Help to get out of debt! :(

[ChelseaB26]

I have got myself into debt.
I have Credit cards, loans, retail accounts - Argos and Very. I just don't even know where to begin. I contacted debt uk and they told me to get an IVA.
I feel like I am in the middle of a black hole and cannot get out of it!

[CliffEdge]

I'm very sorry to hear that.

It is important that you realise that this is nothing to be ashamed of.

It is vital that you realise that you have to find out the very best way to deal with this and do it now.

That will be difficult because you will be feeling very emotional but you must not let negative feelings stop you from achieving the positive outcome that is available to you.

It might be worth looking at Sara Williams' website to give you some ideas of the best solutions that are available.

https://debtcamel.co.uk/about/

And of course StepChange

https://www.stepchange.org/

[DrFfybes]

Hi,

I notice you first posted on this 4.5 years ago when your husband had debt. Is this still ongiong from then?

https://lemonfool.co.uk/viewtopic.php?t=21639

This link has some contacts for impartial advice - I don't know who "debt UK" are but tjey may well be offering you a service for a fee.

https://www.gov.uk/debt-advice

Look at the website addresses, anything with a ".org" at the end of their website should be a charitable organisation and will be free and independant.

A few initial steps before approaching these organisations would be to get a Statement of Affairs together. You'll need to know your income, essential expenditure, what you owe to who, etc. It might also help you if you can work out why you got into this position, rising interest rates making repayments less affordable, reduced income or change in personl circumstances, rising costs meaning you've exceeded income, etc.

Good luck.

[GoSeigen]

It might be worth looking at Sara Williams' website to give you some ideas of the best solutions that are available.

https://debtcamel.co.uk/about/

I second the recommendation of this web site, it may be an idea to start on the IVA page as that was in your initial question:

https://debtcamel.co.uk/debt-options/iva/

Sara Williams was a regular poster on this site and the previous Motley Fool "Dealing with Debt" discussion board. She is very well known to users here and has helped many many people to get out of their debt pit. One notable example was a user called GoStevie who was determined to pay off every penny of his huge debt and received wonderful support from Sara and other posters. He eventually succeeded and became an active investor, earning income from his savings rather than paying banks for their loans.

Good luck, please keep us updated on your progress.


GS

[tacpot12]

Another resource you might find useful is the Debt Free Wannabe forum on MSE: https://forums.moneysavingexpert.com/categories/debt-free-wannabe

[Lootman]

https://debtcamel.co.uk/debt-options/iva/

Sara Williams was a regular poster on this site and the previous Motley Fool "Dealing with Debt" discussion board. She is very well known to users here and has helped many many people to get out of their debt pit. One notable example was a user called GoStevie who was determined to pay off every penny of his huge debt and received wonderful support from Sara and other posters. He eventually succeeded and became an active investor, earning income from his savings rather than paying banks for their loans.

I remember her from TMF but I cannot recall seeing her on TLF, although it is possible she changed her nom de plume here.

I didn't always agree with her advice however. In particular, as creditable as it might have been for GoStevie to want "to pay off every penny of his huge debt", that is generally not a smart idea when various forms of bankruptcy and default can wipe away at least some of those debts.

Also consolidating debts was often advised and, whilst that can mean lower interest rates, it is sometimes better to have a lot of small debts rather than one large debt, as small debts are more readily written off by creditors. In fact debts of less than £100 are routinely written off by institutions in my experience, as it is not cost-effective to pursue them.

[swill453]

I didn't always agree with her advice however. In particular, as creditable as it might have been for GoStevie to want "to pay off every penny of his huge debt", that is generally not a smart idea when various forms of bankruptcy and default can wipe away at least some of those debts.

It was GoStevie himself who went against the advice of just about everyone who said he should use bankruptcy or some other scheme to get out of debt.

In fact the post where he announced "OK, you win, I'll go bankrupt!" was, I recall, the highest ever recommended post on TMF.

(He subsequently changed his mind, did his own thing and, as said, pulled himself out of debt.)

Scott.

[Lootman]

I didn't always agree with her advice however. In particular, as creditable as it might have been for GoStevie to want "to pay off every penny of his huge debt", that is generally not a smart idea when various forms of bankruptcy and default can wipe away at least some of those debts.

It was GoStevie himself who went against the advice of just about everyone who said he should use bankruptcy or some other scheme to get out of debt.

In fact the post where he announced "OK, you win, I'll go bankrupt!" was, I recall, the highest ever recommended post on TMF.

(He subsequently changed his mind, did his own thing and, as said, pulled himself out of debt.)

"Just about everyone" may be true but there was one regular on that board who thought that every debtor should always pay off every debt, even those that were already discharged by bankruptcy!

I cannot recall his name now, only that he was a former banker who had been laid off in his early 50s. Needless to say he and I had a good number of arguments.

And there was at least one other regular there who expressed similar sentiments. Roland something, as best I can recall.

[scrumpyjack]

I'm not an expert in this area but I would just caution about these debt management companies. They contact all your creditors and draw up a plan that you make monthly or weekly payments to them, the debt is all paid off in X years and your creditors stop chasing you.

A dear friend of mine got into deep trouble during Covid and ran up large debts on multiple credit cards - she had a low earning husband and 3 teenage children. Bankruptcy was not an option as she had some, but not much, equity left on the mortgaged house. She was a very hard working self employed person hit hard by trying to keep her family afloat during Covid.

Just before signing the debt management agreement she came and talked to me about it. I read the small print and they were taking 20% of each payment. This would be a millstone round her neck for years and the winner was clearly the DM company. Probably it would fail and she would lose the house.

She had been a huge help to my disabled daughter for many years so, as I'm pretty well off and I really didn't want her to lose her house and be ripped off in the process, I paid off her debts then and there, Her husband knew nothing of any of this - they had only got married a few years before, the children weren't his and their finances were totally separate.

Anyway - steer clear of debt management companies if you possibly can!

[Gerry557]

You don't say how much this debt is compared to your income or spare income.

How long would you need to pay it back and how much suffering would be needed.

Is it too massive or could a few years with some belt tightening sort it.

If there was previous advice for an IVA I'm assuming things are bad and probably very difficult to get out of. Lots of advice upthread.

Good luck with your endeavours

[CliffEdge]

I'm not an expert in this area but I would just caution about these debt management companies. They contact all your creditors and draw up a plan that you make monthly or weekly payments to them, the debt is all paid off in X years and your creditors stop chasing you.

A dear friend of mine got into deep trouble during Covid and ran up large debts on multiple credit cards - she had a low earning husband and 3 teenage children. Bankruptcy was not an option as she had some, but not much, equity left on the mortgaged house. She was a very hard working self employed person hit hard by trying to keep her family afloat during Covid.

Just before signing the debt management agreement she came and talked to me about it. I read the small print and they were taking 20% of each payment. This would be a millstone round her neck for years and the winner was clearly the DM company. Probably it would fail and she would lose the house.

She had been a huge help to my disabled daughter for many years so, as I'm pretty well off and I really didn't want her to lose her house and be ripped off in the process, I paid off her debts then and there, Her husband knew nothing of any of this - they had only got married a few years before, the children weren't his and their finances were totally separate.

Anyway - steer clear of debt management companies if you possibly can!

Good advice. I believe StepChange offer free debt management plans.

[Gersemi]

It is important to distinguish between Debt Management companies, who often seem to recommend IVA's when they are often not suitable for debtors and other sources of debt advice. This is because as noted above Debt Management companies make a lot of money from IVA's, even if they end up failing.

There have been several suggestions above of organisations who will give you free impartial debt advice. It is possible they may conclude that an IVA is suitable for you, and then, I think you have to use a Debt Management company, but at least you know it is the correct solution for you rather than the company!

I suggest that the OP contacts one of these free organisations and has a chat with them to start with, it is often difficult for those struggling with debt to see the wood for the trees, and there is a lot of negative emotion about not being able to deal with it yourself. So the first step is to believe that there is a solution for you and someone will help. Then you can start to collect details about the debts and budgeting etc.

[pompeygazza]

Hi, there is a link on the lemon fool to complete a statement of affairs (soa).

financecalculators/

Please complete this and then post the results on here. Us helpful people will try and advise on a way forward.

Don't rush into an IVA.