am i better to pay CCJ off or clear my debts 1st

WeeTel

i am in debt for around 75k in total.
£32000 is my mortgage.
£29900 is a secured loan
£5000 Credit cards
£3200 owed to abbey from previous overdraght.
£2000 overdraught with halifax.
£4900 for 2 x CCJ 1 for £4000 the other for £900

i have just read my credit file and i always knew that i had court action taken against me but have only realised what they were.
i have 2 x debts on my credit file registered as CCJ, the remainder are either showing default or showing that i am paying.

i have just realised i need to get out of this debt and i have thought that the best thing to do would be to clear out the CCJ registered on my name 1st.
i phoned on friday and cleared 1 for £900, and after reading this forum i think that this may have been a bad idea.

am i correct in saying that it will not matter if i clear the CCJ as 1 lump as i will no longer get charged interest?

really my question is should i prioritise paying my high interest credit card debts 1st or should i clear my credit file and clear the CCJ?

please advise what i am best to do. thanks

WeeTel

thx was hoping someone would advise. but seems not.

GeorgeUK

WeeTel, as this board gets so busy, some posts are moved down very quickly, repoting as you have will bump it back to the top for others to see.

Getting the CCJ debts dealt with will allow you to have them marked as satisfied, even though they will stay on your file for the full 6 years.
http://www.trustonline.org.uk/understand-judgments-fines/certificate-of-satisfaction-satisfied-vs-unsatisfied-ccjs/

Dealing with these debts first will improve your credit score which may may it easier to sort out your other debts later. If for some reason you were to miss a payment on a CCJ, they may have been able to put a charging order against your home, so i think getting rid of these first is the right thing to do.

For the remaing CCJ, they may accept a reduced settlement offer - just make sure that they agree that it is in "full and final" settlement and that you are not liable for any further payment to the debt.

After this i would look at the amount of iterest you are getting charged for the remaining debts. Paying the highest interest first is usually advised, but if you have a good history with credit card payments for a bank and quite a low balance, it may be better to clear that first so you can take advantage of any existing customer balance transfer deals. These don't usually require a credit check so you may still be able to reduce the amount of interest you are paying.

WeeTel

hi george, thanjks for the reply.
i understand that this forum is busy, am just glad that someone was able to give a little advice on this.

i have cleared 1 x ccj for £900.

i have contacted the loan company i have a loan with to get the terms and conditions of the secured loan that i got at a rediculous rate. of 14.9%
just to see if i was missold PPI so i can reclaim,

i have contacted my creditors and asked them to reduce my interest, or freeze it until i can repay some of the debt instead of just paying interest. and have set up arrangements with them.

i just need to prioritise which debts will be getting paid first.

the other CCJ i have is on an arrangement already, i will continue with this, and see how i go.

i will keep you updated on the credit cards and see if they actually will reduce the interest or freeze it.

GeorgeUK wrote: »

WeeTel, as this board gets so busy, some posts are moved down very quickly, repoting as you have will bump it back to the top for others to see.

Getting the CCJ debts dealt with will allow you to have them marked as satisfied, even though they will stay on your file for the full 6 years.
http://www.trustonline.org.uk/understand-judgments-fines/certificate-of-satisfaction-satisfied-vs-unsatisfied-ccjs/

Dealing with these debts first will improve your credit score which may may it easier to sort out your other debts later. If for some reason you were to miss a payment on a CCJ, they may have been able to put a charging order against your home, so i think getting rid of these first is the right thing to do.

For the remaing CCJ, they may accept a reduced settlement offer - just make sure that they agree that it is in "full and final" settlement and that you are not liable for any further payment to the debt.

After this i would look at the amount of iterest you are getting charged for the remaining debts. Paying the highest interest first is usually advised, but if you have a good history with credit card payments for a bank and quite a low balance, it may be better to clear that first so you can take advantage of any existing customer balance transfer deals. These don't usually require a credit check so you may still be able to reduce the amount of interest you are paying.

rog2

Hi WeeTel - and welcome to DFW - some good advice, as always, from George.

It does look as though you need some general advice regarding the 'prioritising' of your debts.

You can get this by talking to one of the Debt CounsellingCharities, such as:

• National Debtline - www.nationaldebtline.co.uk/ - tel 0808 808 4000
• CCCS - www.cccs.co.uk/ tel 0800 138 1111
• A debt adviser at your local CAB

Any one of the above charities (fully endorsed by this site) will be happy to give you free, professional advice on the best way of tackling your debts, and you will get additional advice, and lots of support from this site.

If you post a full SOA (Statement of Affairs), listing your income, expenditure and debts, then you will also get lots of advice on how to avoid further debt.

Good Luck

WeeTel

i have contacted payplan, they have sent me a welcome email, i was going to phone them this evening, the problem is that i dont know if this will affect my credit for future, as i do plan in 2 years to try for a mortgage with my partner,
am unsure what way to go.
have considered remortgage on the house, clearing all debts and starting again, still unsure if this is a good option,
really i am unsure to talk to anyone incase it hinders me further, hence all this forum reading and posting.

WeeTel

here is my SOA

any advise / counselling (lol) would be appreciated.

Monthly Income

Income Amount Net Monthly Salary £ 1,200.00 Partner's Monthly Salary £ 0.00 Benefits £ 0.00 TOTAL MONTHLY INCOME £ 1,200.00



Essential Monthly Outgoings

Outgoings Amount Mortgage £ 200.00 Rent £ 0.00 Council Tax £ 0.00 Electricity £ 60.00 Gas £ 0.00 Heating Oil £ 60.00 Water Rates £ 0.00 Telephone £ 30.00 Mobile Phone £ 30.00 TV Licence £ 12.00 Satellite TV £ 21.00 Internet £ 10.00 Buildings Insurance £ 11.00 Contents Insurance £ 19.00 Life Insurance £ 11.00 Groceries £ 120.00 Clothing £ 30.00 Petrol £ 60.00 Car Tax £ 10.00 Car Insurance £ 0.00 Car MOT £ 10.00 Car Maintenance £ 10.00 Car Parking £ 0.00 Other Travel £ 10.00 Childminder/Nursery £ 0.00 Medical/Dental Expenses £ 25.00 Pets Insurance/Vets Bills £ 15.00 Birthdays/Christmas £ 15.00 Holidays £ 0.00 TOTAL MONTHLY OUTGOINGS £ 769.00 NET MONTHLY SURPLUS £ 431.00



Monthly Debts

Debt Total Debt Min Payment Rate Overdraft £ 2,400.00 £ 0.00 0.00 % Secured loan £ 29,900.00 £ 335.00 14.90 % Credit Card 1 Barclaycar £ 3,000.00 £ 26.00 0.05 % Credit Card 2 HFC £ 663.00 £ 15.00 12.90 % wolfrace CCJ £ 4,200.00 £ 26.00 0.00 % Sky Card £ 253.00 £ 8.00 12.90 % Abbey old ovrdraught £ 3,600.00 £ 10.00 0.00 % TOTAL DEBT £ 44,016.00



Assets

Asset Value Cash £ 0.00 House Equity £ 70,000.00 Shares/Bonds £ 0.00 Car(s) £ 2,000.00 TOTAL ASSETS £ 72,000.00

GeorgeUK

2 tools that may make things a little easier for you (and possibly for us to read)

http://www.makesenseofcards.com/soacalc.html
Remember to use the MSE format for pasting on the board.

http://www.whatsthecost.com/snowball.aspx
Allows you to see what to pay back with the least amount of interest.

WeeTel

It will take you 95 months to pay off these debts if you snowball correctly. During that time, you'll pay £1,045.00 in interest.

If you paid the same amount per month, but changed the order in which you paid your debts so you weren't paying the highest interest rates first, it would cost you an additional £3,230.00 in interest.

See the chart below for a breakdown of your monthly payments. Any months in red mean that the amount you entered as the amount you want to spend per month servicing you debt isn't enough to cover your minimum payments. In the "payments" column, any value shown in blue indicates that you're paying more than the minimum

It's important to note that while, financially, snowballing in interest order will cost you less, sometimes, emotionally, it makes more sense to pay off some the smaller debts first. That can be a great incentive when starting to deal with your debt.

What if I consolidated?

General [URL="javascript:openWindow ('/popups/consolidation.aspx')"]reasons[/URL] why consolidation is not always a good idea

First things first, I am not a financial expert, nor do I intend this site to give any kind of finance advice. I just give you and easy way of seeing the figures.

That said though, in my opinion, consolidation generally a bad idea. If you're in debt, it's because you spend more than you earn, and it's all too easy to get a consolidation loan, pay off your current debts, and because your monthly outlay is less, you feel you have more spending power and run up new, extra debts.

Consolidating debts into your mortgage, or another secured loan is (again, in my personal option) an even worse idea. Secured debt means that if you default on payments you'll lose your home. Not only that, but your mortgage will generally be on a much longer term, so although the interest rate may be less, in the long run you'll be paying far more.

For example, according to the figures you've just entered, you currently owe £14,125.00. If you consolidated that into your mortgage at, say 5.5% over 25 years, you'd end up paying £11,896.96 in interest. By snowballing correctly, you'd pay £1,045.00

WeeTel

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1200
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 390 income from tennant on property,
Total monthly income.................... 1590
Monthly Expense Details
Mortgage................................ 200
Secured loan repayments................. 335 Rediculous 14.9% loan
Hire Purchase (HP) repayments........... 0
Rent.................................... 260 shared accommodation
Management charge (leasehold property).. 35
Council tax............................. 0
Electricity............................. 60
Gas..................................... 0
Oil..................................... 60
Water rates............................. 0 dont pay in NI
Telephone (land line)................... 30
Mobile phone............................ 30
TV Licence.............................. 12
Satellite/Cable TV...................... 25
Internet Services....................... 10
Groceries etc. ......................... 160
Clothing................................ 30
Petrol/diesel........................... 80
Road tax................................ 12
Car Insurance........................... 0 am a named driver on policy not paid by me
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 0
Other child related expenses............ 150 Maintenaince
Medical (prescriptions, dentist etc).... 25 Dental 1 per month,
Pet insurance/vet bills................. 0
Buildings insurance..................... 11
Contents insurance...................... 19
Life assurance ......................... 12
Other insurance......................... 12
Presents (birthday, christmas etc)...... 15
Haircuts................................ 16
Entertainment........................... 60
Holiday................................. 0
Emergency fund.......................... 40
Total monthly expenses.................. 1724

Assets
Cash.................................... 0
House value (Gross)..................... 105000
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 107500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 32000....(200)......5.4
Secured Debt.................. 29900....(335)......14.9
Total secured & HP debts...... 61900.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................3013......26........12.9
HFC............................663.......15........16.9
Sky Card.......................251.......8.........12.9
wolfrace.......................4200......26........0
Halifax overdraght.............2100......10........0
Abbey overdraght...............3600......10........0
Total unsecured debts..........13827.....95........-

Monthly Budget Summary
Total monthly income.................... 1,590
Expenses (including HP & secured debts). 1,724
Available for debt repayments........... -134
Monthly UNsecured debt repayments....... 95
Amount short for making debt repayments. -229
Personal Balance Sheet Summary
Total assets (things you own)........... 107,500
Total HP & Secured debt................. -61,900
Total Unsecured debt.................... -13,827
Net Assets.............................. 31,773
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

GeorgeUK

Slightly confused, but that's nothing new.

Paying mortgage and rent, but no council tax? (okay, i get it now )

Electricity............................. 60
Oil..................................... 60
Check the comparison sites to see if you are getting a good deal (uswitch, moneysupermarket)

Mobile phone............................ 30
PAYG?

Telephone (land line)................... 30
Satellite/Cable TV...................... 25
Internet Services....................... 10
Is this combined in a package?

Groceries etc. ......................... 160
Might be able to cut this down a little. Have a look at the oldstyle board for meal plan ideas etc. Have you moved down a brand (shops own?)

Clothing................................ 30
every month? Can this be cut slightly?

Buildings insurance..................... 11
Contents insurance...................... 19
Life assurance ......................... 12
Other insurance......................... 12
No car insurance? Again, check the comparison sites to see you are getting a good deal.

I think it would be best to try to clear the HFC car first as this is both the highest APR and lowest balance. You don't have enough to cover the basic expenditure and payments according to this - have you missed any payments?