General Advice please!!

fizz190

Afternoon all,

Have been subscribed to the forum for a while but have only just thought to post my debt situation and get some additional support!

Doing ok so far...

In March 2006 was in a complete mess. Missing payments, ignoring letters etc etc. Eventually sat down and wrote to everyone and agreed payments. Since then have reduced my debt from £9000 to just under £5000 :T

I am now looking at what I'm paying now and want to make sure I'm doing the best job possible to get debt free asap.

Here's an outline of my debts:

Capital 1 CC - owe £134, paying £23 pm
GUS catalogue - owe £212, paying £27 pm
Natwest OD (now with debt management co) owe £742, paying £50 pm
Barclaycard - owe £360, paying £7 pm
Next directory - owe £287, paying £6 pm
HSBC managed loan - paying £50pm (can't remember exact amount but will finish Aug 09)
Monument CC - owe £2500, paying £100 pm
Vanquis - owe £250, paying £25 pm

Paying interest on monument, vanquis and HSBC, all the rest have had the interest frozen.

I can afford to pay some more each month (50-75ish), but am scared that if I start to pay more they will assume I can afford to pay it off!

One thing I have tried (and failed) to do is to put some money in a savings account to gather enough to pay one off at a time. This approach doesn't work for me as unless the money goes on payday I spend it!! I know this sounds a bit like a cop out but the only way I have found to manage my money is to have all bills go out on payday so I never see the money.

Has anyone else got any advice as to how to go about reducing this debt and how to avoid my creditors trying to reclaim the debts?!

Thanks in advance
Fizz

SamanthaA

If the bills are set up to go out on payday, why dont you do the same with the `extra` into a savings acc & give someone you trust the building society book. Once your sure that the first payment has made it safely across, you need not update the book till either you need the cash Or its April & tax time OR in my case, mum has it & gets it updated when she goes into the building society.
I say building society with a book, beacuse it means I can`t get to the cash without the book & my mum does a fantastic job of keeping it & my CC away from me!

fizz190

Thanks Samantha.

I've had a look online and can only find savings accounts with cards. I'd be happy to cut up the card, but does anyone know of any that give you a book (and don't allow you to transfer money online?)

Sorry, I've never used a building society before!

Thanks
Fizz

ajaney

Try posting your query onto the Savings & investment boards too.

I use ING direct for my savings. There no branch network, no card & transfers take 4 days so that normally gets rid of any desire to impulse buy!

What about a Postal Account? I am not recommending this institution particularly but the Derbyshire do one with the following features:
Full link: http://www.thederbyshire.co.uk/savings/notice_accounts/postal_60_triple_guarantee.aspx?ekmensel=2152299f_24_40_btnlink


How it works

Opening
Apply via post only.Pay money in
All transactions must take place by post and by cheque.
Take money out:Maximum of 4 withdrawals (minimum £250) per calendar year subject to 60 days written notice.
Early withdrawals subject to 60 days' interest charge

fizz190

Ah, now I should also have mentioned the small caveat that any I need to be able to open the account with less than £100...

Thanks for the link, and I will certainly post on the savings board to see if anyone has any other suggestions.

In the meantime, if anyone has any other ways to tackle this I'd love to hear them!

Thank you
Fizz

spf_2

fizz190 wrote: »

Capital 1 CC - owe £134, paying £23 pm
GUS catalogue - owe £212, paying £27 pm
Natwest OD (now with debt management co) owe £742, paying £50 pm
Barclaycard - owe £360, paying £7 pm
Next directory - owe £287, paying £6 pm
HSBC managed loan - paying £50pm (can't remember exact amount but will finish Aug 09)
Monument CC - owe £2500, paying £100 pm
Vanquis - owe £250, paying £25 pm
Fizz

My very personal opinion is that I would not even attempt to pay the 0% debts off any quicker. There is no fiscal advantage to doing this, though maybe some psychological ones.

As you have a FIXED ammount "£70" per month extra available, then ignore the debt amount when deciding what to do, just look at the interest rates: Attack the largest interest debt first then the next etc. Once the interest bearing debt is cleared, to be honest you can then start to relax, at this point simply continue making the minimum payments as above on the 0% ones, don't even bother to make overpayments on them.

I understand your concerns about not contacting the providers, but personally I would and try to get your payments increased by £70 in strict sequence.

fizz190

That's really sound advice, thank you.

I realised as soon as I read your reply that I was aiming to get rid of the smaller debts first in order to gain some psychological relief rather than focusing on the most expensive debt.

Monument has been the bain of my life for many years now, and were the only company not to stop the interest when I made my arrangements so I should definitely tackle them first. I'm paying over 20% interest on this account, and it's just occurred to me that I'm not even on a payment arrangement with them any more so I don't even need to contact them!

New plan of action (getting excited now!!)

Monument - increase payment to £175 pm. This will clear about £100 a month after interest, and should see it clear within 2 years.

Cap1 and GUS will be clear within a year anyway at the rate I'm paying, as will Natwest (I realised after posting I'm paying £125 pm on that!)

This will give me an extra £175 pm to put towards other debts.

The HSBC loan I think I'll leave to run it's course as it ends next year anyway.

That just leaves Vanquis, Barclaycard and Next, which are fairly small amounts and can be cleared once the payments stop on others.

Does that make sense/sound like a good plan?!

In theory, this means I could be debt free by the end of 2010!

In fact, I may aim to go it by June 2010, my 30th birthday.

That would be amazing!

Thank you!!

Fizz

spf_2

Your revised plan now makes sense.

But please remember once interest debt is cleared there is NO pointing paying the 0% stuff any quicker, treat yourself instead, but within your means of course

Please do not be offended by this next question: From your general status, it appears that your general credit rating is fairly poor and I therefore ASSUME that you have zero chance of getting additional credit? I'm asking because that 20% interest scares me!! Have you considered applying for an Egg credit card? They will allow you to transfer cash to your current account for a charge of 3%, then at 0% interest until Jan 2010 which you can then use to clear your interest bearing debt, at least partially. This will save you a LOT of interest with your "bain company" and accelerate the debt payment significantly. I can't see that you would lose anything by applying but PLEASE cut it up once you've done the balance transfer! I suspect they'd say no, but what have you got to lose?

BE SURE TO APPLY FOR CORRECT EGG CARD THOUGH

fizz190

Ha ha, now we're in dream land!! I can't even get a bank account never mind a 0% credit card!! I have my trusty cash card account and that's all they'll trust me with

I did think about getting a loan to cover it, but the only ones I can get are mega interest too so there didn't seem much point.

(on a brighter note, I did get approved for a £7.50 pm mobile internet package the other day, I was over the moon :rotfl: )

I get your point about the interest free debt - although I would love to just be rid of it all. I suppose Barclays and Next repayments are so small though that I wouldn't even notice if they carried on. Maybe I'll see how I feel next year when a few of the smaller ones are paid off. The extra money in my pocket would be quite nice (£175 extra a month for shoes... ooh!)

Thanks
Fizz

spf_2

fizz190 wrote: »

.....pocket would be quite nice (£175 extra a month for shoes... ooh!)
Fizz

I suspected that I may be "on another planet" with this one!
Apparently one can never have too many pairs of shoes, or so my wife tells me!
Good luck with the debt clearance.