To ask you honestly if this is a bad idea?

[FS2020]

Stuck in two minds at the moment but I've gotten myself into a situation that I just can't deal with much longer. I've had this hanging over me for months, it's made me really ill (severe depression) and I can't deal with the sleepless nights and worrying.

I've gotten myself into debt (circa £5k) and I'm at breaking point. It's spiralled out of control and I don't know what to do. Debt relief orders, IVAs, bankruptcy are out of the question for me as I work in financial services (ironic, I know) so my options are limited.

I was thinking of asking my uncle to help me. He is a business owner and is quite wealthy, I do believe he could help me and I don't have anywhere else at all to turn to. It's my absolute last resort but I don't know if it's a bad idea to ask him. I wouldn't even dream of asking him if I didn't think there was a chance he could say yes, but I'm just worried I'm not doing the right thing here.

What does everyone think? I've just had enough, I feel broken and exhausted

Don't panic OP - £5k is not that much in the grand scheme of things and certainly not worth losing sleep or getting ill over.
What sort of debt is it? Credit card? Loan? Overdraft? Can you speak to the debtors and ask them to sort a payment plan out? Or freeze the interest? Do you have any spare money at the end of the month to clear these debts - even if you have to speed it out over the years? Have you got a mortgage you can borrow a bit extra on at all?

@DenisetheMenace

If you were my niece/nephew, I would want to know and would help you if I could.

Me too.

Could you print this thread to show your Uncle, it would also show him how you have been affected and how reluctant you were to ask for his help.

Stop paying the debts.

Look into claiming money back for improper lending from the catalogue, if your credit is so low why did they give you such a big amount to spend?

Focus on the council tax and utilities, pay them back

When the others send debt recovery letters, three letter process them. Or pay, and it will have given you a 6 month to 18 month break to catch up. Pause the accounts first. Tell them you can't afford it. The will threaten courts, but they arent giving these companies the time of day in court, due to covid. So it will be delayed. You can pay, some don't. But it will give you time to play catch up and focus on the important council tax and utilities.

Go through your bills, cancel any and everything you can. Sky sub? Call them and explain down the phone, get it off your chest. They normally are very helpful once you've explained how dire the situation is.

Cut out all non essentials, keep a spending diary, account for every penny. Do a non spend month challenge, then do one again? Switch food shops to Aldi or Lidl?

5k isn't a lot! It just fills like it. I've been there. But it really is manageable in about 6 months if you really pay off every penny you can.

Don't forget if you really are struggling to reach out to your doctor, food banks and local community churches, some of them have programmes to help.

I've taken the plunge and called my uncle. Said that I needed to speak to him, he asked what was wrong and I totally broke down. He told me not to worry and that he would come and see me as soon as he could. I feel like such an idiot 😢

For goodness sake, ask your uncle! I don't understand the hand-wringing on MN about borrowing money from family.

It would be good if you have a realistic repayment plan sorted out before approaching, with an end date to look forward to. Please don't beat yourself up - many people are in far worse debt than you. Take a deep breath, learn better money management from this, and sort this out. You CAN liberate yourself from this debt that is looming much larger in your life than it should.

Good luck, OP.

I would ask

So glad you called him OP
Take a deep breath and have a cup of tea
Your Uncle can hopefully help you for now and give you some advice for future

I'm sure your uncle would rather you borrow money from him than a lender who will charge you even higher interest rates because of your credit score. He sounds like a good bloke and you've obviously learned from your mistakes.

Good luck OP.

I'm glad you asked. Grief does strange things to people. Please find some support for your mental health too.

I'm going to find it hard not to get upset when I speak to him.

Yes, I'd ask him for a loan. Offer to pay back an amount that you can afford each month and ensure that this doesn't happen again. Make sure you save something each month if you can, even if only £5 as it really does all add up.

Hopefully you'll feel better soon.

After having exhausted all other options, I personally would ask my uncle. I would do so making it clear why this is a last resort (I would not be asking otherwise) and how I intend to pay him back etc. But this is highly dependent on the situation and family dynamics, so may not be the right solution for everyone. What is your mum's view?

If your uncle clears your debt of £5k, the best way you can repay him is to set up a sustainable budget where you do not just fall back into debt again. You need to set money aside every month in savings in addition to any payments you might make to your uncle if a loan, not a gift.

I'd ask. If I knew a family member was feeling this way, I would wish they had asked me for help. And in my experience, a successful businessman will have no issue saying no if he doesn't want to. Be prepared to explain why you are in debt, how you plan to repay him and how you will avoid getting yourself into the same situation in the future.

Just seen the update, well done OP. You've taken the first step, be utterly honest with him and explain how you'll pay it back and the changes you've made etc. I'm sure he'll want to help.

Have you contacted your creditors and explained your situation? They can't legally ask you to pay more than you have.

They'll ask you to complete an income and expenditure form.

www.stepchange.org/debt-info/income-and-expenditure-financial-statement.aspx

Then you can work out how much you can afford to pay. If it's £1 per month, your creditors have to accept that. They can't force you to have an inhumane life just so that they get their money back. You're allowed to do all the necessaries and have some money to the side to have a life, before they can even start to look at how much else you have to pay them back.

This is a standard practice. There is nothing at all unusual about your situation, and you've behaved in exactly the same way as many, many other ordinary people, just trying to get by. Your debt is not large even if it feels big to you, and nobody, even your creditors, is interested in judging you. Don't be hard on yourself.

Creditors like to scare people into getting in touch with them, but once you get in touch, they'll go all nicey-nicey. They want you to stay in touch, because even if you can't pay them back now, they can keep you on side so that when you've got spare money, you give it to them.

Well done op. No reason to beat yourself up any more.
No problem getting no upset when you see him. Try to get some of that out beforehand so you can actually be straight headed. If it were me I’d write things down so you can be organised and he’ll see you are.

@FS2020

I'm going to find it hard not to get upset when I speak to him.

Don't worry. Just be honest with him.

I've bailed my brother out in similar circumstances. I'm glad I could help.

I would ask but make it very clear it’s ok for him to say no. Also go with a proper proposal for repayment and reasons why the situation won’t arise again. And also make sure you don’t get into any more debt.

I was going to ask if you had a partner and did they know about the debt, could they assist.

I will come back and update when I've spoken to him. I don't want to get my hopes up and go into it thinking he will definitely help me. This is my last resort, I don't think I have anything to lose by just asking though

Depending on what type of debt you have you could get interest free balance transfers on credit cards, indid that with 2k on my card to a sainsburys one with 18 months interest free on it so I can take time paying it off etc. Try your hardest to pay the minimum on everything to get your credit back up so you get better cc deals in the future to help manage.
Could you pick up extra work, an evening shift or weekend, use that money solely for paying the debt every month?
The other option is going to your uncle and just being honest with him. Tell him what you could afford to pay every month and set up a standing order on it.

I would ask, but I'd come up with a plan first to tell him how you will be able to pay him back, so you can go with all the information up front.

Think precisely about what monthly payments you'll be able to make to him over how long.

Why don't you ask him for advice rather than money? He might offer you the latter anyway, but you could make it clear that's a last resort and that you'd rather pursue another option if there's one available.

I don't understand. 5k is fine spread over a few things. Can't you ring each company and organise a payment plan

Does it just seem easy to ring your uncle to save you?