23 Year old, Approx 3K of debt.... Help?

[kermit1986]

I'm sorry to actually make this topic given the many many topics already on here, and the stickies etc, however it's just all so much to take in.

 

I'll give you my story in as brief as possible. Although please bear with me if it does get a bit "wall of text"'y. For those with little patience, I've put 3 little red asterisks further down this post where my question/ idea regarding help is. Everything between here and there is generally my story on how I got into debt, and how bad it is.

 

 

Basically I'm 23, hoping to go to Uni in Sept (got a position etc, just need to sort out my loans).

 

I'm currently in about £3000 of debt, this is due mostly to things I got on finance a while ago, and approx £500 of it is bank charges related. I lost my job late last year, which then followed with me splitting with my partner at the time, depression, moving back with my parents, missing payments, etc etc etc...

 

For the early part of this year I had planned to eventually sort things out and get my payments sorted, but I was severely depressed for a while (which I'd rather not go into, but you get the idea), so I just wanted to avoid anything negative (bills, my ex) and just try and stay positive. This went on for a while, and then eventually I was back on my feet in some ways, but I'd ignored debts, they'd got worse, and its all just got a bit overwhelming.

 

I haven't opened any mail of mine that doesn't seem to be from University or such in about 3 months, unfortunately for me, I live with my parents and my dad has the same name, and some letters that my dad has mistaken for him have been opened, and the ones I've managed to get my eyes on have been the usual threatening requests. I get calls each day from 0800 numbers and such, and i just never answer them, and delete there voicemails, but I do want to sort things out. My mum had a bit of a go at me earlier regarding a letter from whomever is dealing with my car insurance cancellation fee money i owe, that company is saying that if they dont get repayment in 7 days they'll pass it onto some company who will likely get a doorstep collection person round, or something of that nature :S.

 

I'm technically jobless at the moment, but my dad does what he can to try and give me things to do for some cash. I hope to have a full time job as soon as possible (although whos to say when that'll be in the current state of employment in the uk).

 

***

A while ago I had the idea to try and get with one of those companies you see advertised on TV that try and consolidate all your debts into 1 repayment etc, the adverts show all smiles, but some internet searching on them showed a darker side :\. Now, I don't know if they're all like that, but considering I'm only 3k in debt (I say 'only' as there are people unfortunately far worse off than me), I'm wondering if something like that is a sensible option?

 

and if so, whom have the best reputation? If I got myself sorted with one of these companies, I would get my parents to be my unnoficial "guarantor" and ensure I never missed a repayment to them as I don't want this to spiral any further out of control than it already has become.

 

...many, Many! thanks if you took the time to read this, and all help is most definitely appreciated in this matter.

 

~Kevin

[IdaInFife]

Hi Kevin,

 

can you give a breakdown of the original creditor, if it's been passed to a dca, approx amount of each and what they are loan or cc etc. and rough date these started,

 

Ida x

[kermit1986]

Hi, sorry for the late reply, busy last few days.

 

The majority of the money I owe is to Currys for some things on Finance, and I believe that has been passed over to an external party to chase the cash for them. Theres a few other smaller ammounts I owe though, and because all of this started around December/ January this year, I believe the majority of these ammounts have been passed to debt collection agencies, as it has been just over 6 months that this has been going on now :\.

[postggj]

hi kermit

 

like most of us older caggers, we got caught in the credit boom when they relaxed the legislation.

ime talking thatcher era now.

 

your debt is nothing new

 

you can sort this out your self with the help of cag

 

to start with, open your mail

 

we have all been there, head in the sand

 

start a thread on each one of your creditors, be it a finance company or dca

 

we will not allow them to bully you

 

never talk to your creditors on the phone

every thing in writing

 

if you get a call, every thing in writing

dont answer there security questions

 

the sooner you start dealing with this, the sooner it will end

 

believe me and its not as bad as you think

[loobyloo85]

Hi there

 

From what I have heard taking out a consolidation loan will only worsen the situation. This is because, you take out the loan and make one payment to this, however with the high interest and charges on this loan it will take a long time to repay, and the payments may be very high, which usually leads to taking out more credit to pay this (robbing Peter to pay Paul.). Based on you owing £3K, have you considered trying a debt relief order? Take a look into the following link, and if you fit the criteria, this would be an option you could take to clear your debt:

Commonly Asked Debt Relief Order DRO Questions | UK Debt Relief Order, Debt Relief Orders UK

 

There is bankruptcy too. With you living with your parents, you would not lose anything by going bankrupt. You would need an upfront fee of £510 (which maybe family could help raise?), you would then be made bankrupt for 12 months, and then your debt is written off completely. Bankruptcy is on your credit rating for 6 years, but this way, your debt will be written off and you can focus on your life and career

 

Thanks

[kermit1986]

Hi thanks for the replies so far.

 

As for the Debt Relief Order, I will have combined assets over £300 so I wont meet the specifications for that. and with bankruptcy how long does that take to get processed, and I'm worried it may affect me whilst I'm at uni (tuition fee loans etc).

 

I understand I'll be paying more off to get out of debt with one of those consolidation companies, but the convenience they'll save me (as long as repayments aren't TOO harsh) then it may be the best option, as I can't do it personally through family or anything. I should be able to pay about £250 a month towards my debt I think...if i consolidated it...so in which case if I did that, I could be out of debt via repayments in approx a year?

 

I'll try and sort out the bank charges side with the banks and try to get them done under hardship, as combined probably about £500 of what I owe is simply just bank charges spiralled out of control. In which case I deduct that approx 500 (possibly a bit more) off what I owe as that's not money I owe...thats money they're trying to steal.

 

Also, In the next 2 days I will open all my mail and my a list of whom is asking for how much, and what the total I owe is.

[kermit1986]

Right...2 months later, and I've made little progress in terms of sorting out my debt and relieving a lot of pressure that is on me, but heres an update.

 

I'm now at university, I'm still waiting on my loans to come through tuition/ maintenance, but Student Finance is bombarded with requests and a lot of people are in the same boat as me in terms of the delays there. I'm happy to of found out on the internet today that bad credit history doesn't affect student loans too.

 

Now...onto the real problem, my debts. I definitely have a number of bad credit scores against my name at the moment due to unpaid bills, and all the threats and actions companies are wanting to take against me, and I spoke to someone who works at a bank the other day who said that stuff will be on my account for a while.

 

So I'm thinking, I owe about £2,500 (estimate) in total, but as it stands I still don't have a job, and when I do eventually get one, I'll need that money just to get by.

 

So I'm wondering... am I still eligible to file for bankruptcy?

I say this because it's clear to me that I'm going to have a bad credit rating for the better part of a decade as it stands at the moment, so if I'm to declare bankruptcy, it will basically just leave me in the same boat I'm already in, but mean I have less to pay (only paying the upfront fee, as opposed to paying off approx £2,500) in debts.

 

Initially when it was mentioned to declare bankruptcy I was hesitant, but now...with pressures mounting (in a time where I really can't be dealing with so much increased stress), it seems like the best option. As long as me declaring bankruptcy won't affect my student loans or anything regarding my university years, then I am fine with it. As for the next 4 years at least I will be studying.

 

So if anyone could shed some light on the information I need to know about to declare bankruptcy, what I'd need to do, what effects it'll have on me, etc? That'd be great.

 

Lastly, I tried to log on to my online bank with Natwest today as I was going to tally up all the bank charges they've taken off me in the last 24 months, as I'm pretty sure it's about £300 in total, I was going to try and go the financial hardship route with them to try and get that money back. However, I currently "owe" them about £80 I think, and it's been a while since I've corresponded to them, so I think they've froze my account or what not and won't let me view my account. Is there alternate ways I can get my account history off them so that I can send them a letter to try and get the money back they 'took' from me as well as getting them to stop hassling me for the small amount of money that they've conjured up for me to 'owe' them?

 

Thanks in advance

[kermit1986]

Sorry to bump this but today I was given a letter that I guess my mum found or opened saying that Bailiffs had tried to visit the premises with intention of seizing goods upto the value of £306.90.

I think this is regarding Council Tax from my old address with some charges of there own chucked in.

This is pretty serious now and I really need to get something sorted in regards to filing for bankruptcy if that is the best option for me.

 

Like I said in my last post (which was something of an update), I'm currently at Uni and have no job or income to sort these things out right now. I already have bad credit markings against me that will stick with me for a long time, so I think being bankrupt won't really affect me any worse than I already am (will it?) and it will mean Instead of paying the near 3k I owe, I'll only have to pay the filing for bankruptcy (£500ish) won't I?

[IdaInFife]

National Debtline England & Wales | Debt Advice | Factsheet 01 Bankruptcy

 

have a read of the link and around this forum

 

Formal Solutions: Bankruptcy, Administration Orders and IVAs - The Consumer Forums

 

ida x

[Readalot]

Hi Kermit,

 

I guess when you are 23 and just started Uni many things may look as the the end of the world. Trust me, they are not.

 

Bankruptcy is quite a radical solution for 2.5k£ of debts and it paradoxically costs money to go bankrupt. (Should have run up 100k£ worth of debt first, just kidding...) Moreover, it may become a problem later, particularly if you'd want to eventually get a job with a bank or practice law or accountancy and things like that. Bankruptcy is a last resort kind of thing.

 

I would suggest first consider this as a life lesson which hopefully will help you to be more prudent with money and debt in the future (hopefully I do not sound too patronizing here).

 

postjjd's post is great and to the point, read it again. Before even thinking about bankruptcy or other formal solution, I think, you should collect more information about your alleged debt. Find on this site how to send CCA request and send it to the company chasing you (2k£+ Currys debt). Should they fail to comply you send 'account in dispute' letter and consider stopping any payments. Consider also sending Subject Access Request, but this probably can wait until you get(or not) some response from DCA on your CCA request.

 

Even if they have everything tip top, which often is not the case, you could than try to arrange with them a debt management plan and pay some small amount every month until the debt is paid off. I personally would agree for such debt management plan only on condition of them freezing the interest.

 

There are many ways to deal with this and impractical for me (or someone else) to go over all the possibilities. Send them CCA request and post the response (minus personal details) here. I am sure you will be quickly advised here about your next step.

 

As for your current account. You have debit balance of 80£ and estimate 300£ worth of reclaimable charges. I would suggest to pay off this 80£ balance as soon as possible, close the account, than claim back the charges. This, while requires some initial outlay, will simplify this affair for you very much. Make sure that you do you everyday banking with another, unrelated bank for a while after that. This, among other things, would give them no opportunity to repay your money (reclaimed charges) to themselves, for example.

 

If you do not have money for this right now, consider approaching your parents and explaining situation and what are you going to do about it. I am sure they will give you 80£ specifically for this purpose. I have kids myself and if one of them approach me with such an issue I surely would help as much as I possibly can and actually would be quite proud and happy that they 'handle' things.

 

Once you have more factual information about your debts or some responses from those chasing you, come back here, post it (more facts, less emotions) and you WILL get help and advise and nobody will judge you, nothing to be afraid of. In any case you are anonymous here, so, who cares.

[loobyloo85]

Hi there

 

I agree with Readalot, bankruptcy should really be considered as a last resort. It does cost £510 to make yourself bankrupt, and if you do not have any assets of a high value, you probably wouldnt lose anything by going bankrupt, interms of assets. However, bankruptcy carries a heavy stigma attached to it, and taking into account your age, you have your future ahead of you to consider. Going bankrupt could have an affect on future credit, careers and mortgages as it is held on the government register,

Another thing with bankruptcy is that your student loans would be excluded, so would not be written off within the bankruptcy. The OR in bankruptcy could also ask for you to pay into an income payment order for a further 3 years.

With you being at uni, have you considered either your own informal arrangement with the creditors, or paying into some kind of debt management plan? This will b flexible for you, with no stigma attached, but at least the creditors will get a payment, and be happy

 

Looby

[kermit1986]

Thanks for the replies everyone.

 

First up, if I was to try and sort some sort of payment plan with these creditors, can I request this in writing? ...as I really don't want to phone them and have someone have a go at me or whatever, plus it'd be more clear in writing and I'd have evidence to go back on if they should try and screw me in anyway I guess. Also I have no income at the moment so it's not like I can even arrange a payment plan at this stage, I am looking into selling a few things of mine that I have no use for at the moment, but really that's just going to cover me for general day to day living, especially at the moment as I'm still awaiting my student loans to come in (due to the delays some people [i.e. me] have had this year and what not) if it was something that would help me out of debt I would've got on the case right away. Hence why i feel trapped. No income + a lot of pressure from various creditors.

 

Second up, the reason I was so casual about bankruptcy is because I thought it was off my record after approx 6 years or so, and as I will hopefully spend at least the next 4 years at Uni, it wouldn't really have much of a hit on my life as I won't be getting a mortgage or anything like that anytime soon, and if i needed to rent a place, I think a lot of places will take references and possibly a guarantor as a back up...and I should be able to provide those easy enough.

 

I would ask my parents for a bit of help in this case, but I have a bad relationship with them and can't turn to them for help in times like this, I wish it was different but it's too complicated to go into and just not an option.

[Readalot]

no income plus pressure from creditors. Consider DMP route.

 

Which is:

- read all stickies on this forum, particularly those relevant to you

- read a few hundreds threads and see what other people do in similar cases

- set up standing orders to pay all your creditors 1£/month, this is called a token payment.

- send all your creditors a letter explaining your financial circumstances and that 1£/month is all you can afford (barely) at the moment.

- ask them to freeze interest at least a few times

- continue with this payment plan whether they accept it or not and ignore most of their threatograms.

- if they have a shred of common sence they will play ball, but in reality the chances are that they eventually will take you to court (and this is a good thing for someone in your position)

- GO TO THE COURT HEARING when time comes

- explain your circumstances to the judge and show all the documents you have collected, dispute all the charges and other fees, other possible defenses could be discussed when you got the court summons.

- chances are that a judgment will be entered against you and it will be ordered for you to pay 1£/month

 

This is just a possible scenario, things can go better or worse. Creditor may mess things up along the way and, for example, forget to issue a valid default notice and than you would have a good defense in court. Or judge may be unsympathetic and tell you pay not 1£ a month but 10£ or 100£. Or there may be a number of other possibilities, to be aware of which you need to go to the beginning of this list or otherwise educate yourself.

 

For now the best course of actions is to request you CCA from creditors (except current accounts) using a valid CCA request and offer them 1£ monthly payment. Do not let them to make you pay more than you can afford.

[Readalot]

Forgot one important thing. You shall not consider your student loan as income which is to be used to repay existing loans. This is for your food and shelter and books i.e. to get you thru the Uni not to fill coffers of your creditors. When time comes you will have to repay this student loan and this might not be easy particularly if as some people predict we get a few years of strong deflation between now and than.

[kermit1986]

Right, I've had a read out on here and a google on Debt Management Plans and it seems like perhaps the only reasonable option I have right now...as long as it all goes to the theoretical plan.

 

However...I had a letter through the door about a week ago saying someone came round to the house wanting to collect stuff in order to get money for one of my debts owed :\, as well as another letter saying they're about to do the same thing.

 

So I really need to get things in motion a.s.a.p as my parents are sometimes opening these letters (as I share the same name as my dad) and my parents already have enough problems with me as it is...it just makes things worse when they have actual evidence to have a go at me. :\

 

Anyway, are CCCS the best people to get in touch with regarding a DMP? and does it have to be set up over the phone? I'm not looking forward to potentially having to have a judge allow my DMP in court (from what I read), but if i have to I guess I'll just have to deal with it.

 

Once again, thanks for the support and help so far to everyone who's took time to reply to me in here, I really appreciate it.

[IdaInFife]

give national debtline a call tomorrow 0808 808 4000