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

Tixy

matt8787 wrote: »

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.

I think probably whatever action you take now is going to involve you living to a fairly tight budget.

You either need a tight budget so you can carry on as you are and make slightly higher payments.
Or if you chose an IVA or bankruptcy you would still be required to live to a tight budget for several years.
Unfortunately you have had the years living on a more generous budget and have ended up with this level of debts. There are no easy outs from this situation and I think your chance of getting a consolidation loan are very very slim.

That said the budgets are not unrealistic to live by in any of those options - you are allowed a small budget for presents and clothes. And you include in your budget things like car maintenance and new tyres and road tax (and similar things that you have to pay out but are not every month). You probably will have to live on less than you do now - but that doesn't have to equate to being more miserable than you are now. In fact once you have a solution sorted and are not so stressed/focused on your debts you might well find you are a lot less miserable.

BeautyandtheBeast_3

Hi Matt, as you can see i have a fairly large debt, but in 56 months (or sooner) it will be gone. I dont have lots of fancy things, all my money goes to my debts and day to day living. However i pay nearly £900 a month into the joint account with hubby and out of the joint account we have obv bills, but bottle of wine, nice special meal now and then.
I have cut back on gifts for B'days and Xmas, I set a limit £10, £15, £20 for presents and stick to it. For Valentines, hubby and I have a nice home cooked meal between us and enjoy a nice cosy night in with Singstar to entertain us.
all spare cash must go to the debts. it was a hard slog for past 2 years but its getting better now. i have taken on extra overtime at work which has helped and i also have another side line which brings in extra money per week. what do you do for a job? you must be skilled to take home as much as you do.

beadgirl87

Hey,
There is good advice here about how to sort out the problem but its not going to go away quickly.

As you are concerned about your gf, going out, and presents etc there are plenty of ways to have fun and keep it cheap.
I'm not suggesting that you go out alot as you need to save up, but when you do go out look out for discounts and vouchers.
Lots of restaurants do buy one get one free, 2 ppl eat for £20, 2 courses for £10, M & S dine in for £10, also orange wednesday at the cinema, join a cashback site online, so that when you do spend or buy stuff you get cashback from it.
Whenever I go out with my bf, I always have some vouchers or choose places that have special offers or reductions on stuff.
Its a case of cutting back on the treats and then when you do go out it feels more special as it is a treat (and I always feel pleased thinking about how much we saved)
Good luck with it!

NinjaSavingKat

Hi there Matt... I read a comment you placed on another thread ( I am not a stalker honest ) and was interested as to your train of thought so came to find your original thread to see what position you are in.,..

I do not want to be deemed as harsh, or in fact assuming I can help you but you come across as wanting a "quick fix".. there is talk of the following.. ..

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).

..could this be classed as a quick fix perhaps when there isn't one??? maybe a cleaner way to address your bills so you don't have to think about it?.... at a push at least yes? Well it doesn't work that way.. you will have to get a little clever with your money and how you spend it, and when you spend it..

Your post on this other thread says this.. in response to "saving for a deposit before paying off debts...."

Time waits for no man.

If you have done your sums and know you can manage both, I would say plough what you have into your deposit and buy as soon as you can. As a Londoner I'm paying approx £1,500 a month rent at the moment - whilst knowing that friends who have bought equally nice places are paying approx £300-500 a month in mortgages.

Now I can't imagine your loans are costing you that much in interest - but thats what it costs me as a renter over being a home-owner each month

Your partner won't wait either. When I say "won't wait" I mean won't wait for you to pull your finger out.

Your post two days ago smells distinctly of someone who wants to continue as they are AND expect to pay off their debts, keep the girlfriend and pay for what can only be a ridiculously expensive rental charge? And possibly save for a house...??

What planet are you living on cause I want to join you?

You don't seem overly worried about your debt, more so about your girlfriend leaving you.. is she with you for the pretty things you buy her? I doubt it... you are clearly in this together if there is a substantial loan in her name? What is her opinion on this? Has she told you she doesn't want any part of this, you are on your own and you better deal with it without dragging her into it..? No? Then perhaps you are concerned unnecessarily..

So you have asked for help and this is my tuppence worth. £40k of debt @ £500 a month will take you 6-7 years to pay off..that's IF the interest is frozen..You will more than likely want to remain where you live as it makes you happy.. everything else needs to change..clothes / food shopping / drinking / dinners out need to stop / no more "gifts" for your girlfriend unless under a fiver ( ).. you NEED to scrimp... declaring yourself BR is cheating. You caused the debt, you deal with it.

If your girlfriend leaves you you will still be £40k in debt..

Sort yourself OUT! Start accounting for EVERY little penny and you will be surprised exactly what you waste your money on...

You will never be accepted for a mortgage with that debt.... so you can wave good-bye to that apparent £500 mortgage... ( by the way you might need a £25,000 deposit for a house in London suburbs at the least )..

So...what are you planning to do next??? Forgive how this might come across but your attitude needs a change...

Good Luck!

Little_Miss_Uni-Debt

Hey Matt8787,

If you want to get a mortgage in the next few years I'm afraid this is where the hard work starts.

If you don't want to start with the easy stuff like budgeting then there's the first issue. It doesn't even have to be 'penny pinching' just organised so your money works for you.

I know you feel like you want some big swooping fix to make a big impact. Unfortunately getting sorted from this situation will take many steps.

You want this debt gone quickly and cheaply not stretched out over a longer term with a lower APR (that would actually cost you a lot more in interest and you'd spend longer unhappy with debt)

You are very fortunate to have a good income which could make a serious impact to your debt if you tried.

If you were brave enough to go to drastic measures i.e find somewhere to live rent free (with family etc) for a while you could probably clear it in 12 months with £500 pcm for general spending money.

The more luxuries you hold onto in your life, the longer you're stretching the debt & unhappiness out for e.g lowest is 1 year but it could be 4,5,6,7+ years.

The timescale you can have this cleared in is down to what work you are prepared to put in.

It's one thing to push spending until your credit runs out but you carried on into your girlfriends too. You've put her in a very dangerous situation (so much debt in her name) and you need to work on proving you'll clear it off and make it up to her - starting with a budget.

Simple few steps to make a start :-

1) Fill in the statement of affairs template & post it up here. First go IS guesswork but that's when you stick at it and re work it with our help.

2)Then get a basic cash card (co-op cashminder etc) with NO overdraft and NO direct debits attached to it. Ideally from a bank you are not already associated with. Get your wages paid in here.

Your income is protected and you can start to manage an account that always operates in credit. Nothing will come out of here without you making the transfer.

3) You then need a bills account (also with no overdraft) which is where your direct debits come out of.

4)Each month on pay day you pay in 1 payment to cover your budget (food, rent, bills, annual payments etc) and minimum debt payments and ideally a buffer of £50 for unexpected items.

A budget is so important otherwise you don't know what is spare.

5) Once you have paid your essentials you can clearly see a surplus remaining in your personal account. This surplus needs to go to your debt with the highest APR.

The more you minimise your monthly budget, the more is left behind to change your debts.

This may take a week to set up, once it is done your money is simplified. 1 payment to bills account & 1 payment of surplus to your most expensive debt.

In fact doing this will probably reduce your stress, you'll feel a sense of instant progress.

Once you have got this set up you can calculate how long it will take you to pay it off at your current rate. If you want to improve on that timescale thats when you can find new ways to reduce down what you have left to pay.

For example reclaiming bank charges, getting 0% offers when you clear a card, PPI, increasing income etc.

I really do hope you'll start with the small steps - they're the ones that make the biggest difference.

sistafromanothermista

:beer: Some great advice from Ninjasavingcat and little miss uni debt. Heed the advice and you WILL get through it.

Good luck.

rising_from_the_ashes

This thread hasn't had any activity on it for 16 MONTHS and hasn't been resurrected by the OP ....... I'd wait and see if he's still around before anyone spends ages trying to offer advice that may never be read by the OP.

NinjaSavingKat

I saw that Rising.. his attitude annoyed me a little I needed to speak. Hope he comes back and reads this...

breathe81

Have you considered a debt management plan?! cccs are good. The debt remedy on their website is great. National Debtline are great at giving advice on all aspects!