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  • FIRST POST
    • emmamc77
    • By emmamc77 14th Mar 17, 9:52 PM
    • 15Posts
    • 7Thanks
    emmamc77
    will be able to fix this?
    • #1
    • 14th Mar 17, 9:52 PM
    will be able to fix this? 14th Mar 17 at 9:52 PM
    Hello everyone,

    Basically after a few really awful years of IVF and other catastrophes, we have found in self in a large amount of debt (65k). Me and my husband are now both back working full time and we feel that this is our time to sort out this mess, before it robs of our future., I will do a proper SOA tomorrow when I am more awake! Here are our basic figures -

    We take home £4,300 per month between us

    our mortgage, all household bills and direct debits ( excl debt payments) comes to £1500

    our minimum debt payments are around £1300

    We need around £600 a month to cover food and fuel and childcare

    We would like to save £150 as we have no emergency fud

    This means that we have about £750 to add to our debt repayments. This is doable now that we are both working full time. This means that we can potentially pay 2k a month off the debts.

    The debts are spread across credit cards and a loan, some at 0% and some at higher rates - we have learnt about how to do the snowball method and we are going to do this to clear the debt asap.

    We have £75k equity in our house, however we don't want to use that.

    Neither of us want to have to enter in to an DMP/IVA or bankruptcy - please tell us that this won't happen if we can afford to pay?? We just want to pay it off and then get on with the next stage of our lives. We don't want to trash our credit files.
Page 1
    • January2015
    • By January2015 14th Mar 17, 9:58 PM
    • 1,757 Posts
    • 4,746 Thanks
    January2015
    • #2
    • 14th Mar 17, 9:58 PM
    • #2
    • 14th Mar 17, 9:58 PM
    Post a full SOA and the lovely folk on this forum will be able to give you some informed advice.

    Don't worry - no-one would recommend you use any equity from your property.

    Take a deep breath and have a good night's sleep. Come back tomorrow. Yes this is fixable.
    DFW Nerd No. 1484 LBM 07/01/15 Debt was £95k I'm driving it down
    £1k emergency fund (member #84) £1k/£1k
    Xmas 2017 £1 p/day challenge No. 20 - £420/£730
    Make £10 p/day Feb £74.31, Mar £664.37 Apr £40
    • enthusiasticsaver
    • By enthusiasticsaver 15th Mar 17, 5:18 AM
    • 4,851 Posts
    • 9,170 Thanks
    enthusiasticsaver
    • #3
    • 15th Mar 17, 5:18 AM
    • #3
    • 15th Mar 17, 5:18 AM
    Good news is you have a reasonably high income and you can easily cover minimum debt repayments so it it is fixable.

    We do need to see a full soa though so post that. I will put the link up for you.

    Don't take out any debt consolidation loans or use your home equity. If you can get most of it on to 0% debt you could get it paid off within 3 years.
    1 week to go until early retirement. Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • enthusiasticsaver
    • By enthusiasticsaver 15th Mar 17, 5:19 AM
    • 4,851 Posts
    • 9,170 Thanks
    enthusiasticsaver
    • #4
    • 15th Mar 17, 5:19 AM
    • #4
    • 15th Mar 17, 5:19 AM
    http://www.stoozing.com/calculator/soa.php
    1 week to go until early retirement. Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • emmamc77
    • By emmamc77 15th Mar 17, 7:52 AM
    • 15 Posts
    • 7 Thanks
    emmamc77
    • #5
    • 15th Mar 17, 7:52 AM
    • #5
    • 15th Mar 17, 7:52 AM
    So here it is. This is quite new to us as we have only just had 2 full time wages coming in. Looking at this makes me think that we can do this without anything too aggressive. I am TERRIFIED of having to go down the DMP/IVA route and I will do ANYTHING to avoid it. Please tell me that we can fix this mess ourselves.

    I am thinking that even if the 0% cards start to incurr interest, we should still be able to service it by snowballing.

    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 2100
    Partners monthly income after tax....... 2120
    Benefits................................ 82
    Other income............................ 0
    Total monthly income.................... 4302


    Monthly Expense Details

    Mortgage................................ 450
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 110
    Electricity............................. 20
    Gas..................................... 80
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 12.99
    Mobile phone............................ 50
    TV Licence.............................. 12
    Satellite/Cable TV...................... 0
    Internet Services....................... 20
    Groceries etc. ......................... 300
    Clothing................................ 10
    Petrol/diesel........................... 160
    Road tax................................ 15
    Car Insurance........................... 50
    Car maintenance (including MOT)......... 20
    Car parking............................. 10
    Other travel............................ 0
    Childcare/nursery....................... 140
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 20
    Contents insurance...................... 0
    Life assurance ......................... 28
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 20
    Haircuts................................ 15
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 1542.99



    Assets

    Cash.................................... 0
    House value (Gross)..................... 145000
    Shares and bonds........................ 0
    Car(s).................................. 7000
    Other assets............................ 0
    Total Assets............................ 152000



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 68000....(450)......0
    Total secured & HP debts...... 68000.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    cc1............................15000.....300...... .0
    cc2............................8500......180...... .0
    loan...........................20000.....489...... .0
    lloyds tsb.....................0.........0.........0
    halifax .......................4400......50........0
    creation card..................3000......88........27.9
    Asda CC........................4500......100.......19.9
    dh CC..........................10000.....200.......0
    Total unsecured debts..........65400.....1407......-



    Monthly Budget Summary

    Total monthly income.................... 4,302
    Expenses (including HP & secured debts). 1,542.99
    Available for debt repayments........... 2,759.01
    Monthly UNsecured debt repayments....... 1,407
    Amount left after debt repayments....... 1,352.01


    Personal Balance Sheet Summary
    Total assets (things you own)........... 152,000
    Total HP & Secured debt................. -68,000
    Total Unsecured debt.................... -65,400
    Net Assets.............................. 18,600
    • worriedDan
    • By worriedDan 15th Mar 17, 8:15 AM
    • 186 Posts
    • 548 Thanks
    worriedDan
    • #6
    • 15th Mar 17, 8:15 AM
    • #6
    • 15th Mar 17, 8:15 AM
    Hi, I am not really in a position to offer money advice as my situation is similar, however I wish you well.

    Looking at your SOA and surplus, I would say that you can beat this. Other will give you better advice than me though
    • armchairexpert
    • By armchairexpert 15th Mar 17, 9:06 AM
    • 726 Posts
    • 4,720 Thanks
    armchairexpert
    • #7
    • 15th Mar 17, 9:06 AM
    • #7
    • 15th Mar 17, 9:06 AM
    Hi! Well done, and welcome. Firstly, don't panic. You've still got a bunch of options here, and I think it's eminently fixable just looking at your surplus, and how many cards are still on 0% - you don't want to rely on them staying there, but you've got some room to move for now IF you start getting this fixed.

    I'm not your girl for a detailed analysis of the SOA, but a few things jump out:

    1) You can get groceries down quite a bit from 300, especially assuming your child is young. I reckon you could shave 100 off.
    2) You need an emergency fund and something for entertainment. It's not a sprint, it's a marathon
    3) Your clothes, presents and haircuts are very low, which is great BUT I wonder if it's a teensy bit aspirational? You obviously don't really have 1300 left over a month, or you wouldn't have 7 different forms of credit. Be careful that your SOA doesn't go so far into "what you'd like to be true" that it fails to be realistic. If, of course, you have a friend who cuts your hair, a talent for making your own gifts out of twine and good intentions, and a passion for charity shops, feel free to correct me. But that's VERY low as it is.

    Hit the Creation and Asda cards first - they're also the smallest balances, which is handy! - but also have a look at what the APR of the others will be when the 0% period runs out, so you've got a plan for the next ones.

    Good luck!
    MFW diary here. 1 Feb 2017 $229,371 - MFD Feb 2043 aiming for May 2028
    14 August 2017 - Refinanced: $220,000
    November 2017 - $216,000.00 Current MFD 31 July 2035
    • emmamc77
    • By emmamc77 15th Mar 17, 5:08 PM
    • 15 Posts
    • 7 Thanks
    emmamc77
    • #8
    • 15th Mar 17, 5:08 PM
    • #8
    • 15th Mar 17, 5:08 PM
    I have had a really frantic day worrying about this. I have been on the stepchange debt remedy tool and they just reccomend a monthly payment plan as we can afford the minimums and we have a surplus.

    I know that the cards may not always be at 0% but I still feel that we can service by this debt by throwing a large overpayment at it. I would much rather do this than go down DMP route and trash my credit rating for 6 years.

    Is this doable?
  • National Debtline
    • #9
    • 15th Mar 17, 5:35 PM
    • #9
    • 15th Mar 17, 5:35 PM
    I have had a really frantic day worrying about this. I have been on the stepchange debt remedy tool and they just reccomend a monthly payment plan as we can afford the minimums and we have a surplus.

    I know that the cards may not always be at 0% but I still feel that we can service by this debt by throwing a large overpayment at it. I would much rather do this than go down DMP route and trash my credit rating for 6 years.

    Is this doable?
    Originally posted by emmamc77
    Hi Emma

    The DMP and insolvency routes you’ve mentioned are for people who can’t afford the minimum contractual payments on their debts, as the debt remedy tool confirmed. You aren’t in that position at all so it isn’t something you need to worry about.

    Make sure the outgoings are realistic and sustainable on your SOA, so that you can stick to it in the long term, and you have a plan to clear your debts.

    James
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • angelpye
    • By angelpye 15th Mar 17, 6:22 PM
    • 988 Posts
    • 3,711 Thanks
    angelpye
    Hi Emma, have you tried using the snowball calculator to work out a payment schedule? It will ask for all your APRs including the ones your 0% deals will turn into. It will work out the most efficient way of paying down your debts i.e. how much to throw at what and when. It will also give you a debt free date (DFD) which is a great focus to have. Just make sure you are realistic with yourselves - I am on my third debt free journey and I think some of that is down to ignoring why I get into debt and also being too hardcore on myself - is your car maintenance budget enough? You need to allow money for 'fun' and to put money aside for emergencies so you are not tempted to put things onto credit when the inevitable scenario of the washing machine or boiler breaks down.

    Good luck, you can do this!
    Happiness is wanting what you have...
    Debt Jan 2017: £2589.22 DFD: Sept 2022 April 2022 but this Marching Minimalist can beat that!
    Use it or Loose it gym target: Feb'17 5/6 Mar 4/6
    EF £0/£4200
    • Fireflyaway
    • By Fireflyaway 15th Mar 17, 7:08 PM
    • 1,356 Posts
    • 1,377 Thanks
    Fireflyaway
    You can manage this. Might be worth speaking to your creditors to see if you can agree on a set amount each month ( smallest amount they will accept) and then concentrate on one debt at a time check out Dave Ramsey snowball method. That might show on file that you have an arrangement in place though. Even if you don't decide to follow the method I would really recommended watching some debt free screams on YouTube its really inspirational. Why not do your emergency fund in one hit? Then its done.
    • enthusiasticsaver
    • By enthusiasticsaver 15th Mar 17, 11:51 PM
    • 4,851 Posts
    • 9,170 Thanks
    enthusiasticsaver
    You have a huge surplus so this should be easily fixable. There are a few gaps in your soa though. Entertainment, emergency fund and I think you need more than £20 in car maintenance if you have 2 cars. My suggestion would be you initially aim for £2000 to go to your debts monthly.

    Tackle the creation card first. It is eminently fixable to sort out your situation and I don't think a DMP at all appropriate.
    1 week to go until early retirement. Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Happier Me
    • By Happier Me 16th Mar 17, 6:12 AM
    • 392 Posts
    • 837 Thanks
    Happier Me
    Yes this is very fixable on your income so please try not to panic too much. Here are my thoughts:
    • Like others have said, I think your SOA is too tight, to the point of unrealistic. You need to be able to live a little on this journey.
    • Aim to pay off the highest bearing interest cards first. But also check to see if there are any more 0% deals available to reduce the interest you are paying.
    • Find all the end dates on the 0% deals and the new interest rates. This will give you an idea of the order in which to pay off your other cards.
    • Once you have amended you SOA, you need to make sure that surplus exists every month. Some use a spending diary, others go through previous month's spends to account for every penny. You need to consciously live within budget. If there is no budget for a coffee out or a takeaway, then you don't have these things.

    You can do this!
    • emmamc77
    • By emmamc77 16th Mar 17, 8:18 AM
    • 15 Posts
    • 7 Thanks
    emmamc77
    Thanks for the posts. I am somewhat reassured I must say! We are so determined to tackle this. I know it wont be plain sailing but we would like to clear it within 4 years. which means that we need to be clearing £1400 from the balance.

    it might take a few more months if we are not able to secure new 0% deals later on this year. Even in this scenario, I think I would prefer to snowball rather than consolidate. What do others think?
    • January2015
    • By January2015 16th Mar 17, 9:05 AM
    • 1,757 Posts
    • 4,746 Thanks
    January2015
    Thanks for the posts. I am somewhat reassured I must say! We are so determined to tackle this. I know it wont be plain sailing but we would like to clear it within 4 years. which means that we need to be clearing £1400 from the balance.

    it might take a few more months if we are not able to secure new 0% deals later on this year. Even in this scenario, I think I would prefer to snowball rather than consolidate. What do others think?
    Originally posted by emmamc77
    I think you have your thinking head firmly in place

    Snowballing is far more preferable than consolidation. You will almost never see anyone on this forum recommending consolidation.

    Stay strong and positive and committed to your goal and you will be debt free before you know it. It is so lovely to read your posts and see you are feeling more positive about your debt already.

    Good luck - you won't need luck though because you are clearly determined to sort this.
    DFW Nerd No. 1484 LBM 07/01/15 Debt was £95k I'm driving it down
    £1k emergency fund (member #84) £1k/£1k
    Xmas 2017 £1 p/day challenge No. 20 - £420/£730
    Make £10 p/day Feb £74.31, Mar £664.37 Apr £40
    • emmamc77
    • By emmamc77 16th Mar 17, 9:37 AM
    • 15 Posts
    • 7 Thanks
    emmamc77
    Thanks. I think it's just the totally amount that freaks me out. I don't think I've ever met anyone with as much debt as us��
    • bearcat16
    • By bearcat16 16th Mar 17, 10:25 AM
    • 318 Posts
    • 368 Thanks
    bearcat16
    Might be worth speaking to your creditors to see if you can agree on a set amount each month ( smallest amount they will accept) and then concentrate on one debt at a time
    If you did this, creditors would consider this a DMP and you'd be marked as in default.

    The creditors have already specified the minimum they will accept within the terms of the agreement; for credit cards it's the minimum monthly payment, for loans it's the standard monthly payment.

    Anything outside of this will be defaulting.
    • January2015
    • By January2015 16th Mar 17, 10:29 AM
    • 1,757 Posts
    • 4,746 Thanks
    January2015
    Thanks. I think it's just the totally amount that freaks me out. I don't think I've ever met anyone with as much debt as us��
    Originally posted by emmamc77
    You just don't realise you have met anyone with as much debt as you ....people don't talk about it

    Not everyone you know will have debt, or even large debts, but I am betting some will. Just look at some of the signatures on this forum (mine included). There are many, many people with debts far exceeding what you owe. The important thing is you have acknowledged there is an issue and you are taking advice and steps to deal with it.

    The best advice I can give is to enjoy the journey to becoming debt free and learn from it. Don't look on making so debt payments as a burden; turn that thought around and see it payment as lightening the load. During the journey learn to save for upcoming expenses such as car insurance, breakdowns, household appliances etc. etc. and learn not to reach for a credit card or loan to pay for such things. There is a strange enjoyment to knowing you've paid for such things with your own money rather than resorting to credit.

    The other piece of advice is to keep visiting this forum - it really helps with staying motivated. Perhaps start a diary to track your journey (ups and downs). You will find others who will become virtual friends who will gee you along the journey.

    DFW Nerd No. 1484 LBM 07/01/15 Debt was £95k I'm driving it down
    £1k emergency fund (member #84) £1k/£1k
    Xmas 2017 £1 p/day challenge No. 20 - £420/£730
    Make £10 p/day Feb £74.31, Mar £664.37 Apr £40
    • angelpye
    • By angelpye 16th Mar 17, 10:33 AM
    • 988 Posts
    • 3,711 Thanks
    angelpye
    Two types of snowballing to consider - Dave Ramsey I believe advocates paying off the smallest debt first and then onto the next smallest debt whereas the other one is about tackling highest interest first. I prefer the second as I want to pay as little interest as possible but the first can give people a psychological boost more often as they are closing the accounts possibly more often depending on whether the lower amounts have the lower APR. Some people focus on paying the smallest off first and then move to the highest interest. It really is up to you and what you think is most beneficial to you.

    Comparing yourself to others doesn't work and isn't helpful. You have a massive surplus compared to a lot of people so its all swings and roundabouts - my current DFD is 5 years away and I have less than £2500 of debt but then my disposable cash is very low at the moment. I am working on it though and determined to be debt free much much sooner.

    Glad you are feeling more positive. The first leg of this journey can be a bit of an emotional roller coaster. Once you have a plan in place that is workable (and that does sometimes mean adjusting it in the first couple of months) you will feel in control
    Last edited by angelpye; 16-03-2017 at 10:38 AM.
    Happiness is wanting what you have...
    Debt Jan 2017: £2589.22 DFD: Sept 2022 April 2022 but this Marching Minimalist can beat that!
    Use it or Loose it gym target: Feb'17 5/6 Mar 4/6
    EF £0/£4200
    • emmamc77
    • By emmamc77 16th Mar 17, 11:39 AM
    • 15 Posts
    • 7 Thanks
    emmamc77
    Thanks for posts. I know it's all relative and there's no joint comparing, but I'm just at a low ebb at the moment. I know we can do this, it just feels like such a mountain is debt
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