All help and advice so very, very welcome!

Triggles

One thing I think that you need to remember that is VERY important:

Consolidating your debt with a loan or switching balances to different credit cards does not CLEAR your debt - it only REARRANGES it - it is STILL THERE! The only way to CLEAR your debt.... is to CLEAR your debt!

I know that sounds silly... but many people think that once they've done the consolidation or switched things around that they are in the clear. And that's just not true. You will need to adopt a new lifestyle really - cut back on spending that is unnecessary and rethink what your priorities are financially. It sounds dire, and I suppose in some ways it is. But DH & I have found that we are rather enjoying sometimes finding ways to save money. And even the little things add up quickly!

Most importantly, you need to discuss this with your wife. You will most likely find that she may have some excellent ideas on how to save more money or ways you can cut your expenses. Why deprive yourself of her help, knowledge, and support? DH & I sometimes make ourselves little challenges during the week to see if we can push ourselves to save more. For example, if we can keep our grocery expenses down to £40 during the week, we will reward ourselves with a bottle of wine on the weekend. Since we budget for £50 during the week, if we keep it to £40, then we'll spend £5 on a bottle of wine as a reward, and still have £5 to put in savings. It may not seem like much, but as I said, these little amounts do add up. If we managed that most of the year, that would be over £200 extra in savings - that would easily pay for our Christmas!!

I completely understand your thoughts on having another baby - we have 2 grown children who live on their own now, with their own families. But we also had DS2, who is now 4. We wanted to have one more child, and felt that even though we were having money problems, we couldn't really afford to wait 5-8 years to pay off our debts before we tried to have another child. Having another child isn't that much of an expense in certain situations - such as for us where I am already a SAHM, so it wasn't like we would be giving up an income or paying for childcare. We already had the baby equipment and clothing from DS2, so we didn't need to buy that. DS2 was potty training, so only one child in nappies at a time (well, that didn't work quite as planned as we're still working on the night-time training but oh well!). So we went ahead and tried for another baby and got lucky having DS3 (although that's it now - no more!). There are always ways around child care bills as well - your DW could work around your schedule part time so there's always someone at home with the children. It's not impossible to sort. Best of luck with that!

You may be able to trim your monthly grocery expense from £280 to £200. By going down a level or two and trying basics or smart price (depending on where you shop) items, you can save a fair bit of money. We buy an awful lot of basics products (our cupboards have tons of white and red labels! LOL), but honestly we don't think they are poor quality at all - most of it tastes the same. And it's all a matter of trial and error - some you might like, some you might not. But even if you only switch half of your stuff to basics, it can make a huge difference!

Look at your spending habits - do you go out for coffee or buy coffee and food at work regularly? Do you bring your lunch to work? Do you meal plan to make the most of your groceries and to take advantage of sales? Do you buy the newspapers, magazines, or books when you can read them for free by utilising the library? Do you go out for meals often - such as takeaways or nights out either at restaurant or pub? Do you go to the movies regularly? Do you often drive places that you could easily walk? Do you impulse buy?

The reason I ask is that I notice you are towards the upper limits of your credit cards. You haven't mentioned specific things that put you in debt, such as redundancy or house expenses (such as white goods packing up or household repairs), so it's a safe bet that you've probably spent a fair amount of money that you can't really put your finger on. And I'm not criticising - we did the same thing. Little things here and there, not thinking about it. But all of a sudden you're at the top end of your credit and not able to pay them back easily. It was like a wall fell on us...and we couldn't pick our way out of the wreckage!

We're on a DMP now (self-managed) and are pushing ourselves into better spending habits - rather like learning to have a new relationship with money, if that makes sense. We have slip-ups occasionally, but we try very hard to keep to the budget. We still allow ourselves to have little treats, as we find if we don't, then we reach a point where we just start feeling down about not being able to do ANYTHING. So we build little inexpensive treats and such into the budget. For example - we generally just don't do takeaways anymore. It's too easy to be tempted into doing it regularly, and it's just soooo expensive!! So we've taken the time to learn to make a few good meals that we used to enjoy from takeaways that don't cost nearly as much - such as sweet and sour pork or curry. And the other day we had a cheap takeaway - we paid £5.50 at the chip shop and got one huge piece of fish for DH & I to share, a fishcake each for DS2 and DS3, and a large order of chips to share. Lovely takeaway, kids thought it was a great treat, and only £5.50 so we could afford it.

Once you've spoken to your wife, it might be a good idea to put up a SOA that includes everything, both hers and your incomes and expenditures, in case people here can come up with ideas to help out overall. I think it's so important to work through debt together as a couple, so that you can provide support and assistance to each other - it really helps keep things in perspective as well so that one of you isn't dealing with all the pressure.

DVardysShadow

A few random thoughts on the SoA.

Cut the Life Assurance. It is partly savings and partly life insurance. In your situation, you cannot afford savings - just get an equivalent amount of Life Insurance, which should be cheaper.

Move debt to cheaper cards. Do not buy stuff to do this, but as you make an expenditure, put it on the cheapest card and pay the price to the virgin card. Between citicard and barclaycard you have £3000 available at 6%, but you will have £8200 on Virgin at 30%.

If you can pay some of your wife's expenditure on your low % cards and have her pay off the amount on the highest % card, that will help move the debt to a cheaper card.

missworks2jobs

I've been watching your thread for a while, but as yet haven't posted cos I couldn't really think of anything super-helpful but would just like to say keep your chin up.

I would definately advise taking a deep breath and discussing with your wife. A problem shared is a problem halved. As Triggles said, she might have some excellent ideas on how to get you both out of this mess. It might actually bring you closer together working as a team to get through this. Me & hubby went through a debt crisis and I was terrified he would leave me when I told him how bad a mess i'd got myself into. Turns out he was freaking out over money and literally flying by the seat of his pants too. We just had to look at 2 things:
* what's the worst thing that can happen (and prepared for it)
* what realistically can we do to sort this out (and focused on the light at the end of the tunnel).

At the minute we've cleared all of "my" debt and are steadily plowing through "his" (i use the " " cos now its called OURS), yes we've had to sell our home and move in with family but we're healthy, were happy, we have a network of amazing friends and family who are always there to listen to our grumbles and offer advice and support and understand our circumstance. Yes it was a shock having to virtually sell everything just to get back to a starting point, but now I know once this last chunk of debt is cleared in approx 2 years, we owe NOTHING to NO-ONE and every penny of our wages is ours to do what we want with it (save for a house). All other options sounded good but were totally un-realistic, we could not have carried on the way we were, I was stressed, tired and basically 2 more phone calls away from a nervous breakdown, our relationship was stormy and strained because of all the worry of the debt and I would literally have to count up the pennies in the piggy bank to buy a loaf of bread or to pay for busfare. It was ridiculous and long term I couldn't have kept that up. Yes both our credit ratings are temporarily screwed.....but I think thats a good thing. We now have to learn to budget and save and live within our means, if we cant afford it we cant borrow money we dont have! Its teaching us to live within our means. I just keep thinking once everything is paid off......think of all that leftover money we'd have every month to save up for a holiday or use on a mortgage. Its an unreal amount.

Keep thinking positive, there is always an option.....it might not be the one you like but sometimes you have to put up with the rain to see the rainbow at the end of the storm!

Good luck, please let us know how you get on.

tbourner

depressedwithdebt wrote: »

I don't know if it is possible to approach some of the creditors explaining the difficulties and simply asking for lower rates and perhaps a reduced payment for some time, and maybe leaving the horrible ones as they are for now.

As you've guessed I'm not a fan of DMPs and IVAs and those kinds of things! I'm always one to try to sort it myself first, so these companies that phone up and say "We can cut 90% of your debt with some new unknown government legislation" I now bombard with questions about what legislation and "That will give me defaults on my credit history though" and "I have too much debt to go for one of those" etc. etc. Basically, I'd much rather write to them all personally, tell them how much you have to pay debts with and suggest a figure you can pay them each month and can they reduce the interest or something. I'm not sure about sending them your SOA or anything, I think some people do, but I haven't personally gone down that route (yet).
I'm not very knowledgable about DMPs TBH, I just see them in a similar light to IVAs, in that you have no freedom to change anything, you're set in a payment scheme. With my own personal plan it's set to pay off in about 4 years, but if I get a £1000 bonus at work I can pay whatever I want off of whichever debt I choose, I'm not sure what happens on a DMP in these types of case?

debtdesperado

Hi DepressedwithDebt

Sorry - this is a long post! Some good advice from Triggles there.

2 years ago I was in a similar situation to you with £42k of debt... by the time we get to Christmas this year, with a bit of luck I will only have around £10k outstanding. Because of my job, a DMP or bankruptcy wasn't an option, so it has been tough, but a real challenge to get my finances under control.

It doesn't sound as if you will be able to get a consolidation loan (and I agree with Triggles that unless you get your spending under control, ie can get through a month living on what you have coming in, without borrowing money from anywhere, all you will really do is add to your debt) but you can still get things moving in the right direction. Thinking back, below are all the things I have done to sort my finances out over the last couple of years. Some things are difficult, some are easy, some are a slow slog, some have instant results.

The main thing is to start doing something, but don't try and do everything at once at it will get completely overwhelming.:) Also remember small things done repeatedly add up to big, big changes over a year or two. When I started looking at my mountain of debt, I felt exactly as you do, so don't look up at the mountain, just start climbing.

You do also need to get your wife on board, with both of you working at this it will get sorted much quicker.

1. The first thing is to turn the tide, so that you are no longer adding to your debt. This means that you can get through a month living on what you earn without borrowing anything. You won't achieve this in a month! It will probably take a few months of trial and error to get right. Some habits to practice:

No Spend Days - sounds easy, but if you are in debt, these will be incredibly challenging! Aim to do 5 a month to start with, then build up to more.
Start paying with cash for everything. Force yourself! It will make you think twice about handing money over. Also, force yourself to either use change up before breaking notes, or to dump your change every evening into a change jar to save (for Christmas, for example).
If you have a lot of debt, you probably have a lot of stuff. SELL IT! Clear out as much stuff as you can. I have probably reduced the amount of stuff I own by about two thirds, and this raised about £4,000.
You will be told to 'work out a monthly budget' but I didn't find this helpful as I would just pluck figures out of the air and then never stuck to it. What helped me was to make a spreadsheet of headings and to make them quite detailed, so instead of just saying 'food', under the overall food heading, my food budget is split into: 1. food bought for lunches and dinners 2. coffees and snacks (eg 4pm chocolate bars, cinema popcorn, coffees with friends). 3. Eating out/takeaways.
The first month just track what you spend, and then the next month start to try and cut it down. Your categories will be personal to you and therefore your budget will work a lot better than general headings. You can also see where you spending too much - eg if you have a 'clothes' heading, split it for each member of the family, and then split it further, so for yourself you might have work clothes, home clothes, clothes maintenance (eg dry cleaning and cobblers), for example. Say if you bought a suit in one month, you would know that the next month, there is no need to buy another suit. Once you get into the swing of this you can then also start to plan your spending, so for example, if you have children, you know that in August they will need new school clothes, so then you can reduce you and your wife's clothes budget to zero for that month to compensate. You will never get on top of your monthly spending unless you know where it all goes, and I have found this is the only way that works for me.

2. The next project is to reduce your monthly necessary outgoings so that you have more discretionary income to go to extra debt repayments. Things to do here:
Post a detailed SOA up to get all the good advice of the peeps on the board - they are particularly good at suggesting sensible levels of expenditure for things like food bills etc.
Check you are getting all the benefits you can.
Cut your electric and gas - switch lights off, turn the heating down etc etc. Cut out any strictly unncessary expenditure. You can start getting Sky again when you have got rid of your debt!

3. Then start chipping away at the debt. I think that this is what people focus on first, but actually, you won't get very far unless you have also started on the first two things. These are the sorts of things I did:
Phone up all your card issuers and ask them to drop the interest rates as you are having trouble keeping up with payments. Try asking them for whatever introductory rate they are offering to new customers. Ask the card you have on zero percent to extend the period. Stress that you are in real financial trouble and bankruptcy may be the only option etc. Some will be helpful, some not.
Balance transfer anything you can from the highest interest rate cards to the lower cards so that the lower rate cards are up to the limit. This reduces the overall interest rate so you can pay off more of the outstanding balance.
Google 'debt snowball' and plug all your details into that to get a plan for paying your debt off (I can't remember the website). Then aim to beat it by squeezing the budget and finding a bit more to pay off your debt.


I also started to obsessively read all the financial gurus, eg alvin hall, dave ramsey, suze orman etc. Not everything they say is relevant, but they do have some really good ideas and strategies and eventually it all starts to sink in.

Hope there is something useful there for you - good luck!

Sunnylooloo

Hi

It seems that there are some good ideas there.

I know that your one of the most important thing is keeping your credit history in tact, but I do think the moment you make any sort of arrangement that goes out the window.

Trev can I ask you if you still have kept your good credit rating? (You seem to have things in good order to sort out your debt)

Triggles has some great tips, the coffee thing... I would love to buy a coffee on the way to work (if we got it a local cafe about 80 or 90p and here in town 1.80....... how ridiculous spending all that money on coffee! The stupid thing is we have a fancy coffee maker thing here that does steamed frothy milk (and they provide us with all hot and cold drinks) what was the point! I can't remember the last time I bought a coffee.

this week at work, I have not brought one lunch, everything has come from home, it makes a huge difference.

One thing I would add again........ I really think you need to sit down with your wife and lay your cards on the tables and pool your money together and as has been suggested do a joint SOA and then you might get some more tips.

As I said, a glass of wine, a trip to the cinema and a meal out are all still possible..... esp when you look for all the deals - you should sign up for the news letter on the main site. Whenever we go out to eat the first thing we do is - o lets see if we can find a voucher.....

Also I must say I am enjoying cooking and trying out more things too!

I really want to try and keep you positive, this is workable in some way shape or form.

Take care
LL

Sunnylooloo

debtdesperado wrote: »

Hope there is something useful there for you - good luck!

Not just for DWD but for all of us I think! Great post!

I love the NSD challenge! I have done if for 3 months now!

tbourner

Sunnylooloo wrote: »

Trev can I ask you if you still have kept your good credit rating? (You seem to have things in good order to sort out your debt)

I have never missed a payment on any of my debts! So you can udnerstand I didn't want to go through unenforcability or any plans as they almost certainly put some 'bad' things on your history. If I can pay it all off within 4 years under my own plan then I'm gonna do my best to go that route!

Sunnylooloo wrote: »

One thing I would add again........ I really think you need to sit down with your wife and lay your cards on the tables and pool your money together.

That seems to be a common theme on replies to this thread!

Sunnylooloo

Don't want to hijack the OP thread so I might have to PM you Trev to see how you did it all!!

Yes I agree, I think the total truth talk with Mrs DWD needs to be done.

depressedwithdebt

debtdesperado wrote: »

Hi DepressedwithDebt

Sorry - this is a long post! Some good advice from Triggles there.

2 years ago I was in a similar situation to you with £42k of debt... by the time we get to Christmas this year, with a bit of luck I will only have around £10k outstanding. Because of my job, a DMP or bankruptcy wasn't an option, so it has been tough, but a real challenge to get my finances under control.

It doesn't sound as if you will be able to get a consolidation loan (and I agree with Triggles that unless you get your spending under control, ie can get through a month living on what you have coming in, without borrowing money from anywhere, all you will really do is add to your debt) but you can still get things moving in the right direction. Thinking back, below are all the things I have done to sort my finances out over the last couple of years. Some things are difficult, some are easy, some are a slow slog, some have instant results.

The main thing is to start doing something, but don't try and do everything at once at it will get completely overwhelming.:) Also remember small things done repeatedly add up to big, big changes over a year or two. When I started looking at my mountain of debt, I felt exactly as you do, so don't look up at the mountain, just start climbing.

You do also need to get your wife on board, with both of you working at this it will get sorted much quicker.

1. The first thing is to turn the tide, so that you are no longer adding to your debt. This means that you can get through a month living on what you earn without borrowing anything. You won't achieve this in a month! It will probably take a few months of trial and error to get right. Some habits to practice:

No Spend Days - sounds easy, but if you are in debt, these will be incredibly challenging! Aim to do 5 a month to start with, then build up to more.
Start paying with cash for everything. Force yourself! It will make you think twice about handing money over. Also, force yourself to either use change up before breaking notes, or to dump your change every evening into a change jar to save (for Christmas, for example).
If you have a lot of debt, you probably have a lot of stuff. SELL IT! Clear out as much stuff as you can. I have probably reduced the amount of stuff I own by about two thirds, and this raised about £4,000.
You will be told to 'work out a monthly budget' but I didn't find this helpful as I would just pluck figures out of the air and then never stuck to it. What helped me was to make a spreadsheet of headings and to make them quite detailed, so instead of just saying 'food', under the overall food heading, my food budget is split into: 1. food bought for lunches and dinners 2. coffees and snacks (eg 4pm chocolate bars, cinema popcorn, coffees with friends). 3. Eating out/takeaways.
The first month just track what you spend, and then the next month start to try and cut it down. Your categories will be personal to you and therefore your budget will work a lot better than general headings. You can also see where you spending too much - eg if you have a 'clothes' heading, split it for each member of the family, and then split it further, so for yourself you might have work clothes, home clothes, clothes maintenance (eg dry cleaning and cobblers), for example. Say if you bought a suit in one month, you would know that the next month, there is no need to buy another suit. Once you get into the swing of this you can then also start to plan your spending, so for example, if you have children, you know that in August they will need new school clothes, so then you can reduce you and your wife's clothes budget to zero for that month to compensate. You will never get on top of your monthly spending unless you know where it all goes, and I have found this is the only way that works for me.

2. The next project is to reduce your monthly necessary outgoings so that you have more discretionary income to go to extra debt repayments. Things to do here:
Post a detailed SOA up to get all the good advice of the peeps on the board - they are particularly good at suggesting sensible levels of expenditure for things like food bills etc.
Check you are getting all the benefits you can.
Cut your electric and gas - switch lights off, turn the heating down etc etc. Cut out any strictly unncessary expenditure. You can start getting Sky again when you have got rid of your debt!

3. Then start chipping away at the debt. I think that this is what people focus on first, but actually, you won't get very far unless you have also started on the first two things. These are the sorts of things I did:
Phone up all your card issuers and ask them to drop the interest rates as you are having trouble keeping up with payments. Try asking them for whatever introductory rate they are offering to new customers. Ask the card you have on zero percent to extend the period. Stress that you are in real financial trouble and bankruptcy may be the only option etc. Some will be helpful, some not.
Balance transfer anything you can from the highest interest rate cards to the lower cards so that the lower rate cards are up to the limit. This reduces the overall interest rate so you can pay off more of the outstanding balance.
Google 'debt snowball' and plug all your details into that to get a plan for paying your debt off (I can't remember the website). Then aim to beat it by squeezing the budget and finding a bit more to pay off your debt.


I also started to obsessively read all the financial gurus, eg alvin hall, dave ramsey, suze orman etc. Not everything they say is relevant, but they do have some really good ideas and strategies and eventually it all starts to sink in.

Hope there is something useful there for you - good luck!

Hi Trev

Thanks a lot for this. I am sure it has taken a while for you to make a note of all of this, and I really do appreciate it.

A DMP and bankruptcy are equally as hard for me in my profession. I desperately want to try and get my funds in order without resorting to one of these methods, and your tips are very welcome.

I haven't been spending on my cards lately, and have seent he balances go down quite slowly, but it has been a start. If Virgin weren't going to go up from £31 a month to £250, I would have just been able to cover it still, especially as I am changing jobs (same salary, just closer to home) which'll save £100+ per month.

I have been offered a loan of £12,500. Interest is quite high at 15%, but a lot cheaper than the Virgin Card of 29% and egg of about 25% (I checked the card and it was highert han I had thought). Over 5 years, it's £297 per month. If I go with this, I would pay off Virgin and egg and a chunk of Natwest. I think I will also contact my lender and explain my difficulties and see if I can either have a payment holiday for a few months, or alternatively switch to interest only for a while. I would then hope to use this money to clear the remaining Natwest card and hopefully some (if not all) of the Citi card (although this is a low interest one).

Virgin may also offer me another promotional rate when the card is clear, which I could stick the cahoot/Santander loan on to bring the interest payments down.

Would be tight initially, but it is a joint loan, and I am going to tell my wife we are in a very tight spot, and see if she can cover some of the monthly food bill.

I have been a debtor for too long now, and am fed up with it hanging like a cloud over my head. I am determined to get out of debt, and will not be increasing spends unnecessary spends as and when the balances and minimum payments go down. I think I am going to adopt tbourners apporach of having some more bank accounts. I have a separate one for fuel and living costs, but will turn this into a food account, for food shopping alone. I don't buy food and drink at works (I make a packed lunch for us all), so any remaining money can be paid into another account (which I will open) as an emergency fund, or maybe once in a blue moon I might treat the family to pizza!

I will ask my banks to see if they can reduce the interest I pay on my ODs as this is quite expensive.

I hope that with determination and (finally) a clear understanding of the mess I am in now, and would be in if I continue to go on burying my head in the sand, I can clear the debt.

I suppose this really is my last chance to get it all in order and sorted.

Thanks to everyone again - I find this forum so unbelievably helpful!

Finally, Trev, you say you were in a similar position to me. Are there any other tactics you employed to bring your debt down? Did you have much success, personally, in getting credit card providers to drop their rates. Did you also ask them to reduce their payments??

T