Debt Reduction Questions

fiscalfool

Hi All,

I've just been reading this thread: 1496721 (sorry cant link!)

It was following my questions asking about a company claiming to clear credit card and other loans ... avoid with bargepole etc!

Anyway ... I have questions regarding the CCA 1974 - non enforcable debt clause:

1) From what I've read ... if they are before 6th April 2007 they might be worth persuing, otherwise don't bother?!

2) All of my debt from before that date is all currently up to date in terms of payment. Is it still worthwhile?

3) My current credit record is clean, following this route, will the cancelled debt have any impact? If so how?

4) Debt that I think may want to investigate further (as they are pre April 07) are:
Barclaycard Platinum - £3.5k
Egg Card - £12k
Cahoot Flexible Loan - £13k
Then my partner also has an:
MBNA Credit Card
Egg Credit Card
Barclaycard
(I'm not sure of her balances)
Are any of these worthwhile to persue?

5) If one card is more likely to cancel debt than another and there is free balance ... is it worthwhile doing a balance transfer from another card to them first?

Note: All of this debt is currently being serviced every month and the minimum payment being met. However mounting costs of living is making it a tighter squeeze and Id like to start whalloping it down a bit. Therefore by getting one of two cancelled would provide breathing space ( disposable income) to increase payments on others.

Thanks in advance for all and any advice.

fiscalfool

As an update, I've just created a fairly quick SoA from my own spreadsheet:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2613
Partners monthly income after tax....... 1200
Benefits................................ 0
Other income............................ 500
Total monthly income.................... 4313

Monthly Expense Details
Mortgage................................ 800
Secured/HP loan repayments.............. 1010
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 176
Electricity............................. 100
Gas..................................... 0
Oil..................................... 50
Water rates............................. 32.7
Telephone (land line)................... 35
Mobile phone............................ 15
TV Licence.............................. 12.12
Satellite/Cable TV...................... 9.75
Internet Services....................... 12.24
Groceries etc. ......................... 250
Clothing................................ 50
Petrol/diesel........................... 250
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 247
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 11
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Burgular Alarm Cover 2nd property....... 5
Insurance for Second Property (paid).... 0
Agency Fee for Second Property.......... 62.5
Mobile Phone (B)........................ 37
Total monthly expenses.................. 3265.31


Assets
Cash.................................... 0
House value (Gross)..................... 366000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 5600
Total Assets............................ 371600


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 237000...(800)......4.25<
Other House....................116000...(504)......4.79<
Car (B)........................10000....(137)......0<
Car (A)........................20000....(369)......0
Total secured & HP debts...... 383000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Cahoot Flexible Loan ..........13500.....350.......17.9
BarclayCard A..................3350......70........9.9
Barclays Premier A.............12000.....300.......13.9
Debenhams B ...................2000......25........19
MBNA B.........................2000......25........16.5
Egg Credit Card B..............4000......50........19.5
Egg Credit Card A..............12000.....300.......26.9
Total unsecured debts..........48850.....1120......-


Monthly Budget Summary
Total monthly income.................... 4,313
Expenses (including HP & secured debts). 3,265.31
Available for debt repayments........... 1,047.69
Monthly UNsecured debt repayments....... 1,120
Amount short for making debt repayments. -72.31

Personal Balance Sheet Summary
Total assets (things you own)........... 371,600
Total HP & Secured debt................. -383,000
Total Unsecured debt.................... -48,850
Net Assets.............................. -60,250

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

Each month I tend to go through my bills to see in what areas we can cut back and reduce spending. There are still a few things that could be cut out ... but not really much.

I'd considered a DMP but that would totally wreck my credit rating ... althought it would ensure that everything could be paid off in <5 years.

Tixy

Hi Jarvy

Someone else will give you better advice than I can on your CCA questions so I've just looked at your SoA

Why do you have 2 houses? What is the value of the second house? I assume the £500 income is from renting this out? Compared to £504 mortgage plus something for buildings insurance, agency fees etc? If there is equity in the house have you considered selling it?

Your cars seem like a huge amount of the problem to me. Is £20k and £10k the amounts left on HP or the original balances? If the original amounts then how long do you have to repay. Even though you have a fairly good income I just don't think you can afford to be running luxury cars with your level of unsecured debt. Have you looked at the contracts with regards to handing one or both of the cars back? (and replacing with a cheap car bought outright)

Your electricity seems high, how long since you checked that you are with the best provider? Are you giving the supplier exact readings at least every quarter? Have you tried to cut down on your usage?

Is landline, internet & satellite a package deal? If no look at switching to an all in package and whether that would save you money (landline looks high but the others seem reasonable)

Your clothes budget could also be reduced a little and possibly food dropped by £50 but I would agree with you that there isn't loads of fat on your normal household expenses. However do look again at whether you can do anything regarding the second house or the cars.

fiscalfool

Hi Tixy,

Thanks for the swift reply.

Tixy wrote: »

Hi Jarvy

Someone else will give you better advice than I can on your CCA questions so I've just looked at your SoA

Ok no probs, thanks for the SoA advice.

Tixy wrote: »

Why do you have 2 houses? What is the value of the second house? I assume the £500 income is from renting this out? Compared to £504 mortgage plus something for buildings insurance, agency fees etc? If there is equity in the house have you considered selling it?

Long story short, moved house July 08. Initially planned to rent first house, then found a slightly more expensive house than I was comfortable with renting. Had to proceed quickly but found a buyer for first house. Then credit crunch hit, and despite having 5 houses in the road, he couldn't get a mortgage for mine.

First house: £116k mortgage interest only ... was selling for £125k (July08) no idea of present value.
Rental Income is £525, minus agents fees of 10%.
Mortgage is £504
So I subsidise it slightly each month. But better to have a tenant than empty!

Likewise the new property we bought for £250k in July 08, at 95% LTV ... just prior to ecomony going pear shaped!

Tixy wrote: »

Your cars seem like a huge amount of the problem to me. Is £20k and £10k the amounts left on HP or the original balances? If the original amounts then how long do you have to repay. Even though you have a fairly good income I just don't think you can afford to be running luxury cars with your level of unsecured debt. Have you looked at the contracts with regards to handing one or both of the cars back? (and replacing with a cheap car bought outright)

Agreed with the cars. Mine I swapped in Feb this year, as the one prior to it was a nightmare to sell on. Dealership gave me a great deal and now have something I could potentially sell on better. Not sure I'd be able to get out of contract. £20,000 was initial value.

Normally used to buy cars on HP and use the VT clause to get rid of it half way through payment. Both of these don't have VT clause though. So not sure I could terminate. How should I find out more info?

Tixy wrote: »

Your electricity seems high, how long since you checked that you are with the best provider? Are you giving the supplier exact readings at least every quarter? Have you tried to cut down on your usage?

Changed supplier two months back. Have gone with First:Utility ... (stop laughing!) ... smart meter has now been installed. They've told me they will be within top 5 price wise, and Im attracted by the transparent billing.

Elec is high as our cooking is done with elec, and I'm a home based worker. Computer, broadband all on 24x7.

Tixy wrote: »

Is landline, internet & satellite a package deal? If no look at switching to an all in package and whether that would save you money (landline looks high but the others seem reasonable)

BT - Phone ... have two lines. Second one recently installed as I work from home and don't want work related calls at home. Seemed a good deal as for extra tenner, it inherits same calling package as main line.

Sky TV - 9.75 .... have cancelled all channels and only paying 9.75 a month for the recording facility of Sky+.

O2 Broadband - Reduced rate as via friend who gets staff pricing. Needed good provider with unlimited package (as work from home!).

Tixy wrote: »

Your clothes budget could also be reduced a little and possibly food dropped by £50 but I would agree with you that there isn't loads of fat on your normal household expenses. However do look again at whether you can do anything regarding the second house or the cars.

Overall food budget is £300 which I allocated £50 towards clothing. I'm not 100% how accurate that is, so will be monitoring partner and ensuring she doesn't purchase "Premium" products!

Thanks for the advice ... food for thought on the car front. Need to ignore my pride, get rid of certainly my car ... get a cheap runaround ... and when everything is paid off I can then get something flash again! :P