Newbie alert! A bit of advice needed...

pencakes26

Hi all,

This is my first post on MSE! Eeek!

Its a long winded post and Im not sure if its in the right place on the forum!

So, after a relatively short period of time (2 years) Ive gone from no debt at all to £11,000. Scary isnt it?!

Since sitting down and going through my finances and taking responsibility for paying them all off as soon as I can, I feel a bit better, and I am doing it the best way round (paying off the most expensive debts first) but I am getting frustrated because I feel like its taking over my life a little.

I have a bad credit history (defaulted on a mobile phone contract 5 years ago) and so applying for cheap credit cards/loans has been near impossible. Thankfully, the default gets wiped in 13 months and I have been on time with all my payments ever since.

In an attempt to build my credit history I got a credit card from Vanquis (BIG MISTAKE!) and my debt has got worse since that point.

The problem is now I have 4 credit cards, 2 loans and 1 "wage overpayment" (from my old job) that I am paying off.

As I said, my credit history is bad, so I am paying high interest rates on the ccs, and the loans are in my OH's name (very kindly helping my out of a sticky situation) but I still feel like I'm in a downward spiral with no way out. Extreme I know, but it really does make you feel bad.

My OH knows how miserable I am, and has offered to transfer my credit card debts on to his Lloyds TSB credit card that he doesnt use (it has 0% on BT for 6 months) and the APR is much lower. This would really help my situation, but ultimately, it is something else in his name, and I don't want to put him at risk financially or mess things up...but I'm getting desperate...

A bit of advice on the situ would be great. Cant seem to see the light at the end of the tunnel yet

pencakes x

Tixy

Hi and welcome to the forum (and yes you've posted in the right place).

First off have you worked out a statement of affairs or income & expenditure account to work out how much you can afford to pay towards your debts and look to see if you can find any areas you can make savings?

You mention paying off the most expensive first which is good. Have you tried putting all your figures into a snowball calculator to work out how long it will take you to become debt free at your current repayment rate? this might be an idea if you haven't yet - and will at least give you a starting point.

What credit cards do you have, what balances/limits and what APR?

A kind offer from OH regarding the lower APR card and something to consider. But also consider
- how stable your relationship is,
- can he afford repayments if you lost your income for any reason (to protect his credit file)
- whether he is likely to want to use the card for something else in the meantime
-whether it will damage your relationship - eg will he moan at you and make you feel bad every time you buy a new piece of clothing or go out for a drink etc.

Another option may be to transfer 1 or 2 of your cards to his - and then see if you can get a promotional deal from one of your cleared cards - to move your other cards on to a cheaper rate (this will obviously be dependant on the cards and limits you have and whether the cards are still open to spending).

pencakes26

Hi Tixy,

Thanks for the reply

I have indeed down a snowball calculator. I am at the moment spending around £750 a month on debt repayments and paying off the Vanquis (39.9%) & Capital One (30.3%) cards first, whilst making just over the minimum payments on the other 2 as they are cheaper. The loans are £198 and £91 a month and they seem to be ticking over nicely. The repaying my old job back (they overpaid me for months, my fault for not saying anything) is the biggest debt at around £5,000, but they are not charging me interest and they are asking for a minimum of £250 a month which I am doing.

My OH is being great about this and wants to help more. He has a good job (double my salary) and has a great credit history so is being offered all the kind of deals I could benefit from (sod's law!).
Your points are very valid about how it would effect the relationship. I do worry about that a lot, and it is the main reason I have said no before. He is very understanding and I dont believe he would start picking up on my spending etc, but you can never tell what will happen in the future and I wouldnt want my problems affecting him. We are planning on getting married in the future so in terms of staying together that isnt really my concern, just the financial risk I would be to him.

Thanks for the tip on moving the debt around, thats def worth looking at.

I really just want to get rid of this vanquis debt, at nearly 40% apr, its utter utter rubbish and is costing me a fortune!

Next step is to rethink my budget.

Takeaway_Addict

Is it worth putting an SOA up here for us to look at?

Tixy

If your OH posted on here saying he was thinking of paying off your cards then he would almost certainly be advised not to do so (because of the risk of you leaving him stuck with the debt) - but as long as he is aware of the risks then I wouldn't rule it out.

I've done it before - my mother offered a 0% card in her name - she knew the risks and knew she would have to pay it if I could not (which she was in a position to do) - ultimately I did pay it all off in the 0% period and it made a big difference to me.

As they are not charging interest would it be worth contacting your ex employers and seeing if they would be prepared to take £200 a month? it would only add an extra 5months on to the time it will take to repay them (from their point of view) so it may not be a major thing for them - and would allow you to clear your more expensive debts quicker. Might be worth a shot - they can only say no!

glasgowsaver2011

Tixy wrote: »

If your OH posted on here saying he was thinking of paying off your cards then he would almost certainly be advised not to do so (because of the risk of you leaving him stuck with the debt) - but as long as he is aware of the risks then I wouldn't rule it out.

I've done it before - my mother offered a 0% card in her name - she knew the risks and knew she would have to pay it if I could not (which she was in a position to do) - ultimately I did pay it all off in the 0% period and it made a big difference to me.

As they are not charging interest would it be worth contacting your ex employers and seeing if they would be prepared to take £200 a month? it would only add an extra 5months on to the time it will take to repay them (from their point of view) so it may not be a major thing for them - and would allow you to clear your more expensive debts quicker. Might be worth a shot - they can only say no!

If you refused to pay them back

They went to court to get the money back

That would take 4-8 months.

Then a judge would ask you to make an offer to pay (a reasonable offer)

if you take home £1k a month, 25 % of your take home is not a reasonable amount.

It is too high!

If you gave the court your income and expenditure, including your debts, they would probably allow you to make much smaller repayments,

50 or 100 a month.

I am not saying do this, but this is a route you could go down

pencakes26

Hmm, if it was my mum I think I would have already said yes, but as it is my partner, I am much more aware of the risk to him.

I absolutely know that I wouldnt intentionally do anything but pay off my debts in his name (or mins for that matter) but obviously if things happen beyond my control, I lose my job for example, then he is stuck with my repayments (which he can afford, but its not really the point). I think we need to sit down again tonight and go through it properly and give him the chance to think of all the implications before he offers to do this for me.

Im not so keen on the court route, because it seems like more worry/stress and Im not coping very well as it is even though paying off my debts properly and on time.

I will def speak to them and see how they feel about changing the repayments. After all they are a big multinational oil company and can afford for me to do that...but of course they could say no. Always worth asking so thanks for that Tixy

I will do my SOA and post it today.

Im also looking at ways of boosting my income so I can throw as much money at these debts as possible. A part time second job would be really useful right now.

Thanks again guys

pencakes26

As promised, my SOA....I haven't entered bills because they are included in the £525 rent.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1811
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1811

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 10
Rent.................................... 525
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 190
Clothing................................ 60
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 45
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 26
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 20
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1006


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


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 140......(10).......19
Total secured & HP debts...... 140.......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Vanquis cc.....................1502......73........39.9
Capital One cc.................668.85....27........30.3
Barclaycard cc.................758.46....24.21.....29.9
Wage repayment.................4994......250.......0
Lloyds TSB cc..................1170......30........11.9
Lloyds TSB loan 2..............1422.38...198.......9.8
Lloyds TSB loan 1..............766.85....91........19
Total unsecured debts..........11282.54..693.21....-


Monthly Budget Summary
Total monthly income.................... 1,811
Expenses (including HP & secured debts). 1,006
Available for debt repayments........... 805
Monthly UNsecured debt repayments....... 693.21
Amount left after debt repayments....... 111.79

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -140
Total Unsecured debt.................... -11,282.54
Net Assets.............................. -11,422.54

glasgowsaver2011

pencakes26 wrote: »

As promised, my SOA....I haven't entered bills because they are included in the £525 rent.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1811
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1811

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 10
Rent.................................... 525
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 190
Clothing................................ 60
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 45
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 26
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 20
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1006


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


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 140......(10).......19
Total secured & HP debts...... 140.......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Vanquis cc.....................1502......73........39.9
Capital One cc.................668.85....27........30.3
Barclaycard cc.................758.46....24.21.....29.9
Wage repayment.................4994......250.......0
Lloyds TSB cc..................1170......30........11.9
Lloyds TSB loan 2..............1422.38...198.......9.8
Lloyds TSB loan 1..............766.85....91........19
Total unsecured debts..........11282.54..693.21....-


Monthly Budget Summary
Total monthly income.................... 1,811
Expenses (including HP & secured debts). 1,006
Available for debt repayments........... 805
Monthly UNsecured debt repayments....... 693.21
Amount left after debt repayments....... 111.79

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -140
Total Unsecured debt.................... -11,282.54
Net Assets.............................. -11,422.54

Clothing and presents too high

Put in something for TV licence

MFWannabe

pencakes26 wrote: »

Hmm, if it was my mum I think I would have already said yes, but as it is my partner, I am much more aware of the risk to him.

I absolutely know that I wouldnt intentionally do anything but pay off my debts in his name (or mins for that matter) but obviously if things happen beyond my control, I lose my job for example, then he is stuck with my repayments (which he can afford, but its not really the point). I think we need to sit down again tonight and go through it properly and give him the chance to think of all the implications before he offers to do this for me. If your other half is willing to do this understanding all the risks then i would let him. I say this because you currently have almost 3k on high interest cards which will take years to pay because of the high APR's. If you check your statements you'll find that all you are paying back each month is interest. If he does this set up a standing order to him to pay him the £100 each month you are currently paying the cards. And cut up and close the cards!!

Im not so keen on the court route, because it seems like more worry/stress and Im not coping very well as it is even though paying off my debts properly and on time.

I will def speak to them and see how they feel about changing the repayments. After all they are a big multinational oil company and can afford for me to do that...but of course they could say no. Always worth asking so thanks for that Tixy

I will do my SOA and post it today.

Im also looking at ways of boosting my income so I can throw as much money at these debts as possible. A part time second job would be really useful right now.

Thanks again guys

Hi
Welcome to the board. I've added a comment above; also if you make extra money from second job you could also pay this to other half (same if you manage to decrease payment to old employer). Also if your OH's credit rating is good then he should be able to get a much better transfer deal card than 6 months 0%

Tixy

Is the £525 what you pay to your partner (assuming you live together)? and this goes to pay rent, utilities & water, council tax, tv licence, internet etc? Has he worked out how much all of these things come to together - and is £525 half of that amount? Does this take into account that you are buying the groceries and the contents insurance?

In terms of your own SoA - Does the £111 left over tie in to what you actually have - ie are you making monthly payments to vanquis of around £173?

Is the grocery cost just for you or for 2 of you? It looks very high for 1 person, and fairly high for 2 - have you tried seeing if you can reduce it a little? perhaps try the 'drop a brand' challenge.

Could you try reducing your clothing spend for a while whilst you target your debts - maybe aim to halve it for a few months and wear what you already have?