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Help me - new to this- want to be debt free!!

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Hi Guys,

A few years ago i was very flippant with my money and am now paying the price. I have a loan with the AA with about £6500 left to pay and a managed loan with HSBC with just under £5000 left to pay. My credit rating is in tatters as i kept applying for loans etc and now i get turned down for absolutely everything!! I cant consolidate etc. I'm worried about this managed loan the interest is sooo high!! As well as payin gout for these loans i am trying to save for a deposit on a house, i currently live with my boyfriend in ahouse that he owns but in a couple of years we want OUR OWN house but will i affect us getting a mortgage?? I want to clear these debts as quickly as possible but can't really afford to up my payments by much. I have been sensible and kerbed my spending, i am on PAYG with my mobile company instead of contract, i make my own lunches rather than buying but is there any other ways of getting myself out of this mess quickly??? I should be debt free in 5 years but want to half this if poss!! Any tips?? I was young and foolish when i got into this mess and just want to come out the other side, i'll never do this again. My partner knows i have some debts but he is sooo good with his money that i dont talk in detail about it as its embarrassing! How can i get my life back and these debts off my mind?? I am owed so much money ( probably a couple of thousand ) from HSBC for bank charges but im not likely to get these back because of the court case am i?? Please can someone give me some advice as to what my options are i am soo scared and stressed.

Currents debts roughly £12000
Rubbish credit rating
Nowhere to turn.

Comments

  • salster
    salster Posts: 175 Forumite
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    Hello.

    Why don't you post a SOA for us to look at and everyone on here will see where they can help.

    I'd also use the money that you are saving for a house deposit to pay off some of the debts. The debt is more is expensive and important at the moment.
    Aiming to be Debt free by October 2013 :D
  • nikki_angel
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    If you post your SOA (statement of account/affairs) i.e all your incomings and outgoings for a monthly period, along with any interest rates etc then there are some very good people on here that will be able to advise where you can make cutbacks in other areas so you can increase your debt payments.

    You're not alone in this.

    xx
    :A

  • Merlot
    Merlot Posts: 1,890 Forumite
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    welcome to the board.

    There is no easy and quick way to repay these debts, it would help us to help you if you could post an soa (a full list of incomings and outgoings).

    Do not apply for any further loans or credit, not only will it further damage your credit rating but consolidation is rarely the answer to repaying your debts.

    Do not be such a rush to buy a home, owning a mortgaged home isn't the be all and end all of life, the housing market is slowing down, mortgages are increasing difficult to get, and lots of people are now in negative equity and whilst it may not be a problem for many, it is for some, I don't know of any current mortgage lenders offering more than 100% of the value. (therefore, they can't take advantage of new mortgage deals etc).


    Merlot.x.
    "Wisdom doesn't automatically come with old age. Nothing does, except wrinkles. It's true, some wines improve with age. But only if the grapes were good in the first place." — Abigail Van Buren
  • bargainbetty
    bargainbetty Posts: 3,455 Forumite
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    Echoing what everyone has said, please post your SOA and everyone will pitch in to help you identify where you can make savings.

    Once you've made sure that you've covered all your income and outgoings, you can look at how to reduce your spending - improving your shopping habits for the essentials and skipping the non-essentials. If you and the other half are looking for a place together, I'm sure he'd be willing to wait for another year to help you get debt-free!

    You could also consider a part-time job, to have extra money to throw at that managed loan.

    Do you have lots of stuff around that you could clear out on Ebay or at boot sales? I managed to scrap up 'junk' that was worth over £700 to other people! DVDs, CDs, books, old VHS tapes and trinkets have seen profit for me!

    Good luck, and take deep breaths. You will get there.
    Some days, it's just not worth chewing through the leather straps....
    LB moment - March 2006. DFD - 1 June 2012!!! DEBT FREE!



    May grocery challenge £45.61/£120
  • savingholmes
    savingholmes Posts: 27,616 Forumite
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    To do an SOA - statement of affarirs you need to go to the website makingsenseofcards. You put in all your income, expenses, savings and debts - at the end you can then choose the option to put it on the mse website. Scary I know but I've done it as a way of having more accountability.

    We'd already made a lot of changes - and I didn't think there was that much to go at - but we've just changed to TalkTalk for £16.95 for 40 gig of broadband and free evening and weekend calls :money: away from BT at £28 and Plus net at £18.75 for 10 gig. So we are getting broadband and phone combined for less than our broadband before... There are a lot of other examples....

    Well done for starting small differences do add up over time...:p
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 236 payments to go - now £183,036 Equity 26.8%
    2) Spend on handyman & external building works & new patio door £12.65K
    3) CC £5.4K on 0% spends card but offset by £33.8K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £10.2K/£127.5K AVC target 8% value at 15/5
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • Kimz_5
    Kimz_5 Posts: 9 Forumite
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    Statement of Affairs and Personal Balance Sheet

    Monthly Income Details
    Monthly income after tax................ 1000
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 1000


    Monthly Expense Details
    Mortgage................................ 0
    Secured loan repayments................. 0
    Rent.................................... 100
    Management charge (leasehold property).. 0
    Council tax............................. 0
    Electricity............................. 0
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 0
    Mobile phone............................ 60
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 0
    Groceries etc. ......................... 200
    Clothing................................ 50
    Petrol/diesel........................... 50
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    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......................... 0
    Presents (birthday, christmas etc)...... 30
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 490


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


    No Secured Debt

    Unsecured Debts
    Description....................Debt......Monthly...APR
    AA PERSONAL LOAN...............6500......168.......0
    HSBC MANAGED LOAN..............5000......150.......0
    Total unsecured debts..........11500.....318.......-


    Monthly Budget Summary
    Total monthly income.................... 1,000
    Expenses (including secured debts)....... 490
    Available for debt repayments........... 510
    Monthly UNsecured debt repayments....... 318
    Surplus(deficit if negative)............ 192


    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total Secured debt...................... -0
    Total Unsecured debt.................... -11,500
    Net Assets.............................. -11,500


    Created using the SOA calculator at https://www.makesenseofcards.com.
    Reproduced on Moneysavingexpert with permission.


    Ok here it is, im just so scared about this whole managed loan. On reading some feedback on here about it, it sounds like ive made an awful decision but how do i get out of it??? xxx
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