Drowning In Debt - Advice Please

Lynsey_G13

Hi all,

My name is Lynsey, I'm 24yrs old and looking for some advice regarding my debt. I feel as if it's never ending at the moment despite trying desperately to fix it.

My husband and I bring home a joint income of around £2.7k a month, we live in fairly cheap rented accommodation, have no kids, one dog (pampered pooch!) and after all our bills etc we are left with around £1.3k for food shopping, petrol, debt repayment, birthdays, going out etc etc

Well, at least that's how it should be but it's just not the case

I have the following debts:

Overdraft - £1000
ASDA Credit Card - £519.22 - 24.8%
Bank of Scotland Credit Card - £1181.77 - 21.9%
Barclaycard Credit Card - £1636.79 - 24.9%
Evans Store Card - £744.04 - 24.9%
Simply Be Catalogue - £589.62 - 39.6% :eek:

Total Debts = £5671.44

At the moment I pay the minimum payment via direct debit for the ASDA and Evans Cards. Around £75 to BOS Credit Card and have a direct debit set up for the barclaycard credit card for £100 per month.

Although the debt itself is an issue, it isn't the main issue. With our surplus income I could quite easily pay the smaller ones off over a couple of months and then concentrate on the larger ones. But I can't seem to get out of my overdraft and back into the black and it is killing me. I don't know what to do.

I made the mistake a few months ago of taking a loan from wonga. and have done so several times since then. i've always paid them back but its a vicous cycle and is stopping me getting out of the overdraft. I know if I could sort the overdraft I'd be half way to solving my debt problems but I just can't see how to sort it

A friend of mine was recently diagnosed with cancer for the second time and since then I've kind of adopted a live for the now attitude and booked a holiday and tried not to worry about debt but i NEED to do something about it and that's not the right attitude to take.

I tried to apply for a £5k loan to clear it all and have one payment a month to make. I was declined. My credit score with Equifax is 397.

My salary goes into one account and covers all our bills. My husbands wages go into another account and that is for food shopping, petrol, birthdays, credit card repayments etc etc etc. Trouble is because of the overdraft my wages go in and I'm left with like £300 It gets to the middle/end of the month and I panic I'm going to go over my overdraft and that's when I end up getting a wonga loan just to make sure.

I've contacted my car finance provider and asked about the possibility of a one or two month holiday payment if that happened it would help ALOT to get out of the overdraft but I'm not sure they'll go for it.

We got married in May 2009 and should have been 25-30% of the way to having a deposit for our own home by now and we have zilch, matter of fact we don't even have zilch we have a huge fat MINUS Our plan was to buy a house in 2014 when my car was paid off and hubby's debt repayment plan was finished (from before I met him) both of these are counted as monthly bills and not debt :undecided but I just can't see that happening at the moment and to be perfectly honest the whole thing is making me stressed/depressed.

I dont' think my husband fully understands my worries and the need to get this sorted as he isn't very good with money (hence the debt repayment plan) and I just feel like I'm left to sort it on my own

Any advice is greatly appreciated.

Lyns x

katerinasol

Hi Lyn,I can't help you but just thought I'd left you know you're not alone, I'm also in the same situation, no matter how much I seem to pay off, it seems to never be enough! Plus it's so much harder when you have another person to share the debts with, especially when they don't quite seem to grasp how bad the situation is!

mildredalien

Hi Lyn,

I feel for you, it's hard to really get to grips with how to pay everything off! I'd recommend filling out an SOA (statement of affairs) and then using the snowball calculator to help you figure out how to pay off everything as quickly as possible - assuming you can stick to a good budget!

Personally I've been using my overdraft in order to pay off my expensive credit cards quicker - the interest rate on the cards is almost triple that of my overdraft! So it's much cheaper to pay those off using every available penny (including the overdraft) and then sort out the overdraft at the end. Whatever you do don't go for payday loans!! Their interest rates are crazy and it'll end up in a horrible circle of debt.

If you post up your SOA here people can help you to figure out if you can shave some pounds off your outgoings and devise a suitable budget Here's a link: http://www.makesenseofcards.com/soacalc.html

Happytogetdebtfree

Hi there can you post a statement of affairs lets see if we can look and break the cycle of the overdraft fear and the wonga use .... once we can see some numbers we can help x

Lynsey_G13

I think I've done this right:

Household Information

Number of adults in household...........2
Number of children in household......... 0
Number of cars owned....................1

Monthly Income Details
Monthly income after tax................ 1304
Partners monthly income after tax....... 1431

Total monthly income.................... 2735

Monthly Expense Details
Rent.................................... 254
Council tax............................. 121
Electricity............................. 95
Telephone (land line)................... 12
Mobile phone............................ 52.5
TV Licence.............................. 12.12
Satellite/Cable TV...................... 32
Internet Services....................... 10
Groceries etc. ......................... 350
Petrol/diesel........................... 120
Road tax................................ 12.5
Car Insurance........................... 48
Car maintenance (including MOT)......... 12.5
Medical (prescriptions, dentist etc).... 22
Pet insurance/vet bills................. 10
Contents insurance...................... 12
Presents (birthday, christmas etc)...... 30
Haircuts................................ 10
Entertainment........................... 200
Car Finance............................. 270.56
Husband’s Debt Repayment Plan 194

Total monthly expenses.................. 1880.18

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card 1..................519.22....20........24.8
Credit Card 2..................1181.77...50........21.9
Credit Card 3..................1636.79...75........24.9
Catalogue......................589.62....50........39.6
Store Card.....................744.04....25........24.9

Total unsecured debts..........4671.44...220.......

Monthly Budget Summary

Total monthly income.................... 2,735
Expenses (including HP & secured debts). 1,880.18
Available for debt repayments........... 854.82
Monthly UNsecured debt repayments....... 220
Amount left after debt repayments....... 728.82



The trouble is the amount that should be left for debt repayments is currently pretty much the same as what my overdraft is. If I didn't have my overdraft and wasn't relying on that to pay bills then I'd have the spare £800 or whatever a month to go towards card payments

Just need to figure out how to get the £800/1000 to get out of the overdraft.......without using payday loans!!

RAS

Hi

I am going to be cruel because you need to get this sorted and at the moment you have ample scope to do so.

You do need to think much harder about how you pay off this debt though and the two accounts, whilst protecting you from Oh's poor credit rating means that you are paying out money you do not have and he is paying too much for things where you could make massive savings.

Lynsey_G13 wrote: »

Household Information

Number of adults in household...........2
Number of children in household......... 0
Number of cars owned....................1

Monthly Income Details
Monthly income after tax................ 1304
Partners monthly income after tax....... 1431

Total monthly income.................... 2735

Monthly Expense Details
Rent.................................... 254
Council tax............................. 121
Electricity............................. 95 - this looks high, what are you using it for?
Telephone (land line)................... 12
Mobile phone............................ 52.5 - you need to cut back on these. When can you go PAYG or reduce contracts?
TV Licence.............................. 12.12
Satellite/Cable TV...................... 32 - needs to go - you cannot afford it
Internet Services....................... 10
Groceries etc. ......................... 350 -whoa - £60 per person is doable. £150 is good.
Petrol/diesel........................... 120
Road tax................................ 12.5
Car Insurance........................... 48
Car maintenance (including MOT)......... 12.5
Medical (prescriptions, dentist etc).... 22
Pet insurance/vet bills................. 10
Contents insurance...................... 12
Presents (birthday, christmas etc)...... 30 - reduce this by £10
Haircuts................................ 10
Entertainment........................... 200 - you simply cannot afford this £30 maximum for the next year.
Car Finance............................. 270.56
Husband’s Debt Repayment Plan 194

Total monthly expenses.................. 1880.18

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card 1..................519.22....20........24.8
Credit Card 2..................1181.77...50........21.9
Credit Card 3..................1636.79...75........24.9
Catalogue......................589.62....50........39.6
Store Card.....................744.04....25........24.9

Total unsecured debts..........4671.44...220.......

Monthly Budget Summary

Total monthly income.................... 2,735
Expenses (including HP & secured debts). 1,880.18
Available for debt repayments........... 854.82
Monthly UNsecured debt repayments....... 220
Amount left after debt repayments....... 728.82

How much is on husbands debt plan?

Go over to the money saving old style forum and do a store cupboard challenge (list the contents of and they will help you put together a menu plan for the month which needs least shopping).

What is around the house that you can sell? Flog it on e-bay, amazon or at a car boot sale.

Seriously stop going out at all for the next month.

You have a good chance of finding about £700 using these three routes.

Verbatim

Hi there,

RAS always has good advice!

I guess you've got a fixed idea about the overdraft being the killer here, but it isn't. As you have pointed out it's Wonga. The first step is to make the decision that that isn't going to happen this month, then plan rigorously to make sure you live within your (available) means this month. Check last November's bank statements to see if there are likely to be any unforseen dds or other payments due or do this on line if you have internet banking. As RAS says check what food is in the freezer and cupboards and WRITE a menu plan for the month based on these ingredients, or ask old style for help to do this. Then write a shopping list based on the meal plan, cost it if you can and stick to it when you go shopping. Then you know you'll have enough food for the month come what may.

Take lunch to work. Try to spend nothing unessential. Planning all this means you're much more likely to succeed than just saying "I'm really going to try this month...".

But on the bright side you've taken that most important step and you have enough money to sort it out relatively painlessly as long as you don't let it drag on. Good luck and keep posting.

Bored

You say the problem is that you need to continually borrow from wonga to ensure you don't go over your overdraft limit. Have you considered opening a new basic bank account (with a different institution) and moving your monthly wage and bills to this new account? This would allow you to treat the overdraft as just another debt, and your entire wage wouldn't be immediately absorbed by the overdraft each month. You could then work out how much you could afford to pay into the overdrawn account each month until it was entirely paid off.

tallyhoh

£350 grocery bill for two people:eek: (or have you sneaked cigarettes in here).
Pop over the the old style money saving boards for tips on how to keep the grocery bill down.

mildredalien

Is your overdraft an arranged one? If it is, then you can for all intents and purposes treat it like a) another debt or b) your money UNTIL you have cleared your more pressing debts (the ones that are costing you crazy amounts of interest).

As Verbatim said, you seem to have an idea that the overdraft is the main problem - but actually it's the credit cards and Wonga loans that are costing you more! There are some good ideas in the posts above about reducing your costs - entertainment and food can probably be reduced by quite a bit to give you more money to play with.

Also, just to check - your rent is £275, is that the total rent that you both pay? As you have included your partners income into your budget, if he also pays towards any of these bills you need to include this too.

gfplux

With your joint income and such a low cost of housing (rent) you should be inclover.
However you are just throwing money away. You have to STOP spending money you do not have.
That is the simple solution but as we know we have got the HABIT.
It is very, very difficult to kick the habit of spending money we do not have, but we must do it.
Good luck.