To think I’ve really fucked up - not sure what to do

[frostedstrawberries]

After a long period of temporary work and sometimes not getting any work for periods of time, I finally got something permanent in January.

I’ve got a big backlog of debt, though, of things that I hadn’t paid for a while because I couldn’t when I wasn’t working.

So now my take home pay is £2050 after tax NI etc.

But my outgoings are:

Mortgage - £800
Electricity - £200 (it’s so high because I’m repaying a backlog)
Council tax - £100 (I owe money on that too)
Car insurance - £70
Mobile phone - £40
Internet - £40
Petrol costs are sky high due to long commute - £300

So in theory I have about £600 left to play with. But it just vanishes. I have pets eating me out of house and home and I have wondered about possibly finding alternatives for them but I just couldn’t. Every day I have phone calls about debts I didn’t even know I had springing up seemingly out of nowhere. I am well aware I am a complete disorganised mess with it all.

I really, really don’t want to go down the route of a DMP - what are the alternatives? I naively thought all would be OK once I started working, but it’s not.

Right I have just sat down with my DS and helped him sort out his debts and what to do next so here is what we did.
Make a spreadsheet put all your essential household bills on it get a total of what has to be paid every month, don't forger food/pet food.
Work out how much you have left to pay your debts off.
Write down every debt you have, they do not spring from no where. Open every piece of mail you have, answer the calls sticking your head in the sand will not help.
Once you have a list see if your left over money covers your minimum payments to them, if it does great if not then you need to ring them one by one explain the situation and offer them something. Most will accept so long as you actually pay.
You live on your own so I would say £100 a month for food and I can't say for pets as you haven't said what you actually have. How much do you owe on Electric? I think you also have more bills than that, there is no car tax there, credit card payment that you mention. Is the £100 council tax including paying some back or not?
How much debt are you in in total? Don't say you don't know, you do even if you don't want to admit it to yourself. There would be credit cards, catalogues, HP, loans etc. Being honest with yourself is the first place to start

I really don’t think a DMP is for me.

I did contact stepchange a few months ago when I still was out of work, and I just found them really unhelpful.

It’s scary, but from what you’ve listed and what you’ve got coming in, it looks doable! Firstly, you need to gather all letters and correspondence and cards etc. and make a list of debtors. Then google all of their phone numbers and write next to them. Then, one by one, call them all and ask exactly what you owe and if you can make an arrangement with them as you can’t afford to live with the rates they are currently charging. You’re probably on the standard/highest pay back rates if you haven’t spoken to them about it. Your petrol rates are astronomical, can you find out if monthly travel card would be cheaper, if it’s possible to get the train to work? £600 is not impossible to live off, and if you can get these various rates of payment reduced, then it should be a bit more. You need to start making lists and keeping track of what goes in and out. Your internet sounds high, too, and £40 for a mobile also sounds high - do you not have unlimited internet with that mobile package? With regards to this company chasing you, I can totally understand why you don’t want to answer the phone, but I would say as you have the number and have googled the company, you need to call them while you’re feeling calm. That debt won’t go away and if you call them and make an arrangement, then thy could agree to put a hold on interest and possibly agree to let you pay it off in small amounts. The more scary possibility is that you ignore it and the bailiffs come. I know that for you as the person in the middle of it all it seems horrendous, but as someone who sees very messy finances a lot of the time, this is very much fixable! You have a job now, and this time next year this will all feel so different. I promise you will feel much clearer and happier once you know where you stand with all of the debts, and when you’ve made your arrangements, tot those up and see what you’ve got left every month. For what it’s worth we are a family of 5 and probably live off of £600 (after bills and saving/holidays) and eat and live very well, so you should be fine on that amount, but don’t pay more than you need to. If you make agreements with the creditors and pay much less and then you have, say, £1200 a month to play with, you can give some to your brother, pay off your overdraft, and start clearing out whole debts at once. It might then feel less overwhelming when there are fewer names on the list.

You HAVE to establish what the debts are. You cannot keep saying you can’t go to a charity for help because you don’t know what you owe to who. Find out to the best of your ability and go. They will help.

I know you feel bad about your brother but would he help if you ask and have a clear spreadsheet of what you owe?

Not knowing is far worse. The bailiff on your doorstep worse again.

Good luck.

I don’t know.

I know I owe

2000 electrics
2000 mortgage
650 overdraft
400 credit cards
At an estimate £200to council tax.

But I know there are others

Ok then you find a lodger who wants a cheaper place to live and is happy to overlook the things that need doing. You can do this.

I used to spend £300 a month on fuel on my 600 mile a week commute. It's certainly a huge drain but better than not having a job!

Definitely agree with the cashback on fuel credit card as long as you set up a direct debit to pay it all off monthly. And if you can get an interest free credit card to tide you over till the debt is paid off that would give you some breathing space.

Matilda - he can’t. I know I’ve unwittingly put him into difficulty and feel awful about that too.

Council tax is a priority debt, so please don’t ignore that.

Open ALL your letters and paperwork. Force yourself to sit firm with it all over the weekend or a couple of evenings and figure out a list of everything.

Add up exactly what your pet costs are and see if there any economies to be made on food.

You can do this, but you need to spend a bit of time getting organised.

A place with nowhere to sleep, nowhere to cook and nowhere to wash? I doubt it. It’s good advice for the future but not now. I do really appreciate your advice though. Thank you.

OP I know it all seems hopeless at the moment, but there is light at the end of the tunnel I promise.

As other posters have said, you do need to face this head on in order to pull yourself out of this. Call every organisation you owe money to, explain your issue and ask how they can help. At the end of the day companies want you to pay them, they would rather work with you to come up with a payment plan than just not receive it at all. I know it seems scary and daunting but I promise the staff are used to these type of calls and are trained in these situations.

Additionally, long term you need to be more aware of your financials. Log everything you buy, it doesn't have to be complicated - a simple spreadsheet will do, keep receipts, work out exactly where your money is going and you'll begin to see where you can make cuts. Check your balance often, don't let yourself put your head in the sand. The only way to deal with debt/financial issues is to tackle them head on, be aware and take action. It will be difficult at times but I promise it'll be worth it.

Good luck x

Also speak to your mortgage company. Have you been on a temporary payment break with them? If not, could you ask if that is possible (may not be if you already owe money) or interest only for a period?

That's not actually a huge debt in the grand scheme of things. It's totally doable- but you've got to be proactive, rather than reactive.

It's ashame that you're so against a DMP and that you found Stepchange unhelpful. It has really helped us.

However you decide to deal with, you need to know exactly whta you owe.

Good luckOP. I hope you find a way to sort it out has it is exhausting to worry constantly.

If you'v got £600 a month left over then £20-£30 a week on cat food really isn't your problem.

That's £100 a month, plus the same for food for you at £100 means you've got £400 a month your wasting on stuff and life, which really isn't going to work if you want to get a hold of this.

I'd tackle that before anything else.

CAP (Christians Against Poverty) are meant to be good, they're not for Christians nor do they preach at you. There are other charities though, mentioned above. Take a couple of days off work and get it started.

First thing is to know what your debts are, it's scary but actually liberating when you know what you owe and have a plan in place to manage it. Once you get a grip of your debt, you'll stop getting nasty surprises.

Then you need a budget. You'll need to go through your bank statement and tot up everything you spend. You'll obviously have key bills that need paying, but you need to know what your grocery spend is for example, so you can then cut back. Try buying the next brand down (so brand to supermarket or supermarket to value), some aren't so nice, but some are perfectly fine. You'll be able to see where you can cut back or indeed you'll know what you're paying for things like utilities where you can price compare at renewal.

I do our budget on a spreadsheet as it adds up as I go. You can use apps or software, but I find a spreadsheet works well for us (and is free). I print it out and stick it up in the kitchen. We have gone cash only before, which can be helpful to stop overspending, and I've cut up my credit card before too.

Honestly, it feels awful to start the process, you almost don't want to know how much you owe, but trust me, it feels so much better to know and to have a plan to make things better. Feeling in control is so much better.

Try You Need A Budget (YNAB), you'll get a free trial of 34 days before you need to pay. It's an envelope budgeting tool that will let you see your money and allocate it to each debt/spending category individually.

Next, gather up every bit of paper you can find that relates to bills/debts, to work out what you owe. It will be overwhelming, but you'll feel better afterwards. After that, every time someone phones, ask for the total amount owed, the installment that should be paid, etc. If they won't give the information over the phone, ask for it to be sent by post.

Once you have everything, order it in terms of priority:

Mortgage - Roof over your head.
Home Buildings Insurance - will be a condition of your mortgage, but may be included in it - check.
Council Tax - Can go to prison.
Any secured debts - can apply to make you sell the house to recover the debt.
Home Contents Insurance - you could lose everything and you can get £75,000 cover, with outbuildings and open cover, possessions away from home, accidental cover, etc., for approx £12 per month with Halifax.
Electricity/Gas - Can be cut off.
Car insurance - Can get a fine/points in license.
Car Tax - Car can be impounded or crushed.
Any monthly contracts - legally bound.
Water bills - important, but lower priority because they cannot cut you off, legally. They can only make a payment plan.
Any unsecured debts.

If you can't make all of those payments and survive the month, then you are insolvent. That's the harsh truth. So you have to either make your own agreements with creditors, or enter a DAMP, or an IVA, etc.

Where do you live that you pay £800 mortgage on a place with no kitchen or bathroom?

DMP*

Right, did you have any catalogues? Buy any thing on HP? Open every letter you get from now, and answer the calls. Knowing is actually better than the worry it might be one of the debts you know about that they are contacting you about.

Does the £800 mortgage include paying any of your arrears? Does the £100 council tax include any arrears? How much of the £200 electric you are paying a month do you think is actually coming off the debt?

How many cats do you have? That seems a lot of food a week I have one very large dog who costs me £40 a month in food.

Please don’t call anyone until you have sorted your paperwork and hit a list if everyone you think you owe money to.

You must prioritise

Mortgage
Council tax
Utilities
Food (pets in with this for now)
Petrol/car costs etc
Regular essential bills

Then you have a clear idea of how much actual spare cash you have. Then you can call round to offer settlement plans.

If you do it before you know exactly what you have left and all your debts, you run the risk of agreeing to pay more than you can afford (like with the electricity, you’re now committed to the £200 which is high and that means you’ve got less to offer elsewhere).

A lot, there is a kitchen and a bathroom, of course there is. But the oven isn’t working and I haven’t been able to afford to replace it. The shower isn’t working, ditto (there isn’t a bath.)

I’m not sure if you’re trying to be helpful -I presume you must be trying to.

But the dismissive sort of ‘oh well if you just did THIS’ isn’t helping me, it’s making me feel a bit panicked and upset.

It will get better, honestly. I know it doesn't seem like it but you're in a much better position now you have a job. It's easier to get a job when you're already in one so you can give it a while then start looking for something better paid/ with an easier commute. But that's for later.

Pet food costs do sound high. How many do you have? Have you tried moving them onto mainly dry food - that's a lot cheaper. If they don't like Aldi stuff, I have had fussy cats before who would eat Pets at Home own brand biscuits and those are a good price, often on deals.

Oh and ring Christians Against Poverty! They can do the negotiating for you. I would just tell them there are other debts but you haven't been able to keep track - they'll have encountered this before, let them help you sort it.

Check out Freebay when it comes to replacing things which don't work.

What help were you looking for when you came on here?

Start with opening post and answering your calls. Then you can start writing down what you do owe. Once you know this, you can them come up with a plan.