What do you think???

Jon_J

We should not be in the mess we are in, but we are and we need to address it now before events overtake us.

We owe £32k in credit cards, loans and overdrafts, plus a £150k repayment mortgage. Our net income is £2600 per month. We've done statement of affairs, spreadsheet analysis, but the bottom line is, major cuts are needed now. No need to share the exact numbers with you - we have already reduced household bills, food costs, no holidays, etc, etc.

We overspend by £400 - £800 per month - yes it's that much!! We are looking for new jobs to try and boost income, plus cut back household costs where possible.

Our unsecured debt is £500/mth minimum and it's just covering interest and not the capital debt of £32k. The mortgage cost £650k per month.

Our objective is to reduce our unsecured debt by approx. £250 per month to help reduce the £400 - £800 overspend each month.

Therefore should we

1. Consolidate the £32k with the mortgage, take longer to pay it off and reduce the monthly payments, but cost more interest in long term

OR

2. Continue shifting credit card balance debt around the 0% for x months or 6.9% life of balance cards; and attempting to pay down the debts with the highest % interest rates?7

We know this will be just the tip of the iceberg, but in our minds we will feel as we're starting to get on top of the debt.

Please let us know your views and recommendations.

Thanks
P & J:(

david_hellier

New jobs will not solve the problem. Paragraph 3 is the problem. Let's see the SOA again.

JasX

Jon_J wrote: »

Please let us know your views and recommendations.

I'd suggest doing a full SOA, eyes on this forum can usually quite quickly identify areas with hidden 'fat' in your budget that might prove easier to cut

Superbiatch

Hi there, you appear to be concentrating on reducing the debt to enable you to spend more each month on living costs yet that is where you are over-spending (according to your post).

Sorting out your debts is one problem, but seeing where cuts can be made to your living costs might well give you more to pay off your debts quicker. I live a pretty lean life, but I've managed to shave off a £100 here and there and even though I'm on a DMP, I've never been better off for a very long time. So I'd say its worth posting your SOA as no one knows you, there is no shame involved and the very helpful people on here can advise you about anything you might be paying too much for

[Deleted User]

Start with a SOA (even if you don't want to post it here) if you fill it in completly and acurately, you will know exactly where you stand and what you are spending and where every month.

If you do decide to post it here, people will be able to comment on where savings and cutbacks could be made so that you can reduce the shortfall, and hopefully help you overpay on the debts to get rid of them quicker.

http://www.makesenseofcards.com/soacalc.html

Boosting income is part of it, but making cutbacks is also important, if you continue to overspend by £400-£800 every month, your debts (and the associated costs) will be mounting and quickly. You urgently need to get your outgoings to meet your income.

Domino9

YORKSHIRELASS

Hi

I would say adding unsecured debts to your Mortgage is a bad idea for three reasons:

1. It is going to take a very long time to repay the debts and the interest costs on this will be huge.

2. You are moving the debts from unsecured to secured. If for any reason you end up not being able to make the repayments you are in danger of losing your home.

3. You are not really addressing the problem. Too many people see consolidating debts as a "quick fix" and dont address the underlying issues about why they got in debt in the first place. I speak with some experience here!

I would advise the following:
Assuming you havent missed repayments and have got a decent credit history you need to move as much borrowing to long term low rate credit card deals or get them on 0%.

You then need to cut back every area of spending. This doesnt just mean holidays and clothes but utilities, food, petrol etc. You might be surprised at how much spare cash you can squeeze out of the budget.

Keep a spending diary to track every penny spent. If you are going to make this work then every penny really does count.

Start paying off as much as possible towards the debts. Concentrate on the debt with the highest rate of interest first.

Its hard at first but it does become a way of life and its such a great feeling once you start seeing the debts go down. There are loads of inspirational people on here and lots of good advice so you are definitely in the right place for some moral support.

chevalier

good luck with getting your debts under control. If you only do the soa for yourself, it may focus you on where you can make cuts
chev

Lipstick99

You need to post an soa.

You also need to keep a spending diary and only use cash, not debit cards

Have you got a massive food bill? Buy lots of clothes? I woud suggest de-cluttering and generate income that way. Its amazing what people will buy on ebay.

You must stick to a shopping list.

Har d to know what else to suggest without the details.....