Where do I start?

handprint

This is the first time I've posted on this forum, and I'm at a bit of a low ebb, so please be gentle with me!

I am 35 and married with children. I used to earn a reasonable amount but took 6 years out to have the kids, and so have only just gone back to work in the last year.

I work part time for a charity and earn £5,400 p.a. My only other personal income is my child benefit of £2,600 every year.

My husband works full time but like a lot of people we're mortgaged to the hilt and just about manage.

I have one credit card (Barclaycard) with a balance of £595 on it, and an MBNA card with £4342 on it. I pay about £98 a month just in interest on these. I also have a personal loan with First Direct that I pay £67 a month for (but it's only got 6 months left to go on it). Our joint account is overdrawn to the tune of £650.

I really want to sort this out and feel as though I'm getting rid of these debts, but I'm running up against a brick wall, time & time again. I asked First Direct for a loan to cover it all and they said absolutely not, won't lend me a penny. I applied for a loan from Sainsbury's, got declined.

I really don't know where to start and feel very despondent about it. I'd really welcome some sound advice.

speedycat

Hi handprint

Welcome

Can you do a SOA (statement of affairs) and post it up so that people can have a look at your outgoings and see if they can give you any advice

ANewEra

Hi Handprint,

Agree with speedycat, you need to write a SOA (there's a link here somewhere, I'll try and find it unless someone beats me to it!) It will show your income/outgoings and show where these is room for cutting back/throwing more at the debts etc.

Also, as you have CC debts, the snowball calculator is a great tool (again will hunt for link) I wouldn't advise another loan to consolodate the existing ones, as you are ultimately adding more to the debt as more interest charges. Although I can understand the lure of it when the interest on a loan is usually less than on a CC, it is still not a good idea.

Once you have your SOA up, there will be plenty of people with great advice for you, and when you have a look at the snowball calculator you will suddenly realise that your debts will be paid off sooner than you anticipate which is a great boost!

Good luck!

ANewEra

http://www.whatsthecost.com/snowball.aspx

http://www.makesenseofcards.com/soacalc.html

gonzo127

hello and welcome to the forum, you have come to a great place

first off this will sound wierd however i am glad they refused you a consolidation loan this is because in 95% of cases consolidation actually leads to MORE debt, as it does not change the course of the debt and it also free's up the old credit cards etc which are very easily filled up again so doubling your debt, this is not directed at you! this is through experience and the experience of many many many others on these boards

as stated above your best place to start is the SOA http://www.makesenseofcards.com/soacalc.html is the link, sit down have a cuppa and a biccy and fill it in as accurately as possible, such as going through last 3 months statements (if possible) to pick up your average costs of groceries etc

if you then post it back up on this thread we will go through it with you and point out possible areas in it which could make you a saving and alot of the time how to do it

anyways big hugs and well done on actually standing up and asking for help, it does take a lot of guts to admit you need it

DVardysShadow

handprint wrote: »

...I really want to sort this out and feel as though I'm getting rid of these debts, but I'm running up against a brick wall, time & time again. I asked First Direct for a loan to cover it all and they said absolutely not, won't lend me a penny. I applied for a loan from Sainsbury's, got declined.

If you want to feel you are getting rid of these debts, then FirstDirect have done you a favour - essentially by borrowing again, you would be filling a hole by digging another.

Once you have your SoA up, people will chip in with ways you can save money. First thing to do is to put any surplus to clearing your overdraft - as it looks do-able. You will soon have the surplus from the FirstDirect loan to throw at the rest of the debt too.

sarahs999

When you say 'I have credit cards' do these not count as your husband's debts too? I presume you're not trying to pay them off with just your money? You spent six years doing unpaid work at home with the kids; he just happens to have been earning the money but presumably you're in it together? Just wondering. Some people have wacky financial arrangements.

Happytogetdebtfree

Hi and welcome :-)

handprint

Thanks, all you kind people. I hadn't thought about it in terms of debt consolidation just being another pot to put all my debt in. Feel a bit better now.

Anyway, I will do the SOA but probably not until this evening as I have to go and pick the children up now.

In answer to sarahs999 - yep, these are just my credit cards and just my money goes towards them. We are definitely one of those couples with the wacky financial arrangements, but believe me, that is a whole other can of worms I could open!!

Thanks again for your support.

dancingfairy

It's difficult - you may find that your salary is not enough to pay for your bills (excluding debt repayments) so you may need to have a difficult conversation with your OH as I would guess that some of the money has gone on stuff for the family/house?
Firstly you need to establish exactly what you have available to you and what your commitments are (hence the SOA) - that's the scary part, once you know what's what you can put plans in place to tackle it.
Good Luck
df

sarahs999

The stuff you bought on those credit cards though, was it just for you? Or for the family/him too? I guess you can see what I'm getting at. Your salary is tiny; it'll take a long time to clear them on that money. If your credit rating is OK you could see if you could get one of the balance transfer deals. You do need to do an SOA as well though.