It's starting to pinch

badlyorganised

Hi there,

I think this forum is brill, well done to everyone and the advisors too.

I am self employed (ltd company) and have a reasonably decent job/skills which brings in good money, however recently my contract rates have been squeezed down by about 20%.

This meant that the financial buffer I had has been taken away, and now we are just managing to pay all our bills, the occasional missed one here and there.

I, fortunately, don't have collectors knocking on my door, but i would like to start planning so that doesn't happen.

I am doing an SOA, and a budget plan, my family are aware that we have to make cuts and curb our spending..

Anyway, we have ammassed unsecured debts in the region of £50,000, and we have roughly £50-60k in equity in our home.

The debts are a mixture of loans and credit cards but mostly credit cards.

I didn't really want to use up the equity in our property as we are thinking of moving or extending in a year or so.

I am going throuigh all the help pages to cut the day to day costs in both my business and the home bit

My long term aim is to get rid of these credit cards , I haven't used one of them for years, we tend to use one that we clear every month.

My short term aim is to bring down the monthly outgoings on the credit cards and loans - which will free up disposable income and make things easier. I would then start using some of that disposable income to start clearing the main balances.

Does anyone on the forum have any suggestions on the best way forward with this ?

Thanks.

Tixy

Hi and welcome

I would say that doing a statement of affairs and looking for cost savings is a good starting point. Gradually work through each item of expenditure to see if you can save any money on it by switching to new providers, changing where you buy or what you buy. Any remember that even small savings add up. Its easy to think its not worth switching to eg a new broadband provider as its only £2 per month, but if you save £2 on 10 things then thats £240 a year.

If your income has reduced have you considered looking if you would be entitled to tax credits at all (although probably depends on how you pay yourself out the ltd co).

With regards to the debts you have, make a list of them all and the interest rates. You want to maximise any cheaper rates and cheap deals.
With the one you clear each month, once you clear it see if they will give you a 0% balance transfer deal to move the most expensive debt on to. Or have you any cards open but with nil balances (that you never got round to closing) - again see if they may give a promo deal.

Then have a look at a snowball calculator, either on the makesenseofcards website (with the SoA form) or on whatsthecost, and make sure you are paying them off in the most cost effective manner.

I think you are right not to use your equity. Better to trim back the expenses a bit and keep the debt unsecured.

Good luck

GeorgeUK

I agree with Tixy - post up a SOA so we can see if there are any savings that can be made and concentrate on paying the debts with the highest APR off first.

If you have a business property, it may be worth appealing the business rates to see if you can get these reduced too.