What Path to take?

NickToye

Hi, I have decided to register on this forum, and as I realise I am one of thousands in this country of bad debt and non-stop credit, I have no shame in using my realname as my username.

That's the first step.

Secondly I have debts that have developed out of my student years, and they have only escalated. I know I am not as bad as some people, and I can live quite comfortably and always pay what I owe, I just want to get out of it as soon as possible.

I have recently started up a business as a Web Consultant, and do pull in quite abit of money each month, with the potential to pull in more if I really market myself.

I would like advice on how I can go about clearing my debts. I've heard all types of ways, ways in which you can declare bancrupcy, but this effects your credit for the next 5 years. Ideally I would like to be in an arrangement that allows me to clear most of my debts and still allows me to be in a position to get a mortgage in the next 2-3 years.

If anyone can help, then I would really appreciate it.

CLAPTON

i'm sure people will be able to help but they will need to know the financial facts so
post a statement of affairs

http://forums.moneysavingexpert.com/showthread.html?t=107280&page=1

forsya

Hi NickToye

Welcome to MSE! Great that you want to clear your debts and there are lots of people on here to help you!

Like Clapton says, post your SOA on here, incomings, outgoings, what debt and interest rates etc

We can then give you some advise.

NickToye

I can understand this requirement, but at the moment I would just prefer to get an initial overview of the options before I divulge my finances.

Broken_hearted

first of all welcome. Take a seat look around the boards and when you feel comfortable you can do a SOA.

NickToye

OK, i'm working on it now, I hope this can help because i'm getting down over it all.

Bothered!

If you seriously don't want to affect your credit rating don't think bankruptcy... especially if you want a mortgage.

Best thing to do is make a list of your debts, highest interest first or secured debts and address them in that order. re - finance if you have a good income now and snowball to clear as much as possible before applying for a mortgage.

NickToye

Ok here we go. This is what I owe:

Barclaycard £3464.00
ASDA Card £1500.00
O/D £1500.00
Choice Catalogue £897.89
Personal Loan £8888.26 (£166.62 per month)
Personal Loan £5469.76 (£147.45 per month)

I also have Student Loans of approx. £5.5k, unfortunately I don't know the exact figure because I must have done the cardinal sin and chucked the letter. I have just been deferred for another year, as I only need to start paying back if I earn 2k per month gross.

Running Costs:

Rent: £595.00
C/Tax: £115.00
NPower Gas: £30.00
NPower Electricity: £25.00
House Insurance: £31.65
TV Licence: £32.87 (Per Quarter)
BT Phone: £40.00
Appliance Rental: £12.95
Sky Digital: £42.50
HP Car: £164.23
Life Insurance: £30.00
Car Insurance: £61.20
Orange Mobile: £35.00 approx
Wanadoo Broadband: £26.99
Choice Catalogue: £100.00 approx

Total = £1320.47
+ loans repayment

Total = £1634.54
+ credit card repayments
(£150.00 per month approx.)

Total = £1784.54

My income varies because I run a Web Consultancy, so I can be busy one month and average the next. I generally earn at least:

£1,080.00

My wife earns at least:

£750.00

This on a worse case scenario.

The credit cards are going to come down soon as I have almost 2.5k worth of extra web work that has come in on top of my minimum workload.

VickyA_2

Thank you for posting your statement of affairs!

The first thing that I notice is that you spend £40 per month on your phone bill. Have a look on the Phones board, but in the first instance you can reduce your Line rental to BT Option 1 (£10.99 per month) and then sign up to www.call1899.co.uk where your phone calls will cost 3p each whether it's daytime or evening. Just an idea.

Do you really need your Sky? Looks like you've got the full package. Are there some channels that you never watch that you could prune to reduce the cost, if you don't want to get rid of the whole thing?

Vicky

NickToye

Hi Vicky,

I was considering ditching BT alltogether. We never really make many phonecalls with it, and generally use mobiles more.

I can't get rid of sky, i'm not being lumbered with Coronation St and Eastenders day in day out. I have though being trying to downgrade, but the online system is down at the moment, so I will call tomorrow.

I'm not keen on using 3rd parties for my calls, I always feel there is a catch.

VickyA_2

NickToye wrote:

I'm not keen on using 3rd parties for my calls, I always feel there is a catch.

No problems! The catch that my OH has found is that I'm constantly changing our calls provider depending on who is cheapest, so that I can save 1p that week! :rolleyes: It can get a little obsessive................