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Advice needed

Hi there,

Today its finally hit me just how much i need some advice on debt. A few years ago i got myself tangled up with someone who turned out to be addicted to gambling, however at the time i didnt realise this, until all my credit cards got maxed out. Before that id taken out a loan to pay off another ex when we split up so i could keep the house. So this is the position i find myself in.

I earn £42,500 before tax
Mortage and bills come to £1200

Now the bad part:
I have 2 credit cards and 2 loans.

Alliance and Leicester loan, took out £20000 in Aug 08, pay £430 a month and have about £12k left to pay

Alliance and Leicester credit card, £3000 limit, owe £2,974 and only pay the minimum a month which is about £90

Natwest Loan, took out £25000 in April 09, pay £460 a month and have just under £20000 left to pay

Halifax credit card, Had £13k limit, owe £11,750 and again pay te minimum a month which is £210.

I have tried to take out a new loan of £25000, to try and consolidate to lower my payments and pay off the debt quicker, but i have been refused as my borrowing is so high.

I have a mortgage but have no capital in it.

I would be really grateful if you could give me some advice over what to do. At the minute, the only way i can see is to try and survive the next 2 and a bit years until my A&L loan is paid off and then try to take out another one to consolidate my credit card debts, but obviously id like to try and start paying more off that off now.

i know ive been stupid and have been so angry with myself letting this happen to me, but im happy that i am taking control and getting it sorted. A lot has already been paid off, i just wish i could find another way to pay the rest of quicker.

I look forward to your replies

Many thanks,

Winne
«1

Comments

  • Hi

    There are plenty of people on here who can help you out a lot more than I can, but I know the first thing they will suggest is that you post your SOA on here. They can help you to see where you can cut back etc then & give you loads of helpful advice.

    Good luck
  • Odette
    Odette Posts: 716 Forumite
    http://www.makesenseofcards.com/soacalc.html

    This link is for an SOA, fill it out and the MSErs can get a better idea of how much you are spending.
    Aim - BUYING A HOUSE :eek: by November 2013!
    Saved = 100% on 03/07/12 :j
  • winnie
    winnie Posts: 45 Forumite
    Thanks for the advice. Ive filled the SOA as best i can. Talk about a depressing outlook! I hope someone can give me some advice.

    Statement of Affairs and Personal Balance Sheet
    Household Information

    Number of adults in household........... 1
    Number of children in household.........
    Number of cars owned....................
    Monthly Income Details

    Monthly income after tax................ 2486
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 2486

    Monthly Expense Details

    Mortgage................................ 719
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 121
    Electricity............................. 65
    Gas..................................... 55
    Oil..................................... 0
    Water rates............................. 64
    Telephone (land line)................... 25
    Mobile phone............................ 30
    TV Licence.............................. 13
    Satellite/Cable TV...................... 25
    Internet Services....................... 25
    Groceries etc. ......................... 100
    Clothing................................ 20
    Petrol/diesel........................... 50
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 17.5
    Contents insurance...................... 17.5
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 1347


    Assets

    Cash.................................... 0
    House value (Gross)..................... 151000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 151000


    Secured & HP Debts

    Description....................Debt......Monthly...APR
    Mortgage...................... 150500...(719)......5.19
    Total secured & HP debts...... 150500....-.........-

    Unsecured Debts
    Description....................Debt......Monthly...APR
    A&L Credit Card................2980......91........18
    A&L Loan.......................12300.....429.......9.9
    Halifax Credit Card............11980.....195.......10.5
    Natwest Loan...................19720.....465.......11.9
    Total unsecured debts..........46980.....1180......-


    Monthly Budget Summary

    Total monthly income.................... 2,486
    Expenses (including HP & secured debts). 1,347
    Available for debt repayments........... 1,139
    Monthly UNsecured debt repayments....... 1,180
    Amount short for making debt repayments. -41

    Personal Balance Sheet Summary
    Total assets (things you own)........... 151,000
    Total HP & Secured debt................. -150,500
    Total Unsecured debt.................... -46,980
    Net Assets.............................. -46,480

    Created using the SOA calculator at www.makesenseofcards.com.
    Reproduced on Moneysavingexpert with permission, using IE browser.
  • The gas and electric seem very high. Try Uswitch and see if there's any cheaper tariffs ?
    The water is really, really high. We pay £23 per month and there's two of us.
    Can you not get a phone/internet/tv package for less than £75 ? You can get basic sky package, unlimited evening and weekend calls and broadband for £41.50.

    You haven't put anything down for haircuts/prescriptions etc. Are you sure don't need anything for them ? No point doing a budget if it doesn't reflect what you need to spend.

    Are you in a position to maybe rent out a room ? You can receive up to £4500 per year tax-free under the rent-a-room scheme, I think.

    Good luck
    Debt at worst point = £8100 Debt now = £956

  • theoretica
    theoretica Posts: 12,685 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    A few places where you could probably be saving a few £10s of pounds a month without really changing your quality of life.

    From your bills it seems you have a fairly large house. Have you considered a lodger?
    winnie wrote: »

    Council tax............................. 121 Have you got the single person's discount? Are you paying over 12 months to spread the load evenly, or 10 to give you two 'free' months to put towards your debt?

    Electricity............................. 65
    Gas..................................... 55 These seem high- check you are on the best tariff and use less.

    Water rates............................. 64 This seems very high, are you on a meter? One might well save you quite a lot!

    Telephone (land line)................... 25
    Mobile phone............................ 30
    Satellite/Cable TV...................... 25
    Internet Services....................... 25 You could probably save money on communications - look at combined deals and are you using everything you are paying for?
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
  • Your utility bills are very high. We are a family of 4 with fairly large house & our gas & electricity is £100 per month, water we pay £30 per month. Also your TV/internet/phone bills are very high! You should look into getting them bundled together possibly & on the lowest package possible. Do you watch much TV? Have you thought of just getting freeview.

    Also, you have said only 1 person in household. I'm not good with groceries budget but could you cut down your monthly spend on this, batch cooking, meal plannings etc?

    Just a few suggestions.

    Good luck
  • Hi,
    The only advice I can give is your £25 per month sky bill. Trust me you can live without it. You can cancel your sky subscription and get a skyfreeview card instead (actually your existing card will work without the subscription, I think). This gives you just the 200 free unencrypted channels that are broadcast through the sky astra 2 satellite. With the sky card, you also get five, fiver, five usa and sky 3. It suites me fine because I mostly watch all those us crime dramas :-) You also get all the news channels and shopping channels, bbc's, itv's, music channels etc.

    Mobile phone? £30 per month sounds like a contract phone. I have an o2 pay as you go. I top up £10 per month and stick to that budget. I get unlimited texts or calls for this per month. I let the month expire and continue using the phone until the £10 is gone, THEN and only then do I top up the phone with another £10. Really it's only for texting friends and emergencies if the car breaks down.

    You will find there are lots of ways to cut down your monthly spending, its just a matter of how much you want to live like a pauper in order to pay off the debt faster.
  • ...Dont be so hard on yourself...at least you're trying to get on top of things now....x
  • Statement of Affairs and Personal Balance Sheet

    Household Information
    Number of adults in household........... 1

    Monthly Income Details
    Monthly income after tax................ 2486 Any way to increase? Over-time? Second job?
    Other income............................ 0 Are you able to take in a lodger to increase your income? You can earn £4350 doing this before having to pay any tax on it
    http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804
    Total monthly income.................... 2486

    Monthly Expense Details
    Mortgage................................ 719
    Council tax............................. 121 Can you spread this over 12 months instead of the usual 10 - ask your council
    Electricity............................. 65 both this and below seem high - check that you are not in credit with these companies - if you are claim it back. Or are you paying off arrears? If neither then you need to check that you are on the cheapest tariff for your area (e.g. USwitch), if switching makes sense then see if there are any incentives for switching through one of the cashback sites (Quidco, Onepoll, topcashback). Also make sure what you use is being used efficiently - don't leave anything on standby and switch things off, switch off heating in rooms that you're not in etc
    Gas..................................... 55 as above - also often online and duel fuel are cheapest
    Water rates............................. 64 This is also high? Again are you in arrears? If not then are you on a meter? Very high for one person. Make sure you are using it efficiently (showers instead of baths, rainwater collecting for watering the garden, only run dishwasher/washingmachine when full etc)
    Telephone (land line)................... 25 - you should be able to get home phone and internet for approx £20 pm (Talk Talk)
    Mobile phone............................ 30 Are you stuck in a contract? If so drop a tariff, if/when out of contract look at SIM only deals, or go PAYG, should get reasonable bundle for £10 pm
    TV Licence.............................. 13
    Satellite/Cable TV...................... 25 - drop channels that you don't watch, or try dropping altogether, look into Freesat
    Internet Services....................... 25 as above
    Groceries etc. ......................... 100
    Clothing................................ 20
    Petrol/diesel........................... 50
    Road tax................................ 0 Is your car a company car and they pay for the following things? If not you need to put something here, and below.
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Buildings insurance..................... 17.5 See if combining would be cheaper
    Contents insurance...................... 17.5 as above
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0 never
    Haircuts................................ 0 never
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 1347

    Assets
    Cash.................................... 0
    House value (Gross)..................... 151000
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 151000

    Secured & HP Debts
    Description....................Debt......Monthly...APR
    Mortgage...................... 150500...(719)......5.19 - Are you on interest only then? If so, what's your plan to pay this off at term?
    Total secured & HP debts...... 150500

    Unsecured Debts
    Description....................Debt......Monthly...APR
    A&L Credit Card................2980......91........18 As always, continue to pay the minimum payment towards all debts. Then this should be your priority for overpayments once you are able to balance your SOA so as you have a surplus as this is the debt that you are pay the most interest on
    Natwest Loan...................19720.....465.......11.9 Once you have paid off your A&L CC then consider overpaying on this before considering overpaying on other debts, but as it's a loan there may be early repayment charges, and you need to weigh up whether overpaying this will work out cheaper in the long run or not
    Halifax Credit Card............11980.....195.......10.5 If overpaying on the loan above is not viable then you need to overpay on this one once A&L is paid off - use what you were previously overpaying to the A&L plus the previous minimum A&L payment (91) to snowball this
    A&L Loan.......................12300.....429.......9.9 - lowest priority for overpayments, as this debt is costing you the least in interest
    Total unsecured debts..........46980.....1180

    Monthly Budget Summary
    Total monthly income.................... 2,486
    Expenses (including HP & secured debts). 1,347
    Available for debt repayments........... 1,139
    Monthly UNsecured debt repayments....... 1,180
    Amount short for making debt repayments. -41 I think with some simple changes to your SOA then you will be able to not only make this balance, but have a surplus in order to overpay with. The issue you need to consider though is whether or not your SOA is accurate as there seem to be a few things missing (car costs, haircuts, dentist, entertainment, presents) If it is accurate then the few simple changes above should make a difference, and to boost your ability to overpay a lodger might be the next logical step if indeed it is practacle for your situation, but certainly worth considering.

    If after making all the changes that you can, and ensuring that your SOA is accurate you still cannot get your SOA to balance, then you need to speak to one of the debt charities - they will offer free, impartial advice on your specific situation and be able to discuss all of your options with you. (CCCS, Debtline, CAB etc)

    Personal Balance Sheet Summary
    Total assets (things you own)........... 151,000
    Total HP & Secured debt................. -150,500
    Total Unsecured debt.................... -46,980
    Net Assets.............................. -46,480
    Created using the SOA calculator at www.makesenseofcards.com.
    Reproduced on Moneysavingexpert with permission, using IE browser.[/QUOTE]

    Hi,

    Made some comments above, I hope that at least some of them will be of use to you.

    D9
  • winnie
    winnie Posts: 45 Forumite
    Thanks for all the advice.

    I do have a company car and try not to go too far at weekends, hence the low fuel bill. I hardly treat myself to anything anymore as im keen to pay my debts off quicker, but yes i guess over the year it averages out to about £20 a month on presents.

    I will look into changing my gas & electric, so hopefully that will save me some money. i am on water rates, so again will look into a meter.

    in terms of sky, i will look at cancelling it and i will look at a cheap phone/internet package.

    i really want to try and make things a bit more comfortable and still pay off my debts as quick as possible.

    Thanks for all the advice i will look into it.
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