Debt - where to start to tackle it?

debih

We have always managed to keep our heads above water - just - but this year has been a huge struggle and our finances have now reached breaking point.

My husband is self employed and his work has been very slow this year so we have been living on our credit cards. Work is starting to pick up again but we are maxed out on two credit cards, up to the limit on our overdraft and already have a loan with the bank and that we are paying off. We have a mortgage and a loan secured to the mortgage.

We have always managed to make the minimum payments but this month we have a shortfall and no money left in our what were already meagre savings to fill it. I know that the credit card payment and the gas/electric payment isnt going to go through this month.


I just dont know where to start or what to do. I want to just go to bed and hide but I know that isnt the sensible option!

thefoolonthehill

in my opinion its time to speak to one of the free debt charities ie cccs, payplan. However, that depends on your view with regard to your credit rating.

You should also post a SOA and let the good DFW's tear it apart!

Alternatively could you ask your bank for a payment holiday on the loan? this would then let you pay (at least) your gas and leccy.

You could also in the short term look at going interest only on your mtg. this would free up some spare cash every month to try reduce your debt

gfplux

Hello debih,
I think there are 3 things you can do immediately which should help in the short and medium term.

1) Make out your SOA (link - http://www.makesenseofcards.com/soacalc.html ) Try not to guess at the figures, dig out the paperwork! However remember a partial completed one is better than none. It is in fact one of the most IMPORTANT things you will ever do to start on the road to recovery. If you want a lot of help on this forum, posting your SOA is the first and most important step. After it is done it is very easy to keep it up to date. In my opinion everyone should have an up to date SOA even if you have little or no debt. It is a great tool to manage your life with. If you post it on the forum answer the obvious questions before they are asked so you get immediate feedback, such as :-
If you have other Income explain what it is
Mortgage – interest only or not.
What is the age of any children.
Council tax over 10 or 12 months.
Electricity and gas any arrears.
Water rates meter yes or no.
Mobiles, how many and when are the contracts up for renewal.
If no contents insurance is it include with buildings insurance.
If your pets cost money, what are they.
House or flat value, has it been valued by an Estate Agent and when.
The more you can explain about your financial figures and circumstances the quicker you will get advise rather than questions.
When you have posted it and it does not look right or you want to change it, do so and repost it.


2) For additional advise and help why not look here http://www.cccs.co.uk/ and here www.nationaldebtline.co.uk/ They both offer help for FREE.
Also here www.payplan.com/index.php


3) Start a spending diary TODAY to find out exactly where your money goes. That knowledge will shock you but also give you power. You don't need a fancy spreadsheet programme a simple note book will do the job. However if you want a free office suite (including a spreadsheet programme) download the free Open Office at http://www.free-download-place.org/openoffice-v2/index.php?source=CCN-CD281-MSN8484UK1-openoffice&msnId=IZB