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BengalTilly
Posts: 16 Forumite
Hello
I'm after some debt management/consolidation advice please.
In the passed few months my circumstances changed and I have become part time however I calculated that our monthly income would still be sufficient as long as we followed a budget. Sadly that has not been followed and this month as we speak we are at our overdraft limit so direct debits are failing for the first time ever.
I personally have 4 credit cards which are maxed out and some of the failed direct debits sadly will be to do with them so that will make the situation worse. My credit rating is Poor 689.
What is the best approach now as unfortunately we're going to be forever chasing our tails now to catch-up. For example, the total £370 this month of failed direct debits this month if I make payments on payday later in the month we're still going to be £370 behind (and we don't have that value of spare cash each month).
My credit cards total and bank overdraft plus current monthly payments are as follows:
Overdraft £1,600 total credit - monthly payment/charges £20
MBNA credit card £3,400 total credit - monthly payment £95
NUBA credit card £5,000 total credit - monthly payment £52
Barclaycard credit card £5,000 total credit - monthly payment £126
Marbles credit card £450 total credit - monthly payment £50
TOTAL CREDIT £15,450 CURRENT MONTHLY PAYMENT £343 say
I wondered is consolidation loans available to me (with my circumstances/credit score) that would cover the £15,450 but spread over x years with a lower monthly payment than £343. This would then allow us to get to a balanced position to follow a budget. But I'm doubtful whether this would be an option to me with my credit score?
I accept I've got myself in this mess particularly through spending over my means but right now I need a solution and for the first time very concerned as we've never not paid direct debits before.
My circumstances changed this year as I was of long term sick with mental health problems and I now work part time instead of full time. After doing my ins and outs we only have £50 spare to clear debts which is nothing. So I don't know where to go from here?
Thank you in advance.
I'm after some debt management/consolidation advice please.
In the passed few months my circumstances changed and I have become part time however I calculated that our monthly income would still be sufficient as long as we followed a budget. Sadly that has not been followed and this month as we speak we are at our overdraft limit so direct debits are failing for the first time ever.
I personally have 4 credit cards which are maxed out and some of the failed direct debits sadly will be to do with them so that will make the situation worse. My credit rating is Poor 689.
What is the best approach now as unfortunately we're going to be forever chasing our tails now to catch-up. For example, the total £370 this month of failed direct debits this month if I make payments on payday later in the month we're still going to be £370 behind (and we don't have that value of spare cash each month).
My credit cards total and bank overdraft plus current monthly payments are as follows:
Overdraft £1,600 total credit - monthly payment/charges £20
MBNA credit card £3,400 total credit - monthly payment £95
NUBA credit card £5,000 total credit - monthly payment £52
Barclaycard credit card £5,000 total credit - monthly payment £126
Marbles credit card £450 total credit - monthly payment £50
TOTAL CREDIT £15,450 CURRENT MONTHLY PAYMENT £343 say
I wondered is consolidation loans available to me (with my circumstances/credit score) that would cover the £15,450 but spread over x years with a lower monthly payment than £343. This would then allow us to get to a balanced position to follow a budget. But I'm doubtful whether this would be an option to me with my credit score?
I accept I've got myself in this mess particularly through spending over my means but right now I need a solution and for the first time very concerned as we've never not paid direct debits before.
My circumstances changed this year as I was of long term sick with mental health problems and I now work part time instead of full time. After doing my ins and outs we only have £50 spare to clear debts which is nothing. So I don't know where to go from here?
Thank you in advance.
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Comments
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Can you get another part time job?
Can you move some of the debt to 0% cards?
Can you take in a lodger?
Have you anything you can sell?
Do you have 2 cars? do you need both? can you sell one?Breast Cancer Now 2022 100 miles October 100 / 100milesSun, Sea
2024 7/28 lbs to go.0 -
Hi. The first thing you should do is to complete a Statement of Affairs, SOA, listing all your incomings and outgoings, your debts and interest rates. Then post it on here and the good people will be able to make suggestions on where you can cut back on your spending to free up money to throw at the debts.
You say 'we', are there two of you? Do you combine wages? Can you work with the other person as a team and sort it out together?
You could contact Stepchange or Christians Against Poverty, free charities who will help you sort it out. Don't ever pay any company that promises to help.
You could set up payment plans yourself directly with your creditors, write to them and tell them of your circumstances, don't wait until they contact you. Offer to pay what you can for now.
Consolidation is a bad idea and rarely works, it sounds as if you wouldn't get a loan anyway, which is a good thing. There are lots of posts on here from people who did consolidate and found themselves in a bigger mess because they kept on using the cards.
You realize that you have been living beyond your means, that has to stop. From now on only buy what you need. Keep a spending diary so you know where your money is going. Go to the Debt Free Wannabe board to get help with cutting back.
Don't despair, there is a solution to every problem. You have recognized that you are at breaking point, from now on the only way is up. Keep your chin up.
IlonaI love skip diving.
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Good advice above. You've said it yourself - a budget was drawn up but not stuck to - that is what needs to change.
Fill in the SOA as said and let's see if your budget is achievable if you DO stick to it!
Avoid consolidation at the very least until you've got to the point where you have learned to budget and live within your means. what will happen currently is that you will take the 15k loan but continue to live in the way that you are - meaning that in another few years you'll still be paying the loan, but will have a further amount on cards/overdrafts that will have compounded the situation. Live within your means and to a budget, and above all STOP using credit cards - that bit is vital, and needs to happen right now!🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00
Balance as at 31/12/23 = £112,000.00SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0 -
Op, you have posted this twice on Ask an Advisor, and you asked similar questions two years and one year ago. Two years of juggling and you are no further forward. I think the best thing you can do is that Statement of Affairs. Please do it to help yourself.
IlonaI love skip diving.0 -
Thank you all for your replies.
My circumstances changed from a couple of years ago as I have been on long term sick with mental health problems (Oct 16 - Apr 17) meaning I can no longer do a full time job. My current part time role (22.5 hours a week) is what I can manage.
I will however do the Statement of Affairs this evening and credit cards have now been removed from use!!
Thanks.0 -
Hopefully done this correctly. Leaves £33 each month but I think some of the promotional periods on some credit cards expire so expected min payments to go hence swallowing this.
Statement of Affairs & Personal Balance Sheet
Summary
Monthly Budget Summary Amount(£)
Total monthly income 2,254
Monthly expenses (incl. HP & secured loans) 1,600.5
Available for debt repayments 653.5
UNsecured debt repayments 620
Amount left after debt repayments 33.5
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 15,900
Total Secured & HP Debt -14,909
Total Unsecured Debt -21,366
Net Assets -20,375
Household Information
Number of adults in household 2
Number of children in household 0
Number of cars owned 1
Income, Expense, Debt & Asset Details
Income Amount(£)
Monthly income after tax 1008
Partners monthly income 1246
Benefits 0
Other income 0
Total monthly income 2254
Expenses Amount(£)
Mortgage 0
Secured/HP loan payments 437
Rent 420 - we live in a granny annexe at my in-laws they just charge this for all bills bar electrcity
Management charge (leasehold property) 0
Council tax 0
Electricity 39
Gas 0
Oil 0
Water Rates 0
Telephone (land line) 15
Mobile phone 76 includes phone insurance payment. Stuck on a contract until Aug-18 *edit* just ditched £12 of this as got rid of insurance element (only thing can change until next year)
TV Licence 0
Satellite/Cable TV 5
Internet services 40
Groceries etc. 150 - this is best budget we could come up
Clothing 0
Petrol/diesel 175
Road tax 21
Car Insurance 78 includes breakdown
Car maintenance (including MOT) 5
Car Parking 0
Other travel 80 - this is my monthly bus fare (cheapest type of ticket I can get)
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 16 - monthly prescription plus dental appointments every 6 months
Pet Insurance/Vet bills 0
Buildings Insurance 0
Contents Insurance 4
Life Assurance 0
Other Insurance 0
Presents (birthday, christmas etc.) 0
Haircuts 10 - our barber charges £5 each cut
Entertainment 0
Holiday 0
Emergency Fund 0
Donations 12.5 - *edit* I have just reduced now down to £3
Gym 17 - joined recently on advice of medical professionals
Total monthly expenses 1600.5
Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 0 (0) 0
Hire Purchase (HP) Debt 13225 (303) 0
PC World 613 (39) 0
Littlewoods 135 (66) 0 - two payments left to clear
Oakfurniture Land 936 (29) 0
Secured & HP Debt totals 14909 - -
Unsecured Debt Description Debt(£) Monthly(£) APR(%)
MBNA (nuba) 5000 52 0
MBNA 3400 95 0
Marbles 450 50 0
Nationwide Overdraft 1600 20 0 - average charges each month are £20
Sainsburys Loan 816 163 0 ends Feb-18
Tesco Bank 2600 26 0
Capital One 2500 88 0
Barclaycard 5000 126 0
Unsecured Debt totals 21366 620 -
Asset Description Value (£)
Cash 0
House Value (Gross) 0
Shares and bonds 0
Car(s) 15900
Other assets (e.g. endowments, jewellery etc) 0
Total Assets 159000 -
Well my SOA is totally rubbish as I've just found my Sainsbury's loan documents and my last payment isn't Feb-2018 as assumed it's Dec-2018.0
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