Sick and Tired of being in Debt!

AJLondon

Hi all,

I have come to the forums as a cry for help, I see the "where to start" threads etc (and will do that) but need to call out for advice to you all as I am in a mess.

Let me explain that I am the proud owner of a new build on a government scheme aimed at first time buyers. With a low mortgage my OH and I pay total of 650.00 per month into a joint current account to account for everything for the month. This money is accounted for and is purely for everything, Mortgage, bills, food etc, TV, Internet... everything!

Its my own money thats the problem.

I have never ever been good with money and always have lived my adult life in debt and with our new place and wanting to pop the question but not being able to afford it, my debts are getting out of control..so I am asking for help.

The situation i was in previously my OH knows about and we nearly split because of it. My debt was turned into a loan for £7,000 initially and has spirralled to the point that a loan for £17,000 was taken out about 12 months ago. But, 3 months ago (after a financial adviser sorted out my own personal life/health insurance) I cancelled the insurance on my loan which saved me over £5000 and the first instalment of the new insurance free loan comes out tomorrow.

So I have an outstanding loan over the next five years of 16,457.52 with my monthly repayments of just under £395.

My overdraft stands at the moment as £5650 OD and I also Owe my folks £2500 and my Credit Card just under £2000.

I have a total debt not including my loan of 10,150.

I have on Tuesday applied for a Tesco Loan 12% over 5 years for 9200 which means repayments will be £202.50. This will clear my OD, the bank of my Folks and most of my Credit Card. But I am wondering if I go ahead with it, It was primarily accepted and have sent the paperwork back. Have also requested a Virgin Credit card today to balance transfer from my CC and came up online with we need more details from you.

I take home on average £1650 a month.
If I go ahead with my loan I would be paying out

Mortgage/Bills/Food = £650
Exisiting Loan = £395
New Loan £202.00
Halifax Ultimate Reward account charges £12.50
PC Insurance = £8.99
Mobile phone (tmobile contract) £40.00
Personal Insurance = £45.00

Total left for month £296.51 for next five years unless I get overtime at work. I can live on £150-200 a month for me as food is accounted for but I need to start saving money for an engagement ring and to get driving!

If I don't go with the loan I am stuck in my OD and Credit Card getting out of control....

What shall I do?
:mad:

P.s I only have myself to blame for the mess I am in and its no one elses' fault but my own. Its about time I sorted myself out once and for all as I don't want to lose my OH... if i told her of this debt and the magnitude I think she would be off.....at least if she can see I am doing something about it then I have a chance....

HELP!

nomorecc

hey I'm writing a reply if u are around wait...


Firstly PC Insurance?! if you need help give me a message, im a computer programmer and i know my way around computers lol they are easy and i could guide you over the phone, let alone parts going wrong thats kinda unlikely thats an extra £8.99 saved.

Overdraft: whats the interest charges etc for having it etc
Do you need halifax ultimate reward account can you drop down and continue with a big overdraft?

personally i have some finance problems as of late hence my mbna settlement thread, basically went to CAB, stopped paying for all my non-priority debts

- loans (non secured)
- credit cards (non secured)

obviously had to get cab to write to them, paid them a pound a month, cab will work out what u need to pay.

nearly been a year and now they are starting to get evils lol not my fault sorry if im having probs!

so anyway cutting to the chase you could do this and use it as an example so save up some big money and pay of people.

however it would !!!!!! you credit file u may even get a default, and they may even take litigation (charging order on your property)

however they are unlikely to do that depending on your situation.

basically put it this way.

PRIORITY - Mortgage/Bills/Food = £650
PRIORITY - Council Tax = ??????
PRIORITY - Gas/Electric

Mobile phone (tmobile contract) £40.00
Personal Insurance = £45.00

CUT - Exisiting Loan = £395
CUT - Halifax Ultimate Reward account charges £12.50
CUT - PC Insurance = £8.99

---

basically you would have if you made the above changes.

£915 CASH every month... this would include to live off...

Be harsh to yourself for a while and use that to your benifit...

Say 200 is to live off a month thats still £715 a month!!

3 months and your credit card is paid off. then apply for another card (preferably now) so that you get 0% deal.

pay off your parents...

Or... speak to your loan lender tell them your having some difficulties and if you could pay half the amount for 6 months etc 200 a month it would take you... 4 months to clear the cc off!

CAB is your friend, don't do any of this without there help. give me a pm if u wanna chat over the phone, i was in a similair situation im in nearly 40k of debt by myself!!!!

also side note... the OH should support and help you not bash you for your dignity to correct your mistakes!

gl dude

AJLondon

I am still here..

mum2one

You've done the 1st step, from someones whos been there done that brought the tshirt and on consodilation loan no 3, plus overdraft and credit cards, you need to work out what it the route cause of the debt, (sorry I'm not asking you to rake up the past), but some people eat, others gamble, some buy clothes.

Maybe the 1st time in debt, you could chalk upto experience, the 2nd and further shows your running away from something that has popped its ugly head up again.

Just a few pointers

By applying for so much credit,

Your existing loan
the financial advisor sorted out the loan

Now applied for Tesco loan - thats 3 quite large payments on your credit card file, in terms of footprints, even thou loan from financial advisor paid the 1st off

In terms of Virgin, they may have done a credit serach and seen the recent applications and may be quering the application.

The first few cuts would be
Halifax reward account - do you use all the benefits?
The £8.99 computer ins - most problems would be fixed easily be an eningeer, say the laptop cost £400 in 12 months u've paid £106 - for a service that is already under guarentee
The mobile phone - in contract ask for better deal, out of contract shop around.

Theres 1001 suggestions that can be made re money saving, not just your part of the income but the "joint expenses".

Theres a few suggestions to start off with, I hope I have not offended you that is my last intention, you've got a good start to your life as a couple, and the house, don't put anything at risk x

planning_ahead_2

Hi

From someone who has spent years going down the consolidation route I wouldn't recommend it unless you are absolutely 100% committed to getting rid of all credit cards and other debt - only then is this even worth considering.

You will see from my signature that we have £46k worth of unsecured debt. What is worse than that is that we have consolidated over the years onto our mortgage and that is therefore hiding a further £73k worth of debt (mortgage is £133k but when I bought the house it was only £60k). I really didn't realise just how much we had borrowed/consolidated over the years (well I suppose I must have but chose to block it out). Each time we consolidated it was all happiness and light for a while and then the debts started building up again.

Please, please think things through before consolidating. If you are sure that this really is the last time and you have learnt your lesson, can live within your means and manage your money then it is probably a good thing (lower, fixed interest rate etc etc). But if you are even just the tiniest bit likely to keep a credit card and spend on it then don't do - work out a plan to clear the debts and learn the hard way.

Good luck - you will find masses of support on this forum to help you through

Edit: The engagement ring doesn't have to cost the earth (it's the thought and love behind the gesture rather than the value of the ring that really counts), and as for driving - if you are really committed to clearing your debts then you will understand and accept that as something that will have to wait. Driving costs are more than just lessons, once you get a car you then have the outlay for a car (likely more debt rather than having saved for it), insurance, mot, maintenance, fuel costs and they just keep coming every month. You are managing without a vehicle now so seriously think about putting off driving until you are debt free.

Generali

OP - can you earn more by moving jobs or taking a 2nd one

AJLondon

Hi all thanks for the messages, its nice to know that people can give you advice and that in this mess people can help me through.

I need to add some additional info, was late last night and have a clearer head this morning.

My overdraft is like it is because i paid off my credit card balance and next account with it in one hit. I was on an overdraft of 100 and nothing more and my credit card was maxed out and next account was approx £500.. So looking at Halifax overdraft they charge you £2 per day for being overdrawn over £2,500 which is alot less than I would of been paying back on CC and Next so decided to whack it all on an extended overdraft. Then due to moving in, going on holiday to the USA for two weeks and Christmas the Credit Card and overdraft have grown!. So my intentions were good after all...


I agreed to pay the bank of my folks 250.00 a month for 10 months to clear what i owe them starting at the end of this month. I have money in my account to cover my first loan payment of £395 (existing loan without the insurance) that comes out tomorrow.

I get paid 25th of each month and have to wait till first new payment comes out to change the DD date of the loan. So once it comes out tomorrow I can request it to be changed to the 26th of the month from Feb onwards which means when I get paid on 25th of this month (Monday) £395 will not be coming out of my account until I am paid again at end of Feb. So have this money as additional money to put towards debts for Jan.

So at the moment I am looking at (when I get paid on Monday) the following coming out:

Mortgage/Food/Bills = £650
Personal Insurance = £45
Mobile = £45
PC Ins = £8.99 - Looking into cancelling this today
URCA Monthly Fee - £12.50
HCC = £35.00
Bank of my Folks = £250.

Total = 1046.49...

I will have approx £600 for this month will try and live on £200 so have £400 towards debts.

The problem for me is when it gets to the end of Feb. I will be paying the next instalment of my exisiting loan (395) on top of what i am paying now so will have just £200 quid to live on and my CC payment will be higher...

So what do I do? I am considering withdrawing my application for a Virgin Card.. sticking with the Tesco loan to clear Mum and Dad, Overdraft and Majority of CC. That way I would be living off around £300 and will automatically save £100 per month, have a 0 balance on my CC and 0 overdraft.

Once this happens I will go to the bank and change my account from the Ultimate Reward account where I pay £12.50 per month to just a reward account with no monthly fee and no overdraft.

I do at times have Overtime as an option at work and have already got two bank holidays lined up (double time) beginning of April and end of May. Luckily enough me and my OH were given holiday vouchers so if we decide to go away later in the year they will pay for the hol and flights.. would just be spending money.

I believe with a plan helped by you guys on here I can spend as little as possible in the month and save whatever else I can...

P.s I am tossing and turning at the moment about a new job. I have been in mine for over 5 years and its local to me, pays good money but feeling very demotivated and undervalued so that could be another option for me.

So once again, what do you suggest I do?

Judith_W

You talk about £200 to 'live off', I think it might be useful for you to have a look at what you're spending this on as food is already covered in your main bills amount - is this clothes, toiletries, entertainment? If so I think you should see what you can do to cut this. Do you really need new clothes, do you have clubcard points you could use for renting DVDs/ cinema etc?

AJLondon

I say to live off and thats to cover for anything out of the ordinary within the month. But I reckon if I have quiet month's then I can get by on £100.. give or take..

terakris

One thing that helped me get debt free was to budget a lot better. so for example you say you have about £100-200 a month to live off... well what does that include.

So take the £200 and break it down. when you then see you are spending say £100 a month at starbucks you can then work to cut that back. I would put my spending into 4 categories... Loans/Debt - Monthly Bills (this would be things like sky/bt, rent etc) - Monthly Extras (so things like petrol, car tax accounted montly etc) - Savings (although if in debt, this should only be saved towards your debts).

So take everything you spend, petrol, insurance, sky, etc etc etc and do a proper full breakdown of everything that is not already included in the joint account you have for your bills... you will be surprised where the money gets eaten away. Once you have htem all totalled up, you can work out monthly what you have left and where you can make cut backs.

I used to keep all my financial data in a kinda spreadsheet so each month i could add my overpayments and see things like "debt under £10k - DONE" to give me a boost, you then find yourself looking for ways to meet the next target.

Also i have been down the consilidation route, and at one time had 3 loans and still spent on my credit card... so if you do go down that route, you need to be REALLY committed not to spend on credit at all. If your loans allow overpayments, start doing that to get them paid off quicker, and you will see its such a great feelign when you have large chunks of money being paid back.

As for the ring, well ive been with my GF for 7 or 8 years now (she will kill me for not knowing the exact number lol) but we are still not engadged as she knew that clearing the debts should be my first priority. And this year, if she is lucky she will get a nice huge sparkly on her finger... all debt free

Good luck!

AJLondon

Well I have taken some small steps. My mobile contract is a flex with tmobile. I pay £35 a month for £180 worth of credit but my bills always come to £45.. I have checked and there is a £5 service on their to download football highlights that I have probably used twice in 3 years so have cancelled that service.

I have also just cancelled my PC monthly Insurance which is £7.99 and not £8.99 as previously stated. So thats £12.99 a month small stuff saved.

I am still wondering what to do about the new additional loan / Virgin Credit card situation. If I take the loan then I will clear everything including overdraft completley and can change my account and save another additional £12.50 per month so that would be an extra £25 a month to save..

Let me just explain one thing, when I say £200 to live on that's £50 a week including weekends.. what my intention would be is to take £200 cash out of my account and not touch the account for the rest of the month. When it comes to next pay day if I have any money left from my £200 I previously took out then I would only take out monies to equate to £200 for the month ahead and not another £200.. So I would be saving more once again...