Advice on Clearing approx £40,000 debt

SimonDeVerde

Hi All

I've gotten myself into a bit of a mess

I've got £22,000 owed on four credit cards and a loan with £14,000 left to pay

I'm getting worried about the Credit card increases due in May and want to get sorted out with one payment in total. I'm currently paying about £700 to service all these debts and i'ts crippling me.

I have a mortage with about £3,000 to pay is a remortgage my only/best option.

I'd really like to get this all paid off in say 5-7 years.

Any advice would be most welcome.

Regards
SDV

Hannah_10

Can you do an SOA please SDV, then we can see clearly where you're standing. That should help us find you the right option, and not just the first option. http://www.makesenseofcards.com/soacalc.html Click the format for MSE button and then post it here. Because you are new you can't post links, so you'll have to just quickly delete the last line which has a link to the SOA calculator in it. Simples.

fatbelly

SimonDeVerde wrote: »

I have a mortage with about £3,000 to pay is a remortgage my only/best option.

I'd really like to get this all paid off in say 5-7 years.

It's a really bad option as it converts unsecured debt to secured.

Without the figures we can't see if getting debt-free in 5-7 years is realistic and, if it is, why you are struggling now. So please post a soa as Hannah has said. Ta.

[Deleted User]

Take Hannah10's advice and post a SOA using the link she;s provided - this will show all your income and expenditure and thus will give people here a clearer picture of your situation. Ensure you include all debts owed, the minimum monthly payments and the APR's.

Also fatbelly's advice is invaluable. It is always strongly recommended never to switch unsecured debt to secured debt.

If you are struggling to service your debts and are unable to meet the payments on your debts the best advice anyone can give you is for you to contact one of the FREE debt management charities who will provide free, confidential and impartial advice on your situation (e.g. CCCS, CAB, National debtline)

D9

dancingfairy

You don't pay unsecured debt and the worst thing is a CCJ etc but mostly a lot of hot air and empty threats up until then. You don't pay a secured debt and you loose your house and it is likely to also lead to bankruptcy - it's a far far worse situation.
There are very very very very few situation when securing debt is in your best interests and this is not one of them.
You would be much better off getting help from someone like National Debtline or CCCS with a view to going through all the options with them - debt solutions include DRO's, dmp's, token payments, IVA's , Bankruptcy etc etc and while they will not all be suitable for you the debt charities will talk you through them. You will need to do the SOA though as advised so you have all the figures to hand when you get in touch with the debt charities.
Best of Luck
df

SimonDeVerde

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 13750
Partners monthly income after tax....... 14000
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 27750
Monthly Expense Details
Mortgage................................ 200
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 90
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 20
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 20
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 100
Petrol/diesel........................... 100
Road tax................................ 10
Car Insurance........................... 20
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 20
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 300
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1442

Assets
Cash.................................... 0
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 400
Other assets............................ 0
Total Assets............................ 130400

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 4000.....(200)......9
Total secured & HP debts...... 4000......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................13000.....428.......13.7
BOS............................11000.....320.......27.95
BOS One........................2000......44........27.95
Egg............................4300......120.......25
Virgin.........................1850......46........23
MBNA...........................925.......30........25
Total unsecured debts..........33075.....988.......-

Monthly Budget Summary
Total monthly income.................... 27,750
Expenses (including HP & secured debts). 1,442
Available for debt repayments........... 26,308
Monthly UNsecured debt repayments....... 988
Amount left after debt repayments....... 25,320
Personal Balance Sheet Summary
Total assets (things you own)........... 130,400
Total HP & Secured debt................. -4,000
Total Unsecured debt.................... -33,075
Net Assets.............................. 93,325

Superbiatch

Are both yours and your partners' salaries correct on the SOA? With an income like that there should be no problem with debt

fatbelly

Whoa Simon!

You earn 27k per month and have 25k left over!

Are you sure?

SimonDeVerde

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1375
Partners monthly income after tax....... 1400
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2775
Monthly Expense Details
Mortgage................................ 200
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 90
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 20
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 20
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 100
Petrol/diesel........................... 100
Road tax................................ 10
Car Insurance........................... 20
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 20
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1342

Assets
Cash.................................... 0
House value (Gross)..................... 130000
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 134000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 4000.....(200)......9
Total secured & HP debts...... 4000......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................13000.....428.......13.7
BOS............................11000.....320.......27.95
BOS ONE........................2000......34........27.95
MBNA...........................925.......30........25
Virgin.........................1850......46........23
EGG............................4300......120.......25
Total unsecured debts..........33075.....978.......-

Monthly Budget Summary
Total monthly income.................... 2,775
Expenses (including HP & secured debts). 1,342
Available for debt repayments........... 1,433
Monthly UNsecured debt repayments....... 978
Amount left after debt repayments....... 455
Personal Balance Sheet Summary
Total assets (things you own)........... 134,000
Total HP & Secured debt................. -4,000
Total Unsecured debt.................... -33,075
Net Assets.............................. 96,925

Superbiatch

You still have £455 a month left after all repayments, does that sound about right? If so, then throw that each month at the debts.

If not, a spending diary would probably highlight where this money is going.

Also, you could put the holiday and clothes on hold and have an extra £300 which would help you clear things sooner?

Hannah_10

That SOA looks honest, although there are hundreds of pounds of savings you can make. I'm sure someone is about to post and detail them all. Your SOA shows that after meeting your repayments you have £455 extra spare. The fastest way out of debt for you will be Snowballing. In short snowballing means taking your spare money and throwing it at the highest interest debt, then when that is paid taking that money too and going for the next highest interest rate and so on. If the repayments you make are not the minimums, cut back to the minimums and snowball harder. If you can make any cut backs you can snowball harder again. There is no reason you can't look for a 0% card in conjuction with snowballing too, again this speeds the process up. Use this snowballing calculator to help.