Lots of Debt - Where do we start?

Jobee

Hi everyone, this is the first time i've ever posted so please be gentle! Also, not sure if i've put this in the right place...

My boyfriend and i have have just moved in together, i knew he had quite a lot of debt and he has agreed to let me help him to sort it out. Plans for the future are... buy our own place (currently renting), get married, start family...

Financial situation is... I have approx 20k in savings which i want to keep for a deposit for a house and 2.5k on a credit card. I earn 30k pa. My bf has a mixture of student loans, personal unsecured loans (with ppi), overdraft and credit cards (bad ones apr 17.9-21) totalling somewhere in the region of 50-60k !!!!!!!!!! He earns between 24-29k pa.

Tonight we are doing the ceremonial 'cutting up of the cards'. His loans end circa 2011... His credit cards - well i have no idea!

As you can imaging his montly repayments are huge (he doesnt miss any repayments so we think his credit record is good) and he often dips into his credit card for cash -a huge no no, hence why they are being destroyed later this evening!

We are open to any and every suggestion on how to tackle this. Our concerns are this is going to take over our lives if we don't do something drastic. Also, i'm not sure if we will be able to get a mortgage with the amount of monthly repayments he has.

Help...?

hypno06

Hi and welcome.

First of all, make sure that bf is really having his lightbulb moment. You will not be able to do this for him - he really does need to make the effort himself although having your sensible encouraging head on will be invaluable along the way.

Assuming that he is completely willing to get this sorted, start off by both reading the sticky at the top of this thread by southernscouser which will tell you what to put in a statement of affairs.

This will give you a true picture of what you have got to deal with. If you post it on this site, we will be happy to see if there is anything that we can suggest to help get things moving in the right direction.

Once you have listed the debts and the aprs etc, put them into the snowball calculator - https://www.whatsthecost.com this is an excellent little tool and one that I would be lost without given the high level of debt that I have. It will give you a focus.

Good luck, and keep posting. Big debts are scary but there are a number of us here with them and we are still smiling

Jobee

thank you.

It is scary, We'll do what you suggested and repost later this evening.

CLAPTON

get him to post a SOA here...full details of income, details of spending, and full debt details..amount, monthly minimum payment and APRs

Iriahm

Hi, I would get his £2 credit report from Experian and it will help you identify all creditors - handy for ones he may have forgotton about (if any) and can help as a starting point for doing your State of Affair (SOA)

Also, having been in a similar situation and my OH was debt free I was advised on here to stay financially seperate. That means no joint bank accounts etc until you know he has a good credit rating. Not the easiest thing to discuss but it protects you.

If he is only paying minimum payments he will be getting nowhere. Can you cancel the PPI?? easy way to then divert money straight into reducing the debt.

It sounds like he wants help as its a huge thing to discuss with a partner - it took me a year to tell my OH and he was really shocked but supported me through it. Still got just under £20k to go (including student loans, car loan and personal loan but the worst bit is over)

keep smiling!! Ix

beanielou

Hi & welcome to MSE.
Look forward to seeing your SOA.

GirlRacer_2

Hi Jobee, Welcome to DFW's. Your boyfriend is very lucky that you willing to help him. As everyone has suggested post his SOA and then the good guys will make some suggestions.

JoeK_3

Jobee, pay your credit card off from your savings, cut it up and close the account for a start.

Under no circumstances enter into any joint accounts, joint purchases or make any purchases for him whatever he pleads.

Whilst his credit rating is still good, try moving the credit cards to 0% interest rate cards, starting with the most expensive APR'S, first. Once this has been done, close all the dormant accounts.

JoeK

Jobee

Thanks for your support guys.

Here goes:

Salary: 1695

Egg loan: (204.70)
Halifax loan (249.86)
Lloyds Loan (253.54)
Student Loan (101.00)

Egg CC (min pay) (10.50)
Halifax CC (min pay) (190)
Lloyds CC (min pay) (140)

Share of living expenses,
rent (313)
utlities (50)
Council Tax (50)
travel (40)
Food (75)
TV licence (6)
Phone (25)

Balance(13.60) !!!!

details of loans and credit cards are:

Halifax loan balance 9805.03 apr 8.3% due to end may 2011 (with ppi)
lloyds loan balance 14985.86 apr 9.79 due to end aug 2013
egg loan balance 8086.17 apr 7.9% due to end oct 2011 (with ppi)
student loan circa 10,000

lloyds cc balance 6999.96 apr 20%
halifax cc balance 9005.36 apr 23%
egg cc balance 465.81 apr 17.9%

overdraft on current account 800

and thats it!!

we havent done the snowball thing yet, this was pretty exhausting so are going to leave that for tomorrow.

being positive about this, this is the first step in getting it sorted so any suggestions welcome. thanks to all for your advice so far.

to be continued....

Jobee

Hi all,

Any suggestions on a starting point to clear this lot??

Going apply for a M&S credit card later, 4.9 for life of balance transfer which is much cheaper than current cards. what do you think??

angchris

well done for trying to help your bf out with regards his debts. you have done a great job so far. can he balance transfer his credit cards to a smaller apr? he could phone up the loan companies and complain about the ppi and get it taken off. ideally he needs to be making a bit more cash to throw at debts as just the minimum payments are being made at the moment, any chance of an evening/weekend job or flogging stuff on ebay? please whatever you do dont take on any of his debt in your name because if the worst happens and you split you will be left with it!