First post... Big debts... How to move forward?

Percy1983

Hi,

First of all I would like to thank you all for the advice you have given me in the past without even knowing it, I have been reading posts on this forum for while and it has helped so far. Now I need some more direct advice.

Basically I am 25 now, when I left school I started on an apprenticeship and was earning next to nothing and spending considerably more.

To sum this up I am now left with debts as follows:
£23k on credit cards
£3k left on loans
£2k overdraft

As it is I am not missing payments (amazingly) but on the flip side so much is being swallowed in interest I am not getting anywhere quick, then when something does go wrong my only option is to put it back on a credit card.

My loans are both up this year (May and October) so when they are gone I will start paying more off the cards may start to make a dint.

The problem I have is that some of this debt on the cards is at 30%+ (approx £7.5k)

I still live with parents and own a car worth about £5.5k.

I am engaged to an amazing women and I have been open with her about this from an early stage in the relationship (not first date material) and she really wants to help. This makes me feel bad as it isn't her debt, but I really can't afford to say no. She is willing to do whatever we need to do to get this cleared.

I have already cut costs down as much as I can and use cashback sites etc on what I do buy, so I am not after advice there (that is what I have already learnt from here)

I am after some advice on how to go forward, my debts as as above and she has £3k on a car and £1k on a credit card.

I am earning 17k while she earns 13.5k

Would it be wise to combine our finances? I do have a clear credit report just high debt and she also has a clear credit report. Would I be better off applying for a consolidation loan alone or would we have more power together? If we could get a joint loan would we need a joint bank account? would it help to have one. I am certainly not trying to get her to pay me dents and I will pay most of any debts myself and will continue to pay more off a mortgage etc in the future.

Basically what ideas do you have? loans, credit cards, single, joint. I don't want to start applying for things left right and centre really as that won't help so want to know where/what to try first.

Sorry for such a long post.

GeorgeUK

Right now i would not advise joint accounts - it's not really needed and one's credit rating will have an impact on the others.

Consolidation loan - no. Rarely a good idea and there are better ways of tackling the debt.

Can you post up a statement of affairs so we can see your income/outgoings
http://www.makesenseofcards.com/soacalc.html

You may be able to reduce the amount of interest you are paying which will allow you to clear the debt much faster. Also, have you looked at reclaiming bank charges or reclaiming PPI if it was missold?
http://www.moneysavingexpert.com/reclaim/

Percy1983

Ok here is my statement, it really does highlight how on edge I am right now.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1180
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1180

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Hire Purchase (HP) repayments........... 0
Rent.................................... 125
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 0
Clothing................................ 10
Petrol/diesel........................... 20
Road tax................................ 15
Car Insurance........................... 40
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 62
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 342


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 5500
Other assets............................ 0
Total Assets............................ 5500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax Classic CC.............11000.....140.......16.95
Halifax One CC.................3000......40........17.95
Egg Loans......................3000......450.......0
Overdraft......................2500......0.........15.95
Virgin.........................2000......50........29
Lloyds CC......................6500......125.......30
Mint CC........................850.......20........35
Total unsecured debts..........28850.....825.......-


Monthly Budget Summary
Total monthly income.................... 1,180
Expenses (including HP & secured debts). 342
Available for debt repayments........... 858
Monthly UNsecured debt repayments....... 825
Amount left after debt repayments....... 13

Personal Balance Sheet Summary
Total assets (things you own)........... 5,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -28,850
Net Assets.............................. -23,350

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

Hope this helps, I don't have any bank charges to claim and I haven't got a PPI.

As you can see once my egg loans are gone it will take a huge strain off my finances, but the interest elsewhere is killing me.

Sure tying our credit records together isn't a problem if we are both good on that front? I will add my other half is willing to apply for credit cards/loans in her name to take my balances if it helps, I do keep telling her this is a huge risk as far as her finances goes but it is an option, but I would like to avoid this is possible.

Deadman_2

Sell the car.

Don't take any money off the girl as she's living on a pittance anyway.

Grow up.

Learn to fend for yourself.

Cut up the credit cards.

Percy1983

"Sell the car."

I am considering this, I have tried in the past with cheaper cars and maintenance has gone up, I currently don't want to sell the car, If it got to the point where I couldn't meet payments etc then there is a few other things to go before the car.

"Don't take any money off the girl as she's living on a pittance anyway."

I don't want to take her money that isn't my intention, if she can get credits cards at 0% etc she is willing to take some debt for that period. She is willing to pay bits off if she has spare money at the end of the month. We want this clearing as soon as we can together as we want to buy a house etc.

"Grow up."

Have I offended you in some way? sorry if my posts have come accross as immature to you.

"Learn to fend for yourself."

I thought I was doing?, I have got myself in this problem and now I am getting myself out of it. Having someone offer support/help isn't always a bad thing... is it?

"Cut up the credit cards."

All but 2 so far, one which is empty with £3k available (could come in use for balance transfers etc) and the Halifax classic card as mentioned it is needed sometimes, I know its not the best way, but putting £20 back on there ocasionally is better than bouncing direct debits etc. I think...

Tixy

Just carry on as you are until the loans are repaid. Obviously you will need to be very frugal this year to make sure you are not putting anything more on the credit cards.

I suspect you will struggle to get new balance transfer cards at the moment. It might be worth talking to your providers to see if they can improve the interest rate you are paying. I've heard that sometimes they may cancel your card - so you can't spend anymore and then drop the % rate you are paying slighty - doesn't hurt to ask them. (someone else may be able to advise better). Are you up to the limit on all your cards? If you could balance transfer the mint card to one of the halifax ones that would help?

Once the loans are gone pay extra on the credit cards (Mint and Lloyds first obviously), after a few months of paying more than the minimum you could then try to apply for a card with a lower % rate to move the highest rate cards.

It will take you time to improve your situation but I don't think it will help to tie your finances to your girlfriends at the moment.

I assume you need your car for work? Do you have anything else you could sell to raise some extra cash -cds, books, clothes etc. Try selling on amazon or ebay.

Good luck.

Tixy

Just seen your last post Percy.

Definatley talk to the provider of the empty 3k card about what rate they will give you for a balance transfer.

And I agree better £20 on a credit card than bounced DDs or missed payments.

Try to ignore the more unconstructive posts.

Horace

Do you have anything to sell on ebay or even at a carboot? That way you can raise more money. Can you get a second job say working in a pub collecting glasses or whatever?

You have money set aside for entertainment and presents - cut this out for a while, presents can be acquired relatively cheaply as can entertainment - sign up for Martin's weekly email as it often has meal deals on it etc. Look on the freebies board too for free stuff including cinema tickets.

Your girlfriend is admirable in saying that she will help you out, however, I would not advise going down that route at the moment not until your debts are clear or at least down to a reasonable level. Don't consolidate either because that makes the situation worse and the debt takes longer to pay off. Cut up all your cards so you are not tempted to spend on them.

If you live with your parents, do they know how much debt you are in? I know you want to get a house with your girlfriend but looking at your current level of debt then I doubt that you will get a mortgage especially as there are no 100% mortgages to be had any more which means that you will need to save at least £50K for a deposit.

Elsas_mamma

HI, you will get all the support you can handle on here!!
I would agree with the others who have said try to sort some of this without your wonderful girlfriends help( at the moment).
The money you are putting towards entertainment and presents really should be thrown at one of the cc for the time being. I would concentrate on the mint card first, it is the smallest amount but the highest rate! If you throw every spare penny at it, along with £50 a month minimum it will go quicker than you think.
Good luck and keep going.
K

Percy1983

Thankyou to all the welcomes.

The empty card is 35% hence why I have emptied it first, I will phone them up see if they can give me any good rates on balance transfers. Currently the lower interest cards are near there limits as I transfer to them from the worse cards when enough of a balance is available. There is a balance available of 2k on the lloyds card. I haven't moved the month card to it as I plan to be rid of mint in 7 months so the interest it will attract and the balance transfer fee won't be all that different.

I do really need my car as I am doing temporary work, I do plan on getting out of this asap but for the minute I never know where I will be next, so I need a reliable car. Currently my petrol is down and other travel is up as I am using the bus but that may not be the case with the next place I am working. Overall the bills remain around the same.

You have all got me thinking now, I have literally started looking at things around I could sell. To my surprise some of my PS1 games are worth more than I paid for them , they will be on ebay soon.

As it is I am an accountant by trade, kind of laughable in that sense, I think that's the only reason I have kept on top of it. Unfortunately there isn't many second jobs which fit my skills set.

For entertainment a good part of that is a cineworld unlimited card, I do go 2-3 times a week so is a firm investment. I will keep an eye on the freebies board thanks for that.

I may have overstated presents a bit, I actually make presents where possible, for my other half's last birtherday and xmas I made a winnie the pooh and a tigger (yes got the fabric and stuffing etc) it saves money and gets you in the good books.

Had a look on whatsthecost, that scared me slightly I tired reducing the interest rates down and time just fell off.

Could I not consolidate for a better interest rate and then pay a lot more than my normal payment?(if terms of loan allow)?

I do believe my other half is willing to combine finances now as we will be doing at some point anyway, I know I can't get a mortgage right now hence why she wants to help so we can get there sooner. As she puts it if she helps me now in the future I will be covering more of the mortgage etc as I will be earning more to which anything will be 'paid back' as such.

Tixy

Percy1983 wrote: »

As it is I am an accountant by trade. Unfortunately there isn't many second jobs which fit my skills set.

It might be possible to do some basic bookkeeping work. If you have friends or family with small businesses /soletraders etc. You're probably supposed to run this past your employer (if you're in practice rather than industry) but usually its not a problem if it is friends or family (and they aren't already clients of your firm of course).

Have you asked if there's any overtime going at work?

Edit: Great news about the PS games.