I have not read any worse than this!

Mode1803

OK, before I start my tale of woe I think I should give some background. I should also state that I am not looking to avoid blame for my situation and have certainly been guilty of stupid, no hang on, "bl**dy ridiculous" spending habits in the past. The daft spending was when the money was rolling in but we always bought on credit rather then saving so when money stopped it all just piled up. We also maxed out the credit cards when I was unemployed for 9 months as we had little other choice.

That said I had my own business which went up the swanny a couple of years ago which was followed by 9 months of ZERO income leading to a nightmare pile of debts.

I am now in a position where my income (£3,967 net) is just covering my expenses and whilst I am not getting further in to debt, I am not clearing any of the balances on the nasty credit cards. (MBNA being the worst and I hate them - they are basically, in my opinion, unscrupulous thieves)

Here goes (this should make a lot of you feel better about your positions!!)-

Credit cards/Accounts

Virgin (MBNA)
Interest Rate: 2.5292% (which I think equates to 30.3%APR? - AAAARRGH)
Balance: £9,453.79
Payments - am paying £275 per month to basically sit still

Barclaycard - 2 no.
Interest rate on both - 25.9%APR
Mine: Balance £1,089
Wife's: balance £1,976
Paying total of £110 to basically sit still

Capital One
Interest rate - 34.08%APR (AAAARGH)
Mine: Balance £470
Paying £70 per month

Next Account
Interest rate - 25.99%APR
Mine: Balance £708
Paying £70 per month

Debt form Business (One Personal Guarantee signed)
Travis Perkins
Balance is around £3,800
Paying £150 per month
Not sure what the interest rate is

Total "high interest" Credit Debt is around £17,500.

Loans (some with companies, some with family)


Barclay Secured Loan
Monthly cost £667
Another 4 years to go on this one (This account is currently in dispute with Barclays and Ombudsman and is the only account affecting our credit rating as it was put into default, wrongly in my opinion - see other post I have placed in "Loans" forum.

Family Loans
Parents totalling about £12k (not paying anything on this yet)
Grandparents totalling £23k (paying £500 per month on this one)

Zero other loans, no car loans etc

Arrears

Council Tax
Arrears totalling around £3,000 paying around £100 per month to clear arrears on top of £245 per month normal payment.

Income Tax
I worked freelance for 9 months and invoiced direct. I owe the tax on this lot and will need to pay this in January and July of 2011 totalling around £7,000.

Tax Credits
While I was unemployed I got Tax Credits. When I started work again I told the tax credit people but they still kept paying and as result I owe about £600. I no longer get tax credits by the way - I have never and never will claim stuff I am not entitled to. (I do know a few people that do and it makes me sick - they could not afford to live where they live if they were honest. To dob them in is too risky as well as they would more than likley figure out who did it!)

Now for some more positive statements:-

I am in a new permanent job where the basic salary is £70k. On top of this my bonus, if I hit target is, £60k. These will not kick in till I finish some stuff in the new job and will probably be in £3k to £5k lumps.

No I know that this fact, if I use the bonus money to pay off the high interest stuff first, will be great and with one year OTE I should clear a lot of the above. The thing is the bonus is not guaranteed and in the meantime I am struggling to even get to work each day!

All that said, I am so determined to get out of the credit cards and NEVER NEVER NEVER get one again. I hate them and, although they were essential to get through the 9 months, I will never use them again.

Any comments on the above and tips on how to get round the high interest rates on the cards would be great.

I obviously have a lot of other outgoings, mortgage, bills and the usual stuff, but these are the big ticket items which play on my mind!

I WILL BE DEBT FREE WITHIN 2 TO 4 YEARS!!!! OH YES I WILL (Repeat to fade.......)

Cheers guys


Mode

Hadley

Hi why don't you contact one of the companys who help people with debt problems they maybe able to get the interest stopped on some of your cards and will be able to sort out a repayment pay for you that you can afford at the moment.You would still be able to pay lump sums off when you had the money.I think CCCS are one that alot off companys recommend because it is a free service.Hope things get better for you

Nottoobadyet

With a high income like yours, I wonder where your money goes? May be worth posting an SOA for people to look over and maybe cut some of your expenditure.

anh1904

Mode, your debts in total, while substantial, are not insurmountable with your salary.

You really need to post (or just do one for yourself if you'd rather) a full statement of affairs, only then will you see if you have enough to bankroll the existing arrangements, and then do forward cashflow projections to see where things change.

Like you, I have a substantial basic, with bonuses on top, but like you I have debts in excess of a years basic. Circumstances, divorces, it doesn't really matter what.

The statement of affairs, together with a detailed and honest spending diary is the place to start if you are serious about addressing the situation, use your bonus, if and when it appears, to accellerate the repayment plans, but do not budget for it.

Good luck, there's plenty here to help if you want them to.

Mode1803

anh1904 - Thanks for the response and I think I will post the SOA. I will get it on there tomorrow if I can.

The help I need it trying to avoid paying the high interest (i reckon about 3-4k goes a year in interest and bank charges!). My credit rating does not help though and I am disputing this with Barclays (see other thread)

moneysavingexpert.com/showthread.php?t=2741482

Cheers

mode

Jacks_xxx

On August 17th 2006 I worked out that we owed £96700.00, and change much of it on cards, and we earned between us about £46k a year with a mortgage to pay, plus two kids and a grumpy old poorly cat to support.

What worked for us is The Snowballing method of paying off debts.

Have you looked at that at all?

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

Mode1803

I have not seen that site before but the idea is a good one. I am certainly hoping to clear the high interest rate stuff first and guess you just pay the absolute minumum on everything else first.

I will look at that tonight and see how much more/extra I can pay off the expensive ones by paying minimum on the others.

Thanks!!

Jacks_xxx

It feels a bit counter intuitive at first, and it only works when there is a bit of spare cash sloshing about, but I'm convinced that Snowballing is the main reason that we were able to clear the debts in just over two years.

Spending less and earning more were very helpful too. :D

Hax

Is there any chance you could persuade your grandparents to give you a reprieve of say 6 months on your payments to them and instead, channel that payment as well as the £275/month at MBNA - that would be a nice £3K knocked off that one over 6 months - and then some! After that, at least your £275/month would start making a reasonable dent each month.

Mode1803

Hax wrote: »

Is there any chance you could persuade your grandparents to give you a reprieve of say 6 months on your payments to them and instead, channel that payment as well as the £275/month at MBNA - that would be a nice £3K knocked off that one over 6 months - and then some! After that, at least your £275/month would start making a reasonable dent each month.

Yeah that is an obvious one but is a really hard ask. It is my wife's side of the family and they have done a lot for us already.

Part of me also thinks that I am big enough and ugly enough (am I really am both!! ) to sort this out on my own without having to ask for rescue yet again. I kind of deserve the pain if you know what I mean.

Our spending is at an all time low and while it is hard to say no to invites out it has made us more aware of money.

What worries me is that if I do that, with Christmas round the corner, we will just use that money elsewhere rather than reducing the loan.

Onwards ans upwards though!

Mode

Hax

Mode1803 wrote: »

Yeah that is an obvious one but is a really hard ask. It is my wife's side of the family and they have done a lot for us already.

Part of me also thinks that I am big enough and ugly enough (am I really am both!! ) to sort this out on my own without having to ask for rescue yet again. I kind of deserve the pain if you know what I mean.

I understand what you're saying as I'd be the same. That said, I can't imagine that they'd be too happy to know how much you're struggling - especially if they were able to help. I know that's how my family would be anyway!

Maybe at the end of it all, you could add a percentage onto what you owe them - as a "thank you" - and to ensure that they haven't lost out on any income that money would have earned them?

Just a thought

Good luck!