 20
    Haircuts................................ 15
    Entertainment........................... 10 This is really low - is it definitely realistic?
    Holiday................................. 0
    Emergency fund.......................... 0 You need to start building sopmething here even if only at 25 per month.
    Total monthly expenses.................. 2108.25



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 10000
    Other assets............................ 0
    Total Assets............................ 10000


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Credit Card debt tota..........17500.....0.........18.9 OK I wondered where you SOA was unrealistic and here it is - you've not put in the monthly payments here so the SOA doesn't show your true situation.
    Total unsecured debts..........17500.....0.........-



    Monthly Budget Summary

    Total monthly income.................... 2,200
    Expenses (including HP & secured debts). 2,108.25
    Available for debt repayments........... 91.75 No - it's not available is it as you've not got your debt payments in there.
    Monthly UNsecured debt repayments....... 0
    Amount left after debt repayments....... 91.75


    Personal Balance Sheet Summary
    Total assets (things you own)........... 10,000
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -17,500
    Net Assets.............................. -7,500


    Created using the SOA calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.
    Originally posted by jamiesmack
    There are savings you can make, but without the full picture on the SOA you can't see where you really stand.

    As someone else says, investigate whether you can get 0% balance transfers to help take the pressure off perhaps but until you've made a decision about whether a DMP will work for you don;t commit to taking any new cards out.

    Above all you MUST keep your heads out of the sand now.
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 1229.00/1035.63 (09/07/18)
    SOA Calculator for DFW newbies: Stoozing.com SOA Calculator
  • National Debtline
    Hi Jamiesmack


    Dealing with debts can be difficult but the important thing is you have come back for help. Your SOA shows that after paying all your normal bills you have 91.75 spare, which I can guess is not enough to cover the minimum repayments on your credit card debt.


    If you enter into a DMP it would currently take around 16 years to be debt free. That's a very long time and would normally mean a DMP is not recommended. However you mention you expect your income to increase significantly over the next 12 months. The more you pay into a DMP the shorter the term, so depending on how much your income will increase it could still be an option.


    Alternatively you may be able to consider bankruptcy which would see your debts written off after 12 months. You could only be asked to make payments towards your debts for 3 years but the implications of bankruptcy are more serious. As you are self employed I would recommend speaking to Business Debtline for free and impartial advice on all of your options. They have a webchat service if you prefer not to speak on the phone www.businessdebtline.org. Good luck with it all.


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • jamiesmack
    • By jamiesmack 12th Dec 17, 3:08 PM
    • 23 Posts
    • 2 Thanks
    jamiesmack
    Thanks for the advice.

    I had considered bankruptcy, but it would mean me losing my business (vehicle, business equipment etc) so It doesnt seem like a viable option.

    Could I enter a dmp for now, to take some of the pressure off and then readdress in a couple of months? does that sound sensible?
    • enthusiasticsaver
    • By enthusiasticsaver 12th Dec 17, 4:31 PM
    • 6,682 Posts
    • 14,173 Thanks
    enthusiasticsaver
    I think a DMP would definitely be the way forward. Bankruptcy obviously is not an option you want to consider because of your business assets so I would think talking to stepchange and setting up a nominal payment for now until you are in a position to offer larger payments. Whether you do the online chat or talk to them over the phone stepchange can take a lot of the donkey work off you which will help you at the start of the process. They have seen it all before so don't be nervous about talking to them.

    So so sorry about your son. This must seem quite trivial in comparison but it is best to get it sorted.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • EssexHebridean
    • By EssexHebridean 12th Dec 17, 4:36 PM
    • 8,719 Posts
    • 46,008 Thanks
    EssexHebridean
    Thanks for the advice.

    I had considered bankruptcy, but it would mean me losing my business (vehicle, business equipment etc) so It doesnt seem like a viable option.

    Could I enter a dmp for now, to take some of the pressure off and then readdress in a couple of months? does that sound sensible?
    Originally posted by jamiesmack
    Re-do the SOA with the minimum payments included first off - I *think* I may be right in saying that to be considered suitable for A DMP you need a surplus - and currently you may not have one?

    If you want to go down that route then your first port of call I suggest is to nail down your budget and make savings wherever you can - then you'll start to get a picture of what you actually have to offer to your creditors. I agree with ES though - have a natter with Stepchange and see what they suggest.

    One thing - you're not still using the Credit Cards now are you? If so stop immediately!
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 1229.00/1035.63 (09/07/18)
    SOA Calculator for DFW newbies: Stoozing.com SOA Calculator
    • Sarastro
    • By Sarastro 15th Dec 17, 7:03 PM
    • 396 Posts
    • 342 Thanks
    Sarastro
    I agree bankruptcy seems a bit drastic as other options might be available.

    I can't advise if you tell your wife, that will have to be up to you but are you realistically going to be able to keep it hidden?

    I think DMP might be a way forward but are you able to move any of your debts onto 0% (or just lower %) as that would help.

    I don't normally advise it but asking relatives to help might not be a bad plan, but I'm talking gifts not loans.

    And, is your business a limited company? If so, you can take a director's loan of up to 5k with no interest implications at all. You do have to pay it back within 9 months of the end of your current financial year. So, if your financial year runs April to April, you have to have paid it back by December. If you have some cash in your company it might be a way to pay off some of the most expensive debt and reduce the interest burden, although you do still have to pay the company back.
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