£4k in debt need help!

JoshyBoy_2

As per title, I've been stupid with money combined with cuts to my course has left me in a mess.

I'm around £4k in debt spread around 4 credit cards and my current account. I just don't know where to turn to, I've got a full time job however its costing me £200plus a month to cope with min payments.

I'm 22 now is this as bad as it sounds!? I just want a clean sheet and to pay off these debts but it seems to be getting worse just feels like there's no options! Help!

Asiacat

You've got a couple of things going for you :-

1. You've had your light bulb moment when you're 4k in debt some people juggle credit cards and don't realise they have a problem until it's something like 40k. Acknowledging it as a problem means you're on your way to a solution.

2. You're young. You've got time on your side. You could well have this paid off by the time you're 25 and with a lesson learn't so you no longer fall into bad debt.

Post a statement of affairs detailing your income and expenditure so that board members can suggest practical steps to take to start reducing your debt.

JoshyBoy_2

Asiacat wrote: »

You've got a couple of things going for you :-

1. You've had your light bulb moment when you're 4k in debt some people juggle credit cards and don't realise they have a problem until it's something like 40k. Acknowledging it as a problem means you're on your way to a solution.

2. You're young. You've got time on your side. You could well have this paid off by the time you're 25 and with a lesson learn't so you no longer fall into bad debt.

Post a statement of affairs detailing your income and expenditure so that board members can suggest practical steps to take to start reducing your debt.

Thanks for the response!

I have 2 credit cards - 1 with Barclays with £1500 outstanding, I pay £100 p/m off, the other £975 I just pay min payments every month arround £30.

I have an Argos store card, £500 outstanding again paying min payments of just under £30 and the other is an Asda card with a balance of £900.

I have two account one £1k over drawn the other £500 both arranged over drafts.

- earn £750 p/m so its managable debt I just want it cleared. I still live with parents and pay £120 keep p/m. I just don't want this to effect me getting a house / flat in the near future.

I just want to know how's best to go, obviously I ca,t keep paying the min every month! I've tried to apply for loans to get rid of the scattered debt and just have one monthly payment, but I have been refused (that was only online)

Thanks for any help!

fatbelly

Two useful tools for you:

statement of affairs generator - use this, format for mse, and post the result here.

Snowball calculator - this is where you work out where to make payments over the minimums. You seem to have chosen the barclaycard and I'm fairly sure you should be starting with the storecard. The idea is that the more high-interest debt you can clear, the more money you can throw at the lower-interest debt

rdchick

You and me both! I'm also 22 but £7000 in debt with a loan, massive £3000 overdraft and £500 credit card - joys! Do you have any time for a part time job - I've just got myself an extra job - just another 9 hours a week but that's an extra £50 a week so in a few weeks I'll knock off the credit card then the overdraft then the loan! Definitely use the snowball calc. makes it seem better in the long run!! It's not all over yet!!

dancingfairy

If you're earning 750 a month and the min payments are 160 a month and you're paying your parents 120 a month where's the rest of the money going? How much after living costs have you actually got to put towards debts? Are your living costs sensible/realistic?
Can you do overtime or sell stuff?
If you can't afford the minimums then you will have to default and try and set up some kind of payment arrangement but this will trash your credit file and there is no guarantee that interest ancd charges will be stopped.
As Fatbelly said you really need to fill in a full SOA and post it here and perhaps others will have suggestions for you.
df

dancingfairy

The other thing is you earn what 12k? you owe 4k - that's about a third of your income. Now apply for a 4k loan that takes your potential debt to 8k - nearly two thirds of your salary - it seems very unlikely to me you will get a loan for this. Your lender won't know or care that you want to consolidate - they will say well what if he pays off his debts and runs the cards up again - it will be 8k of debt, what if he doesn't use it to consolidate - and the answer will be computer says no.
df

ElmerFudd

JoshyBoy wrote: »

Thanks for the response!

I have 2 credit cards - 1 with Barclays with £1500 outstanding, I pay £100 p/m off, the other £975 I just pay min payments every month arround £30.

I have an Argos store card, £500 outstanding again paying min payments of just under £30 and the other is an Asda card with a balance of £900.

I have two account one £1k over drawn the other £500 both arranged over drafts.

- earn £750 p/m so its managable debt I just want it cleared. I still live with parents and pay £120 keep p/m. I just don't want this to effect me getting a house / flat in the near future.

I just want to know how's best to go, obviously I ca,t keep paying the min every month! I've tried to apply for loans to get rid of the scattered debt and just have one monthly payment, but I have been refused (that was only online)

Thanks for any help!

General rule of thumb is to pay off the card with the highest APR first. As others have said post your SOA so we can advise you best.

JoshyBoy_2

I pay £60 pm for my bus pass, £70 for my mobile bill, and £30 over draft interest and account fee's. When I clear my debt will this situation I'm in now effect any future mortgage applications?

I've been really stupid and rubish at saving, I know this but I want to get it all sorted now! I know its going to take years but I just hoped there was a faster way! Looks like loans are out the question! I'd rather have a bigger debt but just one monthly repayment rather than 4 minimum payments!

I'm currently trying to clear one card off by £100 pm payments then once cleared balance transfer the balance of another card then repeat. Is this sensible?

Pee

As long as you don't miss any minimum payments, no it won't affect you getting a mortgage once paid off and may even give you a positive credit history i.e. better than someone who had never had credit and repaid it.

The good news is you have lots of disposable income to throw at your debts, living at home.

The £70 a month for your mobile sounds a bit steep. Are you tied in to this? If not, is there a package that would meet your needs which is cheaper?

Consolidating debt isn't a good idea.

Keeping up the minimum payments on all and then working to clear one, the one with the highest APR, is very sensible.

JoshyBoy_2

Oh that's good to hear, again thanks for the help.

I know it sounds stupid but I have concerns about becoming bankcrupt if I don't clear my debts soon, is there any chance of this happening? I'm not knowledgable in this area! I spose as long as you keep to some sort of payments this won't happen?

Also, I'm only on minimum wage, but am currently taking a course to become a legal executive (already been in a law firm for 3 years) So hopefully in the not to distant future I can get a well paid job of at least 15k a year to start. (I can't seem to get even an interview at the moment in time!) The course is another reason why I'm in some trouble! But hopefully it will all be worth it! Course fee's are about £1k per year ish including exam registrations, membership fees, course books etc.

I'm going to the s'ment of affairs and post it, I haven't got a lot of info to hand but will fill it as accurate as possible.