£10000 in debt, tips obviously needed!

afoolandhismoney_2

Hello

Over the course of the last few years by burying my head in the sand I've managed to acquire a sizeable amount of debt spread over 3 credit cards. Two of them are on a 0% deal, one until March and the other until June the other 1k is with Egg.

I've got a lot of equity in my house and I am thinking the best way to be clear of this debt is just to remortgage get the 10k I need and possible a couple grand extra to put aside for the proverbial rainy day. I've looked at my outgoings and can cut back on a number of things, Sky is being ditched, my mobile contract runs out in January and I'll be going pay as you go. Renewed my car and home insurance last month and got the best deals out there, and used quidco!

If I do get the extra money then it'll go straight on the cards then they'll get cancelled and I will never open another credit card account in my life! I was wondering, though, if it's worth looking into getting a personal loan instead of adding to the mortgage. I reckon I could pay out £150 a month on loan repayments while still having enough left over to make sure I don't get into this mess again!

Any advice is greatly appreciated. Thank you.

CautiousPaul1981

Hi mate, Im a newbie on here as well, in a bit more of a mess than you as well (4 times as bad). Realising it is conquerable though after years of doing the same as you (and so many others) of burying my head in the sand and expecting it to go away.

It seems to me you have made moves to get things clear already which is good. I've found doing a Statement of Affairs has been helpful to put it clearly what I have, what I owe and what I Can afford.....

I worry a bit about you taking more loans or equity to cover debt as this is what I used to do, and it can spiral out of control a bit and become an easy way to cover up what is actually in increasing debt/problem.

Is it possible for you to keep a decent lifestyle and live within your means and budget, whilst paying this back?? In the long run it will be a lot better for you and your bank balance.

I know i'm probably not the best for advice as I'm new and in a lot worse debt than you as well, but it seems like the best way to get through this is to be self sufficient and less reliant on turning to the banks or cards to bail us out.....

Best of luck to you...I hope we can stick together on here to get rid of our debt and move on in life.

Bestthingsinlifearefree

Hi !

Welcome to MSE:beer: Generally borrowing money to pay of debt is not the way forward i.e to increase your mortgage debt by 10K to pay off 10K in credit card debt. Has not tackled the problem of the debt. The debt is still there and you have not tackled the problem of over spending and thus you may well run up fresh debt.

Could you post an SOA? (all ingoings / outgoings).Then people will be able to give you good advice. You need to try and reduce spending and increase income. That is the way forward.

doodledo_2

Hi and welcome to the forum.

I would definately consider other options before remortgaging. Your debt level isn't too bad and I bet you could soon shift that with some budgetting.

I would post your SOA, following this link http://www.makesenseofcards.com/soacalc.html and we can see if there is any way to streamline your outgoings so you can throw more at your debt.

Good luck with your debt free journey

clearmydebts

Hi,

I agree with the others. I have re-mortgaged twice to consolidate debts (the most recent being last May). If you look at my signature you can see it didn't work.

mummum2

Personally I wouldn't remortgage or take on more debt, as mentioned previously you really need to do an SOA for the knowledgeable people on here, so that they can help/advice you with the best way forward.

Good luck!

MM2

afoolandhismoney_2

Money in
Wages - £1865

Money Out
Direct Debits
Car insurance 1 - £32*
Car insurance 2 - £17
Council tax - £149
Gas & electricity - £62.50
Life assurance - £29
Tv licence - £11
Mortgage - £459
Building & contents insurance - £12.50
Internet - £15
Mobile 1 - £25**
Mobile 2 - £20***
Sky - £47
Sky repair plan -£7****
Landline - £14
Lovefilm - £13

Total £913

Other money out
Credit card payments - £110 - I don't have the login details for the cards at work but 8k of the debt is on a Virgin card with a 0% deal until June I know that much.
Rail pass - £330
Groceries -£320
Children's savings account £50

Total £810

Total outgoings £1723

This leaves us £140 quid for 'stuff', nursery fees, petrol, kids' swimming lessons etc.

I've already looked at cutting back the stars next to each item mean:
* Cancelled as I now take the train to work
** Ends in January and will go to pay as you go
*** We tend to use this for our calls rather than the landline, how economical this actually is I don't know
**** Cancelled

Our grocery shop could be cheaper I guess, £80 for a family a 4 per week doesn't seem that bad to me but then I'm 10k in debt! I also want to continue putting money aside for the kids.

Sky and lovefilm are about the only splurges in there, but in our defence we never go out. I guess we should cancel them.....

I know the remortgage thing isn't an ideal solution but this is really getting to us both and we thought we could be shot of it and then properly budget from scratch, minus the credit cards for those nice to haves, I got this wrong too it seems!

Oh and thanks for the warm welcome.

natsplatnat

Just like to say "hi" and good luck! There is plenty of good advice on here - which is why I am not going to offer any of my own - well it did land me in £18,225 of debt! lol

davetrousers

afoolandhismoney wrote: »

Sky and lovefilm are about the only splurges in there, but in our defence we never go out. I guess we should cancel them.....

Yep, £60 a month £720 a year.

You mention 2 lots of car insurance but no petrol/running costs.

afoolandhismoney_2

davetrousers wrote: »

Yep, £60 a month £720 a year.

You mention 2 lots of car insurance but no petrol/running costs.

afoolandhismoney wrote: »

Car insurance 1 - £32*

* Cancelled as I now take the train to work

This leaves us £140 quid for 'stuff', nursery fees, petrol, kids' swimming lessons etc.

True, we might have to rethink them if we can't cut back on other things.

My wife doesn't drive much so £30 of petrol usually does her two months. We've been lucky in that the car sailed past it's last MOT, road tax we usually put a tenner or so aside each month for it and any unexpected repairs go on a credit card usually, hence the debt.

MrsPorridge

Just reading the above posts I echo all they say DO NOT BORROW TO CONSOLIDATE. I myself have done this at least three times and see my siggy - still have lots of credit card debt.

Do you really need 2 cars? If your wife doesn't drive that much and you are using the train then maybe you can just get away with one car.

You must try and budget for the "stuff", nursery fees, swimming lessons etc. I never budgetted for anything like that - in fact until 3 months ago I never bothered to budget at all - there was always a credit card I could use. I have now learnt my lesson, I budget for things and if I can't afford them I don't get them. I'm not finding it easy, but am very determined to keep going this time.

Good luck.