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

Contact CAP (Christians against poverty). You don’t have to be Christian but it’s funded by the church with trained volunteers. The work they do is amazing.

I think you should look at a win-win for your uncle.
Interest rates are peanuts at the moment. He might be happy to loan you 5k for 5 years if you can repay with an interest rate better than he gets at the bank e.g. you repay him £90 a month for 5 years, he gets almost a 10% return, way better than banks

Why does your job mean you can't have an IVA? Sorry if I'm missing something.

Unless the OP has assets to protect, an IVA is unlikely to be the right solution anyway, and the supervisor's fees are likely to be disproportionately high.

I've spoken with my uncle and he is going to help me pay some of it off 🙏🏻 the priority debts. The rest I am going to contact and see if I can come up to an affordable arrangement

I think id be glad to help someone out of a hole for 5K..its hardly a huge amount if you are establisehed with a business..I lent a close friend 4k for a family emergency. If I hadnt they could not make it to an overseas funeral& it was just in my account so hardly a problem. It felt good I could help out with practical solution. Just ask your uncle-he sounds like a nice guy who will help family if he can. Good luck.

Op
Are you still working?

@FS2020

I've spoken with my uncle and he is going to help me pay some of it off 🙏🏻 the priority debts. The rest I am going to contact and see if I can come up to an affordable arrangement

Contact them all, including the priority debts, before your uncle pays you anything. I'll bet you you'll end up in a situation where you don't actually need his help. Creditors have legal obligations to arrange manageable payment plans with their debtors.

Who do you owe money to?

@pinkyredrose

Why does your job mean you can't have an IVA? Sorry if I'm missing something.

Some financial roles require you to be certified 'fit and proper' yearly, this means you need a clear credit file amongst other things. IVA's, CJJs & bankruptcy would mean you wouldn't pass this check

@FS2020

I've spoken with my uncle and he is going to help me pay some of it off 🙏🏻 the priority debts. The rest I am going to contact and see if I can come up to an affordable arrangement

That sounds like a positive solution. Just make sure anything you agree to is manageable and stick to your budget. I know this is easier said then done.

That's good your uncle can help.

You still need to work out your budget carefully, all your outgoings (including debt repayments) versus your income. This way you will be able to calculate your "debt free" date, which is a light at the end of the tunnel even if it is a few years away. To butcher Winston Churchill this is not the end, not even the beginning of the end, but is, perhaps, the end of the beginning.

Check comparison sites for interest free credit cards and low cost debt consolidation loans every month - they will hopefully enable you to keep track of when you become eligible for them, which should reduce your interest and therefore enable you to pay more of the actual debt.

Lastly, remember the lesson that debt is a lot easier to get into than to get out of. Sounds obvious now, but seriously - once you've paid your debts off, it's easy to "forget" how difficult it was. I was £3k in debt in my early twenties, I managed to pay it off in a couple of years, but then by 30 was £12k deep in unsecured debt, which will be with me for some years yet. I say this last part not to depress you, just as a warning not to be as stupid as me!

Ask your uncle if he will be your guarantor for a consolidation loan. That way you have his help, but not directly his money. He has already helped your mother in the past so I would be reluctant to ask him for cash. But he may offer, knowing your situation anyway.

@FS2020

I've spoken with my uncle and he is going to help me pay some of it off 🙏🏻 the priority debts. The rest I am going to contact and see if I can come up to an affordable arrangement

Great outcome!

You've done the right thing OP. Don't feel bad about it; we can all get into trouble financially and although it seems like a huge amount right now, it can be sorted.

If my nieces were struggling financially to the point of sleepless nights and depression I'd be really upset if they didn't feel like they could ask me for help.

I hope 2021 is a brighter one for you - go easy on yourself

I would ask BUT only if you are sure that
1- you can repay him and will do that in a timely fashion
2- you know for sure what brought you there inthe first place and have things in place to manage your money better.

Basically if you got there because of lokdown, missing some revenues etc... fair enough
If you got there becase you keep spending money you don't have, then you firstneed to think about sorting your attitude towads money first.

(Appreciate nothing is black and white and youve arrived there through a mix of things)

@MizMoonshine

Ask your uncle if he will be your guarantor for a consolidation loan. That way you have his help, but not directly his money. He has already helped your mother in the past so I would be reluctant to ask him for cash. But he may offer, knowing your situation anyway.

If I was the uncle I'd say no to this unless OP can prove her ability to live within her means from here on in. Being guarantor for somebody who cannot afford their life or buries their head in the sand is not a wise move.

OP does not need a loan. It would be another debt. OP needs to deal with the debts she has. Otherwise she is borrowing from Peter to pay Paul.

Arrr... missed your update. Sorry.

That's great and it seems you have a great uncle there to support you.

Now, next steps on how to be fully on the road of being with no debt at all :) onwards and forwards

Ask your uncle. Family helps each other out.

@Stillfunny

If you are in a position to pay him back monthly , I would definitely ask him. I know that I would not hesitate to lend money like that to a relative with a job .

This. With a monthly direct debit set up to pay him back directly after you get your salary.

Sorry hadn't read to end of thread- sounds good OP.

@SisyphusDad

If you do approach your uncle, maybe make sure you can explain what you're going to do so that it won't happen again.

This. If you went off the rails with your grandma dying, what will you do when your mother dies and you need to repay your uncle?

At £5k I think your best course of action is to contact your creditors, explain the situation, ask them to help you set out terms of repayment which will be manageable for you. Companies are interested in getting their money back without having to use lawyers and/or bailiffs, so by far the best thing to do is ring up and talk to them.

Oh, well done OP. But I still agree with others - talk to ALL your creditors before paying anything off and see what terms they can offer you.

First of all, you need to set up a direct debit on any credit cards or catalogues, for the minimum payment so that you don't get hit with missed payment charges. They are usually for very small amounts.

Secondly, you need to cut up any credit cards and stop using them and close any credit accounts as soon as you clear them.

Talk to all your creditors and see if they will freeze any accounts so no more interest accrues, or see if you can agree a payment plan to clear the debt.

Make sure that you stick to regular repayments to your uncle, but make sure that they are affordable around your other debts.

Work out a budget, include one off expenses in it as well not just monthly things, and see how much money you have spare each month and then pay off the highest interest debts first, or the oldest ones if they are threatening any court action.

You also need to work out a plan to ensure that you don't fall into the same trap again. I have seen too many people borrow to clear debts and then run up exactly the same amount again and then go bankrupt, one for £50K which was horrendous.