PROMBLEM: best way to reallocate debt to get rid of quicker

Chris170273

ok, got a problem

I have a credit card of £4,300. This is the only debt I have apart from ourmortgage. I've had this debt for a while, bounced itaround zero % cards and been a bit lazy in trying to reduce it. My credit is ok and i don't usually have any trouble getting credit cards, loans etc.

My wife had a similar amount, or so I thought. BUT, tuns out that her credit cards have been racking up debt and for several years she has been getting in trouble. Her combined debt is now £51,000.

She came clean with the whole thing a few weeks ago once she had missed payments on all cards due to not being able to afford the payments.

All the big 'no nos' have happened, using the cards for purchases, only paying off minimum payment etc. She took out a loan to repay but got a lot more than was needed etc.

Long story short
She has 4 credit cards, with these balances £12,000, £9,000, £3,600 and £3,600. an overdraft of £2000 and a loan for the rest.

loan is 10%
credit cards are all between 20%-23%


I now need a plan to get rid of this as soon as possible.
we are both relatively well paid (combined income of 83,000 per year)

I have now transferred my debt to a new 16 month 0% card.
I have also been accepted for a 0% 9 months and a 0% 6 months

So, i am able to transfer her two £3,600 cards over to the 9 month 0%. These cards had the highest interest rate.

the 6 month 0% won't accept a balance transfer from another name.

So, now I am stuck
next thing to reduce payments is a loan, but I feel I stll need to exploit 0% if possible

I can lay off applicatons for 6 months or so I am more likely to be able to get more 0%.

The other alternative is to bring it into the mortgage as we are on a tracker and would be the cheapest way of borrowing money.

Her credit rating has plumetted so that needs rebuilding, will probably use the Capital One progress card

I also put money into a unit trust fund but that money is more valuable where it is at the moment. I did take £1000 out of it to pay off her overdraft which was £1000 over it's limit and being charged £100 per month.


SO, any bright ideas as to what to do next?
I think I need to clear MBNA cards to HBoS cards and then vice versa once the 0% terms run out as I am being accepted by these. (I had an MBNA application turned down due to not realising I alread had an MBNA card!!)
Been mulling this over for a while but I am reluctant to apply for any more credit at the risk of wrecking my rating.

Best way to move forward?

Chris

JA1000

Your wife ran up debts of £51k and you didn't know? Expenditure?? Just want you to make sure there is nothing else.

How are you transferring balances from one party to another? Cash in the bank and then across?

I would get her to do an online credit report to get score and list of all creditors this will reassure you.

Can you remortgage? Secured loan? A lot of people on here say don't borrow to pay off as she did but it sounds like you are going to take control and look at each statement each month to track it. A lower rate will be the 25% monthly but you need to look carefully as you cannot overpay so it could cost more.

Are you aiming to over pay on 0% cards? I think you have this fairly sorted but need to look longer term and a lower rate hence remortgage phone your lender and ask for additional borrowing,

Chris170273

yes I know, but over 6-7 years, a £30 purchase here and there just builds up. I knew there was some debt just not that amount. We have always had separate bank accounts. Especially when I had around £400-£500 left each month AFTER all expenses and aving £400 (she has the same wage)

ANYWAY, i've have control of everything now, statements etc.

Yes I'm going to overpay as much as possble and clear the short term 0% cards.

HBoS have agreed to transfer balances from her cards, but that is to the value of £7000

My main worry is the two large credit bills. £12,000 at 22% and £9,000 at 21%.

I don't want to touch our tracker fund if possible (long terms gains etc) but I'm thnking that if we have to pay 22%, or 9% with a loan, it is better off paying out of the tracker. Better to pay of the credit card and not pay any interest nd start increasing the amount we put into the tracker.

Having our money in the units is currently far out balanced by the interest on the debt.

So, if i shift around this is what I end up with

£5000 on 0% for 15 months
£6500 on 0% fo 9 months
£12,000 PAID OFF from tracker fund
£10,000 still on 21% card
£20,000 in loan at 10%

I also have a 0% for 6 months without anything on but it is a bit useless at the moment, they won't transfer cash or balances from someone elses card.

I think this is best solution.
Once her credit is better we can get a card in her name to transfer the 21% card rather han going for a loan with no over payments which I also want to avoid.

Thoughts? ANything I've missed, any other tricks?

Chris

RAS

Play with the snowball on www.whatsthecost.com and you can set up the various scenarios and see what the outcomes are.

The other thing is for you both to do and SOA and see what you can do to cut your expenditure.

JA1000

£30k still a lot at those rates, Vigin I know offer bank transfers at 0% for a small fee as per a cc transfer, you could apply and use this.

Some people reading will frown at this but I think you know what you are trying to do and will get it sorted.