First time - any advice appreciated!

emmydon84

Hi All,

After living beyond my means for years I'm ready to tackle my debts and need some advice. I have problem debts but am managing to repay minimum every month, however my credit cards have high interest now (around 16-18%) and I can't get any 0% deals as I have poor credit rating (high debt but never missed a repayment).

SOA

Loan: £15,655.94 (will be paid off 2014)
Virgin Credit Card: £6067.39 (£129 minimum repayment)
Halifax Credit Card: £7311.05 (£76 minimum repayment)
Overdraft: £1000

Not sure what to do, ask my credit cards to lower rate of just bite the bullet and go for a debt management plan?!

Hannah_10

Hiya Emmy, can we have a full SOA please so we can advise you properly? There's a post about SOA's including a link to an easy online one here https://forums.moneysavingexpert.com/discussion/107280

Tixy

Hi emmy and welcome

As Hannah suggests a statement of affairs needs to be your next step. That will help you and us see whether you can manage with a few changes and tips or whether you need to be thinking about a DMP or other option. Usually a charity will only manage a DMP for you if you cannot meet your minimums each month (or not without reusing the credit).

Percy1983

Without the SOA I can't be to sure but it looks much like you are where I was a year or so ago.

Firstly if you can budget and live while paying minimums and not increasing balances then it may be worth hanging in there.

You are how I was in the fact the I had a large loan and credit cards, now the point when it all came together for me was when the final payment on the loan went, as you can guess that then gives you a good amount to overpay credit cards each month and they start dropping like flys. One you start making payments in the 0% deals start accepting and then things really start going.

As it is you APR's don't seem too bad, but its worth asking them to reduce them.

Another question is much like you I was living beyond my means, a product of this was I had loads of stuff I no longer needed, to which I listed just short of 400 items on ebay and got about £2500 which helped push the credit cards down before the loan was up.

Either way you are in the right so I am sure we will get you sorted.

emmydon84

Full SOA!

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details]
Monthly income after tax................ 1543
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1543

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 272.5
Management charge (leasehold property).. 0
Council tax............................. 63
Electricity............................. 24
Gas..................................... 34
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 60
Road tax................................ 15
Car Insurance........................... 25
Car maintenance (including MOT)......... 10
Car parking............................. 6
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 836.5

Assets
Cash.................................... 400
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 3400

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................15655.9...269.......9.2
virgin credit card.............6067.39...129.......26.9
halifax credit card............7311.05...72........18.3
overdraft......................1000......0.........17
Total unsecured debts..........30034.34..470.......


Monthly Budget Summary
Total monthly income.................... 1,543
Expenses (including HP & secured debts). 836.5
Available for debt repayments........... 706.5
Monthly UNsecured debt repayments....... 470
Amount left after debt repayments....... 236.5

Personal Balance Sheet Summary
Total assets (things you own)........... 3,400
Total HP & Secured debt................. -0
Total Unsecured debt.................... -30,034.34
Net Assets.............................. -26,634.34

I know I have extra money left over, but the high apr's are stressing me out I can't see light at the end of the tunnel!

Hannah_10

Thank you Emmy, the most obvious thing I can see is to make overpayments on the worst APRs first. In your case that'd mean throwing that £236.50p at Virgin until it's clear, then you'll be £129 plus £236.50 better off a month, so you add those up and then overpay Halifax by £365.50 and so on. It's called snowballing and there is even an online tool for that (God bless the web). Here it is... http://www.whatsthecost.com/snowball.aspx

Tixy

Hi

Do you have the £236 left over? and are you using it to pay more than the minimums off your debts?

Have a look at the snowball calculator (same site as SOA) to see how soon you could be debt free if you use all the surplus for debt repayments.

emmydon84 wrote: »

Full SOA!

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details]
Monthly income after tax................ 1543
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1543

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 272.5
Management charge (leasehold property).. 0
Council tax............................. 63
Electricity............................. 24
Gas..................................... 34
Oil..................................... 0
Water rates............................. 0 is this in with rent? or ctax?
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150 Should be able to reduce this if you need.
Clothing................................ 0 probably need a small budget here.
Petrol/diesel........................... 60
Road tax................................ 15
Car Insurance........................... 25
Car maintenance (including MOT)......... 10 is this sufficent for MOT, annual service, tyres, breakdown cover if you have it?
Car parking............................. 6
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 do you need something here (annual check up, odd prescrip)
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 836.5

Assets
Cash.................................... 400
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 3400

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................15655.9...269.......9.2
virgin credit card.............6067.39...129.......26.9
halifax credit card............7311.05...72........18.3
overdraft......................1000......0.........17
Total unsecured debts..........30034.34..470.......


Monthly Budget Summary
Total monthly income.................... 1,543
Expenses (including HP & secured debts). 836.5
Available for debt repayments........... 706.5
Monthly UNsecured debt repayments....... 470
Amount left after debt repayments....... 236.5

Personal Balance Sheet Summary
Total assets (things you own)........... 3,400
Total HP & Secured debt................. -0
Total Unsecured debt.................... -30,034.34
Net Assets.............................. -26,634.34

I know I have extra money left over, but the high apr's are stressing me out I can't see light at the end of the tunnel!

Do you know that if any try to increase your APR that you can opt out of the increase?
Might be worth trying to ask the card providers if they would reduce your APR (even 1 or 2% would help).

If you don't have that surplus then start a spending diary to see where it is going instead.

Do you have any things you can sell to raise some money to give your debt repayments a boost? what was the loan used for? anything you could sell?

Any chance of overtime at work or a second job at the weekends to help you out for a bit?

HappyMJ

emmydon84 wrote: »

overdraft......................1000......0.........17

I know I have extra money left over, but the high apr's are stressing me out I can't see light at the end of the tunnel!

If you had money left over you would not be in overdraft. Keep a spending diary to see where everything really goes. Get the overdraft paid off and start using it as it is meant to be used. i.e As an emergency buffer. Then, the day before you are paid put everything that is left in your bank account towards the Virgin debt till it's paid off.

emmydon84

thanks for your help everyone, it's refreshing to know there are so many decent people out there!

Percy1983

One tip which helped me but does take a lot of self control is actually involves spending on your credit cards and keeping a close eye on things.

The easy one would be with petrol, at the start of the month overpay the worse APR card with an additional £60 (over and above any planned overpayment). Then during the month buy the petol on the cheapest APR card which can accodate the the balance. In basic terms you are getting changed less interest and transferring the balance to a cheaper card for free.

Personally I would clear the overdraft first, it may not be the highest APR but the bank could ask for it back any second.

As mentioned are you actually seeing the surplus at the end of the month, if not something maybe missing from your SOA.

It seems you have the power to slowly reduce the credit card balances right now so that is the start of the plan, the more you clear the less interest you will get charged, as I said before once you loan is up throw everything at the cards and they will soon go.

Trust me the light is there, it may just seem like a pin hole right now.

One last thing which I say to many if getting debt free isn't a race, as long as its with you means you can spend a little on yourself, I currently have £100 budgetted every month for whatever I want, I very rarely use it all but I know I can afford it and still make good headway into my debts. I know if I don't spend anything I would get there quicker, but its have a life and take longer or cut yourself off and do it quicker. There is no right or wrong way.

emmydon84

Thanks so much for your help and support. It's time to get started. Thanks Percy, it's not a race, and there is a light at the end of the tunnel - I can see that now.