Debt consolidation. Help please

caithnessman

Were having trouble keeping onto of our debt. Short story is:

We have an joint income of 1,800 a month after tax from our work. We currently have 4 credit cards totalling £11,000 and a loan with £7,000 left remaining. Our monthly repayments on these cards work out at £568 a month. After paying out mortgage, council tax, car insurance, food, nursery fees, were left usually with £50 for the month. Out of that we have to pay petrol, extra baby food/milk, nappies, overdraft fees.

We racked up a fair bit of debt when the baby was born and my wife was made redundant around the same time. We didnt receive any maternity allowance until the government finally kicked in 11 months after the birth. By then we had to buy food and pay bills from our credit cards which is why there so high.

Our repayments with the interest dont even scratch the surface and because our payments are so high,. we have to use them still in order to buy food, petrol etc.

We have recently applied to increase our current loan to £18,000 over 6 years which worked out repaying £360 a month and we would have wiped out our credit card. That would free up approx 200 a month for baby food/nursery etc. We would be able to breath again without worrying about the debt. However we were refused the loan saying we havent got a good enough credit score, which could be due to having to much credit. Im at a loss what to do now and were to go. HELP!

Tixy

Hi

A lot of people find themselves in your position unable to consolidate because they already have too much debt. Instead a good plan of action is to work out a detailed statement of affairs to see where all your money is going and how much you should have left for debt repayments. If you post the results on here people may be able to suggest ways you can reduce your other outgoings or increase your income to be able to free up more money for debt repayments http://www.makesenseofcards.com/soacalc.html

Once you have done that you should be able to see whether you can actually meet your debt repayments each month without reusing credit - if you can then you need to look at the snowball calculator to see how long it will take you to repay your debts. If you cannot then you may need to consider other options.
This thread is also worth a read - The Big Guide to Becoming Debt Free

DVardysShadow

You really should do the Statement of Affairs. It sounds like you are beyond the point of being able to afford monthly minimums on your debt. So more debt will not make your problem go away - it will just make things worse. I am concerned that you say

We didnt receive any maternity allowance until the government finally kicked in 11 months after the birth. By then we had to buy food and pay bills from our credit cards which is why there so high.

Presumably you have had this backdated - so you should have been able to pay down some of your debt?

Hannah_10

As Tixy says, if you can do an SOA please then we can see in more detail what the right solution for you personally is. Anything else would be a good guess, but I think you require something more solid than that.