£50k of Debts - not sure how to move forward

[Heropanda]

Over the past two years i've racked up an incredible amount of debt, it reached as much as £60k last Christmas but this has now come down to c£50k. I have a gambling problem which is where all this debt comes from and which is why its so hard to shift.

 

The pressures of this debt, personal relationships and job insecurity have started me feeling anxiety and stress related symptoms, i don't want to over-egg this but going to the GP recently i realised that things had to change. As you can imagine the largest problem i have is being reliable with any substantial sum of money in my account.

 

I'm currently living at home with parents and need to move out by March/April, i'm finding this difficult for budgeting purposes as i don't know how much its going to cost me in the future and i'm already struggling.

 

My Debts are as follows:-

 

Sainsburies Loan - c£11k

Halifax Card - £9k

IHG/Barclaycard - £4.5k

Virgin/MBNA Card - £4.5k

Nationwide Card - £4.5k

Amex Card - £3k

Currys/Creation - £2k

Onstride Finance - £2k

118 Money - £1.9k

Marbles - £1.2k

Paypal - £1k

Very - £700

 

In order to make ends meet i've also taken out several phone contracts to sell the handset, this means that i have about £150 pcm expenditure on line rentals across 5 contracts.

 

Current salary brings in about £2490 per month, minimum repayments for all of these are approximately £1900. So if i was continuing to live at home and if i was able to not fritter away my entire pay packet within 7 hours of it hitting my bank account then i could get by. Unfortunately neither of these are true.

 

I'm considering making a change to my working situation resulting in less hours and a higher pension payment (thankfully money i can't access to waste) which would bring my new salary to c£1800 per month, out of that i would estimate £800pcm for rent and bills, £450 for day to day expenses.

 

So i can't work out whether i can put myself through the mass defaulting stage, i don't know if i can bear the constant calls, i don't know how easy it will be to get a place to rent with a wrecked credit file, i don't know what to do right now.

 

I'm currently asking the gaming company for a partial refund of my recent deposits (After i've self excluded), if that provides a decent return i can keep going with the regular payments for a bit longer but its no long term fix.

 

My dream is to own my own home, trying desperately to work out how i feel about pushing that out another 6-7 years.

 

Also wondering if i should leave open the Halifax account or pay separately as its still on a balance transfer offer and presume it would be good to have one high value account with history when looking to get a mortgage down the line...

 

Bit of a stream of thoughts there but i'm really at a crossroads, mostly 0/1 months behind and its about to hit the fan.

[BankFodder]

I understand that you are a young-ish and that you don't own any assets – particularly a home.

 

Somebody else may come along and say different but frankly in your position I think I would be looking at bankruptcy. I find it difficult to understand how you could deal with £50,000 worth of debts in the short term, the medium term – or even the long term. It will certainly prevent you getting your life back on track for many years – far more than the six or seven years that you are suggesting.

 

Bankruptcy doesn't have any of the stigma that it used to have and you should certainly be seeking advice on it with a view to putting in hand very quickly if it seems to be the way forward.

 

In terms of your gambling problem, I see that you have been to see a doctor. I don't know what has been proposed as a result of that but I am sure that there are therapies around – probably on the National Health Service if you push for them and also I expect that there are excellent organisations to assist with gambling addictions including regular group meetings et cetera.

 

You haven't come here for this kind of advice but if you haven't done it already then I suggest that you get involved in those very quickly because it will help to support you and to motivate you.

 

In terms of your financial problems I suggest that you have a look at the Internet for bankruptcy counsellors. Let us know what happens.

 

Other people may visit this thread and give you advice about challenging the debts or reducing them but frankly bankruptcy will deal with everything at one go, let you start again at zero but also put you in a position where you will have to declare this and this will assist you if you try to get credit or to get into gambling again in the near future. They will tend to lock any applications you might be tempted to make – and that can only be a good thing for you.

[Heropanda]

Frankly i don't have any assets whatsoever, company car, everything thats not nailed down i've sold to fund my habits over time, most expensive thing i own is probably a digital camera worth £100...

 

I will read through the information around it, specifically around impact upon job and housing but do you know if this would create any problems or difficulties for my parents listed currently at the same address?

 

Thanks for looking in and taking the time to advise

[BankFodder]

I'm sure it won't cause any problems for them – and certainly nothing worse than having you associated with that address with all of the debt problems that you have.

 

However, go and see a bankruptcy adviser. I understand that they are extremely decent and nobody is going to sit in judgement on you. In fact, when they hear your story and if they really feel that you are trying to turn this very difficult corner, they are likely to be highly supportive and positive with you

[renegadeimp]

Are all your debts still with the original lenders or are dca's chasing you

[unclebulgaria67]

Agree you need to see an insolvency advisor locally. If you phoned National Debtline, they should have details of who to contact. There should be a list of different advisors in each region.

 

With that amount owing and continued adding of interest, it would be like struggling in quick sand. You need a solution to get out of the quick sand and then you can move forward. If you spoke to an insolvency advisor and decide that it is not for you, then you can look at other options. But that might be paying these debts back over 10 years plus and that is going to affect you buying a house anyway, as your budget might not allow you to repay a mortgage. When you are repaying debt, these will be shown on your credit record.

 

If you defaulted, then you have the debts on your credit record for 6 years from the default date. If they got CCJ's, that might not be until a few years time and then they will be on your credit record for 6 years. So potentially if you defaulted today and a creditor obtained a CCJ in say 5 years time (2022), the CCJ would be on your record for 6 years up to 2028. And creditors can ask a court to continue enforcement of a CCJ beyond the relevant 6 year anniversary.

 

If much of the debt is down to gambling, speak to National Debtline about this as any UK gambling operator has to comply with certain rules. Perhaps if this is looked into and rules have not been followed, they might have to pay some of this money back. If you don't look into this, you will never know.

 

Once you consider that repaying debt or defaulting are long term problems, then bankruptcy however you feel about it after it is explained to you, might be something you need to pursue.

[Heropanda]

The Debts are still with the original lenders yes...

 

I appreciate the advice everyone, i feel a bit of a stigma over the bankruptcy option but i am reading more and more about it to see what suits. Feels like the calm before the storm at the moment. It's going to come to a head in the next month though so i'm just preparing myself for that.

 

Will keep you posted on next steps

[unclebulgaria67]

Remember the current President of the US Trump has been bankrupt several times. It is a bit different in the US, but if you have debts of £50k, unless you have a very well paid job, inherit a major sum of money or win the lottery, it is unlikely with interest being added you will ever pay it off.

 

Best option is to alert creditors to your problem and ask for help. They now have a responsibility to help their borrowers under the lending code (from memory) and other regulatory requirement that apply. I am sure if you speak to National Debtline they will explain what legal duties Banks have towards their customers with large levels of debt, without means to make repayments.

 

DO NOT leave contacting Banks until you have to default on repayments.

[renegadeimp]

Still need to know if these debts are still with the OC before you consider bankruptcy

[unclebulgaria67]

Useful info in lending standards.

https://www.lendingstandardsboard.org.uk/the-standards-for-personal-customers/#financial_difficulty_p

 

renegadeimp said:

Still need to know if these debts are still with the OC before you consider bankruptcy

 

They have already answered that as yes still with OC'S

[Heropanda]

I think one problem i have is that i feel like i can repay these debts, but i've always sabotaged myself along the way with gambling, it will be different when i'm paying rent and bills as i'll have much more outgoings, should i look to sort out a place to rent before this situation comes to a head?

I get that i shouldn't wait for all the debts to default, i've only got two payments which are currently a week overdue, i'm awaiting the response of my complaint/request to the casino in question to refund some past payments, if they do that then i'll be able to survive a bit longer and have a few more options. Half the problem is that i have to almost game plan against myself, its very tiring...

[unclebulgaria67]

You need to write to the Banks to advise of your circumstances and ask them to consider your situation. Ask them to freeze interest. If they are not adding interest, then you have more of a chance. If you are making repayments agreed with the Banks, they won't default you and therefore no issue if your record is checked as part of the property rental checks.

 

First read the link i provided earler for the Lending rules that apply to Banks.

 

Then look at this letter from the CAG library. ( letter is out of date, as it no longer the Lending Code. It has been renamed. So if you use the letter as a template it needs updating.)

 

https://www.consumeractiongroup.co.uk/forum/showthread.php?387436-Letter-for-consideration-regarding-Hardship-or-Financial-Difficulty

[dx100uk]

I wonder if irresponsible lending plays a part in this...

a creditor knew, or ought to have known or investigated where money has/will go...