Need some help, don't know what to do???

tracy24582_2

Hi everyone, i am in a mess right now. Basically i have 6 credit cards and owe on all of them in total approx. £6,500, this has come from cosmectic surgery and the need for a car and some clothes shopping all of which i regret. Anyway the interest is crippling me and meaning that i am not getting the balances down on these cards and i try to put everything i have left at the end of the month before i get my wages in paying them off but its just not working not when the interest is near enough cancelling out anything i pay. My absolute ideal situation would be to get a consolodation loan as i have been looking and can afford the monthly repayments as they are the same as the direct debits that are coming now in total, Unfortunately i don't think this is possible as i have tried and been declined as i think i just have too many credit accounts and when i spoke to my bank natwest they advised that i can not afford it yet i know i can which is frustrating as all my credit card payments equal the same monthly payment as a loan. So now i am stuck and i know it is my fault and i shouldn't have spent on things i can't afford but i am trying to get myself out of this but i know if i keep doing what i am doing i am going to be paying these credit cards off for the next 40 years, i really don't want these credit cards anymore i have got myself into a situation that i always said i wouln't after seeing the debt my mum and dad have got themselves into before and i am just angry i have done it myself. If anyone has any suggestions of different paths to go down or what i could do, all replies will be much appreciated.
Thank you
xxxx

skintdragon

Welcome to the forum.

There are a few Money Saving Experts out there who will be along shortly with some tips... but in the meantime it may be worth your while to sit down and work out your incomings and outgoings each month. The first thing MSE people will advise you to do is to fill out a Statement of Affairs (SOA)- there is a sticky on the Debt Free Wannabe page titled SOA calculator. Take a look and give it a go, then post it on here so we can help you scrutinise it (and I don't mean in a negative way). You may find some solutions from there. You have come to the right place... good luck.

:A

gonzo127

as suggested above this is always the best place to start http://www.makesenseofcards.com/soacalc.html the SOA

and i know this might upset you a little bit but please bare with me, i am glad you have been refused a consolidation loan! now let me explain, consolidation loans very rarely work and this is through personal experience and from the shear amount of people on these forums who started off with the idea that the consolidation loan would solve all their money problems and has ended up making it worse. this is the general cycle consolidation loans tend to take

buy things you dont need/overspend on essentials/have a lot of emergencies so put everything on credit card
start to find hard to repay credit cards so get consolidation loan (majority of which have front loaded interest so your £6000 actually becomes £10000 as the interest that they charge you over the term of the loan is just added to the start of the loan so you do not catually end up paying any of the balance of until you have paid their interest)
have a short reprieve where payments become manageable again,
carry on buying things you dont need/overspending on essentials/have more emergenies/decide to 'treat yourself. put everything on your creditcards again
start to struggle with repayments look into consolidation again
get another loan which yet again is front loaded with interest for a much higher value than your first loan due to extra credit card spends and having to pay the interest on the first loan
rinse and repeat
untill finally credit drys up and the brown stuff really hits the fan when you realise just how much debt you have managed to get into

now i am not saying you would 100% garenteed to get into this cycle as there are people who manage not to, however a very large portion of people who come onto this site have been/are in this cycle and can agree how easy it is to fall into no matter how many good intentions you had at the start (personal experience coming into it here)

anyways as stated if you can fill in your SOA we can help you go through your finances and we are usually able to spot areas in peoples life styles where savings can be made that they didnt realise,

Happytogetdebtfree

Hi Tracey and welcome, good luck on paying the debts off,an soa would be great we can help you cut back and help you pay more off the cards chin upx

tracy24582_2

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 954
Partners monthly income after tax....... 800
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1754

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 450
Management charge (leasehold property).. 0
Council tax............................. 113
Electricity............................. 30
Gas..................................... 75
Oil..................................... 0
Water rates............................. 32
Telephone (land line)................... 12
Mobile phone............................ 30(this is for both mine and my partners we pay £15.00 each a month)
TV Licence.............................. 10
Satellite/Cable TV...................... 40
Internet Services....................... 0 (including in sky package above)
Groceries etc. ......................... 300
Clothing................................ 50
Petrol/diesel........................... 100
Road tax................................ 15
Car Insurance........................... 60
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 160 (unfortunately i have been having driving lessons since october and i really need to pass ASAP so i have to fork out money for 2 a week and cannot lower this)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 6.52
Buildings insurance..................... 0
Contents insurance...................... 7.05
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1605.57


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 800
Other assets............................ 0
Total Assets............................ 800

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
c/c............................1300......0.........16
c/c............................1500......0.........16.9
c/c............................300.......0.........40
next...........................140.......0.........26.4
very...........................200.......0.........40
c/c............................1800......0.........17
c/c............................1700......0.........17
c/c............................150.......0.........40
Total unsecured debts..........7090......0.........-


Monthly Budget Summary
Total monthly income.................... 1,754
Expenses (including HP & secured debts). 1,605.57
Available for debt repayments........... 148.43
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 148.43

Personal Balance Sheet Summary
Total assets (things you own)........... 800
Total HP & Secured debt................. -0
Total Unsecured debt.................... -7,090
Net Assets.............................. -6,290

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.


Thanks for eberybodies replies, i have posted my SOA looking at it makes me want to move back in with me mum and dad :-)
I understand what people have said about the spending on your credit cards again once you have paid them off but believe me, i want to cancel every single one of them and maybe keep one for my credit rating but have the limit reduced to say £400.
Any thoughts about it would be again be much appreciated.
xxxx

gonzo127

tracy24582 wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 954
Partners monthly income after tax....... 800
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1754

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 450
Management charge (leasehold property).. 0
Council tax............................. 113
Electricity............................. 30
Gas..................................... 75 - gas and electric seem high for only 2 people, either work out your annual usage or contact your current supplier and ask for it then do a price comparison to make sure you are on the best tarrif i only pay £100 a month for both for a 3 bed semi, with 2 adults 2 teenagers and a baby, with the baby and one adult at home all day
Oil..................................... 0
Water rates............................. 32 - have you considered a water meter?
Telephone (land line)................... 12
Mobile phone............................ 30(this is for both mine and my partners we pay £15.00 each a month)
TV Licence.............................. 10
Satellite/Cable TV...................... 40 - this could be dropped to a lower package, cheapest packed only comes out at £28 a month
Internet Services....................... 0 (including in sky package above)
Groceries etc. ......................... 300 - you can shave some of this with relative ease, i usually tell people to aim for £60 per month per person, which is doable (although does take some time to get down to this) please bare in mind some people can do this for a family of 4 on £150 a month! try meal planning and only buying for the meals you plan on cooking, buy in bulk and batch cook freezing the left overs for home made ready meals, and hte drop a brand challenge for a start, aim for £200 a month to begin with and then work from there
Clothing................................ 50 - £600 a year on clothes is a lot of money, this needs to be cut, try and ware what you have for the time being, tesco asda primark matalan or charity shops if you need anything else
Petrol/diesel........................... 100
Road tax................................ 15
Car Insurance........................... 60 - auch when is renewal? looking at the value of the car and trying to guess the excess see if it would save you any money changing your insurance to Third party only, or third party fire and theft instead of fully comp
Car maintenance (including MOT)......... 0 - need some here!
Car parking............................. 0
Other travel............................ 160 (unfortunately i have been having driving lessons since october and i really need to pass ASAP so i have to fork out money for 2 a week and cannot lower this)
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 6.52
Buildings insurance..................... 0
Contents insurance...................... 7.05
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 100 - really in current situation this is a lot, try to make the most of hte better weather, nice walks in the park/woods/seaside, movie and cuddle on the sofa instead of the cinima etc
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1605.57


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 800
Other assets............................ 0
Total Assets............................ 800

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
c/c............................1300......0.........16
c/c............................1500......0.........16.9
c/c............................300.......0.........40
next...........................140.......0.........26.4
very...........................200.......0.........40
c/c............................1800......0.........17
c/c............................1700......0.........17
c/c............................150.......0.........40
Total unsecured debts..........7090......0.........- - how much are minimum repayments?


Monthly Budget Summary
Total monthly income.................... 1,754
Expenses (including HP & secured debts). 1,605.57
Available for debt repayments........... 148.43
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 148.43 - this would appear to be to little to make your minimum payments, is this right?

Personal Balance Sheet Summary
Total assets (things you own)........... 800
Total HP & Secured debt................. -0
Total Unsecured debt.................... -7,090
Net Assets.............................. -6,290

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.


Thanks for eberybodies replies, i have posted my SOA looking at it makes me want to move back in with me mum and dad :-)
I understand what people have said about the spending on your credit cards again once you have paid them off but believe me, i want to cancel every single one of them and maybe keep one for my credit rating but have the limit reduced to say £400.
Any thoughts about it would be again be much appreciated.
xxxx

ok so i have made a few comments, from what i can see you have got some savings you can make with some minor changes to your lifestyle however we do need to know the minimum repayments you have to be able to advise fully, i estimate you can make roughly £250 a month of extra savings based on my comments above which would give your about £400 a month for debt repayments which would give you (with proper snowballing of your money) a debt free date of about 2 1/2 years

of course this does depend on your current minimum repayments and the interest you will have to pay for the time being until we can free up some of your credit rating to get 0% balance transfers or life of balance cards for your to card tart with

misscousinitt

Hi there

The thing that really stands out to me is that you some debts that are very small in comparison with the others. Have you got anything you could sell to pay off some of the smaller debts eg Clothes, Books, DVD's etc... via e-bay, Carboots, Amazon etc...If you could raise £340 that would cut out your two most expensive debts - Very and Next.

Are your APR's right - if so you have two 0% cards with small balances - is there any room on these cards to jiggle some of the more expensive debts around.

Cuts in your budget - please look at the gas and electric - there are just two of us too and we pay £85 a month... Groceries - again, we spend between £180 and £220 per month and we eat REALLY well - I reckon you could easily cut £100 off this budget. Also, try to limit your entertainment - this is also really high.

Well done for posting and good luck.

A

xxx

tracy24582_2

the gas and electric is high because when we first moved i was only paying what they estimated so when they finally got the reading the bill was over 500 quid and so when i decided to eventually set up a direct debit as i was paying quarterly they said it so high because of those two massive bills. i am on the £28 quid sky package but becasue i upgraded to HD that is what took it to more. when i was on a water meter it was expensive. calculating all my minium repayment together it is probably just over 200 quid.

what companies out there offer genuine debt advice and help, what are debt management plans???

i'm just trying to see what different options are available to me

xxxx thanks

tracy24582_2

What is an IVA??

tracy24582_2

whats the difference between IVA and DMP?

RAS

An IVA is an insolvency arrangement (bankruptcy light). You are not eligible because your debt is below £15,000.

If you were to do any informal or formal arrangment with your creditors, they will not accept your current SOA. You will have to reduce your food budget, say bye bye to Sky, entertainment and driving lessons. You will probably be asked to reduce clothing and mobiles.

You could actually cut £350 off this budget and still live, and clear the debt in two years without wrecking your credit rating.

So you really need to make enough of those reductions