how do i get out of this mess?

garwil

i will be submitting a

dib-dab

garwil wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1900
Partners monthly income after tax....... 1500
Benefits................................ 120
Other income............................ 0
Total monthly income.................... 3520
Monthly Expense Details
Mortgage................................ 867 Can you get a deal with a lower interest rate?

Council tax............................. 45
Electricity............................. 40 Check that you are getting the cheapest deal.
Oil..................................... 25
Telephone (land line)................... 25 Is this the cheapest deal?
Mobile phone............................ 50 Can you reduce this cost at all?
TV Licence.............................. 12

Groceries etc. ......................... 150 See whether you can reduce this - cheaper supermarkets, cheaper brands, cooking in bulk, get ideas on here of how to cook budget meals.
Clothing................................ 20 Do you really need to spend this?
Petrol/diesel........................... 20
Road tax................................ 0 Why no road tax? Is this correct?
Car Insurance........................... 30
Car maintenance (including MOT)......... 10

Buildings insurance..................... 25
Contents insurance...................... 15
Life assurance ......................... 10
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 20

Total monthly expenses.................. 1384

Assets
Cash.................................... 1000
House value (Gross)..................... 170000
Shares and bonds........................ 0
Car(s).................................. 6000
Other assets............................ 1000
Total Assets............................ 178000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 130000...(867)......6
Total secured & HP debts...... 130000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................5000......150.......19.9
credit card....................6000......297.......19.9
credit card....................7000......250.......20
loan...........................9000......180.......16
loan...........................20000.....300.......9
over draft.....................8000......0.........0
credit card....................2000......40........26
credit card....................1500......45........19
credi card.....................5700......154.......24
Total unsecured debts..........64200.....1416......-

Monthly Budget Summary
Total monthly income.................... 3,520
Expenses (including HP & secured debts). 1,384
Available for debt repayments........... 2,136
Monthly UNsecured debt repayments....... 1,416
Amount left after debt repayments....... 720
Personal Balance Sheet Summary
Total assets (things you own)........... 178,000
Total HP & Secured debt................. -130,000
Total Unsecured debt.................... -64,200
Net Assets.............................. -16,200


My bank has refused me aloan to pay off all these debts - can any one advise me as to how i should go about clearing this debts - i want to make a clean start ASAP.

I am no expert with all of this as am a newcomer myself but your outgoings look pretty reasonable, just make sure that you are getting the best deals you can on things. Is this your actual spend or what you want to or think you should spend? Make sure you are not 'accidentally' spending more than you realise by using a spending diary and questioning every purchase.
As for the debts - the usual answer is that you should pay off the debt with the highest interest rate first and go from there. You have a good income and a good amount left over each month so you should be able to make a dent in this fairly quickly. Try contacting your credit cards to see whether you can get a better interest rate.
We recently cancelled a couple of credit cards and immediately they were offering us a 0% rate, higher credit limits etc I ended up getting quite annoyed with them as that is how we got into this mess in the first place but it might be worth calling their bluff and seeing what they offer you so that you can transfer your more expensive debts to a cheaper rate.
Good luck, you have done the right thing by coming on here for help.

pure_dead_dopey

Hi garwil thought I just congratulate you on your LBM, now is the time to get it fixed. I wouldn't have the experience to suggest anything about your SOA but there will be many good people come along to help in a minute. To be honest though, I don't think another loan is the best idea. You do have some money left over each month so I would think it is doable, but it will take dedication.

gonzo127

hi well basically you seem to have a reasonable SOA, and i am glad the bank refused you a consolidation loan as they so very rarely work and usualy land the person in a worse situation in the long run!

anyway as it stands you have £720 a month left over (surplus) after all your outgoing are paid (including your minimum payments) which should go towards increasing your payments if you do not have ~£720 a month left over then you seriously need to start a spending diary as £720 is a hell of a lot of money to 'lose' each month

all the things that you can do in your SOA will not make a massive difference to things as you could probably save a few pounds here and there but you already appear to have 'cut down' to a good point so it will the the £720 left over which will make a massive difference so what i would suggest is to snowball it like below

credit card....................2000......40........26
pay ALL the extra £720 on this and get it paid off in ~3 months then add the £40 minimum payment from this to snowball onto the other giving you a new surplus of £760 a month

credi card.....................5700......154.......24
this then needs to put all on this one taking you roughly 6 months however will free up £154 giving you a surplus of £914 a month

credit card....................7000......250.......20
would be next taking you roughly 7 months and freeing up another £250

anyways you can see the idea in snowballing the money

alison999

gonzo127 wrote: »

hi well basically you seem to have a reasonable SOA, and i am glad the bank refused you a consolidation loan as they so very rarely work and usualy land the person in a worse situation in the long run!

^This! I really wish Id listened to my mum when she said dont borrow money to pay off money.

perkisc

Hi Garwill and welcome

Just has a quick look at your SOA and noticed that you only spend £20 per month on petrol to run 2 cars. If this is correct then with such low mileage are 2 cars really necessary. Two lots of road tax, insurace etc. You may be able to make some significant savings

bargainbetty

gonzo127 wrote: »

credit card....................2000......40........26
pay ALL the extra £720 on this and get it paid off in ~3 months then add the £40 minimum payment from this to snowball onto the other giving you a new surplus of £760 a month

credi card.....................5700......154.......24
this then needs to put all on this one taking you roughly 6 months however will free up £154 giving you a surplus of £914 a month

credit card....................7000......250.......20
would be next taking you roughly 7 months and freeing up another £250

To add to this idea, as you clear each card, call the provider and ask for a reduced interest rate for balance transfers. If you get one, bring some of the higher interest debts over. If they say no, cut up the card and close the account immediately, so you aren't tempted to use it again.

Good luck x

garwil

thanks for the advice
i have been on to the CCCS website and they recommend a DMP
HAs anyone gone down that route - the repayments seem ok and manageable and i would be Debt Free in 9 years - the way i was paying off the min on the CCs i wouldnt be Debt Frre until i was DEAD!
HAs any one any experience of the banks accepting declining DMP's for OD facilities?
Any help would be appreciated.

barbarawright

Do you really only spend £20 a month on petrol? Wouldn't it be cheaper to sell the car and get the occasional cab?

garwil

sorry folks
some of the figures are not correct and i am trying to do another SOA.
can anyone tell me how going down the DMP route effects you getting a mortgage?
I may be looking to re mortgage in a few years time and wouldnt like this to be effected.

MrsTinks

If you're on a DMP then you will have defaulted on all your unsecured debts... I'll let you take a guess at what effect that could have.