we need help with debts....

dhc2212 · 7 May 2007 at 2:38PM

Hi,

Me and My husband really need some advice on clearing our debts. Credit rating was good up until a couple of months ago when we changed bank accts and the direct debits were messed up, some where not being taken and we were unaware as hubby is in army and we were out of the uk at the time, this is now sorted and we are nearly finished repaying what we missed and still on top of the regular repaynments. we have a couple of credit cards and a loan. oh and one store card. We are usually only mnaging to make the minimum repayments on the cards and more on the store card. the credit cards are more or less at their limit and Im worried we will have this debt forever! I just dont know where our money seems to go?????? on paper it looks like we should have plenty but it doesnt seem that way!!!
Please help!!!!!
Monthly Incomings:

My salary - 0.0000 (recently had baby)
Partners salary - 2000
Benefits - £550
csa - £250

Total - £2800

Monthly Outgoings:

Mortgage/Rent - £215
Council Tax - 0.00 (living abroad with army at the mo)
Gas - £40
Electric - £40 (gas and elec, this amount is taken from wages and a rebate is given at end of yr if neccesary)
TV License - 0.00
Sky £18
Phone - £45
Food - £350
Car Insurance - £45
Petrol - £40
school dinner money - £28

Total: £821

debts

hsbc c/c £3150
halifax c/c £4500
mint loan £16000, £234 p/month
Overdraft - £800 (£12 p month)

We have applied for balance transfer on 2 different c/c companies and been refused, also refused loan at bank?????

worried now!!!!

think we need to get rid off c/c's first!!!!

thanks for any advice!!!
d xx

KellsBells · 7 May 2007 at 2:43PM

Only 215 for your mortgage??? God, how lucky are you?!!

As far as the debt it concerned, try snowballing the debt in a calculated on
http://www.whatsthecost.com/snowball.aspx
and then you'll see what you should pay each month off each of them, and work through getting the highest interest ones cleared first.

Good luck, and congrats on the new baby!xx

debtmonster · 7 May 2007 at 2:57PM

Think you need to keep a spending diary because on the face of it you should have plenty left to service your debts. First priority is to find out where it's all going.

Secondly you need to check your credit record to see what is there and what impact the problems you had with the bank may have had.

Biffa · 7 May 2007 at 3:04PM

How many of you are there? Your food bill of £350 a month is massive! If you take a look at the old style boards, you'll find ways of cutting your shopping bill right down.

Technically, you've got quite a bit of money spare each month but in reality you haven't. You should think about keeping a spending diary each, and write down everything that you spend - whether it's 30p on a newspaper or £40 out of the cashpoint. By keeping a spending diary for a couple of weeks, you'll be able to see where all your money is going. It could be that you're spending far more on food shopping than the £350 a month you've allocated for it. Also, you've clearly got a car but haven't included anything for tax, mot or servicing.

Your outgoings are actually quite low at the moment. You could easily clear the £800 overdraft in one month. Are you getting hit with bank charges? If so, take a look at the bank charges board and start claiming the charges back.

You could also request a copy of your credit file from Experian so that you can get an idea why you've been refused credit. It could be late payments or defaults that are showing up. Once you know what the problem is, you can start tackling it.

Hope this helps

dhc2212 · 8 May 2007 at 7:52AM

Thanks for the replys.

There are 4 of us! me, my husband, an 11month old and a 6yr old. I have looked at the snowball thing and it has given me some perspective. We definitly have enough income to sort these debts, we just need to curb our spending! we do flitter money away and buy things we could do without (i.e huge pool for the garden!) its boiling where we are at the moment so it was a treat for the kids and us too i suppose! We have been buying furniture for the house as we only recently moved, I now realise these debts come first. I think iv had "the lightbulb moment" trying to get my hubby to have it too!!!!!!!! I did tell him last night that we should start throwing £600 a month at these debts instead of £250 like we have been doing!!!!
He agreed and said we will stop our spending and he will leave the details to me:T :j

I am going to allow myself a set amount every month for food and stick with it. As we are not in england at the moment a lot of the money saving tips are not relevant to us but im going to do what i can.

Thanks so much, its funny how a swnoball calculater and this website could change so much in my head, its really given me a starting point and focus.

the hsbc card was only taken in nov 06 so it has 0% til nov 07 so We will concentrate on reducing this asap until then and then turn attention to the halifax one. the store card has just £300 on it so that should be easy!

Thanks for the replys and advice!
dxx

peb · 8 May 2007 at 12:32PM

Just a thought or 2 (I don't usually comment as I don't think I am experienced enough)

(1) The hsbc card has some months at 0% to run, I would pay the minimum until it expires, you may then have (in 6 months time) a better chance at getting a life of balance card.

(2) The store cards are usually higher in interest and if is only £800 you shuold be able to clear it very quickly - challenge yourself to clear it in a month or 2? This will also release a monthly payment

(3) Once the storecard has gone you will have more money to throw at your other debts.

I know you are overseas but unsure where - is it possible to ebay? I ask as I have purchased from forces wifes overseas (usually rare books that I would otherwise pay a lot of postage for from the USA).

Good luck

hypno06 · 8 May 2007 at 1:45PM

Hi there, last year I changed my bank account and some of the direct debits got messed up for a while. I got a copy of my credit file and saw that the problems related directly to the changeover period so I wrote to each loan/card provider and explained and all but one have amended the records to show that nothing was even late!!!

Worth a try!

grannieannie_2 · 8 May 2007 at 1:57PM

I'm not sure if this will help any, but when we lost our catering business, we owed £25,000 and it took me 6 years to pay it off as I was the only wage earner. I made my budget and allocated what I could to each creditor, I wrote to each of them and sent them a copy of my income and outgoings and told them what I could afford each month.

I stuck to this religiously. OK, I didnt' have a life apart from work eat and sleep, but each time one of the debts were cleared, instead of spending that money, I allocated bits of it to all the other creditors, so gradually they all got paid off. Some of them like the credit cards also stopped putting the interest on as i told them that was setting us back too.

AT the moment things are tight too, we owe nearly £4,000 on CC's, and as you know the interest rates are high! Recently we got some cheques from the Halifax and Barclays to use, as well as balance transfer offers. The cheques are for 5.94% per annum interest and can be used for anything, so what we've done is transferred the £2,700 debt from the Halifax to Barclaycard at 6.9%, then once we've made a payment on that, we are going to pay off the Barclaycard with a Halifax cheque at 5.94% and pay my CC off with a Halifax cheque and if that works, we'll save nearly £60 a month in interest charges.

Good luck with it all anyway, and congrats for the baby!!!!

jo1972 · 8 May 2007 at 2:12PM

Hi

Congratulations on the new baby :beer:

Well certainly on paper it looks as though you have enough money, although there are a few things that you've not mentioned that I don't know if you have to pay out for i.e. car/petrol/MOT, clothes allowance (6yr old's school uniform), school dinners, sociallising etc. etc.

I would recommend going onto https://www.nationaldebtline.co.uk as they have a budget sheet you can download, not sure if there's even one on here but I'm quite new on here too... You can write down all your incomings and outgoings, work out your priority debts and nonpriority and work out a pro rata payment for them all. They also have lots of good factsheets for help with credit cards and baliffs/ccjs - not that you have these but just incase anyone else is reading and may come in useful!!

Hope that helps, hopefully you should be in the black again very soon

Jo.

we need help with debts....

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