Advice and help with our 20k debt

beepboes

We owe over 20k on credit cards. Spend around £500-£600 a month paying them off (usually a £100 on each) but it barely dents it, maybe paying £30 off a month after the interest. Will take us FOREVER to pay it off at this rate.

Our debts are:
Tesco £1,700 22.5% APR
Barclaycard (OH name) £5,200 19% APR
Barclaycard (My name) £2,600 15% APR
BHS £2,600 18.9% APR
Halifax £3,900 19% APR
Nationwide £5,000 )% until Oct 2010

My OH earns £1900 per month and i earns £1200

We have lots of other outgoings, out household outgoings (mortgage, gas, elec, water, house insurance, life insurance, council tax) comes to about £1000

We have two large loans which cost about £650 per month

Could anyone advise me about consolidation loans, is it possible to get one for the 20k over a long period that would mean we were actually paying off our debts as at the moment we are barely making a dent. It is dishartening to pay £600 a month and the actual debt balance is barely dipping below £200.

Would appreciate any thoughts and advise on this from all you experts.

Thansk very much

anh1904

A full statement of affairs in the standard format would be a good place to start, that might highlight if you are genuinely struggling to pay off with your current income, or whether there are other items you could potentially reduce.

Tixy

Hi

Before you consider looking at consolidation loans then I would suggest you would be best to start by completing a statement of affairs. This will give a better picture as to your full financial situation.
It will show you where the rest of your money is going (as there is about £800per month unaccounted for in your figures above) and might show you ways you can increase your debt repayments to pay down the debts quicker.

Consolidation loans are rarely recommended as though the APR may be lower as you pay it over a much longer period you often pay just as much interest overall (if not more). In addition many people consolidate rather than address the overspending issue which means they end up in more debt overall in 2-3years time.

Just from the information you have posted you would probably struggle to get a £20k unsecured consolidation loan from any prime lender as you would appear to be over committed in terms of the your existing income to debt ratio. And a secured loan would be a really bad idea.

Here is the link to the statment of affairs calculator - http://www.makesenseofcards.com/soacalc.html if you post on here you should get lots of suggestions as to what other alternatives you may have.

beepboes

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1167
Partners monthly income after tax....... 1977
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3144
Monthly Expense Details
Mortgage................................ 560
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 101
Electricity............................. 55
Gas..................................... 70
Oil..................................... 0
Water rates............................. 18
Telephone (land line)................... 0
Mobile phone............................ 100
TV Licence.............................. 11
Satellite/Cable TV...................... 75
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 50
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 4.5
Buildings insurance..................... 0
Contents insurance...................... 55
Life assurance ......................... 22
Other insurance......................... 22
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1343.5

Assets
Cash.................................... 0
House value (Gross)..................... 85000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 6000
Total Assets............................ 96000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 85000....(560)......0
Total secured & HP debts...... 85000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco..........................1700......100.......22.5
Barclaycard (OH name)..........5200......100.......19
Barclaycard (my name)..........2600......100.......15
Jewellery Loan.................900.......130.......0
Sofa Loan......................1500......126.5.....0
Wedding Loan (Tesco)...........6500......141.......0
Car Loan (Mint)................4000......251.......0
Halifax .......................3900......100.......19
BHS............................2600......100.......18.9
Total unsecured debts..........28900.....1148.5....-

Monthly Budget Summary
Total monthly income.................... 3,144
Expenses (including HP & secured debts). 1,343.5
Available for debt repayments........... 1,800.5
Monthly UNsecured debt repayments....... 1,148.5
Amount left after debt repayments....... 652
Personal Balance Sheet Summary
Total assets (things you own)........... 96,000
Total HP & Secured debt................. -85,000
Total Unsecured debt.................... -28,900
Net Assets.............................. -17,900
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

ItMightBeUsefulOneDay

According to your SOA you have £652 left every month to throw at your debts. I'll make a guess that you don't otherwise you'd wouldn't be here. Don't worry, this is quite normal but you do need to find it...

Start a spending diary now and find out where that £650+ actually goes. Once you've actually got some/all of that "extra" back, start throwing that at the highest APR debt (Tesco perhaps). Clear that then use the extra money (£100 per month) to move onto the next debt and clear that.

While you're doing your spending diary, writing every last penny down so you know where it goes you might want to review your sky package and your mobiles. These are luxury items that need to be cut back if you're serious about making inroads into your debts.

HAYLEY8005

I see you have petrol in there but you have pt nothing down for insurance or maintenance so something needs to go in there, Also nothing down for presents , haircuts or entertainment and im sure you must by a gift for at least someone in the year and you must also go out at some point so all these need to have something in them. maybe so back over recent bank statements to find the surplus you are showing and see what it was spent on as a few of the boxes are missing things.
Hayley

HappyMJ

I imagine your Sky bill comes to £75 and includes everything including the landline, calls, broadband and the telly including maybe multiroom, hd, movies and sports. You need to review that bill it can be much lower. What do you spend on Entertainment? I think that's where most people excess amounts go to. It's fair to put an amount maybe £60 per month. Are your shopping bills really £200 per month? It seems to me to be a bit low considering you're not sure where £652 is.

MFWannabe

beepboes wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1167
Partners monthly income after tax....... 1977
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3144
Monthly Expense Details
Mortgage................................ 560
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 101
Electricity............................. 55 - this is high for 2 people who are out at work all day!; are you in arrears? Check comaprison sites to see if you can get cheaper
Gas..................................... 70 - Same comment as Electric
Oil..................................... 0
Water rates............................. 18
Telephone (land line)................... 0
Mobile phone............................ 100 - this is very high for 2 mobiles; reduce to a low tariff or go payg
TV Licence.............................. 11
Satellite/Cable TV...................... 75 - I assume this includes internet and phone; but you could cut TV package
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 0 - Do you never spend anything on clothes?
Petrol/diesel........................... 50 - This is low; is this correct?
Road tax................................ 0 - You need to put something in here
Car Insurance........................... 0 - How much is this? You need to put something in here; even if you pay yearly; you still need to budget
Car maintenance (including MOT)......... 0 - You need to put an amount in here to cover mot's, tyres, servicing etc
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 4.5
Buildings insurance..................... 0
Contents insurance...................... 55 - This is high; check comparison sites to see if you can get cheaper
Life assurance ......................... 22
Other insurance......................... 22 - What is this for?
Presents (birthday, christmas etc)...... 0 - You need to put something in here; even if it's only £10 per month
Haircuts................................ 0 - Do you never get your hair cut?
Entertainment........................... 0 - Do you never go out? You need to put something in here
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1343.5

Assets
Cash.................................... 0
House value (Gross)..................... 85000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 6000
Total Assets............................ 96000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 85000....(560)......0
Total secured & HP debts...... 85000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco..........................1700......100.......22.5
Barclaycard (OH name)..........5200......100.......19
Barclaycard (my name)..........2600......100.......15
Jewellery Loan.................900.......130.......0
Sofa Loan......................1500......126.5.....0
Wedding Loan (Tesco)...........6500......141.......0
Car Loan (Mint)................4000......251.......0
Halifax .......................3900......100.......19
BHS............................2600......100.......18.9
Total unsecured debts..........28900.....1148.5....-

Monthly Budget Summary
Total monthly income.................... 3,144
Expenses (including HP & secured debts). 1,343.5
Available for debt repayments........... 1,800.5
Monthly UNsecured debt repayments....... 1,148.5
Amount left after debt repayments....... 652
Personal Balance Sheet Summary
Total assets (things you own)........... 96,000
Total HP & Secured debt................. -85,000
Total Unsecured debt.................... -28,900
Net Assets.............................. -17,900
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

Hi
I've added some comments to your soa above. You could make some cutbacks but also you need to put amounts in where you have put nothing. Your soa says you have £652 per month left over; you need to see where you are spending this as this could be a big chunk you could pay off your debts.
You've listed £6000 of other assets; what are these? If they are savings or something you could sell then you should pay off your highest interest debt/s with this amount. If you only spend £50 per month on fuel; do you really need a car? If not then think of selling to raise more money to pay off debts.
You also need to find out the APR of the loans.
You need to pay off the highest APR card/ loan first and then move on to the next highest APR etc. Is there any chance you could move any of the balance of the cards to a 0% card for 12 months?