Some advice please?

shadow2405

I have accumulated a debt of around £6000 over the last few years on credit and store cards.
In the past I've been able to pay off the balances in full each month from my salary (I'm part time enployed and part time self employed) but then ended up using the cards to cover the shortfall and have ended up in a vicious circle. To make matters worse, my income from self employment has taken a dramatic downturn since November, I'm earning less that half that I used to.
I was recentley turned down for 2 perosnal loans which makes me think my credit rating isn't too good (probably from having so many different debts?)

I own my own home (no mortgage) would a secured loan be a wise move at this stage or can you suggest any alternatives?

For a bit more information I owe £2000 on one card, 1600 of that was a 0% balance transfer that runs out in Sept.
£1000 on another card (all 0% balance transfer runs out in May)
£1000 on a high interest rate card which is due for payment next week (I'm bricking it as I can only pay just over the minimum repayment unless I use another card to draw cash from)
£600 on another high interest card due at the end of the month
£500 on an Argos store card (due to start payments in June)
£400 on a couple of other store cards.

All I can see a the moment is interest piling up. What I'd like is a totally fresh start but not sure how to go about it?
Any help or advice would be greatly appreciated.
Thanks.

savingmummy

Hi and welcome

First thing to do is cut up ALL your store cards and credit cards (leaving one maybe lowest APR)!! Vicious circles will only continue. You need to stop using them!

Post a SOA here http://www.makesenseofcards.com/soacalc.html we can then see whats going on each month and may be able to help you reduce outgoings to pay off these debts quicker!!

shadow2405

Having real problems with the SOA, it says to copy and paste the contents of the scollable box below but there is nothing underneath the 'highlight text' button?

Tixy

Hi Shadow

Usually the SoA its fairly straight forward (and works okay)? Did you press calculate before you clicked on the format for MSE option?

And then when the new window opens there should be instructions, the highlight text button and then in a large text box below should be the details of your SoA?

I just had a quick look myself and it seems to be working okay. Not sure what else to suggest.

shadow2405

Yes I pressed calculate first, I just tried to do it again and still nothing I'm using Firefox though, does it work okay on that?

shadow2405

Damn tried it another way but won't work.

gonzo127

should work fine on firefox however can depend on what plugin you are running, do you have noscript running and blocking it?

shadow2405

I have no idea what that is?

I am finally back for another shot, the SOA still won't work so I'm just going to type in what it says because I'm getting pretty desperate.

Summary of Monthly Income, expense and surplus


Total monthly income 1031.
Expenses( inc HP and secured debt) 831
Available for debt repayments 161
Unsecured debt repayments 211
Surplus (shortfall if negative) -50

Personal Balance Sheet Summary

Assets 92,500
Secured and HP debt 0
Unsecured debt 5954
Net Assets 86,546

I hope this okay, and I'm really hoping that someone call tell me what to do for the best!?

I have been looking on Credit Expert at secured loans however the only one available to me wanted phoned me up and went through a ton of details and then wanted £70 (which I don't have at present) to act as a broker? Is that usual?

Verbatim

Hi there,

It is not a good idea to take out a secured loan/ mortgage to pat off store card and cc debt. As the loan/ mortgage would be secured on your house that would be at risk of repossession if you were unable to keep up the repayments for any reason. At the moment all your debt is unsecured which means you are in a stronger negotiating position. Also, although secured debt comes with a lower interest rate it typically lasts for longer and you can end up paying more. And thirdly there's the temptation to continue with the previous spending, running up more debt and so ending up in a worse position than before. This cycle can continue until the entire vlaue of a property has been remortgaged.

if you are struggling with the minimum payments have you considered a debt management plan with one of the free debt chaities, CCCS or Payplan. You could contact them for free advice even if you do not want to follow this route. And at least your home would be safe.

shadow2405

Thank you I will do a bit of googling and try and contact CCCS or Payplan, I've never heard of them but hopefully they will be able to help.

shadow2405

I've been in touch with Payplan and they are sending me some stuff out in the post, thanks so much Verbatim, I didn't realise that a service like this was available free of charge.