Please help me deal with my enormous debts (£40k)

matt8787

Hi

I would really welcome some advice on how best to deal with my substantial debts. If there are any CCCS or similar professionals out there, your advice would be very welcome.

I currently have approx £40,000 of debt. I am 33 years old. I am employed in a job that gives me a monthly take-home of £2,500. I do not own my own home, living in rented accommodation.

I owe the following:

Loans

• Barclays loan - £1,870 outstanding - monthly payments of £150
• Tesco loan (i) - £7,100 outstanding - monthly payments of £280
• Tesco loan (ii) - in partner's name - £3,950 outstanding - monthly payments of £190

Credit cards

• Halifax (i) - £4,254 outstanding - monthly payments of £100 - APR 3% for lifetime of balance
• Barclaycard - £4,150 outstanding - monthly payments of £150 - 21-25% APR
• Barclaycard OnePulse - £4,850 outstanding - monthly payments of £160 - 21-25% APR
• Mint card - in partner's name - £4,525 outstanding - paying monthly minimum of £110 - 21-25% APR
• Halifax (ii) - in partner's name - £3,720 outstanding - paying monthly minimum of £70 - 21-25% APR

Overdrafts

• Barclays overdraft - in the red to the tune of -£3,000 - get charged monthly interest - approx 20% rate
• LloydsTSB overdraft - in the red to the tune of -£2,000 - get charged monthly interest - approx 20% rate - make monthly payment of £50 to keep it below OD limit

So my monthly repayments come to about £1,230 a month.

I really don't know what to do. After all my other bills such as rent, utilities, food, etc, go out I don't have much left over to make the monthly repayments.

Though my main concern is not being able to keep up with the payments, but the realisation that I'm effectively treading water with many of my debts, particularly the credit cards and overdrafts, all of which I'm getting charged high APR's (except for the one Halifax card).

As you'll have also seen, a fair proportion of the debt is in my partner's name (which she has taken on for me due to me being unable to get any more credit). It comes to approx £27,000 in my name and £13,000 in hers - even though all of it is my debt.

I've considered some kind of debt plan / bankruptcy (though I don't know if this is open to me seeing as I can cover the monthly repayments). Also the added complication of a large chunk of debt being in my partner's name makes this less straightforward I presume.

So I really am up a creek without a paddle. Any objective views on the best course of action from here on in welcome. I also have the added complexity of my partner hoping we can get a mortgage in future years & not wanting to have our credit record destroyed. It's quite annoying as we pay as much in rent as we would in a mortgage right now, but until we can get a deposit together I guess we'll be going nowhere.

thanks in advance.

IF

Hi Matt and Welcome, You've made a list of all your creditors, debts and assets. Please contact one of the following debt charities. Please try these they don't charge and are impartial. They will go through all your options with you and if they suggest bankruptcy then come back to this board and we will help you all we can. Also if your not ‘clicking’ with one of the Debt charities do try another.

Please don’t do anything rash take your time and weigh up your options and read everything you can x

For ‘essential’ BR info this is Fermi’s sticky - Click here

Main recommended sources of help:

• National Debtline - Website: National Debtline Telephone: 0808 808 4000
• Citizens Advice Bureau - Website: Citizens Advice or visit your local CAB centre (find nearest)
• Consumer Credit Counselling Service - Website: CCCS Telephone: 0800 138 1111
  

Others:

• Business Debtline - Website: Business Debtline Telephone: 0800 197 6026
• Christians Against Poverty
• PayPlan
• TaxAid - Help with tax debts.

And do remember we’ve all been through this and anything you don’t understand don’t be afraid to ask.

Best wishes
If...x

matt8787

Thanks for the reply.

I tried my local citizens advice bureau previously and they weren't very helpful. They admitted that they didn't really have any answers for a person with debts of my size. They said they were more geared up to help people draw up budgets on buying cheaper beans and things like that.

I also tried the national debtline who seemed to be giving me the hard IVA sell from the very off. They gave no heed to my concerns of credit rating being destroyed / mortgage lenders running a mile / partner consequently giving up on relationship / large portion of debts in partner's name not being addressed / etc / etc.

Tixy

Hi matt

Have you tried the CCCS debt remedy calculator to see what options it recommends?

Have you worked out a detailed income & expenditure statement? does this show that you can meet all your repayments without reusing credit? If you have a surplus showing do you have that in practice and is it being used to pay more off the debt than the mininmum payments?

I suppose it would be useful to work out how long it will take you to clear these debts if you just carry on as you are (a snowball calculator will help with this) and then that might help you consider whether one of the debt solutions might be a better option for you.

IF

If you are not thinking of going BR Matt, I would re post on the DFW Board too.


The Debt-Free Wannabe Board - Click here

matt8787

Yes, I have posted it in the wrong place - I'll repost over there - thanks

matt8787

Tixy wrote: »

Hi matt

Have you tried the CCCS debt remedy calculator to see what options it recommends?

Have you worked out a detailed income & expenditure statement? does this show that you can meet all your repayments without reusing credit? If you have a surplus showing do you have that in practice and is it being used to pay more off the debt than the mininmum payments?

I suppose it would be useful to work out how long it will take you to clear these debts if you just carry on as you are (a snowball calculator will help with this) and then that might help you consider whether one of the debt solutions might be a better option for you.

I manage to cover all the repayments each month - I'm just wondering whether its a fruitless exercise that will go on for eternity given the high APR's of some of them, and whether I'd be better getting some kind of consolidation loan to reduce the monthly payments / interest rates being charged

Tixy

I'd try putting everything into one of the snowball calcs
http://www.makesenseofcards.com/snowcalc.html
or
http://www.whatsthecost.com/snowball.aspx so you can get an idea how long it will take you to clear them all conventionally. I suspect you won't be able to get a consolidation loan given your level of debts and income (they'll see you as over committed financially already).

Fermi will probably move this thread for you to save you having to repost again on DFW.
edit - thank you fermi!

Hovel_lady

Hello and welcome.
If you post a SoA (statement of affairs) here we'll be able to help more.
The link is:

https://forums.moneysavingexpert.com/discussion/107280

There's always a way out and I'm sure we'll be able to come up with some ideas to help.
Do you keep a spending diary? really helpul to know exactly where the money has gone.

fermi

Tixy wrote: »

Fermi will probably move this thread for you to save you having to repost again on DFW.

Done. ......

Koicarp

matt8787 wrote: »

Thanks for the reply.
I also tried the national debtline who seemed to be giving me the hard IVA sell from the very off. They gave no heed to my concerns of credit rating being destroyed / mortgage lenders running a mile / partner consequently giving up on relationship / large portion of debts in partner's name not being addressed / etc / etc.

National debtline and CCCS who I have dealt with will give you good advice which costs you nothing-they don't "sell" anything.
Your credit rating IS destroyed which is why you have been unable to borrow anything in your own name.
I'd guess mortgage lenders would currently run a mile, but they won't once you've got rid of your debt and got a deposit.
Debt is an excellent test of a relationship, if your girl leaves you because of it, would you seriously want to spend the rest of your life with her?
My missus and I had over 80k of debt a few years ago, but once we accepted where we were and took the advice of CCCS we started down a long path to becoming debt free. In november we'll be at the end of that path with £1500 a month to put away in savings, and we are closer as a couple than we ever have been.
Good luck.