So I want to be free of my 3 k debt, options:

crazy_gooner

Hey guys, I'll try and keep this quite brief and summarise my situation.

I'm around 3k in debt.

A credit card of 2 k, which I no longer use from Halifax, I took this out 3-4 years ago when I went on holiday and first started working, thinking I had money, which I wasted, and now regret, but I have to deal with it, so I don't feel sorry for myself.

Also £900 over draft from Halifax, which they charge £1 a day for.

I'm paying around £100 a month, to kep the overdraft going and paying the credit card, but whre interest is high, it never really seems to get lower. I can't really afford much more, due to living expenses, running a car etc to get me to work.

I'm still an apprentice, and earn under 10 k a year, which is poor, I should be doing better, but the because of this recession, I haven't advanced or had a pay rise, so I appreciate having a job everyday.

I live with family at the moment.

I'm wondering, what are my best options? Halifax rejected a loan from me.

I just want to cut the card in half, get rid of the overdraft, and say, be free in 2-3 years, or idealy, get a new job in the coming year with a better salary and pay things off quicker.

Thanks for your advice guys.

dancingfairy

Hi -a couple of thoughts from me:
1) have you got a credit union near you? they may be able to lend to you at a decent interest rate - have a look on this weeks email fromMartin as he mentions credit unions and how to find one near you.
2) it might be worth posting more details of the credit card - ie exact balance, apr, min payment etc and how much you are paying, the same with the overdraft - so we get a better picture.
3) you might need to change the amount you pay to each debt if one has a higher apr than the other, h
4)have you reviewed all your expenses to see if you can free up some money to get these debts paid off quicker?
5) have you got anything you can sell at all - apparantly you can make quite a lot of money selling things on ebay/car boots - even stuff which you might consider junk.
6) if all else fails then it may be worth defaulting on the debt and trying to arrange a repayment plan - obviously this method is not without risks as it will affect your credit record and may lead to further action (ie your creditors MAY decide to take you to court). At the end of the day though if you're not making any headway at all and the other options aren't doable then you may have to consider this route and ask for them to stop interest and charges to allow you to get back on your feet - this probably should be a last resort though.
Good Luck
df

crazy_gooner

dancingfairy wrote: »

Hi -a couple of thoughts from me:
1) have you got a credit union near you? they may be able to lend to you at a decent interest rate - have a look on this weeks email fromMartin as he mentions credit unions and how to find one near you.
2) it might be worth posting more details of the credit card - ie exact balance, apr, min payment etc and how much you are paying, the same with the overdraft - so we get a better picture.
3) you might need to change the amount you pay to each debt if one has a higher apr than the other, h
4)have you reviewed all your expenses to see if you can free up some money to get these debts paid off quicker?
5) have you got anything you can sell at all - apparantly you can make quite a lot of money selling things on ebay/car boots - even stuff which you might consider junk.
6) if all else fails then it may be worth defaulting on the debt and trying to arrange a repayment plan - obviously this method is not without risks as it will affect your credit record and may lead to further action (ie your creditors MAY decide to take you to court). At the end of the day though if you're not making any headway at all and the other options aren't doable then you may have to consider this route and ask for them to stop interest and charges to allow you to get back on your feet - this probably should be a last resort though.
Good Luck
df

Hi DF, thanks for your input.

I could probably free up around £30 more a month, at the moment it's so hard, living, getting to work etc.

The overdraft is £1 a day so £30 or £31 a month in most cases.

The credit card I think is 28% APR, if I'm correct there.

Minimum payment for the CC is £46 pound a month, been paying £60.

Credit unions seem a good option, are they good? I'm based in North London and prett sure I have one around.

I never wanted it to come to this, but I just want this cloud gone, knowing I'm making progress, at 21 years old, I want to be free and in good will by the time I'm 25.

I don't have much to sell, apart from an old PC, which would raise about £50, which is still money towards the debt.

I want to avoid going to court if possible.

Thanks for the reply. Appreciated.

Percy1983

In short cut right back to save as much as possible for the moment.

Right now I would say only pay the minimum off the credit card and try to get rid of the over draft a it is costing you approx 41% APR at the minute.

How much is available on the credit card (credit limit less current balance) as the halifax may be willing to transfer your overdraft onto the card saving you some money.

How is you credit file looking (you don't strictly need to look) in short have you got any missed/late payments?

crazy_gooner

Percy1983 wrote: »

In short cut right back to save as much as possible for the moment.

Right now I would say only pay the minimum off the credit card and try to get rid of the over draft a it is costing you approx 41% APR at the minute.

How much is available on the credit card (credit limit less current balance) as the halifax may be willing to transfer your overdraft onto the card saving you some money.

How is you credit file looking (you don't strictly need to look) in short have you got any missed/late payments?

Hi, thanks for your reply, not sure how much I have available on the CC, probably not much as I'm paying the minimum.

I haven't missed any payments, so take that as a positive. I guess my credit isn't great because I owe money and I'm not a homeowner?

Percy1983

It might be worth applying for a credit card with a 0% balance transfer, but only apply for one and pick carefully, if you get rejected leave the idea alone.

crazy_gooner

Percy1983 wrote: »

It might be worth applying for a credit card with a 0% balance transfer, but only apply for one and pick carefully, if you get rejected leave the idea alone.

Thanks Percy.

I have another question for everyone, I wont make another thread unless I need.

Basically, in march I want to move away, and start a new life, in the north of England, it will kickstart my life I think. (I have family there too)

I'll probably be without a job for a month or 2 at max I hope! I like working actually!

Money may be tight, so I'm wondering, would Halifax freeze payments for 2 months say for my credit card and overdraft? Just until I get myself back on my feet and get work. Obviously I want to pay it, wondering if there's a way around this.

If I say I lost my job etc?

I do want to be working there ASAP!

Percy1983

They might freeze payments or just offer you an more of an overdraft, all you can do is ask.

With that just get as far as you can into your overdraft and you may go back into it but with good reason.

crazy_gooner

Percy1983 wrote: »

They might freeze payments or just offer you an more of an overdraft, all you can do is ask.

With that just get as far as you can into your overdraft and you may go back into it but with good reason.

I guess all I can do is put my honest position when the time comes. What do you mean in regards to my overdraft Percy?

I'm already in my overdraft, I think I can extend it online, I want to avoid getting into more debt at the same time if possible.

Thanks again

bouncydog1

Before you move away and give up the job you have got, you need to ensure that you have enough money to cover expenses for say 6 months. Why don't you try to find a job first before moving or at least get an idea as to availability of employment.

At the present time you are employed, live with family and have minimal outgoings and are in debt. Unless you have a job to go to and have budgeted to cover your expenses things are highly likely to get worse when you move.

Is there any way you could put this decision off until you have managed to pay off what you owe - could you get a second job to help - or if you need to move then you really should have enough to cover your debt payments for a few months otherwise you will default and end up with your credit rating trashed.

Sorry if this isn't what you want to hear - but there is no guarantee that you will get work in March, whereas at least you have some money coming in now.

crazy_gooner

bouncyd!!! wrote: »

Before you move away and give up the job you have got, you need to ensure that you have enough money to cover expenses for say 6 months. Why don't you try to find a job first before moving or at least get an idea as to availability of employment.

At the present time you are employed, live with family and have minimal outgoings and are in debt. Unless you have a job to go to and have budgeted to cover your expenses things are highly likely to get worse when you move.

Is there any way you could put this decision off until you have managed to pay off what you owe - could you get a second job to help - or if you need to move then you really should have enough to cover your debt payments for a few months otherwise you will default and end up with your credit rating trashed.

Sorry if this isn't what you want to hear - but there is no guarantee that you will get work in March, whereas at least you have some money coming in now.

Thanks for the response BouncyD, appreciated, what you say it the truth.

I'm really not happy in London, I feel depressed with work, treated wrongly at times even though I work hard for rubbish money, been here since I was 17 years old. I need a fresh start, I aim to stay with family where I move until I find work.

I have a rough idea, to save up around £1200 within the next 3-4 months before I move, my debts are costing me around £110 a month, plus my phone £35, so say £150 a month.

So really £1200 should hold me in decent stead if I move in 4 months time right? half of it would cover my expenses per month.

Maybe I can get JSA, I have contributed national insurance for the past 4 and a half years, that little would also help, plus they can help find me a job that bit quicker.

What do you think?

Thanks