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    • JB1991
    • By JB1991 16th May 18, 8:37 AM
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    • 2Thanks
    JB1991
    Swallowed up by Overdraft - Help!
    • #1
    • 16th May 18, 8:37 AM
    Swallowed up by Overdraft - Help! 16th May 18 at 8:37 AM
    Hello,

    I have been a long time viewer of these forums, however have never felt the need to sign up to them. I have always managed my money fairly well, but recently have started renting my first home with my long term partner, and over the 6 months of rented bliss, we have both crept further and further into my account. The problem stemmed from me being certain I was going to get a payrise but unfortunately it didn't happen, and then we had an incident with the car which needed sorting.

    Really I don't fully understand the options that are available to me. I have run through the usual steps of trying to get a 0% interest credit card and moving the amount over to there, however it seems because I have been in my overdraft on and off for a few years that I cant be accepted. At least that is what I was told by my bank (HSBC). I have read about speaking to the bank about it, but is this actually worth it? What steps do they take to deal with this?

    Currently I take home 405 a week, and have worked out with all outgoings (Rent/car/hoursehold bills/food) I am left with 55 of that. My partner is left with a similar amount. I am in my overdraft as of Friday by 3200, with my rent/car payment this will drop to the 4k mark. The Overdraft fee is around 50 a month.

    At the moment I just don't see a way out of it. There is no light at the end of the tunnel so to speak. My partner has gotten over a long stint of suffering with severe anxiety, the house was a massive massive move and we have been incredibly happy up until this point. I wake up feeling sick to my stomach and cannot focus on anything else. I know they perhaps seem like trivial debts to some folk on here, but for us it is a big thing.

    Any help is massively appreciated.

    JB
Page 1
    • SWSEGirl
    • By SWSEGirl 16th May 18, 9:41 AM
    • 114 Posts
    • 367 Thanks
    SWSEGirl
    • #2
    • 16th May 18, 9:41 AM
    • #2
    • 16th May 18, 9:41 AM
    Hey there,

    I've been in a similar position myself in the past - I lived in my overdraft for 7 years, and was too afraid to check my bank balance for 2 years Why don't you try posting an SOA & people can help advised based on the information?
    Original Mortgage as of September 2016 = 322,999 Paid off by 2051
    Current Mortgage Balance as of September 2017 = 316,649
    Emergency Savings = 9,661 10,000 10,500 11,200 11463 12,213 13,000 14,000 18,000 18,459 20,000 20,500
    Mortgage OP's Total = 1500 2200 2900 3900 4900 5900 6900 7900 8900 9900
  • National Debtline
    • #3
    • 16th May 18, 10:10 AM
    • #3
    • 16th May 18, 10:10 AM
    Hi JB1991 and thanks for your post.


    This doesn't strike me as a situation that cannot be resolved one way or another. It may end up being the case that you will need to start banking elsewhere and then negotiate to pay off any outstanding overdraft on affordable terms - however, as SWSEGirl suggests above, if you can post a Statement of Affairs (SOA) here it'll give us all a bit more insight into how best to support you.


    Link if you're not already familiar with it: http://www.stoozing.com/calculator/soa.php


    Dennis
    @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
    • Dobbibill
    • By Dobbibill 16th May 18, 11:14 AM
    • 3,396 Posts
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    Dobbibill
    • #4
    • 16th May 18, 11:14 AM
    • #4
    • 16th May 18, 11:14 AM
    Hi JB1991 - welcome to the forum.

    I agree posting a SOA is the first step. Make sure it's as accurate as possible - use bank statements or receipts etc. There is always a temptation to create a wish list when doing a SOA which is slightly counter productive.

    There is always a solution. Don't worry - fresh eyes can sometimes see things from the outside looking in that can't be seen when you are looking at a situation from the inside.
    I'm a Board Guide on the Energy, Student Money Saving, UK Armed Forces and
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    • kevinb1967
    • By kevinb1967 16th May 18, 11:21 AM
    • 104 Posts
    • 210 Thanks
    kevinb1967
    • #5
    • 16th May 18, 11:21 AM
    • #5
    • 16th May 18, 11:21 AM
    I can't speak for HSBC but we had a similar situation with Barclays (2800 overdraft, 90 fees per month). I called them and explained that we couldn't reduce the overdraft because of the fees. They put the overdraft onto an interest free loan over 4 years. We opened up a new account, still with Barclays and the overdraft is steadily decreasing.
    • MEM62
    • By MEM62 16th May 18, 11:35 AM
    • 1,786 Posts
    • 1,388 Thanks
    MEM62
    • #6
    • 16th May 18, 11:35 AM
    • #6
    • 16th May 18, 11:35 AM
    Currently I take home 405 a week, and have worked out with all outgoings (Rent/car/hoursehold bills/food) I am left with 55 of that. My partner is left with a similar amount.
    Originally posted by JB1991
    If we assume a 4-week month you outgoings are 1,400 per month. If you partner is in a similar situation that's 2,800, which seems very high.

    You need to post an SOA so we can see where your money is going.
    • EssexHebridean
    • By EssexHebridean 16th May 18, 12:29 PM
    • 8,718 Posts
    • 46,058 Thanks
    EssexHebridean
    • #7
    • 16th May 18, 12:29 PM
    • #7
    • 16th May 18, 12:29 PM
    This was the situation that prompted us to become active on here too - not so much the being turned down for 0% cards but that thing of creeping into overdraft use.

    Get the SOA posted and let's see what you can do to cut down on what is going out - I suspect a lot may be to do with thinking you could continue to live the lifestyle you lived when paying keep to parents, when your outgoings are now higher, and a sensible budget will sort things for you.
    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
    • ReadingTim
    • By ReadingTim 16th May 18, 12:41 PM
    • 3,100 Posts
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    ReadingTim
    • #8
    • 16th May 18, 12:41 PM
    • #8
    • 16th May 18, 12:41 PM
    The only way out of it is to spend less than you earn. It's basic maths, not rocket science:

    Earn 100, spend 95 = savings of 5 = good.
    Earn 100, spend 105 = debt of 5 = bad.

    It really is that simple.

    So, you need to do an SoA, which is basically a budget which includes every single thing you spend money on to see where you stand. Keep a spending diary to see where every single penny goes, as you're going to need to know. Armed with that information, you can see where you need to cut down to ensure the books balance - it's amazing how many people are in debt, yet pay expensive mobile phone contracts, have sky TV or gym memberships which are completely unnecessary....
    • fatrab
    • By fatrab 16th May 18, 2:46 PM
    • 1,069 Posts
    • 3,898 Thanks
    fatrab
    • #9
    • 16th May 18, 2:46 PM
    • #9
    • 16th May 18, 2:46 PM
    So you have a surplus of 55 per week and your partner has the same? That's 110 per week. So every 4 weeks you have a surplus of 440. At the end of each month reduce your overdraft by 400. In 10 months time you won't have an overdraft.


    If you can cut your outgoings, or increase your income, you will pay it off sooner. As mentioned above, it really is that simple.


    Best wishes
    You can have results or excuses, but not both.
    Challenge - be 14 Stone BY XMAS!

    • JB1991
    • By JB1991 24th May 18, 10:52 AM
    • 2 Posts
    • 2 Thanks
    JB1991
    Ever so sorry for the long response guys. Thank you all for your help and advice. I think possibly when I was posting this I was just having a particularly bad day and let the pressure and stress of the situation get to me. I am usually quite a laid back person, however this has possibly lead me down the road to getting into this mess.

    I have realized something needs to change however. Here is what everything looks like:


    My monthly income - 1,620

    Monthly Outgoings:

    Mortgage/Rent - 700
    Car Finance - 200
    Council Tax - 165
    Electric - 26
    Water - 16
    TV License - 12
    Broadband - 16
    Phone - 40
    Food - 120
    Car Insurance - 60
    Car Tax - 12
    Overdraft Fees - 45

    Total: 1,412

    Overdraft Amount - 4513/5000
    Amount Remaining - 208


    I didn't include my partner in this as she is in a similar situation, albeit not quite as far as me. I want to focus on my situation in particular.

    Unfortunately my rent/car/bills just came out which dropped me down into the overdraft a bit further. I hate being in this situation, so I am looking at making as many changes as I can.

    Already I have started making calls regarding trading the car in and carrying on a new finance on something cheaper. I rung the dealership and they reckon I have about a 3000 negative equity at the moment however, so not sure how practical that will be.

    I have also made the decision to look for extra work. I have a job interview lined up next week for part-time contract work which potentially could see an increase of my wages by 100-200 a week depending on how well it goes.

    I have also put some items up for sale on Ebay to the value of around 200.

    We managed a weekly food shop of 35 this week rather than the previous 60 as well.

    Everything is coming together, and I can see how to get out, however it just at the moment seems to be a very long road ahead. I am appreciative of the fact that looking around on these forums there are people in a lot worse situations than myself, and I don't want pity because I did this to myself.
    • andydownes123
    • By andydownes123 24th May 18, 11:54 AM
    • 388 Posts
    • 484 Thanks
    andydownes123
    Okay - I think your out-goings for a person earning 1600 a month are too high. You've got some extravegances on there that I would have on that wage, namely a car on finance.




    My monthly income - 1,620

    Monthly Outgoings:

    Mortgage/Rent - 700 - very large for your earnings - nearly half of your money goes on rent. Can you find somewhere cheaper? Get a roomy?
    Car Finance - 200 - huge on your wage. If this is a three-year PCP, negotiate to hand the car back and get a something that costs 1500. If it's a five year car finance and then you own it, it's probably a 15k-20k car?...something you cannot afford on your wage.
    Council Tax - 165 - again this could be lower with a smaller home
    Electric - 26
    Water - 16
    TV License - 12
    Broadband - 16
    Phone - 40
    Food - 120
    Car Insurance - 60 - this is high. Are you a newly qualified driver? Depends what car you've clearly splashed out on!
    Car Tax - 12
    Overdraft Fees - 45

    Total: 1,412

    Overdraft Amount - 4513/5000
    Amount Remaining - 208


    Originally posted by JB1991
    • Hopeless Case
    • By Hopeless Case 24th May 18, 11:56 AM
    • 888 Posts
    • 5,322 Thanks
    Hopeless Case
    I do understand as we also lived with an overdraft for a long time and it is totally debilitating. I'd either try and open another account (a day-to-day one so your salary still goes in to the main one and your main direct debits for council tax etc still go out of it, but transfer your budget for expenses with in the month into another account so that you're not looking at the overdraft the whole time and it can make it easier to see where the overdraft ends and your month'd money begins too)

    Or see if the bank will let you put it on a loan, seeing as you already owe them the money that's hopefully different to looking for a 0% deal on a credit card, and it would mean a fresh start with your bank account and knowing exactly when the load would be repaid (depending on it being the same or lower interest rate of course)
    • MEM62
    • By MEM62 24th May 18, 12:08 PM
    • 1,786 Posts
    • 1,388 Thanks
    MEM62
    My monthly income - 1,620

    Monthly Outgoings:

    Mortgage/Rent - 700
    Car Finance - 200
    Council Tax - 165
    Electric - 26
    Water - 16
    TV License - 12
    Broadband - 16
    Phone - 40
    Food - 120
    Car Insurance - 60
    Car Tax - 12
    Overdraft Fees - 45

    Total: 1,412

    Overdraft Amount - 4513/5000
    Amount Remaining - 208

    Originally posted by JB1991
    The figures quoted for rent, council tax, water, electric, TV license and broadband - are these the total costs or just your share? Council tax for example looks like it may be the full amount. Does your OH contribute fairly to these costs?

    The amount you are paying for you car is a burden considering your income and other expenses. If you are not tied into something like a PCP deal considering changing to a cheaper car. Your car insurance seems very high - why?

    Also, you have missed a whole bunch of expenses off your SOA unless you never take holidays, have no contents insurance, never have a haircut, do not socialise, do not buy clothes etc etc etc. If you are not realistic with your budget you'll never be able to sort your finances out.
    • tallyhoh
    • By tallyhoh 24th May 18, 2:37 PM
    • 2,161 Posts
    • 2,228 Thanks
    tallyhoh
    Is that just your income & outgoings, what does your partner pay for? or are the outgoings 50%?
    Tallyhoh!

    Stopped Smoking October 2000. Saved 21,840 so far!
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