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

matt8787

I must admit I find the monthly spend / budget things very difficult to complete. Yes it is fine to fill in for all the regular things, but what about all the irregular things? Admittedly I'm also unconvinced that adhering to a strict budget for the next x years is realistic for me and an appropriate solution. My debts are large - penny-pinching / abstaining from any kind of luxuries for the next x years will make me manically depressed and severely lessen any chances I have of maintaining my current relationship.

I'm prepared for the long slog of paying off my debts - no matter how long it takes - but I don't think following a tight budget is necessarily the answer. Really, do those budgeting things take into account things like buying your girlfriend a present/flowers on valenties day, her b'day/christmas? paying for coach/train fare to go and see the folks every few months? a bottle of wine on a friday night? the odd night out for a friend's b'day - yes, it'll be easy for all to say 'matt, you can do without those things' - but no, no I can't - not without making my life more of a miserable experience than it already is and severely jeopardising my relationship (my poor fiancee is already having to go without a wedding, holidays, a house that every other couple in our circle of friends has, because of me).

I have massive debts which I appreciate, and am systematically paying off a few of them via monthly loan repayments, taken out at rates that I can abide by. The sticky situation I've got myself into is with the credit cards and the overdrafts, both of which have painfully high interest rates applied. That is what I'm primarily looking for - a solution to deal with these high interest debts so that I can more effectively dig myself out of the hole.

I can prioritise what little money I have left over after the other monthly repayments, but even with doing that it'll still take me a very very long time to pay off the high interest credit cards / overdrafts, because of their prohibitively high rates. So what I could really do with is a solution to move the amount owed from these cards / overdrafts to a more structured repayment plan (even if its over a long period) that imposes a lower APR (and ideally a solution that doesn't decimate my credit rating).

thanks

clearmydebts

How about trying to make some extra money then, to throw at the debts?

Could you do a part-time job, or extra hours in your current work?

What about any skills/talents you have? Can they make you money.

You could do surveys, dooyoo, sell some things on ebay, recycle old mobile phones, sort out CDs and DVDs and make money on music magpie, Quidco etc

Have you thought of any of this?

I would take one of the cards in your partners name and concentrate on paying bits and pieces (made from the above things) and throw it at one of the credit cards. It's amazing how quickly little amounts do pay something off.

There is no quick fix unfortunately, so it might be quite a while before you can afford a house, wedding etc.

backinbusiness

The whole point of budgeting is to include even the irregular things.

Following a tight budget is the ONLY answer.

If your girlfriend loves you she won't mind if her gifts cost £150 or £1.50; it truly is the thought which counts.

Have you identified your past spending habits? What's got you into this situation in the first place?

You also mention your "circle of friends" who have this that and the other - possibly they also too have unsustainable debt and are desperately unhappy because of it - you can't know.

It doesn't have to be years of misery, value beans on value bread toast - but cutting spending combined with increasing your income if you can is the only way.

The best of luck.

BiB

kazwookie

Have you got anything you can sell, that you bought with all these loans and cc?

matt8787

Debts amassed through years of online gambling unfortunately, so no assets to show for debts. Habit kicked, but destruction with me for years to come.

Really don't have enough assets to sell to make a chink in the debt.

My job often requires me to work long hours as it is (which are sometimes hard to predict), so getting another job would be tricky, as i'd be unable to commit to hours.

I appreciate there's no easy solutions - was just hoping there'd be somewhere I could shift the debt to (away from credit cards / overdrafts) that didn't have such high interest rates.

dancingfairy

O.K here's a few pointers for you:
1) on a dmp with CCCS or other debt charity or self-managed you will need to budget for all the irregular things you've mentioned - you need to be putting away several pounds a month to visit the folks etc as you've pointed out otherwise you will jsut have a massive blowout and not stick to it at all. Obviously it has to be proportionate and reasonable and the more sacrifices you can make the quicker you will be debt free but it is a personal choice thing.
You should do the budget and see what it suggests - you can always add things/change it later when you actually speak to someone but it will be a good starting point.
2) Can you make the minimum payments? if yes then you can either continue as you are - how long will it take to be debt free this way? do a dmp if you can only just manage but by giving up other things or consider bankruptcy or an IVA.
3) Bankruptcy /IVA will affect your ability to get a mortgage more than a dmp and will always have to be declared but your credit rating can be improved over time (as it can with a dmp).
4) you are a bit stuck with the debt that is yours in your partners name as now technically the law will see them as her debts so she may need to do a dmp/IVA/bankruptcy as well.
5) if you fill in the SOA calculator at makesense of cards and post it up here people will try and help where possible and give you ideas and suggestions.
Best of Luck
df

dancingfairy

More questions/thoughts :
1) do you own any assets that are worth anything major in value that could be a problem in bankruptcy?
2) could it negatively affect your career - some careers it is amajor no-no such as finance, law , politics, etc etc
4) you are hardly likely to get a consolidation loan given you can only make minimum repayments at the moment and your girlfriend has had to get debt in her name for you - it suggests someone who is currently overcomitted I'm afraid and you aren't going to get interest and charges frozen unless you start defaulting and possibly several months after that which will obviously dmaage your credit rating - basically there are no easy answers and you've either got to continue on the path you are on now or go for a dmp or IVA or bankruptcy.
Best of Luck
df

RAS

Just to add

1. Have you sought help with the gambling situation; as without that, you will struggle?
2. Have you blocked all gambling sites?
3. Are you aware that gambling is viewed poorly by Official Receivers and you may face an extended period of supervision?
4. Are you aware that everything you do not need for day to day living costs goes to the OR to pay for your debts for three years (bar £20 per month). Given the way your debts to your GF are structured this may cause problems paying her back.


I would add that a proper SOA includes a small amount for socialising, a small amount for presents and a reasonable housekeeping budget that allows for the odd bottle of wine. Just you need to list last year's expenditure on those items, divide by 12 and put that much aside every month.

You are worried about your GF doing without nice things; you relationship will falter a lot faster if you fail to pay the debts she has accrued on your behalf.

Does you GF know the extent of your debt, by the way?

mogsi80

Hi Matt

I know exactly how you feel, I have a similar level of debt with my OH (£45k!!) and we both were maintaining the payments on all of our bills, but having to cut back on everything else to meet the commitments we have taken on.

We decided to do our own self managed DMP, and have budgetted for all the things you are worried about - we have a little bit on clothing, a lot more of a healthy budget for food than we did previously, money for entertainment, presents, car maintenance - all the things that we never used to budget for - and would then have to end up buying things on credit or getting deeper into our overdrafts etc to cover. We have only just started and I will admit that it's been really really difficult not to just go - screw it lets go out for dinner, or get a take away, or go out to see a movie - but I think once things are more settled it will get better and from what the people on here say I am very confident that it will...

Sorry to sound harsh but like others have said if you had to get credit out in your partners name there is no way that you are going to get a better rate on a loan to consolidate everything, and is taking out more debt really going to solve the problems?! Mortgage companies aren't going to lend to someone with no deposit and massive loans - especially now when it's so hard to get even the smallest amount of credit...

Take care
Mogs

DS4215

Ok, so you earn £2,500 and are paying out half that to your debts. What are you spending the remainder on? Can you cut back anywhere - even if just £50 a month extra to throw at the debts?

Read up on snowballing - If you can pay £60 extra on your Barclays Loan it will be clear in 9 months (instead of 1 year). You can then throw that £200 at the overdrafts (10 months for the TSB one). In 19 months you will then have an extra £250 to throw at the next one to pay off (and thats not including the £190 from the Tesco Loan that will have ended then). It will take time, but the more you can put into it the quicker it will be. Unfortunately, even if you put your entire wages in to paying the debts back it will still take you 18months.

Like the others have said, do a SOA even if you don't post it. Little things like one less takeaway a week is your £50.

The snowball calculator reckons you can do it in 36-40months, but you will need to put in accurate figures including interest rates and find out if the loans are flexible.