Oh dear, that is rather a lot of debt....

tricky_plus

Hi everyone, I've just signed up to the forum but I've been lurking for ages.

So the story is....

A few months ago I added all my debts up for the first time in years and it made for quite a horror story. By basically avoiding the situation for years I'd racked up an amazing £50k in debt. This consists of credit cards and two loans which were meant to consolidate the debt. I fell into the classic situation of getting loans to consolidate the credit cards then not quite cutting them up. You can guess the rest.

So basically, no excuses, I've been a total a**. I now want to sort this out. I've got a great wife who is amazingly supportive when I told her, I feel a million times better for sharing my dilemma.

What if really like is some pointers as to the best and fastest way out of this without ruining my credit for life ( only for mortgage reasons, never want to touch a credit card again!).

My total debt is £50k, my annual salary is £51k.

Monthly outgoings are currently about £100 a month more than my income. About £1500 a month goes on my debts and the rest is mortgage and living expenses.

I've looked at IVA's and DMP's, they all seem fairly extreme. Anyone got any smart ideas how I can sort this out or is it DMP time?

Thanks everyone!!!!

bottleofred

Hi trick and welcome to the forum,

I would have to think it's probably dmp time due to the amount of money involved. If you do decide to go down this route though, I strongly recommend the consumer credit counselling service as the service is free and all the money you pay goes towards your debts. You could also post you statement of affairs though and you'll get loads of advice on how to save money. http://www.makesenseofcards.com/soacalc.html

Good luck in whatever you decide

Red

katsu

post the soa from Red's link and we will see what advice we can offer to change the overspend and you can then see how it looks.

sp1987

Post yourself a statement of affairs and a lot of people will be able to make comments. There may be some obvious changes people could help you make, or allow you to see what your options are with input from objective onlookers.

The good thing though is that your debts are under your annual wage. Your problem currenty is you are spending more than you earn so are continually accumulating more debt. Posting an soa should get you enough help to break even on that, which means it won't get worse but better.

mum2one

def agree re the SOA route, as at the mo theres a £100 difference, in all honestly it should be easy to cut £100 out of the expenditure, - good luck, you've taken the hardest step, you've added the amount up and asked for help. Glad your wife is being supportive, def makes the life a lot easier xx

[Deleted User]

As other posters have mentioned above - if you post a Statment of affairs people will be able to see where's best for cutbacks or savings.

tricky_plus

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 3100
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3100
Monthly Expense Details
Mortgage................................ 530
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 65
Electricity............................. 20
Gas..................................... 35
Oil..................................... 0
Water rates............................. 12.2
Telephone (land line)................... 0
Mobile phone............................ 45
TV Licence.............................. 6.2
Satellite/Cable TV...................... 27
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 450
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 14
Life assurance ......................... 50
Other insurance......................... 6
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 100
Total monthly expenses.................. 1670.4

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

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 240000...(530)......1.5
Total secured & HP debts...... 240000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
EGG CC.........................2630......83........26.9
EGG LOAN.......................11400.....400.......13
BARCLAYCARD LOAN...............9340......320.......10
BARCLAYS CURRENT ACC...........3370......25........10
SANTANDER......................4900......120.......16.6
VIRGIN CC......................13650.....300.......23
BARCLAYCARD CC.................6000......138.......26
Total unsecured debts..........51290.....1386......-

Monthly Budget Summary
Total monthly income.................... 3,100
Expenses (including HP & secured debts). 1,670.4
Available for debt repayments........... 1,429.6
Monthly UNsecured debt repayments....... 1,386
Amount left after debt repayments....... 43.6
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -240,000
Total Unsecured debt.................... -51,290
Net Assets.............................. -291,290

Reproduced on Moneysavingexpert with permission, using IE browser.

tricky_plus

There we go, any advise greatly appreciated.

Many thanks

Tricky_plus

theoretica

Is this just for you? You could shave quite a bit off groceries if it is.
Your debt is an emergency so pay the £100 off your debt.
Is there any way you can save on other travel? season tickets or working more hours on fewer days or anything?
Your life insurance is high- especially if you don't have family do you need this?
What is the other insurance?
You could probably trim smaller sums off entertainment, clothes and mobile.

If you can overpay your egg CC by 250 a month it will be gone in 10 months freeing another £80 and making things easier.

katsu

Can you add some more details (use the edit button on your SOA post).

How many people are in your household (post 1 mentions a wife, are there kids?).

Looks like you put half of some bills as TV license is not £6 but £12pcm. Can you show which is halved and explain what happens re the wife's income and any benefits so we get the whole picture. For example your gas and elec is good if it is 100% of the monthly bill but you can make savings if it is 50%.

Then we will go to work with SOA advice I'll give you the first one - the mobile phone. Look at deals to drop your monthly payment as that definitely can be reduced.

HTH

MFWannabe

tricky_plus wrote: »

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 3100
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3100
Monthly Expense Details
Mortgage................................ 530
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 65
Electricity............................. 20
Gas..................................... 35
Oil..................................... 0
Water rates............................. 12.2
Telephone (land line)................... 0
Mobile phone............................ 45 - For one phone or two? Change to lower tariffs or go payg
TV Licence.............................. 6.2 - This should be doube this amount?
Satellite/Cable TV...................... 27 - I'm guessing this includes telephone line and internet? If so check if you could get line and internt cheaper seperately and ditching the tv
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 30 - Wear what you have for now
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 450 - What is this? Could it be reduced in any way?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 10 - check comparison sites to see if you can get combined buildings and contents cheaper
Contents insurance...................... 14
Life assurance ......................... 50 - This seems high; check comparison sites to see if you can get cheaper
Other insurance......................... 6 - What is this?
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 40 - you can't afford this for now
Holiday................................. 0
Emergency fund.......................... 100 - you can't afford this now; you need to put this towards debts
Total monthly expenses.................. 1670.4

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

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 240000...(530)......1.5
Total secured & HP debts...... 240000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
EGG CC.........................2630......83........26.9
EGG LOAN.......................11400.....400.......13
BARCLAYCARD LOAN...............9340......320.......10
BARCLAYS CURRENT ACC...........3370......25........10
SANTANDER......................4900......120.......16.6
VIRGIN CC......................13650.....300.......23
BARCLAYCARD CC.................6000......138.......26
Total unsecured debts..........51290.....1386......-

Monthly Budget Summary
Total monthly income.................... 3,100
Expenses (including HP & secured debts). 1,670.4
Available for debt repayments........... 1,429.6
Monthly UNsecured debt repayments....... 1,386
Amount left after debt repayments....... 43.6
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -240,000
Total Unsecured debt.................... -51,290
Net Assets.............................. -291,290

Reproduced on Moneysavingexpert with permission, using IE browser.

Hi
I've made some comments above where you could make some cutbacks; although your soa is quite tight. Put every spare extra money you have towards the Egg card first as this is your highest APR card and actually has the lowest balance; when you've cleared this it will free up some more money to put towards the others.
It will be a long road but it is doable