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    • teasolvesit
    • By teasolvesit 13th Mar 17, 11:03 PM
    • 11Posts
    • 1Thanks
    teasolvesit
    Help I don't know where to start
    • #1
    • 13th Mar 17, 11:03 PM
    Help I don't know where to start 13th Mar 17 at 11:03 PM
    I have been extremely careless over the last two years and accumulated a huge debt. I had been avoiding it for some time but sat down today and decided to crunch the numbers. I didn't realize I had accumulated £30000worth of debt!!!! panic set in early but I had done some research and I think I've started to accept the amount. But I just needed some advice on how to tackle it and what to pay first. below is my statement of affairs.

    My set income is about 1700 a month, it can go up to about £1900 depending on the number of unsocial hours I get rostered to do each month but this varies. However, I have now started to pick up extra shifts and hoping to make an extra 300-400 a month. I'm also very fortunate to have recently moved back in with my parents which means I'm not paying any rent at the moment, only have to cover the internet / TV bills.

    I would be grateful if anyone could help me understand what I should tackle first. I have also read up on debt management plans and IVA's but, at present, I haven't defaulted on any of my cards and I don't really want to go down that route if it is avoidable. My credit rating isn't great but i don't want to make it any worse.

    Statement of Affairs and Personal Balance Sheet

    Household Information[/b]
    Number of adults in household........... 3
    Number of children in household......... 0
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 1700
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 1700


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 0
    Electricity............................. 0
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 0
    Mobile phone............................ 25
    TV Licence.............................. 12.13
    Satellite/Cable TV...................... 47
    Internet Services....................... 38
    Groceries etc. ......................... 150
    Clothing................................ 50
    Petrol/diesel........................... 70
    Road tax................................ 17
    Car Insurance........................... 53
    Car maintenance (including MOT)......... 50
    Car parking............................. 70
    Other travel............................ 300 (train)
    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......................... 10
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 60
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 952.13



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 3000
    Other assets............................ 0
    Total Assets............................ 3000


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Lloyds.........................6862......159...... .17.7
    Capital one....................2510......128.......34.08
    virgin atlantic................1662......25........22.9
    barclaycard....................7298......178...... .17.18
    virgin money...................4550.93...47........17.48 (interest-free until 11/2/19)
    vanquish.......................2937......135...... .34.08
    aqua...........................753.11....22....... .24.9
    santander......................2012......21....... .17 (interest-free until 20/08/17)
    MBNA...........................2270......25....... .26.9 (interest-free until 21/11/17)
    Total unsecured debts..........30855.04..740.......-



    Monthly Budget Summary

    Total monthly income.................... 1,700
    Expenses (including HP & secured debts). 952.13
    Available for debt repayments........... 747.87
    Monthly UNsecured debt repayments....... 740
    Amount left after debt repayments....... 7.87


    Personal Balance Sheet Summary
    Total assets (things you own)........... 3,000
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -30,855.04
    Net Assets.............................. -27,855.04
    Last edited by teasolvesit; 14-03-2017 at 12:06 AM.
Page 2
    • teasolvesit
    • By teasolvesit 14th Mar 17, 5:44 PM
    • 11 Posts
    • 1 Thanks
    teasolvesit
    Thanks everyone for the response.

    My sister recently died so hence helping my brother in law out with the kids. Selling the car Is an opition I have thought about and will I will look at again. I dont really want to speak to him about it as hes under alot of stress himself.

    I will start by revalutating my budget and cutting back on as many things as possible. No entertainment no clothes and have already started to search for a new phone deal. And any extra shifts I do and the selling of my designer goods will hopefully give me an extra bit of cash to put towards the debt.

    Thanks again for all your input.
    • teasolvesit
    • By teasolvesit 14th Mar 17, 5:50 PM
    • 11 Posts
    • 1 Thanks
    teasolvesit
    I've just been over you debt payments.

    Firstly, you need to immediately, slightly increase the monthly payment to the Virgin Atlantic card, as you are currently not even covering the interest, meaning the balance is going up each month.

    A year from now, the balance will be £1,745.34, and two years from now it'll be £1,849.90.

    Increasing the monthly payment by £10, will at least get the balance reducing, albeit by only a tiny amount each month.

    Now for the actual clearing of the debts.

    Based on your current situation, it's going to take 46 months to pay off these debts, and cost you £9,570 in interest.

    However, if you changed your Mobile Phone to a £10 PAYG deal, and cut out entertainment and clothing purchases completely, that would give you an extra £125 per month.

    That £125, put toward your debts, would reduce the repayment period to 37 months, and the interest to £7,045.

    That's a reduction of 11 months and £2525, for just £125 extra per month.

    You see where I'm going with this?

    The more you can cut back, the more you can put toward your debts, and the faster and cheaper it will be, to clear them.
    Originally posted by Bedsit Bob
    I will defiantly increase my virgin Atlantic payments, thanks for pointing that out.

    Do you think i should start by tackling the smallest debt first or start with the highest or just spread the cost between the debts?

    thank you for your input.
    • teasolvesit
    • By teasolvesit 14th Mar 17, 5:53 PM
    • 11 Posts
    • 1 Thanks
    teasolvesit
    I think you can do it without entering a DMP, when we started a couple of years ago, we had payments bouncing etc.
    We stripped back all spending, and cut everything back till we got to a point where we weren't having payments bounce.
    We were able to pay minimums and a little bit more on the cards.
    Then last year we managed to move all the debt onto 0% cards (I really was amazed and didn't think we could have but we did) and so now it's all spread onto 0%

    But you need to do the initial claw back on spending etc first to see if you have the wiggle room xx
    Originally posted by kindofagilr

    Thank you for yourreponse. Its good to know that someone has done it without entering into a DMP. I will look at my budget and like you said claw back on spending but I think it will be doable.
    • Bedsit Bob
    • By Bedsit Bob 14th Mar 17, 6:21 PM
    • 9,592 Posts
    • 50,477 Thanks
    Bedsit Bob
    Selling the car Is an option I have thought about and will I will look at again.
    Originally posted by teasolvesit
    How do the numbers add up, if you were to scrap the monthly train ticket, and use the car instead?

    No entertainment no clothes and have already started to search for a new phone deal.
    In your position, I wouldn't tie myself into another phone deal.

    Instead, I'd go PAYG, so I could skip paying, in the event of a really bad month.
    My job is Top Secret. Even I don't know what I'm doing.

    Amount I have so far denied the BBC - £1161
    • Bedsit Bob
    • By Bedsit Bob 14th Mar 17, 6:27 PM
    • 9,592 Posts
    • 50,477 Thanks
    Bedsit Bob
    Do you think i should start by tackling the smallest debt first or start with the highest or just spread the cost between the debts?
    Originally posted by teasolvesit
    The general rule is to start by overpaying the debt with the highest APR, which will see off the debts in the quickest and cheapest way possible.

    In your case, due to the 0% deals, it's a little more complicated.

    I suggest you put all your debts into the Snowball Calculator (making sure to include the 0% deals and their expiry dates), and print out the results.

    That will give you a spreadsheet style chart, telling you exactly what to pay, each month, to each debt, to clear them in the fastest (and cheapest) way.
    My job is Top Secret. Even I don't know what I'm doing.

    Amount I have so far denied the BBC - £1161
    • teasolvesit
    • By teasolvesit 14th Mar 17, 6:36 PM
    • 11 Posts
    • 1 Thanks
    teasolvesit
    Great thanks will try the calculator and see where it takes me.
    • teasolvesit
    • By teasolvesit 14th Mar 17, 6:39 PM
    • 11 Posts
    • 1 Thanks
    teasolvesit
    Sorry I'm unable to quote and reply on my phone. But I haven't looked at taking the car to work option. That's something I can try I know there is a charge for car parking and I think it's about £50 a month then I would need to take into account petrol. I will check with Aa route planner to see how much the journey would cost. Thanks.
    • Bedsit Bob
    • By Bedsit Bob 14th Mar 17, 6:48 PM
    • 9,592 Posts
    • 50,477 Thanks
    Bedsit Bob
    I know there is a charge for car parking and I think it's about £50 a month then I would need to take into account petrol.
    Originally posted by teasolvesit
    If it costs £50 to park, that leaves £250 from the £300 train ticket.

    If you can get to work, using a decent amount less than that in petrol, you are onto a winner.

    Don't forget to inform your insurance company, if your mileage is going to rise above your currently declared amount.
    My job is Top Secret. Even I don't know what I'm doing.

    Amount I have so far denied the BBC - £1161
    • itsallabitmuch
    • By itsallabitmuch 14th Mar 17, 10:11 PM
    • 51 Posts
    • 83 Thanks
    itsallabitmuch
    The people that have already replied are far better in terms of giving financial advice than I.

    However, in regards to the Internet/TV:

    If you can do without, great, but it's not unreasonable these days to need the Internet. If you do definitely need it, try a switching service such as USwitch to see how much you could save by switching. Generally, the company you switch to will cover the cost of cancelling the previous service.
    • kindofagilr
    • By kindofagilr 16th Mar 17, 12:29 PM
    • 6,024 Posts
    • 20,220 Thanks
    kindofagilr
    Thank you for yourreponse. Its good to know that someone has done it without entering into a DMP. I will look at my budget and like you said claw back on spending but I think it will be doable.
    Originally posted by teasolvesit
    Definitely

    We have paid nearly 20% of ours off ourselves and we aren't in a DMP

    Another thing I wanted to say was look up the challenges on here, I love them, especially the 'pay off all your debt by christmas 2017' one, I won't have all mine paid off by then, but you can set targets, last year we wanted to pay off £7000 and managed just more than that, so this year I have set my target for £10,000 xx
    At LBM DFD was Dec 2024
    £47,166.44
    /£45,353.15 ~ 31/07/2017
    ~3.84% Paid

    POAMAYC 2017 #87 PD £6751.90/£10,000

    POAMAYC 2016 #87 PD £7454.80/£7000


    Mortgage (Start Date 01/04/09 ~ 30 year term, due to end 01/07/39)
    £104,409/£86,312 (as of 31/07/17) ~ 17.33% Paid

    Holiday 2018 Fund = £0.00 ~ 17/08/17
    Lost Weight 0/48 Lbs ~ 17/08/17

    My Debt Free Diary (Link)
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