Have I ruined my life?

[confused2014]

Hi,

Before I start I'm not looking for sympathy I know I've been stupid.

To put it bluntly I'm in a financial mess... I'm 25 I've borrowed more than I can pay back to the point after I've paid my other living expenses I'm left with practically nothing. I'm falling deeper into my overdraft and struggling to hold it together. In total I owe around £15,000 through loans, credit cards and an overdraft. I've tried looking at consolidation but no loan company will touch me anymore. Although I have an excellent credit rating on experian, I think I've just borrowed to much.

Can anyone offer any help or advise? Other than calling me an idiot.

[Eric Mc]

What assets can you sell?

[confused2014]

Only my car which is probably worth about £4,000 but I need that to get to work. The only other things are electronics. But that's it if I sell those then i am really left with nothing.

[fido]

>> In total I owe around £15,000 through loans, credit cards and an overdraft.
You got yourself in this mess, now you need to get yourself out of it.

Get it all down on a spread-sheet - amounts, repayments etc.
Look at paying down the most expensive stuff first.
As Eric says, what assets can you sell off? List off the most expensive items (check on eBay) and sell it NOW - no ifs or buts - you'll have to be a bit mean to yourself.

confused2014 said:

Only my car which is probably worth about £4,000 but I need that to get to work. The only other things are electronics. But that's it if I sell those then i am really left with nothing.

Could you bus/cycle to work - it would be sh8t for a while but that car will be costing you petrol, maintenance and trips to the pub you can't afford - no pain no gain. Electronics, if you can get more than half the purchase price (iPhone?) then you really should consider doing it. Okay, i'll be generous - you can keep ONE item - for me it would be the phone!

[Edited: to consolidate [no pun] my thoughts.

[okgo]

confused2014 said:

Only my car which is probably worth about £4,000 but I need that to get to work. The only other things are electronics. But that's it if I sell those then i am really left with nothing.

I'm beginning to see why you're in this situation.

[WinstonWolf]

confused2014 said:

Only my car which is probably worth about £4,000 but I need that to get to work. The only other things are electronics. But that's it if I sell those then i am really left with nothing.

The electronics are probably what got you in the mess in the first place?

Cycle to work, you'll get fit and save a packet on fuel.

[TTmonkey]

Consolidation is not the answer. Borrowing more never helps.

Seek financial help from a company called PayPlan. They used to be the Consumer Credit Service.

They will turn your finances around without totally killing your credit history. They DO NOT charge for their services.

You will be put on a negotiated debt repayment plan which if you stick to will get you out of debt over some years. You wont be able to borrow money during this time but YOU will clear all your debts without the need to go bankrupt or setting up an IVA.

Call them today and explain your situation.

[Lotus Notes]

Ruined your life at 25? No chance.
Surprise, surprise there's no magic bullet to resolve your problems:

Gubberment advice

and follow it unless you're completely feckless..

[Abbott]

Cancel all holidays and other non essentials
Down grade the car to a 1000 pound runabout.
Find an additional income, bar work in the evening.
Cut up the credit cards so that you are not tempted to spend.

[confused2014]

I've looked at financial help companies. Don't they normally require you to change your bank account? How much would it damage my credit rating? Has anyone used them? What are your experiences with them?

In terms of electronics I have My TV my PS3 and an iPhone... that is literally it.

Cycling to work is a good shout.

[Muzzer79]

Abbott said:

Cancel all holidays and other non essentials
Down grade the car to a 1000 pound runabout.
Find an additional income, bar work in the evening.
Cut up the credit cards so that you are not tempted to spend.

This.

You mention you have an iPhone - sell it; it has a value. Get a cheaper phone.

PS3? Sell it - it has a value.

Second job will work wonders - income solely to pay off your debts (in addition to your regular job) and working all the time will mean you have no time to spend.

The key is not to add to your already-huge debt. It will take time to pay it all off, but it can be done.

A colleague ran up £17k on credit cards some years back. All credit to her - 2nd job in Domino's and stringent self-control on spending meant she had it all paid off within a year or two.
Not easy though.

[TTmonkey]

confused2014 said:

I've looked at financial help companies. Don't they normally require you to change your bank account? How much would it damage my credit rating? Has anyone used them? What are your experiences with them?

In terms of electronics I have My TV my PS3 and an iPhone... that is literally it.

Cycling to work is a good shout.

PayPlan isn't a financial help 'company', its run as a charity. If you really wan to to pay off your debts the quickest way - give them a try. Once they take on your case they will get an agreed freeze all interest on your debts whilst you run a debt management plan (dmp). This will also stop the threatening letters from your creditors and stop them from taking any legal attempts to recover money, and also stop any charges from being applied to your debt.

They will analyse your income, find ways of cutting your bills, and get your debt paid off over a set time period. Most credit card companies accept DPM's run by payplan as they get all their money back without resorting to expensive legal matters.

If you do NOTHING else about your debt, at least talk to PAYPLAN. It costs nothing to talk to them, and they do not charge you ANYTHING for their services.

[confused2014]

TTmonkey said:

PayPlan isn't a financial help 'company', its run as a charity. If you really wan to to pay off your debts the quickest way - give them a try. Once they take on your case they will get an agreed freeze all interest on your debts whilst you run a debt management plan (dmp). This will also stop the threatening letters from your creditors and stop them from taking any legal attempts to recover money, and also stop any charges from being applied to your debt.

They will analyse your income, find ways of cutting your bills, and get your debt paid off over a set time period. Most credit card companies accept DPM's run by payplan as they get all their money back without resorting to expensive legal matters.

If you do NOTHING else about your debt, at least talk to PAYPLAN. It costs nothing to talk to them, and they do not charge you ANYTHING for their services.

I have made a request to talk with them, as for all the other points you are right. Everything will go on ebay tonight when i get home from work and i shall start looking for part time work in the evenings.

Thank you all... you have given me a huge kick up the backside.

[TTmonkey]

confused2014 said:

I have made a request to talk with them, as for all the other points you are right. Everything will go on ebay tonight when i get home from work and i shall start looking for part time work in the evenings.

Thank you all... you have given me a huge kick up the backside.

its a mistake to just sell everything in some kind of knee jerk reaction. Selling your TV and playstation is only going to pay off a very small part of your debt - and in the mean time you've got no way of keeping yourself entertained. So you'll get bored and end up replacing them by borrowing even more money.

Same with your car. If its not going to clear your debts and you really do need it for commuting and keeping your employment, then perhaps you need to keep it. If however you can get rid of it and perhaps car share with someone you'll drastically cut your outgoings.

First thing you need to do is really work out where your money goes.

The part time evening job is a great idea as it keeps you busy and stops you spending money in your free time.

[Mobile Chicane]

TTmonkey said:

confused2014 said:

I have made a request to talk with them, as for all the other points you are right. Everything will go on ebay tonight when i get home from work and i shall start looking for part time work in the evenings.

Thank you all... you have given me a huge kick up the backside.

its a mistake to just sell everything in some kind of knee jerk reaction. Selling your TV and playstation is only going to pay off a very small part of your debt - and in the mean time you've got no way of keeping yourself entertained. So you'll get bored and end up replacing them by borrowing even more money.

Same with your car. If its not going to clear your debts and you really do need it for commuting and keeping your employment, then perhaps you need to keep it. If however you can get rid of it and perhaps car share with someone you'll drastically cut your outgoings.

First thing you need to do is really work out where your money goes.

The part time evening job is a great idea as it keeps you busy and stops you spending money in your free time.

I absolutely agree with this. Work out your outgoings and see where anything can be cut. Mobile phone tariffs, bought lunches for work, and unnecessary insurances can all suck money, and are easy to cut back on without feeling impoverished.

Selling electronics won't make the slightest dent in the debt, and you'll miss them to the point where you'll just buy more.

[Simpo Two]

My accountant has never had a car that cost him more than £700. He buys or inherits old bangers, drives them until they stop working, then gets another. He gets the cheapest motoring I can think of, and gets great satisfation from the money he's saving! He's currently on a Focus diesel turbo, £500 at auction. Hard to fault really!

So yes, you don't need a £4,000 car. If you want to get back from where you are, cut everything back hard. Including the smartphone, gym, Sky, Netflix and all the other must-have clutter that costs people £1,000s a year without them realising. Call me boring but £1 saved is a £1 earned. Old skool or wot eh?!

I don't blame people for taking stuff that's waved under their nose. I blame easy credit for allowing people to get into a mess they can't afford in the first place.

Good luck

[Blaster72]

TTmonkey said:

Consolidation is not the answer. Borrowing more never helps.

Seek financial help from a company called PayPlan. They used to be the Consumer Credit Service.

They will turn your finances around without totally killing your credit history. They DO NOT charge for their services.

You will be put on a negotiated debt repayment plan which if you stick to will get you out of debt over some years. You wont be able to borrow money during this time but YOU will clear all your debts without the need to go bankrupt or setting up an IVA.

Call them today and explain your situation.

The best advice you can be given, however hard it is you need to take this advice and listen else you will just dig a bigger and bigger hole that'll take much longer to get out of.

Credit cards are murder for building up debts fast, especially if you start borrowing more to cover your basic costs of living.

That level of debt can be cleared but you'll need to be disciplined/ruthless with your spending.

Good luck.

[fat80b]

Apologies if this comes across as all a bit preachy, it is not supposed to be:

You haven't ruined anything. You are only 25 and the problem you have can be solved. Hopefully, you will come out of the other side in a much better place.

As a 25 year old, lots of people get in far worse positions than this and most of them continue this way for ever, ultimately remaining poor for life - you have now given yourself an opportunity to change your outlook to money.

I would suggest that you have actually had a moment of realisation and everything going forward will be much clearer. I agree about not having a knee-jerk reaction and fire-selling a few electronic items. This won't really make a dent to the big number.

Now that you are aware that this is not a great place to be, you can start doing something about it. For me, that means knowing the numbers behind it.

I would start by tracking (in a spreadsheet) all of your monthly incomings and outgoings. This way, you can start planning & optimising your spending / debt snowballing and ultimately saving.

You can then sit down and think about how best to start tackling the debt reduction. It will take many months, but once complete, you will be in a position to regularly save & invest (as effectively that is what you need to do to pay down the debt). Saving and investing will ultimately make it so that you are rich not poor.

Bob

[confused2014]

I have certainly learnt the error of my ways. Again all of you, thanks for being understanding and not just telling me how stupid I have been.

I am very remorseful and frankly embarrassed that I've let myself get into this mess. The advise some of you have given me has given me a little bit of light (although still faint) at the end of the tunnel.

It'll be hard but i'll have to be strict and limit what I do.

Once again thanks for the support.

[Dave350]

confused2014 said:

I have certainly learnt the error of my ways. Again all of you, thanks for being understanding and not just telling me how stupid I have been.

I am very remorseful and frankly embarrassed that I've let myself get into this mess. The advise some of you have given me has given me a little bit of light (although still faint) at the end of the tunnel.

It'll be hard but i'll have to be strict and limit what I do.

Once again thanks for the support.

Update the thread with how you are getting along and decisions you make mate, you never know, it could help others learn from your mistakes or stop their position worsening until it reaches that level!

Personally, i wouldn't sell the phone / tv / PS3. You'll get a much lower amount than it's value to you, and it won't make a huge difference, keep them and have something pleasant in your life, as lots of other luxuries e.g. holidays have to go!

I would however downgrade the car to a £1500-£2000 car or cycle to work and sell the car completely for the next couple of years.
No holidays / weekend aways
2nd job on evenings / weekends or overtime is available. I'd say this is crucial to speed things up and avoiding more interest
Create a finance plan in a spreadsheet (List income, less committed outgoings (bills/rent/disposable income for the month (be tight on this)), then put as much as you can towards paying off your debt

I've just guided my mrs out of a few 4k debt (from uni) and into a few k savings on a very modest salary, easily done provided you make the commitments!