What to do?

purplebiro

Hi all,

I have mounting debts which, while not critical at the moment, are becoming more and more of a burden and I'm keen to get things sorted while I still can. My debts are as follows:

Alliance and Leicester - £600.00 overdraft - at limit
I have been paying £50.00 a month in to pay this off but becuase I am !!!!less I had been spending the £50 at the end of every month. I have now cut the card up and resolved to pay it off. Problem is I accidentlally went over my o/d limit for over a week and now I now (becuase of A&L's charming £5 per day policy) I have a load of charges coming in that will probably take me over my limit again and I don't now whether I'll have enbough cash to clear it , but I will try. I have phoned A&L today to say that I have cut up my card and simply want to pay off this debt and can they offer me a payment plan and I was told that the only thing they would do is a 6 month payment plan - meaning I'd be paying approx £100 per mont - not exacly helpful when I've told them I am struggling to find £50.00!
Barclaycard - £260 credit card - over limit
I have been late in paying minimum payment on this card the last few months and therefore have been stung with late payment charges. I would like to approach Barclaycard and ask them for a payment plan as I am struggling to repay this.
Lloyds TSB - £920 overdraft - at limit
I pay the interest on this account every month (approx £20.00), ultimatley I'd like to clear this but I can't see it happening.
La Redoute - £180 catalogue - at limit
I have been paying £25.00 per month to this and I am paying it off gradually.
(Bloody) Virgin Media - £100.00
I could write an essay on how it isn't actually my fault that I haven't paid for the last few months but they ain't listening and the upshot is that I owe them approx £100.00. I've not been cut off and they randomly phone me up and demand £40.00 to stay connected but they won't let me set up a direct debit until I've paid off the full amount which I can rarely afford to do.
Mortgage - £122k
At least my biggest debt is my best! Just remortgaged so I'm fairly insured against interest rate rises (for the next two years at least).

I have had debt problems in the past and having worked really hard to get out of them and make myself credit worthy enough to own a home I am desperate not to get myself into that situation again and to stop this problem before it becomes a disaster. I am really scared.

What would you do in my situation?:eek:

SouthernSoftie

Fill in and post your SOA on here. Make sure you include everything and be accurate.
Here is the link... http://www.makesenseofcards.com/soacalc.html

as apart from the mortgage it doesn't look like much. But if you are struggling then we can see why and suggest ways to help.:D

Horace

Have you thought about taking in a lodger to help with the bills?

dancingfairy

As above. Draw up a detailed SOA. See if there are any areas in which you can cut back, post it up here and see if anyone has any ideas. It really depends on whether you are able to make the minimum payments or not really what the best course of action is.
Also try keeping a spending diary - you will be amazed at where all the money goes to.

Hope these suggestions help a bit.

JimmyTheWig

Well done for sorting your mortgage. Now for the rest...

Firstly you need to stop getting charged for going over your limits. Nothing is more important than this. It is a complete waste of money and gets you nothing.

You need to do a budget and work out how much you can realistically afford to pay off debts.
Then you need to work out if the amount you have available is enough to stop you getting charged.
If it is not then you need to go back to your budget and have a re-think. Post a statement of affairs (SoA) here and people can help you.

I'll assume, for now, that you have enough to meet your minimum repayments.

Then you need to look at which are your most expensive debts. Pay the minimum on the cheapest debts and pay the rest onto the most expensive debt to clear it as fast as you can. Then move on to the next most expensive debt. And so on.

Something you could do is get a 0% credit card for balance transfers to clear some of this debt. Alternatively you may want to go for a low life of balance credit card for balance transfers.
BUT... if you do this you must be absolutely sure _why_ you are in debt in the first place and that you won't end up there again.

Is your mortgage repayment or interest only?

purplebiro

I have and I am currently preparing the spare room to make it suitable so that will help.

I was thinking that my easiest option would be to consolidate as I ccan afford to pay £100.00 a month to pay off and this would surely be enough on what amounts to approx £2k worth of debt?

Horace

One thing that they do say on here is never ever consolidate as that piles more debt on top. Post your SOA and the good folks on here will be able to see where you are spending and where you can save money to chuck at your carrds.

dancingfairy

Arggghhhhhhhhhhhhhhhhhhhhhhhh - did someone mention the 'C' word? Consolidation? Noooooooooooooooo. The amount of people on here that have gone for the reduce your monthly payments, get of debt in one easy step, pay loads more interest over the life of your debts, carry on spending, get another consolidation loan to clear all your debts, keep spending, get another loan, get in a mess. Oh I see, one of those.

purplebiro

My mortgage is repayment.

I have done a budget using the tool on this site and I have managed to stick to it quite well for this month but I unexpected charges (from A&L and (Bloody) Virgin Media) meanI have no money once again so once again I am unable to make
repayments, only minimum payments.

I will do a SoA this evening when I have access to my interest rates and exacty balances. Actuially, one question on the SoA - under assets do I list the value of my house even though I have a mortgage on just over 85% of it?

purplebiro

OK, if you can convince me that having one payment that (I have budgeted and know is manageable) for coming out of my bank a month and no nasty surprises is better than constantly playing catch-up on 2 out of my 5 creditors and hoping that I don't get charged then I will forget all about consolidation.

The truth is that I am CRAP with money and I am scared and I don't trust myself to balance paying off these debts in order of urgency etc. Mad as it sounds I'd happily pay (the extra interest) for the peace of mind. Does that make any sense?

SouthernSoftie

purplebiro wrote: »

Actuially, one question on the SoA - under assets do I list the value of my house even though I have a mortgage on just over 85% of it?

Yes, of course as it is an asset.
Don't panic, do the SOA later so we can see what might help.