Advice on my debt please

asoe209 · 11 October 2016 at 9:48AM

Morning, just looking for some advice really as I seem to be at a sticking point in repaying my debts.

A friend advised that I should look at getting a loan. but there are a couple of different factors involved.

So the break down is,
I owe a total of £16,252
to over draft - £1450
Online Retailer - £7950
Credit Cards 0% - £2954
Credit Card - 0% - £3898

I'm paying about £510 a month on all.

I take Home £1800 a month and I am about to take in a lodger that will pay 365 per month.

All my other outgoings total approx £950 per month.

I had a look a getting a loan for the full 16k but that is not likely, but I could get one to pay off the retailer as this I the most and the highest interest.

This difficult bit is I need to also get a new car, this is due to work and the car allowance policy which I have put off for a year now but my current car is has been braking down a fair bit this year so its getting to the point where I need to change it soon any way.

My salary is due to go up I would estimate in the next 4 months, if all goes to plan.

so can any one give there suggestions on what may be the best solution?

EssexHebridean · 11 October 2016 at 10:09AM

First thing is to do a full SOA (Statement of Affairs) - you can find the link in the sticky post at the top of this thread. Format for MSE as per the instructions and post it in here - people will then be able to take a look and see where you may be able to make savings.

Consolidation can work in some circumstances, but generally speaking is not advised.

You say your take home is £1800 a month, you're paying out £950 on all other outgoings and £510 to your debts - where is the other £340 going? Savings? At the moment you'd do better to pay off debts than save, beyond your obvious emergency fund, of course.

Don't rely on a salary increase that "might" happen - it also "might" not.

Lodger is a great idea - that's an extra lump sum to go to the debts then, yes? You need to "snowball" your debts too - that is pay off the ones that are costing you the most, soonest. So the 0% cards are low priority at the moment - when are the 0% periods due to run out?

Can you explain what you mean about the car? Car Allowance policy? What have your garage said about yours? How old is it? Is the issue causing the breeakdowns something that they can sort out or are they advising you not to throw good money after bad?

[Deleted User] · 11 October 2016 at 10:29AM

asoe209 wrote: »

I had a look a getting a loan for the full 16k but that is not likely

Why would you even consider taking out a loan, to pay off 0% Credit Cards :huh:

What are the APRs on the Online Retailer and OD debts?

Also, as advised by EssexHebridean, post an SOA.

MEM62 · 11 October 2016 at 10:30AM

Advice from friends is often well meant but not always sensible.

Almost £7K of your debt is currently interest free? Why would you include that on a loan and pay interest? Madness! Particularly as the interest rate on a consolidation loan is likely to be relatively high.

At first view your situation is far from unmanageable, as you will have at least the £365 rent to throw at it - and I expect probably a lot more.

You need to post an SOA and the good people on here will offer some great advice on getting to grips with this. Do not forget that dealing with clearing the debt is only part of the solution. You also have to honestly address the seasons why you are in this situation in the first place.

MrsTinks · 11 October 2016 at 10:41AM

EssexHebridean wrote: »

Can you explain what you mean about the car? Car Allowance policy? What have your garage said about yours? How old is it? Is the issue causing the breeakdowns something that they can sort out or are they advising you not to throw good money after bad?

This is quite standard in some jobs - part of a car allowance in a job where travel is essential or you might reasonably be expected to represent your company on client sites will have a generous car allowance policy instead of a company car. Usually the requirements is that the car must be under 3 years old and in some jobs it must be of a certain type - ie it would not be seen as appropriate for a senior director to spend 20% of his allowance on an old Fiat Panda and pocket the rest... it's not considered PAY it's to make up for any cost incurred by having to drive a car that is appropriate for the company image...

Husband forexample has to drive a car of a certain type due to his senior position. They don't get iffy about a 4 or 5 year old car if it LOOKS appropriate and is reliable. They WOULD flip if he turned up in a Morris Ital that never started...

Or they can stop the car allowance... breach and all that

sourcrates · 11 October 2016 at 10:48AM

MrsTinks wrote: »

They WOULD flip if he turned up in a Morris Ital that never started... Or they can stop the car allowance... breach and all that

Just slightly off topic, but you mentioning Morris ital awoke a memory in me.
My brother, to whom a car is just a method of getting from A to B, once had a Morris marina, from new, had it ten years, then sold it, missed it so much, be bought it back two years later, and kept it till it finnaly fell apart lol you can't teach taste can you lol

asoe209 · 11 October 2016 at 11:12AM

Thanks you all so far.

I will do that SOA and post that up.

The remaining money which I have spare I put into savings and other things which crop up over a month.

£250 is saved each month and the remainder is my spending. I often dip into these saving though to pay for anything that crops up like car repairs or bills.

I drive a 2005 vw polo, its got 56,000 on the clock but this year its undergone repairs some from breakdowns some preventive maintenance. to be fare the car runs but its more the company I don't believe they want any thing driven older than 5 years. but I have been adamant not to change until I am financial more stable.

the car allowance works out at about £300 after tax, so this is sort of what I am saving.

As for the pay its 100% happening its just a case of when as my pay will change once I pass my exam for the job in which I am doing.

MrsTinks · 11 October 2016 at 11:27AM

sourcrates wrote: »

Just slightly off topic, but you mentioning Morris ital awoke a memory in me.
My brother, to whom a car is just a method of getting from A to B, once had a Morris marina, from new, had it ten years, then sold it, missed it so much, be bought it back two years later, and kept it till it finnaly fell apart lol you can't teach taste can you lol

And I had an orange morris ital that I HATED lol bought because it was cheap when my Fiat x1/9 had a slight gear box malfunction :cool: I went from 2 seater 70's cool to... a knackered satsuma. Darned thing only started about 75% of the time so I had to park it on the top floor of the work multistory so I could push it to the ramp and bumpstart it if it had a mood... This was only 15 years ago... the satsuma was old then!

EssexHebridean · 11 October 2016 at 11:27AM

Got you on the car thing - HOWEVER your figures are currently wrong on the question of where your money goes...

£250 is saved each month and the remainder is my spending. I often dip into these saving though to pay for anything that crops up like car repairs or bills.

When you do your SOA, you need to budget for things like car repairs on a monthly basis. For example - we have two cars - and pay £155 a month into a dedicated account which then covers MoT, Tax, Insurance (paid annually), Service, Tyres etc. One of our cars is older than yours and higher mileage, the other is 2 years newer but with more than twice the mileage.

On the car allowance - so I assume you would be looking to sort out a loan for the amount to be paid, then pay the £300 a month off against that? Are you currently saving the car allowance in a savings account to put towards the cost of a replacement?

Another thing on the SOA - base it on your pay now, not what you expect to get in the future - then any increase just improves your situation.

asoe209 · 11 October 2016 at 11:29AM

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1888
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1888
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 700
Management charge (leasehold property).. 0
Council tax............................. 86
Electricity............................. 50
Gas..................................... 40
Oil..................................... 0
Water rates............................. 23
Telephone (land line)................... 17.4
Mobile phone............................ 25
TV Licence.............................. 37
Satellite/Cable TV...................... 22.5
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 30
Petrol/diesel........................... 70
Road tax................................ 12
Car Insurance........................... 33
Car maintenance (including MOT)......... 100
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 0
Entertainment........................... 60
Holiday................................. 0
Emergency fund.......................... 100
Total monthly expenses.................. 1535.9

Assets
Cash.................................... 1400
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1250
Other assets............................ 0
Total Assets............................ 2650

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Online Retailer ...............7795.94...360.......39
Current Account OD.............1450......40........0
Card 1.........................3898.45...45........0
Card 2.........................2954.11...40........0
Total unsecured debts..........16098.5...485.......-

Monthly Budget Summary
Total monthly income.................... 1,888
Expenses (including HP & secured debts). 1,535.9
Available for debt repayments........... 352.1
Monthly UNsecured debt repayments....... 485
Amount short for making debt repayments. -132.9
Personal Balance Sheet Summary
Total assets (things you own)........... 2,650
Total HP & Secured debt................. -0
Total Unsecured debt.................... -16,098.5
Net Assets.............................. -13,448.5
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

[Deleted User] · 11 October 2016 at 11:29AM

asoe209 wrote: »

The remaining money which I have spare I put into savings and other things which crop up over a month.

Aside from an emergency fund (the size depending on whether you own or rent), I don't think you should worry about savings, while you have interest attracting debts.

Advice on my debt please

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free