09 Mar 2015

A question about : Please help.... struggling big time.... any advice appreciated!!

Good evening,

I'm in a bit of a mess and I really need some advice and help from people that have debt problems, experience in clearing debt or financial experts.

I need help. I don't really know where to start so here goes.

A bit about myself:

I am 35 years old and I feel like life is passing me by.

In 2008 I split from somebody who I had been in a relationship with for 9 years. We had 2 children and a mortgage together (for 8 years). We also had quite a bit of (at the time manageable)debt, as we were both working. I was told by a solicitor that as the kids were under 18 I had no entitlement to any equity in the house unless my ex agreed to sell it which she wouldn't. My name is still on the mortgage now as my ex does not earn enough to have the mortgage on her own.

So, I was left without a house and quite a bit of debt. I moved back in with my parents which I really hated so after about 3 months I left and I flat shared with somebody. At the time of flat sharing I met somebody and about 5 months later we started renting a place together. I still had the debt from my previous long term relationship so we struggled to have a great standard of life but the relationship was good so it didn't seem to matter. We had a (planned)baby too. To cut a long story short everything put a massive strain on the relationship and last April we split and I moved back in with my parents where I am still now.

I have paid off around Ј11,000 worth of debt in the last 14 months and this is what I have left:

Halifax Visa Card - Balance Ј7000 - Payment of Ј108ish per month - The balance of this card goes down about Ј5 after every monthly payment

Nationwide Visa Card - Balance Ј5000 - Payment of Ј115ish per month - The balance of this card goes down about Ј50 after every monthly payment

Personal Loan - Settlement around Ј3000 - Payment of Ј140 per month

Personal Loan - Settlement around Ј4400 - Payment of Ј122 per month

In store buy now pay later - Settlement Ј485 - Payment of Ј32 per month

Store Card - Balance Ј440 - Payment of Ј18 per month

Overdraft - Ј2000 - Costs Ј30 interest per month

Here are my full list of outgoings per month. My parents don't charge me any rent at the moment and instead of paying my ex CSA I pay her car and car insurance payment every month, which is Ј270. This is probably around Ј90 more than the CSA payment but she moved more than 200 miles to originally be with me and has basically told me if I don't pay them then she will move back to her home town so that she can be with her family. I figured that Ј90 would be less than petrol money to travel a 400 mile round trip every month to see my daughter and this way I get to see her everyday:

Halifax Visa - Ј108
Nationwide Visa - Ј115
Personal Loan 1 - Ј140
Personal Loan 2 - Ј122
Store Purchase - Ј32
Store Card - Ј18
Overdraft - Ј30
Mobile Phone - Ј10
Petrol - Ј50
Car Insurance - Ј33
Car & Car Insurance payment of ex = Ј270

Total - Ј928

I take home around Ј1875 per month (Ј343 CSA payment for the 2 children from my 1st long term relationship has already been deducted automatically from my wages and also Ј91 pension)

Total left - Ј947

I need some advice how to tackle this from now on. I am really struggling living at my parents house. I have pretty much existed in the last 15 months and not had any real quality of life and I don't think that I can carry on much longer before I snap.

Could anybody please give me some advise, thoughts and views and recommendations please. Here are some questions that I have?:

Should I freeze my pension? I was thinking maybe for a year and just use the pension amount every month to pay off the store card and store purchase and that would take care of that.

What would be the best way to deal with it? Have no standard of life for the next 16 months or so or make a manageable 2 or 3 or 4 year plan to get everything paid off?

Are there any options where I could get interest on my cards frozen without severly damaging my credit rating?

Should I consider an IVA? I do not know the in's and out's of what is involved and what the disadvantages are and I don't really want to get roped into something by a sales rep but your advice would be helpful.

I want to pay off the loan which currently has a Ј3000 settlment and the credit/store cards but I am happy to let the other personal loan to run its course as it only Ј120 a month.

I really need to get out of my parents house as it is starting to depress me now but obviously renting is expensive and I will be forever in debt.

Is bankruptcy an option??

Bearing in mind I have my name on a mortgage (that I have not contributed towards for nearly 5 years) I don't want anything that I do to effect that or also my parents credit rating (as I am registered at their address).

I have sold what I can on Ebay.

I have no chance of any overtime at work.

I have tried delivering leaflets in the small amount of spare time that I have but that was more trouble than it was worth.

I am not looking for any sympathy, I just want some good advice please.

I can't see anyway of reducing my outgoings at all.

Anybody who is still reading this, BE CAREFUL with loans and credit card. Debt has ruined my life.

Any help would be really, really appreciated.


Best answers:

  • if you managed to pay off 11k over the last year or so, it sounds you're on the right track. I'd probably suggest talking to CCCS or payplan as a DMP might be a viable option, and having interest frozen would help significantly. Personally I don't think your numbers are big enough to go for an IVA or bankruptcy.
    I'd think you should hang in there and look forward to being debt free (if you keep it up you will be in a couple of years). If you can keep on living with your parents for another year or so that'll make a massive difference.
    To avoid going mad you should have a minimal budget to fund your social life and find ways to have activities and hobbies that are (almost) free. Best of luck mate, don't give up, you have my support!
  • Thanks for sharing this. People are very supportive on this part of the forum. Many have been where you are and come out the other side and many others are at different stages of a similar journey.
    It would help if you could post your Statement of Affairs and particularly the interest rates on your credit cards and loans. A longer term member will no doubt be along shortly and post a link. I haven't been a member long enough to do that. When you've done that it'll be easier for people to see where you can cut back and which debts should be tackled first. Have you heard of the snowball calculator? It's a tool where you enter all your debts and interest rates and it calculates how much you should pay on each one to clear your debt the quickest. Again someone else will post a link if you can't find it.
    Anyway best of luck.
  • I might be tempted to go for the snowball route. For exampl in month 1 you could pay off the instore credit and part towards the store card, month2 you can finish off the store card and move on to the next. Obviously each time you get one paid off that leaves you less minimum payments to make so more can go towards your next debt.
    You might also want to allow yourself a small entertainment budget each month.
    Best of Luck
  • I would second deancingfairy and also keep a spending diary. But please, as she (?) says allow yourself some treat money because you need something to keep you going.
    Snowball calculator
  • Dancing fairy is right but target the debt with the highest interest rate first while still keeping on top of your minimum payments on the other debts. As you gradually pay off each debt it turn that frees up more cash to throw at the next debt.
  • You have quite a high amount of disposable income each month, so even though your debts are fairly hefty, you should be able to tackle them meaningfully. Fill out an SOA including reasonable amounts for things like entertainment, and throw every spare penny you can at the debts. Snowballing as people have suggested is a great idea - start with minimum payments on everything and throw all the rest at the debt which is costing you most in interest.
    You could calculate how long it would take you to pay off either with paying rent/moving out or staying at your parents. You might find that once you have a 'debt free date', it'll give you some oomph to pay it off so you can move out debt free. You may find that with rent and other expenses, moving out for your own sanity and quality of life and finding a different route (e.g. a debt management plan or continuing to snowball over a longer period of time) suits you better.
  • Hi. I hear what you are saying about the regular contact with your child but do you think your ex is making a real threat or might it just be to force more money out of you? (please note that I am a single mum who gets little / nothing in the way of maintenance so this is not me being bias). I understand that the CSA would take 25% of your netincome and share it between the 3 children - so about 450 in total.
    However, at the moment you are paying just over Ј600 in maintenance which is considerably more.
    I am all in favour of men supporting their children but it needs to be fair to all parties.
  • Thanks to everybody for your replies.
    I guess after about 14 months of paying off debt and being really careful with money I have started to become a bit restless and have started to feel that life is passing me by.
    I am really getting down about having to live with my parents at the moment but I know that it makes financial sense.
    I think that what I am going to do is make 3 payment plans. One that allows me to move out in February, one that allows me to move out next August and one that allows me to move out next December. That way I can see what an impact of moving out would have on paying everything off. Hopefully what will happen is that I will get to February and think this is going well, I will stay until August and then stay till August and think the same about December.
    I am going to get all my interest rate info together and have a play with the snowball calculator. I think from a personal point of view mentally for me it would be better for me to pay off the smaller things first so that I can see them going quicker.
    So I guess off the top of my head I am going to go in this order - smallest personal loan, smallest credit card, largest credit card. I have decided to stop my pension and on the day I get paid over pay the store card and store purchase then that should be paid off in about 9 months.
    Fingers crossed by the end of next year I would have got rid of one loan, one and a half credit cards, a store card and a store purchase scheme.
  • pay them off starting from the highest apr then once paid off move to the second highest and so on
    i'd insist that you try to find some (free or inexpensive) hobbies to make sure you don't go mad and spend your days thinking about your financial troubles, it might also make living with your parents easier. Reading, running, volunteering, free events, gigs, plenty of things to do, you still need a life, the fact that you have little money doesn't mean you can't have one!
    wonderful job so far, keep it up
  • Hi. I'm not sure I'd recommend stopping your pension as depsite your best intentions you may never get around to rejoining. Don't forget it is tax free cash, plus your employer may make a contribution as well? That's a lot of cash to be giving up. Also don't forget that it's the earlier cash that's going to make the most difference - due to the compounding effect ie you'd get growth on growth on growth.
    I'm not sure I'd give up the pension yet to be honest.
    I do agree with the person that said work out whether you want to be debt free as soon as possible or whether for your sanity it would be best to move out and take a bit longer.
    Best of Luck whatever you decide.
  • I have done 3 spreadsheets. One that enables me to move out of my parents in June, one in September and one in December.
    I calculated that moving out 6 months earlier in June would only make around 3-4 months to my debt free date(minus the personal loan that I am letting run its duration).
    I decided that once I do move out that I want to enjoy life more so I am going to have Ј400 a month "spending money" and use the rest of my wages to pay bills and remaining debts. I am not desperate to be debt free as soon as possible, I just want it gone in a reasonable amount of time.
    I also continued my spreadsheets until 2015 which calculated that I should have a 10% deposit for my own place mid 2015.
  • Oh, and I went a bit over the top on the spreadsheets and worked out a savings plan for my retirement starting in Jan 2016.
    I worked out how much I could save plus the interest from a savings account, adding more to it when I stop paying my CSA payments and adding more to it when I would stop paying a mortgage. I also worked out how much my pension would be worth and the lump sum I would receive.
    Got a bit carried away I think....