What to do?

dancingfairy

It's great that you have started to budget and great that you are still able to make the minimum repayments. Not being funny now - I was being a bit tongue in cheek before, sorry. A lot of people come on here after having consolidated several times(2-3 or even more). It happens an awful lot and they all regret it. I'm not saying that in a very small percentage of cases it won't help but unless you really get to the underlying issue of why you are overspending it won't help and the temptation of having all that spare money per month is what sucks people in and gets them spending again.
Would it help if you got a fresh bank account - seperate from your creditors and treated your overdraft like another debt - ie set up a standing order each month to pay off the £50 then what you have left after the bills go out is yours to spend. Some people find this helps.
Is there anything you could ebay/car boot to find some cash to try and get some of the more annoying debts paid off?
I have to say it doesn't sound like you are managing to pay the minimum payments each month - it may be worth getting in touch with CCCS or CAB or Payplan and seeing if a DMP is suitable for you.

dancingfairy

Generally there are 3 main ways to get out of debt
a) up your income - plenty of advice around here on how to do that
b) decrease your outgoings - again loads of advice round here - this may mean going on a payment plan and cutting back where you can.
c) take out more credit and store problems up for the future.

purplebiro

Right, here's my SoA. I've tried to be as honest as possible (all the debt figures are as of today)

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1400

Monthly Expense Details
Mortgage................................ 570
Secured loan repayments................. 30
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 53
Electricity............................. 18
Gas..................................... 31
Oil..................................... 0
Water rates............................. 20.97
Telephone (land line)................... 0
Mobile phone............................ 38
TV Licence.............................. 11.29
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 36
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 6
Pet insurance/vet bills................. 0
Buildings insurance..................... 11.42
Contents insurance...................... 8.06
Life assurance ......................... 8.8
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Gym..................................... 19
Virgin Media Phone/Broadband/Cable TV... 31
Credit Reference........................ 14.95
British Gas Cover....................... 16.97
Total monthly expenses.................. 1109.46

Assets
Cash.................................... 0
House value (Gross)..................... 105000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 105000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 91500....(570)......5.79
Secured Debt.................. 0........(30).......0
Total secured debts........... 91500.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Catalogue......................143.96....8.........26.8
A&L Overdraft..................600.......5.........0
Lloyds TSB Overdraft...........920.......20........0.1
Barclaycard....................285.......0.........14.9
Total unsecured debts..........1948.96...33........-

Monthly Budget Summary
Total monthly income.................... 1,400
Expenses (including secured debts)....... 1,109.46
Available for debt repayments........... 290.54
Monthly UNsecured debt repayments....... 33
Surplus(deficit if negative)............ 257.54

Personal Balance Sheet Summary
Total assets (things you own)........... 105,000
Total Secured debt...................... -91,500
Total Unsecured debt.................... -1,948.96
Net Assets.............................. 11,551.04

What next?

SouthernSoftie

purplebiro wrote: »

Right, here's my SoA. I've tried to be as honest as possible (all the debt figures are as of today)

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1400

Monthly Expense Details
Mortgage................................ 570
Secured loan repayments................. 30What is this as below it says '0'
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 53
Electricity............................. 18
Gas..................................... 31
Oil..................................... 0
Water rates............................. 20.97
Telephone (land line)................... 0
Mobile phone............................ 38Could you change contract or go on PAYG?
TV Licence.............................. 11.29
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 50You could cut that back for a bit
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 36
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 6
Pet insurance/vet bills................. 0
Buildings insurance..................... 11.42
Contents insurance...................... 8.06
Life assurance ......................... 8.8
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 15That could be cut for a bit?
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Gym..................................... 19Is that essential?
Virgin Media Phone/Broadband/Cable TV... 31
Credit Reference........................ 14.95What is this actually for??
British Gas Cover....................... 16.97Do you need that? I know lots of people who have had problems, you may be better off putting it aside and using smaller local gas services
Total monthly expenses.................. 1109.46

Assets
Cash.................................... 0
House value (Gross)..................... 105000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 105000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 91500....(570)......5.79
Secured Debt.................. 0........(30).......0Why are you paying 30 a month is there is no balance?
Total secured debts........... 91500.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Catalogue......................143.96....8.........26.8
A&L Overdraft..................600.......5.........0
Lloyds TSB Overdraft...........920.......20........0.1
Barclaycard....................285.......0.........14.9
Total unsecured debts..........1948.96...33........-

Monthly Budget Summary
Total monthly income.................... 1,400
Expenses (including secured debts)....... 1,109.46
Available for debt repayments........... 290.54
Monthly UNsecured debt repayments....... 33
Surplus(deficit if negative)............ 257.54That's quite a bit to put towards your relatively small debt. I reckon with a bit of cutting back you could get yourself sorted in no time. But then cut that card!

Personal Balance Sheet Summary
Total assets (things you own)........... 105,000
Total Secured debt...................... -91,500
Total Unsecured debt.................... -1,948.96
Net Assets.............................. 11,551.04

What next?

I've aded my bits in red above, though others may have better ideas.

purplebiro

OK, in order:

Secured Loan - *sigh* this is a hangover from my student bad debt days. I have an agreed payment amount of £30 per month for a loan I had passed to Apex Credit management. To be honest I've been paying it for about 5 years and I *think* they're not charging interest so I may be near paying it off. They're closed now so I will call them tomorrow and find out the outstanding amount and if there is interest. It tells you a lot about how good I am at putting my head in the sand that I didn't even think to put it as a debt

Mobile - I think I'm tied into my contract but I will call tomorrow and see if I can change to a cheaper deal since I barely use the minutes and texts I get for this.

Clothing - Yes, I overestimated on that one, I could probably cut that to £25 a month.

Haircuts - I can go once every two months.

Gym - That is essential - I use it at least 5 times a week and I HATE running outside

Credit reference - It's checkmyfile.com - I signed up to check my reference while I was remortgaging (given the current climate and that our old mortgage was sub prime I wanted to know exactly where we were while we were trying to get a high street deal), don't need it any more.

British Gas Cover - Well my central heating system is a bit of a dud and they've been great so far. There have been several occaisions in the last year where I would have had to shell out money I didn't have if they hadn't been there. I'm inclined to keep it, at least until my debts are clear and I have more ready cash when anything goes wrong. I could be persuaded.

So for now are you advising that I pay as much as I can off the most expensive debt and minimum amount on everything else until the first debt is cleared and then proceed down the chain?

Am I right in thinking that (discounting the Apex debt for now) that would be catalogue, barclaycard, lloyds then allience & leicester?

SouthernSoftie

purplebiro wrote: »

OK, in order:

Secured Loan - *sigh* this is a hangover from my student bad debt days. I have an agreed payment amount of £30 per month for a loan I had passed to Apex Credit management. To be honest I've been paying it for about 5 years and I *think* they're not charging interest so I may be near paying it off. They're closed now so I will call them tomorrow and find out the outstanding amount and if there is interest. It tells you a lot about how good I am at putting my head in the sand that I didn't even think to put it as a debt

Mobile - I think I'm tied into my contract but I will call tomorrow and see if I can change to a cheaper deal since I barely use the minutes and texts I get for this.

Clothing - Yes, I overestimated on that one, I could probably cut that to £25 a month.

Haircuts - I can go once every two months.

Gym - That is essential - I use it at least 5 times a week and I HATE running outside

Credit reference - It's checkmyfile.com - I signed up to check my reference while I was remortgaging (given the current climate and that our old mortgage was sub prime I wanted to know exactly where we were while we were trying to get a high street deal), don't need it any more.

British Gas Cover - Well my central heating system is a bit of a dud and they've been great so far. There have been several occaisions in the last year where I would have had to shell out money I didn't have if they hadn't been there. I'm inclined to keep it, at least until my debts are clear and I have more ready cash when anything goes wrong. I could be persuaded.

So for now are you advising that I pay as much as I can off the most expensive debt and minimum amount on everything else until the first debt is cleared and then proceed down the chain?

Am I right in thinking that (discounting the Apex debt for now) that would be catalogue, barclaycard, lloyds then allience & leicester?

Put those debts into this snowballer and it will tell what to pay and in what order to get them paid off quickest...
http://www.whatsthecost.com/snowball.aspx

purplebiro

OK, before I forget, thankyou all so much for this advice. I am already feeling less scared.

The snowball thing makes it look really manageable, a couple of questions -

It doesn't know quite how to handle the 0% interest and £5 a month charge for A&L, is there a way I can express this as an interest rate?

Does my Lloyds interest rate look right to you? I end up being charged about £12 a month for interest on £920 a month. I'm not great with maths but...

purplebiro

Oh and Southern Softie, where abouts in Suffolk are you? Ipswich born and bred here.

sidnee

Your SOA looks OK... Mobile/Clothing a bit high, but quite good otherwise.... Entertainment is 0??

Right, I think the root of your problem is where the other £250-odd of "spare" money goes each month... unless I've missed something out in the above posts. I would not be overly worried, but if something unexpected happens you give the impression that you won't have spare cash lying around to deal with it...

A good thing for you to do is to keep a spending diary. Might sound a bit tiresome to do, but is something of an eye-opener. Note down everything you spend down to the final penny. You'll be surprised what gets spent over a month! Also keeping a detailed track of your groceries spend is a good idea. Are there things you could without? Could you take advantage of more BOGOFs? I take it you live alone? (Personally I tend to stock up big time on anything I use all the time - non food related - if it's on a decent offer, this means your overall shop will start coming down).

You seem pretty prudent with your cash anyway. A plan would be:
- Find out your Apex balance
- Get rid of Credit Reference!
- Pay off the dreaded catalogue!! With your free money each month I see no reason why you can't rid that next month!
- Think about the spending diary

Hope that helps, keep it up, it's just about getting on the right track!

JimmyTheWig

purplebiro wrote: »

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?

You've answered your own question.
You are crap with money.
That is _exactly_ why you shouldn't consolidate.

Listen, you are in a bit of a state with money. Not terrible (especially compared to some on here!), but not good.
How did you get into this state? I take it you're not quite sure. I take it the debts just started building up. Maybe you saw your credit limits as money available to you?
Now, imagine the situation. You consolidate your debt into "one easy monthly payment". Then in six months time you want something from a catalogue but don't have the cash that month. Maybe you'll put it on credit and pay next month. And the next month you can't pay it off, and the debt builds up again.
Then this time next year you are back in a situation where you can't afford all your debts.

The point is a consolidation loan isn't a solution. It's a bit like giving a blood transfusion to a bleeding man. The problem is he doesn't have enough blood. One solution is to give him more blood. But a much better solution is to stop him bleeding.
(Wow. I love that analogy. I think I just made it up. I'm well chuffed with myself!)

So in your case you need to tackle your debts head-on.

I agree totally with the spending diary. That two hundred odd quid is going somewhere each month.