First time post - facing my problems

Basilbrush66

Hello...

Finally decided that its time to deal with my debt problem after they have been getting out of control for the last 4 or 5 years following uni.

I really wish that I had some sort of excuse for the mess I am in, loads of you appear to have had some contributing factors that got you in the situation. Unfortunately I have just been really stupid and spent money I didnt have beliving that because I was doing well at work it would all be ok later on...

At the moment Im mamaging to meet all my payments however a year ago I promised myself Id sort the problem out and on reflection its got quite a bit worse and Im now begining to really worried about my future. All my mates are starting to get married and buy houses and I have realised that this isnt even a possibility for me. Basically its highlighted what a mess I have got myself into - not a pleasent at all.....

Im considering contacting payplan or CCCS to see if a debt management plan might be suitable however I have one major concern. When this huge mess has been sorted out and I have eventually paid everything off (I not kidding myself and realise that this will be quite some time in the future) I want to be able to get a mortgage and buy a place.

What are the longer term implications of a debt management plan? A few years down the line will I be able to get a mortage like "normal" people...or will all the companies I owe default the loans/credit cards and put it on my record forever preventing this?

Basically my dilema is that whilst my debts are very bad I think the right answer is a debt management plan - I don't want to take this option and ruin my future by never being able to buy a house....

Can anyone advise me?

My income is £1400 per month

Debts are: £6000 loan
Credit Card 1: £2700
Credit Card 2: £3400
Credit Card 3: £3600
Overdraft: £2000

Your help is hugely appreciated.....

amosworks

Hey Basilbrush66, and welcome to the Debt Free Wannabe forum

Firstly you really don't have to beat yourself up about being in debt, as you mentioned people got in to debt for all sorts of reasons and in this society where it's seen as the norm for people to get in to debt, you did just what the boffins in the marketing departments at the banks and card companies wanted. Don't feel bad about it, but do rejoice in the fact that you've had your lightbulb moment This means that you are now much smarter than they want you to be

Secondly before we can really get to grips in helping you, we need a lot more information out of you! You won't be judged for it at all as I sense that's something you feel a bit wary of, I promise you nobody will say a single bad word about how this happened or the situation you're in. You need to post your State of Affairs (SoA) which gives the DFW nerds (affectionately so called ) the info to really help you out.

It might be premature to decide that you want a Debt Management Plan (DMP) right now, as it's highly likely we can help you out of the situation you're in just as easily. So you need to research this thread which southernscouser has most excellently compiled, and then report back here with all the information it asks for as best as you can. A DMP would ask you to do the same thing so it's worth taking the effort to be really concise with it.

There are some bits of information missing in your post above, such as who your loans and cards are with, their APR's, when any special offers may expire, your current monthly payments, and of course details about ALL of your outgoings. We can save you money in ways you probably never even reaslised, and that's a promise too

I look forward to hearing back from you with your complete SoA so we can all get to work and turn your debt crisis in to a thing of the past

beverleyhills

:hello: Basilbrush66

Welcome to MSE. You have already set your debtfree goal. Follow Amosworks advice and post your SOA on here. There are very able people who will help you work out how to achieve that goal.

Good luck

Basilbrush66

Right here goes....now its all down on paper its actually quite a bit worse than I thought...

Monthly incomings:

Salary (take home): £1406 per month – however this is paid four weekly - £1298 every 4 weeks (travel costs are directly deducted before I get the money in my account.

Monthly outgoings:

Rent: £534
Council tax: £55
Mobile Phone: £40
Landline: £9
Food: £35 Approx
Electricity: £15 Approx
Gas: £15 approx
Internet: £8.50
Socialising: £55 (I reralise that this is the first thing that has to go!)

Total outgoings: £766….

Doesn’t sound too bad at this point – its when you add the debt on to it:

Egg Loan: £6328.78 – APR 7.7% - Monthly payments of £160.98 – 44 remaining

Egg Money Account: £3530.77 – Min monthly payments: £72.06 16% APR

Capital One Credit Card: £2950.00 - Min monthly payments: £88.65 – Interest 1.384% per month

Egg Credit Card: £3205.90 – Min monthly payments: £65.43 – 16%APR

HSBC Credit Card: £900 – Not sure of min as I just paid a large bit off – 14% apr

HSBC Overdraft: £2000

Any adive would be hugely appreciated - this is really begining to concern me now!

Emmzi

Basil,

so you have at least £640 a month to throw at your debt? And this looks like more than your monthly minimums.

Don't panic, and don't sign up to a DMP yet! It's possible you can get out of this on your own, without hurting your credit rating.

Just wanted to wish you the best, and the DFW nerds will be along soon with how to do it.

Emmzi
xx

Annie_Fanny

Get a part time job to get some extra income coming in? It doesn't have to be forever - just until you give the debt the boot! Then you can concentrate on saving for your future....do you have any savings? Friends owe you any money? Is there a possibility of an interest free loan from a relative?

Basilbrush66

The amount I have to throw at the debt looks ok on the fac eof it - around £640 per month...

However once all the minimum payment gor from that Ill make little or no ground on the actual debt:

£640 - £160 - £72 - £88 - £65 = Just £255

Out of this unexpected things always seem to come up which would leave me with very little to make an impact in the actual debt???

muddled_midget

Your minimum debt repayments are around £435, even taking the minimum payment of HSBC at £50, and I'm sure it's less than that, which leaves you £200/month to snowball, ie throw at the highest interest debt until that's clear, and then throw all your money at the next highest interest rate. So as long as you stick to your budget I really don't think you need a DMP just a bit of willpower and determination!
I'm sure someone will give you the link to the snowball calculator which will show you exactly how you should focus your money and when you can expect to be debtfree.
In terms of your SOA, only your mobile and socialising look like they can be reduced to me, even if you just cut mobile down to £20 and "me money" down to £40, that's an extra £35/month to snowball, if I can do maths!

Found the linkhttp://www.whatsthecost.com/snowball.aspx

Sea78

Hi,

Don't despair. It doesn't look like you need to go down the DMP route at all. Have you applied for any 0% balances transfers or lower life of balance transfers...these will make your payments seem more meaty! Also, don't necessarily cut out socialising etc as then you won't have things to look forward to and might not stick to your new routine. Maybe just take money saving cuts instead.

How about the mobile? Seems like a lot, have you asked/researched a better deal?

Sea xx

Ps don't feel depressed, my debt came about in a very similar way to you, except I spent more and used having babies as an excuse!!

Emmzi

Drastic measure!! (would be for me anyway) - any chance of moving back in woth parents while you sort yourself out?

£18900 debt (ish) divided by the £600 you spend on rent and council tax + £600 a month you repay at the moment = debt free in a year and a half.

18 months rough times now for a financially secure future.

Alternatively, can you rent a room instead of a flat? It could half your rent.

Just a thought.

Annie_Fanny

http://www.whatsthecost.co.uk/snowball.aspx

Try this - as mentioned above!