Author Topic: Newbie advice  (Read 1177 times)

coolio1986

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Newbie advice
« on: Jun 17, 2010, 10:13:19 AM »
Hey folks, long time lurker first time poster!

Background info - I am 23, all this debt comes from being at uni!
Earn pretty well (24k a year not including commision) but living in Germany for next 6 months paying crippling German income tax which leave me about 450 per month once my rent is paid.

I spent 3 months here before I got paid as an unpaid intern which has blown everything apart in terms of my payments (however it is the job oppertunity of a lifetime for me). Somethings are up to date now (my mobile, one of the cards) but others are really bad.

I am about 7k in debt. 3k each on 2 visa cards (both with fairly good intrest rate 16-18%) and 1k on a loan which is 0% interest.

I am paying about 75 quid each month on each card plus my monthly payment should be 165 on the loan (although its 3 months in arrears.)

One visa is up to date.
The other has 75 outstanding from last month.

My Credit rating is fairly poor now, which is gutting because I spent 5 years NEVER missing payments and getting a very good rating for someone so young.

I have applied for a graduate loan through my bank but been denyed.

I just don't know what to do... I considered consolidation but finding a company that will deal with me while living in Germany is proving almost impossible. I am only here for another 6 months but while paying this tax and rent I just cannot afford to live in a month if I pay the bills.

Theoreticall I can afford 150 p/m to pay these creditors for 6 months. Once I am back in UK and paying UK income tax (something I never though would turn out to be a blessing!) I can live with my dad for a year for very low rent and board and pay all these off in 16 months (I hope!)

I need a short term solution to this but do not know where to begin.

Sorry if thats a bit wordy I just wanted to give as much info as I could!

Steven Jackson

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Re: Newbie advice
« Reply #1 on: Jun 17, 2010, 04:24:58 PM »
Hello Coolio1986
 
Sorry to hear about your situation. Given your circumstances, my suggestion is that you do consider a debt management plan (DMP). Basically this is an agreement with your creditors to reduce the payments that you make down to an affordable amount - say to £100-£150 a month (I guess around 120-180 Euros) which would cover payments to them all.
 
Your creditors will not like it but if you approach it correctly and show them that this is your best offer at the moment, in my experiance they will agree. The DMP is very flexible so you can increase your payments again at any time.
 
A DMP will of course affect your credit rating but as you say, it is probably already shot to pieces anyway so there is little point in worrying about it. Once you are back in the UK and able to pay off the debt this will start to repair so it is not as if you will never be able to get credit again.
 
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coolio1986

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Re: Newbie advice
« Reply #2 on: Jul 05, 2010, 12:19:27 PM »
Thinks have brightened up a bit.

Managed to push one of my credit cards and my phones down to no arrears
Moving to a new apartment for a heck of a lot less rent next month and made an arrangement to clear the loan (turned out i only owed 600 pounds! should of stopped avoiding the calls and found that out earlier, never been so cheerful to be told I owed someone 600 quid!) in August in full.

I took kind of Stevens advice with Barclaycard and arranged a fixed payment plan for 3 months to get back on my feet.

September will be a cheerful month! Thanks for letting me vent here!

Steven Jackson

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Re: Newbie advice
« Reply #3 on: Jul 05, 2010, 01:26:04 PM »
Great news that you have got your head around things Coolio1986. Reducing your expenses as you have done by moving appartment is always a great idea so good job on that front. Keep us up to date with how you get on.
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coolio1986

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Re: Newbie advice
« Reply #4 on: Jul 05, 2010, 01:34:25 PM »
Strangest thing about it is that the new place is twice the size and a heck of a lot nicer than where I was living before!

Steven Jackson

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Re: Newbie advice
« Reply #5 on: Jul 05, 2010, 03:01:08 PM »
Sounds like we should all move to Germany :)
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