Advice please

stuckinthepast

I currently owe £18k on various credit card and a loan of £17k giving me almost £36k of debt.

I am looking to pay this off and have worked out it will take me around 7 years to do so.

On the credit cards I am paying interest but I am paying more than the min repayment.

Am I better off looking to shift the money on the cards around or writing to the cards to see if I can get the interest frozen, what normally happens in this situation?

wolveslass

I would say that you should try to get the highest interest debts onto 0%. Whether you can do this will obviously depend on credit rating, but I currently have £18000 on various 0% cards. There are lots of people on here who will be able to give you great advice but also look at the websites info pages on balance transfers.

Tixy

If you can currently meet your minimum payments then its unlikely that any of your creditors will agree to freeze interest.

If your credit rating and financial position are in such a position that you can get a 0% card (or more than 1) then that might be a good option. Of you might want to look at a low life of balance card.
If you could get one or more extra cards (or have any open cards with a nil balance) then you might be able to shuffle some of the debt around to get it cheaper overall.

If any cards threaten to increase your APR you can reject the rate rise and continue to pay at the current rate (though you will no longer be able to use the card).

Then its probably a good idea to look at the snowball calculator and input your debts and APRs to work out which order to pay any extra off your debts to minimise the amount of interest you will pay (basically pay the minimum to all except the highest APR and then pay all you can afford to that debt until it is clear).

If your loan is a higher APR than some of your cards then check out the terms of the agreement and see if it allows overpayments -if it does then you can factor this in to the snowball.

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

stuckinthepast

I can just meet the min but am living off my parents to some degree but this cannot continue forever

Tixy

If you cannot keep up with minimum payments long term (or not without continuing to re-use credit) then a DMP could be a possibility for you. On a DMP you pay an overall amount you can afford after basic living expenses which is then distributed to your creditors. If you do this you agree not to take on any more credit until all the debts are paid off and if will impact severely on your credit reports for the next 6years. But many of your creditors may agree to freeze interest.

There are other possible options depending on your circumstances. It would probably help either to post up a statement of affairs on here using this link SOA for people to understand your financial position better and therefore be able to advise (and maybe make suggestions as to how you can save money elsewhere) or you might want to contact one of the debt charities who will run through all the possible options in your position. IMPORTANT - Where to seek professional impartial advice about your debts.

stuckinthepast

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1059
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1059
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 50
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 120
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)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 325

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................17000.....208.......7.4
Nationwide.....................2328.2....110.......16.9
Tesco Card.....................750.......70........17.4
Halifax........................10672.....160.......19.9
Virgin Money...................2800......60........17.4
Barclaycard....................1560......60........10.5
Total unsecured debts..........35110.2...668.......-

Monthly Budget Summary
Total monthly income.................... 1,059
Expenses (including HP & secured debts). 325
Available for debt repayments........... 734
Monthly UNsecured debt repayments....... 668
Amount left after debt repayments....... 66
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -35,110.2
Net Assets.............................. -35,110.2
Created using the SOA calculator at Reproduced on Moneysavingexpert with permission, using IE browser.

stuckinthepast

As you can see, there is not a lot to play with, just tried one of the 0% cards and got turned down.

stuckinthepast

So any advice out there on what to do?

lililoo123

Have you written to your creditors to advise them of your situation. I would suggest that's a good place to start. It may be that you can come to arrangement and request that your interest is frozen for a period of time. Other than that i would suggest speaking to Payplan with a view to a possible debt management plan.

Hannah_10

With £35k of debt and less than £13k a year income, even living as you are doing (pared right down to the wire) you're going to take four and a half years to clear it and that's IF the interest was all stopped immediately... If the interest carried on and you kept making these repayments it'd take you until August 2027! Even if you correctly snowballed the £66 it looks like you have free it'd still take until August 2024. Four and a half years at your current levels of income and expenditure just can't be done, nevermind fourteen to seventeen years. At some point you will want to replace your worn out socks!

Which brings me to your expenditure- rent of £50 a month and no electric, gas or council tax? Well Ok if you're living with Mum and Dad this might be the case. You never ever pay for a birthday card for anyone, or buy that child you pay expenses for a Christmas present? You could be a Jehova's Witness I guess. You don't ever get your hair cut? Could have a sister int he trade I suppose. You've never had to buy paracetomol or pay for a pair of glasses or a dental check up? I guess it's not impossible. You neither go out nor watch rented DVD's or anything, ever, as your entertainment budget is nil?... Look mate are you sure this SOA is right? Or was it sort of a worst-case scenario SOA and actually your expenses are in truth a fair bit higher? Those worst-case ones are quite common, people do them in error and with the best will in the world just because they're desperately trying to make the sums add up- when they don't.

Lets say you got your SOA a bit wrong and that in actual fact your outgoings are more like £500 a month, not £325... Well then your best case scenario would be that if all creditors froze the interest and you went on a debt management plan you'd be debt free again in about five and a half years. If your expenses were say £650... nearly 7 years.

You can't be expected to sustain an SOA that tight for 6 months, let alone years on end.

Snowballing is definately out (that was the 14-17 year one) and I would say looking at the numbers here a DMP is out unless you can drastically increase your income. You'd be better off considering an IVA or bankruptcy. I would recommend you speak to one of the charities (National Debtline, Citizens Advice Bureau or Consumer Credit Counselling Service) for more advice about bankruptcy or an IVA.

stuckinthepast

Here is a revised SOA

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1059
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1059
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 50
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 80
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 120
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)...... 5
Haircuts................................ 5
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Pension................................. 40
Total monthly expenses.................. 385

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

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Nationwide.....................2328.2....110.......16.9
Tesco..........................750.......70........17.4
Barclaycard....................1560......60........10.5
Northern Rock..................17700.....208.1.....7.4
Halifax........................10672.....160.......19.9
Virgin Money...................2800......60........17.4
Total unsecured debts..........35810.2...668.1.....-

Monthly Budget Summary
Total monthly income.................... 1,059
Expenses (including HP & secured debts). 385
Available for debt repayments........... 674
Monthly UNsecured debt repayments....... 668.1
Amount left after debt repayments....... 5.9
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -35,810.2
Net Assets.............................. -35,810.2