Drowning in debt

Speak to the people at Step Change they are a debt advice charity and will help you pick your way through your current debt situation. They do not charge for their services.

@Cottagecheeseisnotcheese thanks I'll look that up. 2023 will be the year of less spending!!

@Chesneyhawkes1 I would recommend you do a CAP course as that will help with the emotional side of why you are spending for very short term happiness as well as budgeting.
You can also give yourself so much money a month for spending whether you buy leggings or lattes is for you to decide but when it's gone it's gone ( decide the sum in advance depending on your income )and it needs to stay in wish list basket until next month even a 24 hour delay will stop some purchases, then turn it into a week then a month

The snowball method pays off smallest debt first regardless of interest rates, then second smallest so giving a small win early on and that seems to work best on a psychological level.

the avanlanche method pays off debt with highest interest rate first regardless of the sum of that debt then second highest etc this method works best mathematically as you will pay off a smaller amount in total
it depends on personality type but for most people the snowball has better incentives so marginally works better if you have 10 debts and get that down to seven in 6 months it somehow inspires you better to keep going than paying off half the debt with largest interest rate

to my mind if you owe 100k and a few of the debts are just hundreds rather than thousands I can see getting rid of some relatively small debts first helps you feel you are reducing overall debt, then concentrating on debt with highest interest next
also if you have borrowed from friends or family you might need to pay them first as they can't afford to be without the money for long and you need to maintain decent relationships even if no interest on the other hand if they know situation they maybe prepared to wait until last.

Well done for facing this. Hopefully stepchange can help with good advice.

There's a (albeit American so different rules and regs) woman called Jordan Page who runs Fun Cheap or Free on YouTube who does a lot of talks on debt management/budgeting etc.

One thing she mentions is a sort of snowball effect on debts. So you put the debts in order of lowest to highest value, then meet the minimum payments on the bigger amounts (obvs take into consideration interest rates), and chuck every additional penny at the smallest debt. It will then be cleared really quickly, so you then tackle the next biggest etc.

As your number of debts balances reduce, the funds available to drop into the next one increase.

That’s interesting.
My addiction was to collecting a specific type of antique toy-
I came off facebook groups to do with it, as well. Reading of others collecting made me own addiction worse.
Thrill of the hunt &c.

There most definitely is hope!
it’s such a fleeting pleasure, and is all down to a dopamine surge in the brain, just like what cocaine and heroin users get.
When you realise it’s chemical, it becomes easier ti say “No, I don’t need it, it won’t make me any happier”
🙂

@MarshaBradyo thank you. I'll try that too!

Wish list is good too. Go back a few weeks later and see if you think oh I’m fine without it. Usually the case ime although I don’t need to anymore.

@Hoppinggreen thanks I'll try that. Just keep them in my basket for a bit! Be less impulsive 😬

when I had a bit of a shopping addiction I found that putting things in the online basket but not hitting the buy button for 24 hours meant I usually didn’t bother actually buying the things.
Maybe worth a go?
I found not going on e-commerce sites at all didn’t work but this did

I am currently in a DMP with Stepchange and it's definitely not a scam. They got in touch with all the companies I owed money to and arranged a plan with them. All interest charges have been frozen for the whole term of the plan. I have paid off over £10k in the last 2 years and have just over a year left now. It has helped so much, I was honestly depressed and suicidal about how much debt I had and how I would ever pay it off as I could barely even cover the minimum monthly payments

@oakleaffy yes it is! I get the "thing" I want and the feeling of happiness quickly wears off. Basically I feel like I'm always looking for the next thing as soon as I've pressed pay now on the screen 🤦‍♀️

I think in the New Year I'll have to address it somehow. Glad you have managed to control it. There is hope!

thanks for the info

Shopping like this is definitely an “ Addiction “
Have suffered it myself-
It is manageable if you treat it like an addiction, the dopamine rush of buying , but it never lasts, and it’s on to the next thing.
Oddly, it doesn’t make you any happier.
I get totally the buying leggings in every colour!
Best of luck!

@eveoha Thanks for replying, and I’m really sorry that you were screwed over like that.
As a kid, Dad drummed it into me “ Never to borrow “ ( Apart from mortgage) and at times in my life I have been very poor ( When husband left me to be a single parent)
If I’d have known I could have borrowed and not paid it all back, I would probably have done so-
But I thought all loans were secured against property?
Having been homeless as a teenager, I’d do anything to keep my home. ( have been offered loans lots if times, secured against house, but always declined)
I hope you and your Husband are ok now.. Lots of work for electricians , Hopefully!

@MarmaladeFatkins
Stepchange can help you lower your payments because they have looked at your outgoings and they can see that you can't afford your debts in full after your priority outgoings. When you work with stepchange your lenders understand this and know that even if they took you to court a similar budget would be drawn up and the court would only order a similar amount - so they accept the reduced payment.

This arrangement is usually informal, agreed between the person and their lender and called a DMP (Debt Management Plan).

An IVA is a more formal arrangement and people should be wary of them because providers can get paid for setting up an IVA so they might recommend one when it's not the best solution for you. Don't take out an IVA without getting a second opinion from the people on the Debt Free Wannabe forum of Money Savibg Expert.

yeah, it's not a choice I expect many people are happy about. but at least it's a (recoverable) option, huh

DMPs do indeed ruin/affect your credit reference, but not forever.
My choice was a DMP, pay it off, get my credit status clear again (it is).
or
pay the min on my credit cards (and still be totally skint) for the next 77 years.

He was self employed, his business got into difficulty during the 2008 recession, to try to save the business he took out loans against it, when he couldn’t take out any more loans he became desperate and took out a huge secured loan against the house. The business continued to suffer and he defaulted on his mortgage and secured loan, he tried to sell the house, but because it was a recession he made a loss, minus the mortgage there wasn’t enough left to pay the secured loan off so he had to declare bankruptcy. He was lucky that he could go straight into well paid employment because of his transferable skills and his contacts.

It is, but the person I quoted was seeming to imply that DMP and bankruptcy are get out of jail free cards. DMPs can also ruin your credit rating.

Your FIL was very lucky/fortunate he wasn’t self employed - I presume his debts were caused by ‘personal needs’ You need to appreciate that when you’re self employed and your credit rating affects your ability to buy materials / cable etc vans/tools and that’s before fripperies like internet etc 😡

I think bankruptcy is different to debt payment plans

Not without huge consequences, your credit rating will be destroyed for years. My father in law was declared bankrupt, he lost everything, he had to put a years rent down upfront because his credit rating was that bad no one would trust him to pay rent, he earnt a lot of money, but couldn’t get a mortgage for many years, he couldn’t get an overdraft, a mobile phone contract, an internet contract, had to pay for electric and gas on a meter etc. He’s fine now, but it took many years to rebuild his life and he was lucky that he was able to get a well paid job fairly quickly after going bankrupt and could live with his parents for a while, so paying for things upfront in cash like cars and rent wasn’t a huge issue, but for people on low salaries especially without family support it would make life incredibly difficult.

www.moneysavingexpert.com/budgeting-debt-help/