Help with my debt please :(

JoshyBoy_2

I need help trying to get rid of this debt.

The following is a detailed list of my outgoings.

Firstly not making an excuse of why I’m in this mess, let’s just say I was application happy a few years ago, planned to pay back what I paid for on cards and well it just escalated.

No excuses what so ever.

OK So here goes:

Credit Cards (all near enough maxed out now, and paying off monthly min) x 4

Barclays Credit Card: £1500 – paying £100 P/M but using £70 of that payment to cover my two phone bills (I lost had a phone stolen and needed a new one, however that contract is due up in June ’12) 27.9APR

ASDA Store Card: £1,100 – Paying £30 P/M. 24.7APR

Argos Store Card: £450 – Paying just under £30 P/M 29.9

MasterCard: £900 – Again paying just under £30 P/M 15.9APR

Bank Accounts:

I opened these two accounts aimed at getting some savings, but the idiot I was thought ‘Overdraft, I’ll pay it back’ guess what I never (these are planed overdrafts)

Natwest: £500 overdraft - Paying £15 P/M trying to clear it whilst covering interest etc

Lloyds: £500 overdraft – Paying £30 P/M again trying to clear it whilst covering interest etc

I also pay for my current Platinum account, again with Lloyds £30.

Other:

I pay for Xbox live, but this is just £6 P/M
Bus Pass £55 P/M
Rent at £120

As you can see that’s around £446 out my wages every month.

My sole income is my monthly wage of around £770.

This leaves me, after I’ve paid all the above, around £324.

My question is, what’s the best way for me to get out of this mess, and become debt clear.

I’ve been stupid so please don’t have a go at me lol I just want to know the best way to go forward and get help.

Is this even ‘bad’ debt, I know it’s a lot, but I’m guessing I can make it manageable.

It certainly doesn’t feel manageable at the moment, it’s just stressing me out so much, and just want a clean slate, but I’m aware it’s going to take time to clear the above.

Any help is much appreciated.

Tixy

Hi

What does your £324 that you have left have to cover a month? do you pay for your food or is that all in with rent?, a phone? clothes, haircuts, socialising?

Oh - you have 2 phone contracts at £70/m? but these are from a credit card so that debt is presumably increasing a little each month? what is the limit on that account? Have you phoned both phone providers to see if they can drop you to the cheapest possible tariff?

What do you have left after all those types of costs? and what are you doing with that money currently? are you using it to pay off more than the minimum payment off your most expensive debt?

What does the platinum account with lloyds for £30 get you? do you use any of the benefits? doesn't look like you get a free overdraft, therefore you can save £30 by switching to a regular current account. Thats £30 more to put towards your debts.

Can you increase your income at all? work overtime? a second job?
Do you have any things you could sell to raise some cash?

Tixy

I've just put your figures into a snowball calculator (http://www.whatsthecost.com/snowball.aspx) - (with estimated APRs on the overdrafts)

You are currently repaying £235 towards your debts, but reusing £70 credit so thats £165 a month. If by saving on the account fee and using some of your surplus cash you could increase that by £60 to £225 you could be debt free in 28months.

Obviously if you can increase the payments further you could be debt free sooner (eg £300 a month would take it down to 20months).

JoshyBoy_2

Tixy wrote: »

Hi

What does your £324 that you have left have to cover a month? do you pay for your food or is that all in with rent?, a phone? clothes, haircuts, socialising?

That's what's left out of my wages after I pay bare min on everything, I use it throughout the hole month for travel i.e train which doesn't come with my bus pass, socialising and for my ILEX Law course. I think it's 'disposable'?

Oh - you have 2 phone contracts at £70/m? but these are from a credit card so that debt is presumably increasing a little each month? what is the limit on that account? Have you phoned both phone providers to see if they can drop you to the cheapest possible tariff?

Yes, it's with vodafone, they won't budge apparently that's as low as they can go!

What do you have left after all those types of costs? and what are you doing with that money currently? are you using it to pay off more than the minimum payment off your most expensive debt?

See above, I don't pay off any debt ATM, I just spend bare min

What does the platinum account with lloyds for £30 get you? do you use any of the benefits? doesn't look like you get a free overdraft, therefore you can save £30 by switching to a regular current account. Thats £30 more to put towards your debts.

It's phone insurance mainly, but there are other benefits (breakdown cover for drivers even if I'm a passenger, travel insurance etc), I thought my phone insurance was vital given what happened to me when my phone was stole.

Can you increase your income at all? work overtime? a second job?
Do you have any things you could sell to raise some cash?

Not really, xbox games I don't use but I don't think that'll raise much

Answers are in bold

Tixy

You can get phone insurance much cheaper than £30 a month. Wouldn't worry about breakdown cover if you don't drive - leave that to the driver to have (and again they can get much cheaper cover than that). Doesn't look like you can afford to be using the travel insurance at the moment. I'd shop around for phone insurance and switch to regular account.

You need to increase the amount you are paying to your debts. If you only pay the minimums you could still be in debt in 5years time. Even just paying £5 more than the minimum is better than nothing, although really you need to try to find a way to pay more than that.

JoshyBoy_2

would it not be better to try and go to my bank for a loan to aim to clear all those cards, and pay back a similar amount now, over two or so years?

that seems easier to me than trying to fiddle about with 4 or 5 outstanding debts?

Tixy

Chance of you getting a loan is very slim.

The fact that you are in 2 overdrafts every month and only paying minimum payments shows any potential lender that you are already struggling to repay your existing debts, and so they won't think you can afford to take on any more debt.

Your salary is around £10500 a year? and you owe £5k already. People find it very hard to get credit that will take them above half of their salary, which you are pretty much at already.

When you take out a consolidation loan the lender views it as extra debt on top of your existing debt (as they cannot be sure you will use it to pay off your debts or that you won't run the cards up again).

Shouldn't be a big fiddle to have several debts rather than 1 (do you pay by direct debt) - you just need to start paying more a month. The general advice is to pay minimums to all and then as much as you can afford to the one with the highest APR. That way you pay the lowest interest you can and get out of debt as quick as you can.

sickasachip13

Hi,
I'll let Tixy continue with the excellent advice above but just wanted to say well done for acknowledging the situation and that I'm sure there are good ways forward.
Best of luck
SAAC

JoshyBoy_2

Is this debt as bad as it feels?

my debt is now half of my income, so in a sense at least it's manageable?

It just feels like a mess, it's really causing sleepless nights, hence the need to get help.

I'm panicing a bit now, xmas hit me hard.

Obviously I had to get xmas prezzys, but my brother and girlfriend have their birthdays either side of xmas, and my law course fee's were due on Jan 1st.

I'm really worried about future credit, and how long I'll be in debt for.

It just feels like a heavy weight on my mind.

No one but myself to blame, but that's how I feel.

I'm looking forward, and I know by June, I'll have paid off my one phone contract and I aim to pay off my Argos Store card, so that's an extra £70 plus.

Then I'll spose I'll try and use that extra money to work on paying the next card off.

It just feels like there's no light atm.

Thanks for above advice it's really appreciated

curlytop12

JoshyBoy wrote: »

Is this debt as bad as it feels?

my debt is now half of my income, so in a sense at least it's manageable?

It just feels like a mess, it's really causing sleepless nights, hence the need to get help.

I'm panicing a bit now, xmas hit me hard.

Obviously I had to get xmas prezzys, but my brother and girlfriend have their birthdays either side of xmas, and my law course fee's were due on Jan 1st.

I'm really worried about future credit, and how long I'll be in debt for.

It just feels like a heavy weight on my mind.

No one but myself to blame, but that's how I feel.

I'm looking forward, and I know by June, I'll have paid off my one phone contract and I aim to pay off my Argos Store card, so that's an extra £70 plus.

Then I'll spose I'll try and use that extra money to work on paying the next card off.

It just feels like there's no light atm.

Thanks for above advice it's really appreciated

its not manageable,its increasing every month ,and is already half your salary.

would you like to fill in a proper statement of affairs,there is one in the stickies at the top of the page.

there is really no benefit of the £30 premium bank account-cancel it.

have you any "room" on a lower interest card to shift some of the higher interest debt to?

doubtful you would get a loan....

it IS do-able,you just need a plan,and you will get loads of advice here,don't worry about that!

have you had any ideas how to sort this out apart from getting a loan?