I'm 12,000 in debt and don't work. I'm very worried is it as bad as I think?

[ajeo]

It's all through money building cards, over draft and a very account for £6000. It all adds up to £12,000

I'm trying to get a payment system set up (I'm from Scotland). They have debt repayment schemes were they freeze the debt

How bad is this? I'm so worried.

@NewUserName5 are you in England or Scotland just as Scottish debt agencies seem to be quite different

Long term, if you get on a repayment plan where they freeze the interest and you are going to be earning more in a year’s time, this is a difficult but manageable debt.

It will have a significant impact on your life until you can repay it. £100/month is a lot of money if you don’t work and are relying on benefits(?).

Is there any chance you can start working sooner? Why do you need to wait until next year? The sooner you can put more money towards the debt, the sooner you can get out from under it.

Yes@ajeo it is a lot!! Especially as you're not working, it's very worrying.

Stepchange operate in Scotland, OP. Please contact them.

@ajeo It would be better for you to make yourself bankrupt under scottish law. this wipes all your debt!

And don't take debt advice from random people on the internet.

You do need to get some advice but it is manageable. Your CAB or local equivalent can help. Firstly you have to accept the need to change your lifestyle. Don't spend any more than is 100 per cent necessary. Do you have anything to sell? Can you work part time now? Look at your bank statements and reduce any subscriptions. If you can freeze the debt, commit to getting rid of it, then you can do it.

OP, what amounts have you got at each interest rate? (IE the card, overdraft etc).

Paying only £100 your debt is surely actually going up each month. For me that's when it's a really serious problem, you can't afford to reduce the balance, so it's uncontrolled.

Why can't you go back to work earlier than next year?

I hadn't heard of them before and this made no sense to me so I googled them.

They are credit cards. They're worse than normal credit cards because have a really high rate of interest for people with bad credit. The only way they benefit anyone is by building credit for people who have no credit or bad credit history but are now financially stable and they can only build your credit if you pay them off every month.

Based on the interest rates for those and the Very account (39-44%) your debt will be going up by about £400 a month in interest alone. If you're paying off only £100 a month you wouldn't even be keeping up with the interest and your debt will go up not down.

It definitely sounds like you need urgent advice from a debt relief charity. You say there is a scheme where they freeze your interest, almost certainly that will have an impact on your future ability to borrow money in any form but it sounds like you have very little choice at this point.

Christians against poverty are good ( you don’t have to be Christian )

I'm not sure it's that helpful to you to frame it as 'as bad as you think'.

But any debt where you can't afford to keep up with the interest payments is a problem you need to get help fixing.

I'd agree with the pp that you need to talk to a debt advice charity. Steer clear of other debt advice - there are some predatory firms out there that push people into debt solutions that aren't right for them.

Lots of people have been where you are and you will get through it, but you are going to need some help getting there.

Try StepChange - they can discuss your options, arrange an affordable payment plan, and help remove the interest rate.
Good luck @ajeo

https://www.stepchange.org/how-we-help/debt-advice-scotland.aspx?gad_source=1&gclid=CjwKCAjwufq2BhAmEiwAnZqw8t2wuxNBmKxcmbZottKZNrdJdjIEPo1ABfRjQZ_FNJL1XjQfVSekAhoC0FEQAvD_BwE&gclsrc=aw.ds

£12k debt is a lot for someone not working.
The type of debt you also have is very expensive.

Can you sell some of the items bought on the Very account or do you need them?

You need to talk to a free debt advisory service. In order to tackle this, you need someone with the expertise to propose a plan on tackling this you for.

If the reason for not working is illness, bereavement, childcare etc, this can be explained.

The future change in circumstances can also be outlined.

The fact that this a temporary situation and that you will be returning to work means that a future payment plan is possible.

Get expert help and it will work out for you.

Yes, it is really bad, even for someone earning, BUT you have faced up to it, which means you are now in a position to start sorting it out.

Loads of good advice above about Citizens advice and debt charities.

Why aren't you able to work until next year? Are you on maternity leave or ill? You will HAVE to work around your other commitments to deal with this.

Essentially you have to do two things at once, minimise outgoings and maximise incomings.
Cut back on everything non-essential, sell things, get a bar job. Make sure you are getting all the help you are entitled to.

You CAN do this now you've faced up to it.

I didn't see your reply last night but have messaged you now

Bankruptcy may be the best option for you.

Go to a free debt advice service like CAB.

There are lots of exploitative debt advisors out there- do t give them money!

Honestly that sounds like a lot to me, and I earn a decent salary and could prob pay if off in about 2 years with a bit of effort.

That said when I was in my 20s and early 30s at one point I owed over 20k on credit cards and catalogues etc....just basically living above my means and barely touching the interest each month, so I completely understand how you got to this point. In the end I took out a personal loan over a long term to consolidate and was just very strict with myself about spending going forward, and chipped away at the loan when I could. I progressed at work, got a couple of decent payrises which obviously helped, but it took me several years to get out of the hole.

If you're not working I assume its going to be difficult if not impossible to try and restructure your debts yourself as getting a low interest loan or other cards will be tricky.

I second others suggestions about Step Change or similar, but you also need to find a way to change your mindset about spending beyond your means, and accept that you basically will have to write off £x of your income (when you have one!) each month to clear the debt.

Agree it is a lot especially when not earning. Have you stopped spending and changed your habits? It would be easy to start accumulating further similar debt elsewhere. Could you work pt sooner? You come across as pretty casual and resigned that everyone must be in same boat, but they are clearly not.

Contact Stepchange. They are a debt advice charity and can guide you through the various options. It won't cost you anything and they are extremely experienced in dealing with situations like this. I know someone in a very similar situation to you, also in Scotland. She has a repayment plan via Stepchange. It will take her another couple of years and then she'll be debt-free.

Call them today. The sooner you pick up the phone, the sooner the interest is frozen. https://www.stepchange.org/

I think you need to understand how it was run up.

If you have £200 a month spare, why are you in debt? This isn't said to have a go at you, just that you can't address it until you understand it.

People do a calculation of what they have left after bills but often miss annual expenses. Car MOTs, maintenance costs, boiler service, birthdays, Christmas, school uniform etc.

It's not taking these into account when you budget that leads to them being put on credit.

Go over to the money saving expert forums and do a statement of affairs. You'll get better advice there in terms of self managed DMP versus other options.

It's no use committing to a payment plan you can't manage. Work out every penny, where anything can be saved and what is left for debt repayment.

Why can't you go back to work until next year @ajeo ?

What has the money been spent on? 5 years is a long time to pay it off, but a bigger worry is that you don't understand where the money has gone and/or will still continue to spend in the same manner so the debt will increase, not decrease.

This section of MSE has some experienced people on it, giving good advice:

https://forums.moneysavingexpert.com/categories/debt-free-wannabe

Yes it's a lot.

You've had some good advice here about contacting debt charities but you also need to look at why you spent 6k at Very? Do you have a shopping addiction?

It completely depends on much you earn.

£12k if you solely rely on benefits is a lot.
£12k if you earn £30~40k a year isn’t much different than a loan on a car - which is totally ok.

So whilst it will sound a lot just now, it should be ok in a year’s time