Help, need to act quick

tommyt_3

Hello guys and gals, hoping you can give me some advice. After being debt free up until 2 years ago, I now find myself £26,000 in debt, and cannot meet all my repayments. Take home £1050 net per month and am repaying £298 per month on a loan, and minimum payments of £60 per month (Marbles), £180 (Egg) and £120 (Capital One). I have yet to default on any payments, but having exhausted my "savings", am no longer able to meet the credit card minimum payments next month. Clearly £658 out of £1050 is not sustainable. I have contacted the CCCS, who recommended an IVA nad put me in touch with the Insolvency firm they use. Did the facts and figures and CCCS worked out I had £340 available to put towards repayments. However iInsolvency firm stated that they would not be able to get an IVA for me, as creditors would expect at least £400 per month and over 5 years this would amount to repayments of £24,000, which would virtually repay the debt in full. However, this would be assuming all interest was frozen.

CCCS has now suggested I follow a DMP, paying the £340 available per month. With interest frozen this would take me 7 years to repay, but there is no guarantee that all creditors would freeze the interest, so could take even longer than 7 years.

I am currently living with my parents, and have no assets. What would you suggest I do ?? Have considered getting a "top-up" loan and paying off my cards, and repaying the debt over 8-10 years, but rescuing my credit rating. Ideally want to be debt free asap, but any other suggestions would be welcome.

southernscouser

Well I don't know of too many companies that do loans longer than 7 years!

If you list ALL your monthly incomings and outgoings, and all your debt with APR's and terms on loans people might be able to help you save some money.

What did you spend all that on by the way? £26,000 in 2 years is quite alot with nothing to show for it! No car or electrical goods for example!

Don't understand what you mean by "Clearly £658 out of £1050 is not sustainable." What happens to the other £392 left over?

tattooed_lady

Hiya,

Personally I think you should start the DMP with CCCS. When we started ours many of our creditors refused to freeze interest but in fact they had done and we could actually see the debt going down. In the end we cleared £11,000 in approx 7 years but that was with paying much less than you will be.

If it takes you 7 years to pay your DMP and if your creditors file defaults they will come off your credit report after 6 years.

tommyt_3

My monthly expenses, as approved by CCCS is £702. My monthly debt repayments are £658, therefore my monthly income would need to be £1360. Thats what I mean when I say making the current repayments are unsustainable. Haven't had a holiday in four years and drive a 10 year old Peugeot 306, but know many on this board are in the same boat. Got to an age where I decided to take a chance on some investments which didn't come off. Will get on with life and not let my situation drag me down, howver frustrating things get. Would still appreciate anyone with some useful advice to assess my position. Bankcruptcy, DMP, or any other option considered !!

southernscouser

tommyt wrote:

My monthly expenses, as approved by CCCS is £702. My monthly debt repayments are £658, therefore my monthly income would need to be £1360. Thats what I mean when I say making the current repayments are unsustainable. Haven't had a holiday in four years and drive a 10 year old Peugeot 306, but know many on this board are in the same boat. Got to an age where I decided to take a chance on some investments which didn't come off. Will get on with life and not let my situation drag me down, howver frustrating things get. Would still appreciate anyone with some useful advice to assess my position. Bankcruptcy, DMP, or any other option considered !!

Oh OK I understand now.

Definately post all your outgoings here then and people will be able to help you cut back on your non-essentials.

tommyt_3

Southernscouser, notice you are clearing £38k of debts in 5 years, could you give me some tips on how you are achieving this ??

black-saturn

I cleared £4,000 in 1 year and I'm a lone parent on benefit so I'm sure someone living with their parents and bringing home a salary can clear £38,000 in 5 years :rolleyes:

southernscouser

tommyt wrote:

Southernscouser, notice you are clearing £38k of debts in 5 years, could you give me some tips on how you are achieving this ??

Blimey you want tips from me?

Well, I only got my "lightbulb" moment last month so to be honest I'm only at the start of a long long journey. I am just about managing to break about even each month but it's not easy. I keep a spending diary when I note down everything I spend. And I mean everything, even 20p on a packet of chewing gum.

Also this link is very interesting as to how you should pay your debts off. It gives you a projected debt free date and although it seems years away it is a target that you came aim for. This personally helps me as before I couldn't see any light at the end of the tunnel.

http://www.whatsthecost.co.uk/snowball.aspx

Also do post all your outgoings on here. You might be surprised in what people can help you cut back on.

southernscouser

Also as you haven't defaulted on any payments have you tried applying for 0% cards? Or maybe even low life balance cards?

Let us know all the APR's, balances, and limits of your cards and people can advise you accordingly.

The more info you give us the more we can help you.

Eager_Elephant

Hi there,

In your first post you wanted ideas to get rid of this debt in the quickest way possibly - well the quickest way would be to go bankrupt.

I think you are an ideal candidate for bankruptcy, you are young, live with parents and have no assets - I'm wondering why CCCS did not suggest this.

What is your job because if you go bankrupt then you can't work in certain professions such as in finance?

You say some investments went wrong, does this include gambling as in online poker, fruit machines or betting because if there is any hint of suspiscion about where the money went then they can delay your discharge from 1 year up to 15 years if it is deemed serious.

You also need to think about what you want in the future - if you want a mortgage then maybe bankruptcy may not be such a good idea. Although all CCJ's, defaults and bankruptcy fall off your credit file in 6 years when you apply for a mortgage one of the questions is have you EVER been bankrupt. So this could put a dampner on getting a good interest rate however there are brokers out there who know the companies that can offer mortgages to people with adverse credit history.

I second what southernscouser said I think you need to post a SOA, because without meaning to be judgemental I can't see how your expenses are £700 per month when you live at home.

So let us know what it is you want out of life and I might have a different answer.

tommyt_3

All credit cards at their max, Egg £5000 (14.9 APR). Capital 1 (12.9 APR), Marbles £3000 (12.9 APR), Tesco Loan £14,500 (6.9), repiad at £298 per month.

Monthly Expenses:
Keep/council tax £250 (parents pensioners who need the money)
Telephone/internet £ 40
Car insurance/road tax £ 40 (need car for my job)
car maintenance £ 10
Petrol/car parking £ 85
food £130
clothing/footwear £ 25
Dentists/opticians £ 25
birthdays/christmas £ 25
Sports/hobbies £ 40 (cricket club membership/5-a-side football)
stationery/postage £ 5
Charitable donations £10
Newspapers £10
Toiletries £ 5
Total £700

hope this leads to some more advice !