Please help me make the right decision before I make it worse!

GemmaMoore

Hello everyone

I'm a newbie here so I've posted by SOA below. As you'll see I owe £5K across 6 credit cards which have horrific aprs (up to 40%). This is teamed with a looming student loan and a graduate overdraft of £2K. I am most worried about the credit cards, because they never seem to go down.

I built up this debt by living off credit cards through university which meant I also took out huge cash advances on them too, sometimes £500 to pay the rent. I got a good job after uni but was made redundant so had so much more going out than coming in. I have cut back my outgoings considerably by temporarily moving back to my parents house (hence the minimal outgoings) but I also had to take a much lower paid job. I'm constantly trying to get a better job but when that happens I'll be under pressure to move out straight away so my surplus money will probably stay at a similar level.

I have done some research and considered various options, I'm really interested in your opinions. Here is what I could do as far as I know.

1. Go to a debt charity like CCCS - they have quoted me £97 a month but I would have to sign to say I wouldn't take out any more credit etc. and I'm worried for my credit rating.

2. Get a loan or a long term balance transfer - I am normally refused or offered horrible interest rates. The best I've been provisionally offered is from egg at 25.9% for £5000 over 84 months. I want to clear it in 48 - 60! I'd like a loan that was £100 - £150 a month, I could afford that and maintain that for the term which would hopefully fix my credit rating.

I'd love to know if there are any loans I could get. Although I'm paying my parents board money and buying food, travel etc, I pay no official rent so on a loan application it looks like I have a lot of surplus money. However.. I have missed payments and been rejected for several loan and card applications over the last 6 months.

I have spoken to the card companies I'm with and no one is helping me to shift the money around they won't lower my interest or increase my balance so I could transfer to a lower rate card etc. I am so keen to get this into one payment so I could manage it more easily too! I can't get new credit they offer me a limit of £200 or something silly like that. I've tried contacting a credit union but they haven't replied to me and I could only find one in my area (Portsmouth).

I'm sorry that was so long! If anyone has any advice I would be so so grateful. I really know I need to do something right now to sort my debt out and I might have more chance of getting a loan etc. while I'm staying at home so I want to get the ball rolling!

Thank you!

Gemma x

SOA:

Monthly Budget Summary Amount(£)

Total monthly income 700
Monthly expenses (incl. secured loans) 500
Available for debt repayments 175
UNsecured debt repayments 162
Surplus 13

Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 0
Total Secured Debt -0
Total Unsecured Debt -5,020
Net Assets -5,020


Income Amount(£)

Total monthly income 700

Expenses Amount(£)

Rent 200
Mobile phone 30
Groceries etc. 100
Clothing 20
Other travel 100
Medical (prescriptions, dentists, opticians etc.) 25
Entertainment 50

Total monthly expenses 500

Description Debt(£) Monthly(£) APR(%)
Virgin 1800 60 26
Capital One 750 40 39
Egg 1600 40 24
Natwest 320 11 22
Aqua 250 5 41
RBS 300 6 19
Unsecured Debt totals 5020 162 -

cally6008

Can you cut back your mobile phone, clothing and entertainment ?

Airwolf1

GemmaMoore wrote: »

Hello everyone



SOA:

Monthly Budget Summary Amount(£)

Total monthly income 700
Monthly expenses (incl. secured loans) 500
Available for debt repayments 175
UNsecured debt repayments 162
Surplus 13

Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 0
Total Secured Debt -0
Total Unsecured Debt -5,020
Net Assets -5,020


Income Amount(£)

Total monthly income 700

Expenses Amount(£)

Rent 200
Mobile phone 30 - If not in a contract, ring up and get it reduced.
Groceries etc. 100
Clothing 20
Other travel 100
Medical (prescriptions, dentists, opticians etc.) 25 - would it be cheaper to have prepayment certificate if you have a few prescriptions?
Entertainment 50

Total monthly expenses 500

Description Debt(£) Monthly(£) APR(%)
Virgin 1800 60 26
Capital One 750 40 39
Egg 1600 40 24
Natwest 320 11 22
Aqua 250 5 41
RBS 300 6 19
Unsecured Debt totals 5020 162 -

Can you get another part time job?

You mention you're worried about your credit rating if you go with the CCCS, but you mention you are normally refused loans or offered horrible interest. Considering this, it may help you at the moment if you did set something up through the CCCS.

GemmaMoore

Thanks for answers so far. I can't get another job because I already work 45 hrs and it takes me 3 hours to travel there and back each day so I have no time I'm stuck into my phone contract till April and will then get a cheaper one. I've cutback on clothes and entertainment a lot but realistically this is the minimum of what I spend and if I limit myself too much I tend to binge when I get paid and then miss my credit card payments which I know is so stupid. I think I'm going to have to do the CCCS thing x

RAS

Hi

What you have not told us is what the maximum limits on those cards are???

Could you shuffle any of them and then clear one and start shuffling some more?

Have you got any stuff you no longer use that you could flog on e-bay, amazon or take to a car boot sale?

Could you contact your local credit union to get a freedom loan to pay off the Aqua card (even at 26% it would be better) and then start to apply yourself to the cap 1 card?

And get DDS set up for the minimum on all cards NOW.


And more ...

If you have been making late payments, have you incurred penalty charges? reclaim them and your debt could reduce substantially.

Did any of these have PPI attached when you took them out? Check them all out. If so, id you claim when you lost the job and did it pay out. Most PPI is mis-sold, so you can get it back.

doodledo_2

Hi and welcome to the board.

Your wages are very low for a 45 hour a week job, but then I am sure you appreciate that and you have said you are looking for a new job. I think that is key to you sorting your finances especially as you are spending £100 travelling there as well.

Do your parents know the situation? I wondered if they were in the position to reduce to your rent in the short term so you could chuck the money at your debts.

Personally I wouldn't recommend getting a consolidation loan as these aren't always the best answer.

Good luck and keep posting.

smarties84

Hello, i haven't really got ne advice as i have only just started posting! However i know you will get some great advice and help here:cool:

miss_essex01

I wouldnt suggest a loan as i think this will make the situation worse.

I would suggest to get a small part time job or even get a piece of paper and pen and do a huge search through MSE for ways to bring in more cash (up your income forum bit) As every single penny adds up and ive found some fantastic ways to bring in more cash.

I would also suggest to cut back on the clothes, entertainment and things you dont really need only get these things if you really need it and litrelly cannot live without that item. I know you may think you will be working for nothing but it will be worth it for now and it wont be forever as when you are debt free you will be able to spend as much as you want on clothes and entertainment items.

Hope this helps hunni.
xx

urg123

HI Gemma

What a horrible situation you are in - it must feel awful. Well done for posting your SOA on this site. It's the first major step to dealing with you debts.

YOu've mentioned the option of taking out a loan to repay your debt and work on paying it off. I know from reading lots of others' posts that this is not the best solution for most people.

It sounds as though you have become reliant on the credit cards to get by. You now need to wean yourself off of them. The great thing is that you have realised your situation now rather than let yourself get too used to the credit and end up with a debt as big as mine - at its worst I reckon my debt was close to £25000!

There are some brilliant pieces of advice on this site and on this thread and I am going to add mine:

• Keep a spending diary - you'll be surprised at where your money goes
• Write a budget and stick to it - set yourself a spreadsheet up so that you can keep an eye on your spending. My one is based on the SOA which keeps things nice and simple for me.
• Look into reclaiming your bank charges - it sounds like there may be a lot.
• What can you sell - do you have textsbooks from Uni? Try selling these on Amazon. If you are a recent graduate your texts will be recent and worth more money. I saved mine for years - some of them were still worth something but others weren't. Just don't fall into the trap of trying to sell them too cheaply - you'll find that the cost of postage can be higher than what you get.
• Look at other ways to up your income - can you do some mystery shops at the weekend or even take on a weekend job?
• Have a look at the snowball calculator - it will help you to identify where to target your repayments.

Keep going - I know things seem bleak now but you have just started on a journey that will really help you to deal with your debt and your attitude to money.

Keep posting - we'll be here to support you.

URG x x

robin_banks

Total monthly income 700

45 hour week

Are you working below minumum wage ?

natsplatnat

GemmaMoore wrote: »

Description Debt(£) Monthly(£) APR(%)
Virgin 1800 60 26
Capital One 750 40 39
Egg 1600 40 24
Natwest 320 11 22
Aqua 250 5 41
RBS 300 6 19
Unsecured Debt totals 5020 162 -

Hi Gemma!

Well done for acknowledging your situation :T - you have come to a good place. Everyone is soooo friendly and there are heaps of tips, hints and help that will come your way.

I do agree with previous posts that a consolidation loan probably is not the best way to go. I took one out about 3 years ago and now I owe that plus an additional £6500 :eek: !! Not good!

I am presuming that you are currently paying the minimum on each of the debts above? If you are, any spare money (that I am sure the good people on here will help you find) needs to go against the highest interest rate first. Once cleared, you can increase your payment to the second one etc.

Really, you do need to keep all spending to an absolute minimum initially! I have been running a spending diary now for about 3 weeks and couldn't believe the amount of money that trickled through my fingers. You do need to write it down (and cover everything you spend out) as when you just think about it, you will no doubt miss the odd couple of pound here and there, not count that packet of chewing gum etc.

I wish you all the best on your journey - keep coming back here - its priceless support and encouragement!!

:T