Advice with dealing with debt please?

striker123

Hi,

1st post so go easy guys. I have been viewing the board for a while now and been reluctant to post however i really need help and have read some of the wonderful advice on here and hope that someone can offer some my way.

The situation is my partner an i have run up about £12k of debt (pure stupidity and in hindsight embarassing we allowed this to happen) we are having to pick and choose what to pay each month and have done so far a year now meaning we have missed payments etc which has dragged our credit rating down to both having a "fair" credit profile.

We owe the following £4.5k to online catalogues (minimum payments are over £100 each on the 3), £4.5k to credit cards and approx £3k to others such as store cards. The minimum payments total around £800 per month and with our mortgage and bills etc on top of this we are left with next to nothing to live off, aslo as a result of missing payments we get hit with default charges etc.

We have approx £50k equity on our home (never missed a mortgage payment) but the bank would not allow us to release equity to consolidate this amount as we failed the credit check (due to missing alot of payments)

Our income monthly is approx £2200 and outgoings are around £1850 this before food, petrol etc.

Our last resort was looking at a homeowner loan (if we borrowed £13k and payed back over 5 years re-payments would be around £300 - saving us £500 per month at least) but unsure if we would be accepted and worried about using these companies.

Sorry to bother everyone with another debt help thread but i would appreciate any advice.

thanks.

DVardysShadow

Fill in a Statement of Affairs [SoA] on this link http://www.makesenseofcards.co.uk/soacalc.html and post the results here.

It looks like you are in the situation of increasing your debt month by month, and I would suggest that a consolidation loan will only delay the problem while you get yourselves deeper into trouble.

striker123

Ok filled in to best of my knowledge.

Summary

Monthly Budget Summary Amount(£)
Total monthly income 2,370
Monthly expenses (incl. HP & secured loans) 1,682
Available for debt repayments 688
UNsecured debt repayments 750
Amount short for making debt repayments -62
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 97,150
Total Secured & HP Debt -55,000
Total Unsecured Debt -11,000
Net Assets 31,150
Household Information

Number of adults in household 2
Number of children in household 2
Number of cars owned 1
Income, Expense, Debt & Asset Details

Income Amount(£)
Monthly income after tax 1350
Partners monthly income 900
Benefits 120
Other income 0
Total monthly income 2370
Expenses Amount(£)
Mortgage 500
Secured/HP loan payments 0
Rent 0
Management charge (leasehold property) 0
Council tax 131
Electricity 55
Gas 75
Oil 0
Water Rates 0
Telephone (land line) 40
Mobile phone 80
TV Licence 12
Satellite/Cable TV 47
Internet services 15
Groceries etc. 250
Clothing 50
Petrol/diesel 200
Road tax 12
Car Insurance 29
Car maintenance (including MOT) 15
Car Parking 0
Other travel 0
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 0
Pet Insurance/Vet bills 0
Buildings Insurance 15
Contents Insurance 15
Life Assurance 19
Other Insurance 22
Presents (birthday, christmas etc.) 20
Haircuts 30
Entertainment 50
Holiday 0
Emergency Fund 0
Total monthly expenses 1682
Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 55000 (500) 0
Secured & HP Debt totals 55000 - -
Unsecured Debt Description Debt(£) Monthly(£) APR(%)
catalogues 5000 400 0
credit cards 4000 200 0
store cards 2000 150 0
Unsecured Debt totals 11000 750 -
Asset Description Value (£)
Cash 1500
House Value (Gross) 95000
Shares and bonds 0
Car(s) 650
Other assets (e.g. endowments, jewellery etc) 0
Total Assets 97150

DS4215

striker123 wrote: »

Ok filled in to best of my knowledge.

Summary

Monthly Budget Summary Amount(£)
Total monthly income 2,370
Monthly expenses (incl. HP & secured loans) 1,682
Available for debt repayments 688
UNsecured debt repayments 750
Amount short for making debt repayments -62
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 97,150
Total Secured & HP Debt -55,000
Total Unsecured Debt -11,000
Net Assets 31,150
Household Information

Number of adults in household 2
Number of children in household 2
Number of cars owned 1
Income, Expense, Debt & Asset Details

Income Amount(£)
Monthly income after tax 1350
Partners monthly income 900
Benefits 120
Other income 0
Total monthly income 2370
Expenses Amount(£)
Mortgage 500
Secured/HP loan payments 0
Rent 0
Management charge (leasehold property) 0
Council tax 131
Electricity 55
Gas 75
Oil 0
Water Rates 0
Telephone (land line) 40 knock this down if you can?
Mobile phone 80 and this? (£30 contracts will save £20 pcm)
TV Licence 12
Satellite/Cable TV 47
Internet services 15
Groceries etc. 250 and this - should be able to feed 2 on 150 a month (save £100 pcm)
Clothing 50 can go for a while (save £50pcm)
Petrol/diesel 200 any way to reduce this?
Road tax 12
Car Insurance 29
Car maintenance (including MOT) 15
Car Parking 0
Other travel 0
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 0
Pet Insurance/Vet bills 0
Buildings Insurance 15
Contents Insurance 15
Life Assurance 19
Other Insurance 22
Presents (birthday, christmas etc.) 20
Haircuts 30 cut hair every two months and halve this (save £15pcm)
Entertainment 50 Cut in half (save £25pcm)
Holiday 0
Emergency Fund 0
Total monthly expenses 1682
Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 55000 (500) 0
Secured & HP Debt totals 55000 - -
Unsecured Debt Description Debt(£) Monthly(£) APR(%)
catalogues 5000 400 0
credit cards 4000 200 0
store cards 2000 150 0
Unsecured Debt totals 11000 750 -
Asset Description Value (£)
Cash 1500
House Value (Gross) 95000
Shares and bonds 0
Car(s) 650
Other assets (e.g. endowments, jewellery etc) 0
Total Assets 97150

That saves you £210 per month to put towards your debts. The store card will be at stupid APRs, but at £360 a month towards them you can pay them off in 6-7months. Then throw that at the credit cards (another 6-7 months at £560pcm) and then the whole lot at the catalogs (3months). Job done in well under two years. Even faster if you can raise any extra money through extra work or selling stuff.

Tixy

Hi

Well at the moment you seem to be short by £62 a month, so first off you need to try to find £62 that can be saved so you can break even, after that anything else will help you overpay to your most expensive debt.

Some possible suggestions

striker123 wrote: »

Ok filled in to best of my knowledge.

Summary

Monthly Budget Summary Amount(£)
Total monthly income 2,370
Monthly expenses (incl. HP & secured loans) 1,682
Available for debt repayments 688
UNsecured debt repayments 750
Amount short for making debt repayments -62
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 97,150
Total Secured & HP Debt -55,000
Total Unsecured Debt -11,000
Net Assets 31,150
Household Information

Number of adults in household 2
Number of children in household 2
Number of cars owned 1
Income, Expense, Debt & Asset Details

Income Amount(£)
Monthly income after tax 1350
Partners monthly income 900
Benefits 120
Other income 0
Total monthly income 2370
Expenses Amount(£)
Mortgage 500
Secured/HP loan payments 0
Rent 0
Management charge (leasehold property) 0
Council tax 131
Electricity 55 do you have arrears? gas & elec both look high. have you shopped around for a cheaper provider or a better tariff? have you tried to reduce your usage (lots of tips on the providers website on this)
Gas 75
Oil 0
Water Rates 0
Telephone (land line) 40
Mobile phone 80 can you drop to lower tariffs?
TV Licence 12
Satellite/Cable TV 47, phon, tv and internet are costing you 102 a month. look for a combined deal for all 3 for around £50. or switch to the most basic sky package and then get a combined phone & internet for less than £30
Internet services 15
Groceries etc. 250 this is not high for a family of 4 but some people can manage on a bit less - might be worth having a look on the oldstyle board for some tips to see if you can cut it down a bit.
Clothing 50 can you try to reduce this in the short term, adults just wear what you have and try cheaper shops for the kids?
Petrol/diesel 200 is this all essential miles? do you fill up at the cheapest place and drive efficently?
Road tax 12
Car Insurance 29
Car maintenance (including MOT) 15
Car Parking 0
Other travel 0
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 0
Pet Insurance/Vet bills 0
Buildings Insurance 15
Contents Insurance 15 do you shop around for B&C at renewal? hopefully should be able to get a bit cheaper than this (and always check if you can earn cashback as well if you switch)
Life Assurance 19
Other Insurance 22 what is this - is it competitive?
Presents (birthday, christmas etc.) 20
Haircuts 30
Entertainment 50
Holiday 0
Emergency Fund 0
Total monthly expenses 1682
Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 55000 (500) 0 what is the apr on this? is it a fixed deal? how soon until the fix finishes?
Secured & HP Debt totals 55000 - -
Unsecured Debt Description Debt(£) Monthly(£) APR(%)
catalogues 5000 400 0
credit cards 4000 200 0
store cards 2000 150 0
Unsecured Debt totals 11000 750 -
are these all the minimum payments? have you stopped all spending on the cards & accounts now? it would be useful to break them down based on the APRs and minimums of them all so you can work out how best to snowball repayments

Asset Description Value (£)
Cash 1500
House Value (Gross) 95000
Shares and bonds 0
Car(s) 650
Other assets (e.g. endowments, jewellery etc) 0
Total Assets 97150

Are you in arrears with any priority costs at the moment? are you in arrears with your unsecured debts at all?

Is there anyway either of you could increase your income? have you checked to see if you might be entitled to any benefits/tax credits at all?

striker123

Tixy wrote: »

Hi

Well at the moment you seem to be short by £62 a month, so first off you need to try to find £62 that can be saved so you can break even, after that anything else will help you overpay to your most expensive debt.

Some possible suggestions

Ok filled in to best of my knowledge.

Summary

Monthly Budget Summary Amount(£)
Total monthly income 2,370
Monthly expenses (incl. HP & secured loans) 1,682
Available for debt repayments 688
UNsecured debt repayments 750
Amount short for making debt repayments -62
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 97,150
Total Secured & HP Debt -55,000
Total Unsecured Debt -11,000
Net Assets 31,150
Household Information

Number of adults in household 2
Number of children in household 2
Number of cars owned 1
Income, Expense, Debt & Asset Details

Income Amount(£)
Monthly income after tax 1350
Partners monthly income 900
Benefits 120
Other income 0
Total monthly income 2370
Expenses Amount(£)
Mortgage 500
Secured/HP loan payments 0
Rent 0
Management charge (leasehold property) 0
Council tax 131
Electricity 55 do you have arrears? No arrears, unsure about changing as we were advised to alot of cons out there? currently with Scottish gas.gas & elec both look high. have you shopped around for a cheaper provider or a better tariff? have you tried to reduce your usage (lots of tips on the providers website on this)
Gas 75
Oil 0
Water Rates 0
Telephone (land line) 40
Mobile phone 80 can you drop to lower tariffs? Not until December
TV Licence 12
Satellite/Cable TV 47, phon, tv and internet are costing you 102 a month. look for a combined deal for all 3 for around £50. or switch to the most basic sky package and then get a combined phone & internet for less than £30 - Will do this with Sky lowest is around £50 per month.
Internet services 15
Groceries etc. 250 this is not high but some people can manage on a bit less - might be worth having a look on the oldstyle board for some tips to see if you can cut it down a bit.
Clothing 50 can you try to reduce this in the short term, adults just wear what you have and try cheaper shops for the kids? yes
Petrol/diesel 200 is this all essential miles? do you fill up at the cheapest place and drive efficently? yes 30 miles per day in and out from work.
Road tax 12
Car Insurance 29
Car maintenance (including MOT) 15
Car Parking 0
Other travel 0
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 0
Pet Insurance/Vet bills 0
Buildings Insurance 15
Contents Insurance 15 do you shop around for B&C at renewal? yes,this was cheapest available! hopefully should be able to get a bit cheaper than this (and always check if you can earn cashback as well if you switch)
Life Assurance 19
Other Insurance 22 what is this - is it competitive?
Presents (birthday, christmas etc.) 20
Haircuts 30
Entertainment 50
Holiday 0
Emergency Fund 0
Total monthly expenses 1682
Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 55000 (500) 0 what is the apr on this? is it a fixed deal? how soon until the fix finishes?
Secured & HP Debt totals 55000 - -
Unsecured Debt Description Debt(£) Monthly(£) APR(%)
catalogues 5000 400 0
credit cards 4000 200 0
store cards 2000 150 0
Unsecured Debt totals 11000 750 -
are these all the minimum payments? have you stopped all spending on the cards & accounts now? it would be useful to break them down based on the APRs and minimums of them all so you can work out how best to snowball repayments

Asset Description Value (£)
Cash 1500
House Value (Gross) 95000
Shares and bonds 0
Car(s) 650
Other assets (e.g. endowments, jewellery etc) 0
Total Assets 97150
Are you in arrears with any priority costs at the moment? are you in arrears with your unsecured debts at all?

Is there anyway either of you could increase your income? have you checked to see if you might be entitled to any benefits/tax credits at all?

Thanks for advice guys, no way of increasing income at moment through our jobs, only ever in arrears with catalogue repayments (never more than 1 month late) Checked the benefit calculator and were not entitled to anything, will check it again today.

striker123

DS4215 wrote: »

That saves you £210 per month to put towards your debts. The store card will be at stupid APRs, but at £360 a month towards them you can pay them off in 6-7months. Then throw that at the credit cards (another 6-7 months at £560pcm) and then the whole lot at the catalogs (3months). Job done in well under two years. Even faster if you can raise any extra money through extra work or selling stuff.

You make it sound so easy, will it down with My partner and show him your reply, thanks.

Tixy

I thought you might just earn too much for tax credits but wasn't sure.

A few articles its probably worth a read of to see what savings you can make

Cheap Gas & Electricity

Cheap Petrol & Diesel Cut your fuel spend by a third

Sky, Virgin & BT TV
Cheap Broadband Get online from £2 a month

Regarding the mobiles do the contracts finish in December? a lot of providers will still allow you to drop down one tariff before the contract finishes - if you haven't rung them to ask it might be worth a try.

striker123

Tixy wrote: »

I thought you might just earn too much for tax credits but wasn't sure.


Regarding the mobiles do the contracts finish in December? a lot of providers will still allow you to drop down one tariff before the contract finishes - if you haven't rung them to ask it might be worth a try.

Thanks again. Unfortunately both contracts run to December 2012 and we can only lower the tariff this December.