Help - What do I do?

comedy_dave

I would advise going to http://www.cccs.co.uk/ and using thier Debt Remedy tool.
Take 20 mins to fill out the questionairre and they will advise you of the best course of action. In your case they will probably sign you up to thier debt management plan (DMP).
If they take you down this road, they will ask you for a very full and frank budget (they will help you scale up a few figures to allow you to have some small luxuries to stop you going mad) and come up with a figure for you to repay.
Now heres the beautiful bit. You will pay them that figure, they take ZERO admin costs out of it, and then distribute it percentage wise to all of your creditors. At the same time, they will attempt (and in most cases succeed) to get the interest frozen on these debts.

So in a nutshell, you will pay less, and pay only 1 monthly payment to 1 company.
It will not damage your credit rating, as it is a voluntary agreement, and it is not bankruptcy. And at the edn of the day, you are paying off your debts.

I have been with them a year, and have been thoroughly happy with thier services.

planning_ahead_2

boxerlover wrote: »

I'm alittle surprised at the results as I never seem to have any money left!

Don't be surprised....this happens to most of us DFWs when we start our journey.

Start a spending diary...get a little notebook and write down every penny you spent and what you spent it on. You will be amazed at where that 'spare' money goes, and pretty quickly you will really have that money spare to throw at the debts.

comedy_dave

planning_ahead wrote: »

Don't be surprised....this happens to most of us DFWs when we start our journey.

Start a spending diary...get a little notebook and write down every penny you spent and what you spent it on. You will be amazed at where that 'spare' money goes, and pretty quickly you will really have that money spare to throw at the debts.

This is the most important element.
Very soon you will find yourself picking up that packet sandwich on your lunchbreak and thinking, "I can make a weeks worth of these for that price"
Or as I did yesterday in a Sports Shop. "Do I really need this new football shirt" and put it back on the shelf and put that £30 in my savings account instead.

boxerlover_2

comedy_dave wrote: »

I would advise going to using thier Debt Remedy tool.
Take 20 mins to fill out the questionairre and they will advise you of the best course of action. In your case they will probably sign you up to thier debt management plan (DMP).
If they take you down this road, they will ask you for a very full and frank budget (they will help you scale up a few figures to allow you to have some small luxuries to stop you going mad) and come up with a figure for you to repay.
Now heres the beautiful bit. You will pay them that figure, they take ZERO admin costs out of it, and then distribute it percentage wise to all of your creditors. At the same time, they will attempt (and in most cases succeed) to get the interest frozen on these debts.

So in a nutshell, you will pay less, and pay only 1 monthly payment to 1 company.
It will not damage your credit rating, as it is a voluntary agreement, and it is not bankruptcy. And at the edn of the day, you are paying off your debts.

I have been with them a year, and have been thoroughly happy with thier services.

Thats really great advice! People on here are so wonderful!!

So it won't affect my credit rating at all? I have a very good score at the moment as I have never missed any payments, gone over my credit limit etc.. There must be a catch surely?!

mummy2mygirls

I though if you went on a dmp then it could still effect your credit rating?? The companys can still put a default on your file as you are not paying the full minimum amount.....but i havent gone down the DMP route so dont hold me to it and im sure somebody who does know will be able to tell you.

Your SOA shows a extra £170 after the mins have been paid so if this is a real acount of your money you could be able to throw more at your debt without going into a dmp. I think do a spending diary is a great first step so you can see exactly where your money is going and then you can work from there to see if you can pay some more off.
Also you could try uping your income a little by selling anything you no longer need, doing surveys and free scratch cards - every little helps.....
good luck

dancingfairy

I think Comedy Dave's advice is pretty good - HOWEVER it will damage your credit rating - if you are not paying the minimum amounts on your statement then you will be defaulting - whether or not you are sticking to the new agreement.
You have a couple of options - 1) identify where that 'spare' money is going and carry on making minimum payments and try and find any extra savings to pay off the debts or
2) going on a dmp (debt management plan) with a charity like the CCCS - or you could do one yourself but the charities cna provide you with additional support.

A dmp is an informal agreement between you and your creditors - a lot of companies will stop interest and charges to allow you to get back on your feet and make repayments but they are not obliged to. It also can take months (sometimes quite a while) before they accept your dmp and some will not 'formally' accept it.
Going on a dmp would hopefully get you interest and charges stopped but would affect your credit file and creditors could potentially take you to court and get CCJs etc.
On the other hand if you didn't do a dmp it would take longer to pay the debts off and you would likely pay more in interest overall but your credit rating would be preserved.
You can always do the debt remedy suggested by Dave and see what it recommends and you can always get in touch with the debt charities to chat things through before you make a decision.
df

IWantToBeFree_2

boxerlover wrote: »

Thanks for the advice. I'm sure I could afford it as the loan payments would be less than what I'm paying at the moment.

I have a store card with Comet with a balance of around 800.00. The APR on this is shocking, but you can't pay the balance off with a CC, only a debit card, or this would be the first thing I would have done. I already have the Virgin CC with an outstanding debt of 3,000. This are my only 2 debts, but my income isn't very high and I want to find the best, cheapest way of paying them off.

If you applied for a card that allows you to do a super balance transfer then you could pay the Comet card off with a credit card and pay 0% interest for the introductory period.

A super balance transfer is where you transfer the credit limit to your current account rather than another credit card, the lenders who offer this are:

MBNA
Post Office
Egg

As you already have a Virgin card, you may struggle to get another MBNA card, however it is worth try if you have a decent credit rating (i.e. no missed payments/defaults etc) as you only need a low limit.

Once the money is in your bank, you would simply pay the card off via your debit card, and then ensure that you pay back the new credit card before the 0% promotional period ends. Egg are currently offering 0% until 1 April 2011 on their Egg cards.

Hope this helps!

EDIT - I was under the impression that a DMP is not possible if you are meeting your minimum payments and have a surplus left over once you have budgetted for other spending. A DMP is usually for people who cannot meet their minimum payments and therefore lenders will accept a lower payment because it is better for them to do this than for someone to go bankrupt.

It will ruin your credit rating, and could do so for upto 6 years from completion.

Personally, if I was you I would do a spending diary for a month, see where you are really spending your money, and then reasess the position once you have a more accurate SOA.

boxerlover_2

Thanks for the further advice! I don't think a DMP is going to be right for me if it does damage your credit score, I also don't like the thought of maybe being taken to court!!
I will look in to the balance transfer idea, sounds like it could be the best way forward. My mortgage is coming to the end of its fixed rate in April and I would be very worried if my credit score was ruined that I wouldn't be able to get a good deal.