Trying to sort myself out

[MakingAFreshStart]

Right, taking a deep breath (have name changed as I can hardly believe the mess I am in). Early last year I had a bereavement which affected me very badly and I stopped keeping on top my finances. I have begun to feel better but am now extremely anxious and ashamed about my finances and my stupidity in ignoring it all.

I have three things to sort out: student loan repayments,tax. I would be really grateful for some kind of advice to give me an idea of what I am facing. With respect to tax,I need to find out whether I have to fill in a self-assessment by the end of the month. I earned only £4000 for the 2010/11 tax year, but then had an extra £4000 as a one off payment for a side project which hasn't been taxed. Do I just notify the tax office that I had a one off extra payment or do I need to go through the rigmarole of self-assessment?

Student loans: I have the old style student loans from the 1990s (have never earned enough to pay them off) and I failed to complete the deferral forms last April. I would have certainly been able to defer payments as I am not earning anywhere near enough money (though as I am sure they have access to that knowledge through the tax office?). So now I need to get in touch and see whether they have taken action against me and whether I can have it deferred and what money is owing. I am still on a very low income and worried that this is going to be the last straw. Any thoughts or experiences.

Credit card: I have kept my NatWest credit card at its limit (about £800)paying off the interest each month without fail, for the last few years, but suddenly a payment came off my card unexpectedly (an annual subscription which I had forgotten was going out of the account) so it is overdue and the bank have sent letters for the last 8 months saying I am overdrawn and asking me to pay charges, but I couldn't face up to dealing with it. I wasn't given the option of extending my credit limit and have been banking with natwest since 1990. Do you think I should argue that I should have been given the option of extending the credit limit? Interest is still being paid on the card every month.

I really hope I can get myself out of this hole now!

Any words of practical advice or enouragement gratefully received!

Hello. Self-assessment has to be in by the end of Jan for the 2009/2010 tax year (ending April 2010). If your earnings and the extra payment are for the 2010/2011 tax year you'd only have to submit that post April 5th. So I don't think that one is urgent and self-assessment forms are quite easy to fill in.

I don't know about student loans specifically but my view is that it's always best to own up and face the music. The reality of what happens next is rarely, if ever, as bad as you think it's going to be. And the same philosophy applies to the NatWest Credit card. Keep ignoring it and you'll just end up with a black mark on your credit score, lots of interest and a big bill for charges from the bank. Talk to them and see if you can come to some arrangement. £800 is a lot of money to you but, in bank terms, it's quite a small sum and they may be more flexible than you think.

Good luck

Thanks Chil, I think that the sense of embarrassment and shame has really made me freak out as I have always been on top of things - until last year when things fell apart. I will see what happens: should the bank approached me to see whether I would like a higher credit limit? I am going to make an appointment with the tax office to talk about the one-off payment (this would be for the 2009/2010 period as the payment came in in March 2010).

Right, I should try to stop worrying and get to bed!

The personal allowance threshold for income tax in 2009/2010 was £6475 (unless you're over 65). So if you earned £8000 in total you'll probably be asked to pay tax on £1525 at 20% which is £305. They may be able to get this back by changing your tax-code or with a payment plan rather than insisting on the full amount all at once.

If taking a higher credit limit from the bank means you are no longer charged with unauthorised borrrowing and paying charges then it might make sense. But you may also want to look at switching your balance to a different card. I know several people that have found Nat West very harsh & inflexible.

You'll feel 10 x better now that you're doing something positive. Good luck

Sounds like you need someone to sit down and work things through with you.

Probably worth going to the Citizens Advice Bureau and seeing one of their financial people. Often they can write to people on your behalf which can get a better response than if you do it yourself.

I used to work for NWB. Your best bet is to give them a quick call and advise them of your situation. Maybe suggest a payment plan with them and ask if they will freeze the account (stops interest and fees being added). They would not have automatically increased your card limit, and given the level of income you have might have felt it irresponsible to do so at that time.

In relation to the poster who said that they are inflexible. You are right, they can be very inflexible. That has only happened since RBS took over ownership of them though. Before they used "discretion".

In relation to the tax, if you are referring to 2010/2011 that Self Assessment will not be due until next year, and in relation to the student loan company I would call them and again explain your circumstances at the time.

In my experience if you are honest with people they will want to help you.

Oh, I just want to give you a hug. Please don't worry just pick up the phone.