Debt Advice

bertles86

Hi All,

My figures are below, any help in working out where to go from here would be great. I am trying to reduce my spending by becoming a hermit but it's tough when each month I start on -£700 in the current account and my salary disappears in the overdraft/rent in the blink of an eye!

Please help!

Monthly Incomings:

My salary - £1,366.42


Monthly Outgoings:

Rent - £575
Household Bills - £89
Mobile - £19
Gym - £40
Loan Repayment - £83
Travel - £40
Groceries - £70
Having Fun - £80

Total: £996.00

Credit Card 1 - -£340.00, interest free
Credit Card 2 - -£91.00, 29.9% APR
Overdraft - -£720.00 (Limit £720.00, reduces £40.00 per month by agreement with bank).
Savings - £0.00

EDIT: Would a DRO be a good/bad idea? I'm guessing topping up my loan to pay my overdraft is a terrible idea?

Allypops

Hi Bertles,

I think you may need to provide a bit more information. Could you fill in the usual format of Statement of affairs - this provides a bit more info and will prompt you to put in figures for things such as haircuts, clothes, birthdays, christmas etc. You'll also need to put in some figures for the minimum monthly payments for the credit cards.

Link to the SoA: http://www.makesenseofcards.com/soacalc.html

Once you post the full SoA I am sure you'll get some really good advice from the peeps on here regarding what your options are.

A

Firewalker

Agree; we need more detail - if nothing else, I bet you have missed items and that what you have provided is not precise.

As a first thought though there is an entry saying 'fun - £80'. I know this will sound harsh but it may be an idea to forego fun for some time (paid fun, I mean). Also, if this is really your situation you need a second job or a way to make money.

Firewalker

bertles86

Thanks folks, try this:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1366.42
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1366.42

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 575
Management charge (leasehold property).. 0
Council tax............................. 27.67
Electricity............................. 13
Gas..................................... 26.89
Oil..................................... 0
Water rates............................. 7.95
Telephone (land line)................... 3.67
Mobile phone............................ 19
TV Licence.............................. 9.7
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 70
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 8
Entertainment........................... 80
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 890.88


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................3000......83........0
Barclaycard....................92.49.....5.37......29.9
Nationwide Credit Car..........305.......25........0
Nationwide Overdraft...........737.87....40........18.9
Total unsecured debts..........4135.36...153.37....-


Monthly Budget Summary
Total monthly income.................... 1,366.42
Expenses (including HP & secured debts). 890.88
Available for debt repayments........... 475.54
Monthly UNsecured debt repayments....... 153.37
Amount left after debt repayments....... 322.17

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -4,135.36
Net Assets.............................. -4,135.36

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using other browser.

bertles86

Whoops - the gym membership @ £39.99 /month was omitted from the above. I will cancel this when the contract expires in April.

camuk81

Bertles, the council tax is very low are you paying a share of it. Can you up your hours at work or take a second job. As regards money going keep a spending diary, it's amazing how the odd coffee, newspaper, mags and takeaways mount up. Keep a diary for a month and I think you'll be surprised at the amount. Just recheck on your loan and credit card apr as you have them as 0%? What is the other travel for can you reduce with a season pass?

bertles86

Hi cam thanks for the reply, answers as follows:

Council Tax: my share between the three of us who share the flat
More Hours: I initiated a job review three weeks ago, there is additional work but no extra pay
2nd Job: quite possibly but I only have Sat/Sun
Loan: 16.4% APR
Nationwide Credit Card: was a balance transfer with 0% for 17 months, so no interest to pay
Other Travel: is my Oyster for getting around London, I walk to work but use it go to the girlfriends place etc. I could reduce this to £20 per month, but a Season Ticket would not help as it is £110/month.

camuk81

Do you know where the £322 is going each month? This could be the best thing to paying off your debts. See if you register for online banking and keep a spreadsheet or a pocket book with all your transactions.

Sometimes that cup of coffee and sandwich can be way more expensive then you think.

bertles86

Yes well I pulled off the last six months of transactions on my current account last month and worked my through it all - labelling each transaction. Hence I have now reduced my spending to reflect the expenditure above, but the problem for me is that I am starting each month overdrawn because of my past habits.

So I believe I am on the right track for spending, but my starting point is screwing me! I have an agreement with Nationwide whereby my overdraft is reduced by £40 each month. For February it is currently a £760.00 limit, on 1st March it is reduced to £720.00 etc. My current balance is -£737.00 hence I need to find £17 in four days...but that's another story!

Essentially I studied Spanish at night school and course fees/travel/textbooks added up to £700 - so as a direct result of the course I am overdrawn.

Three questions:

1. Is a top up of my loan a very bad idea?
2. Is a debt relief order a bad idea, can it affect my credit rating?
3. Is calling Nationwide and reducing my loan repayments detrimental to my credit rating?

camuk81

Ok, few choices. Speak to nationwide, explain what is happening. If your cards are well within their limits you (however I would not recommend this) take money off for the £17 you need. You'll get a higher apr being applied. Speak to the bank first.

Even a few hours would help. As horrible as it sounds needs must to repay the debt.

Make sure you get your notice in early as some places as for advance notification, check your contract.

Consolidation loans rarely work in 85% of cases. Prime example me! I did this and ended kept doing it a few loans down the line and I took one out just under 6k and will end up repaying 13k due to intrest. Ouch!

redpete

Either I or you are missing something - I suspect you are missing out stuff that you spend some of that £322 on.

If you are desperate to clear debt than a reasonable part of the £80 on entertainment could be used as well as whatever spare cash you really have.