Too far gone into DEBT!!!!!!!

hardcore_since84

Hi guys, First off I just wanted to say that I'm new to the forum. Seeing one of Martins programmes last year made me tighten my belt some what and tried to sort out a lot of my debt problems but I cant help thinking that I'm too far gone into Debt land. Over christmas I had some misfortune and also didnt monitor my spending. I'm in a very bad state with my finances at the moment with regards to debt and could do with some help. This is my situation:

I earn net income £1430 per month

I have no savings

my direct debit monthly outgoings:

£235 Car
£100 Board
£205 consolidation loan
£26 Gym
£50 Car insurance
£35 Phone Bill

+£140 on petrol

= £791 per month OUTGOING

Currently I have outstanding £10,034 on a unprotected Nationwide consolidation loan ( I pay back £205per month over 5 years)

I'm £1304 Overdrawn (my overdraught limit was £1300 but have managed today to push it to a temporary £1800)

I owe my Dad £650 for a car service and repairs

I owe my Best friend £388 for a flight to LA this June

The LA Trip will require a further £800 for car hire, accomodation and spending.

And to top it off I've been turned down for 3 seperate credit cards this week and 2 consolidation loans due to poor credit scoring! To add to that I've been advised to not apply for anymore credit for the next 6 MONTHS as it'll have a negative impact on my credit score. I'm really stuck, I don't know where to turn... people of the forum please help me.

Kind Regards

Phil

P.s I also have an unused ikea store card (with £900 limit) would it help my credit scoring if I WAS to spend on this and make the minimum repayments consistantly or would you not recommend getting into any further debt at this time?

skintchick

Hi there - can you cancel the trip? Or sell your ticket to someone else? You really can't afford to go away and certainly not at that cost!!

No, don;t spend on the Ikea card. If it were a proper cc I'd say yes, buy your petrol on it and pay off in full each month to build your credit score, but don;t buy stuff from Ikea as it won;t be stuff you've allowed for in your budget!

You have nearly £800 a month to use for your debts, assuming that budget is for everything (inc going out etc) so it is do-able.

Can you earn money anywhere else?

Can you get cheaper car insurance?

Can you use your mobile less?

Have you looked at the snowball calculator to see how a bit over your minimum each month could really hammer your debt? It's at https://www.whatsthecost.com/snowball.aspx

What are the APRs on your debt and the OD? Pay off the highest one quickest.

Your dad should be paid last if he can possibly wait for it - if not then arrange a payment schedule with him.

I think you need to cancel that trip as a priority, but once you've done that you really have got the means to pay this off fairly easily. Stay positive!

HTH

kathfisch

I'd agree, it sounds like you should be able to clear the debts at a reasonable rate if you are determined. And part of being determined is realising that it is necessary to live within your means and that things you thought were "I need" are in fact "I want" and you can live without (aka "the lightbulb moment"). This applies to every little thing you buy, not just big spends. But that holiday is a big spend, no doubt about that. I don't know your situation or anything about the trip but I would suggest you seriously consider not going. And then when you are debt free and have saved up for it, make a point of planning a trip as something to aim for.

Just my suggestions, sorry if it sounds harsh. If you want to post a full list of where every penny goes in and out we will be happy to make some suggestions to help you cut back and pay off the debt faster.

Best of luck

Kath

melancholly

Any chance that the gym membership could go? It's not much monthly, but an extra £312 a year will help clear something.
can't think of anything else on top of what skintchick has said - just good luck!