73K debt advise please

John4702

Hi,

Well its times too take charge of my stupid youth.

Im 27 and now in a good job, partner works to.

I have 73K of debt

A mortgage of 110000

So a total of 183000

My property has been valued at 155000

So if i sold up and rented i would be looking at an outstanding balance of approx 30K

My take home per month after tax is £2200

And my partners is 700

Total of 2900

I have had a mortgage agreed for 140000, thus releaseing 30000 and my 73K of debt goes down to 43K, I am scared i may not be able to maintain or reduce this level due to my stupidness. I want a one stop solution.

I think going bank rupt is a bit extreme.

Im not sure about an IVA as wont it eat up all my spare cash, i know, i know but what if my car goes wrong how will i pay for that? or the boiler blows up etc.... I wont have any emergency funds, will i?

I was thinking of taking the remortgage and then trying to offer my 73K of creditors 30K... not sure that idea makes any sense.

Advise please!!

Ah and i have kinda just hot the ceiling on my credit cars, meaning i have been stupid enough to put my self in a position where i cant transfer balances to take advantage of low rates so soon the interest will kill any disposable cash any way.


Thanks

angelavdavis

Hi John and Welcome to MSE,

First things first, you need to post a full SOA onto the forum so we can get a good view of your incomings and outgoings - look for SouthernScousers sticky at the top of this forum. You need to provide information relating to debts, a breakdown of each debt, apr, monthly payment, total owed, length of payment, etc.

What is the current situation with your credit cards? Are you still spending on them? This needs to stop now! You need to cut up the majority and keep one in case of emergencies, put it in a tupperware box of water and place in the freezer.

What have you been spending on? Do you have lots to ebay to reduce the debts?

Post up the SOA then the folks on here can help out.

Good luck!

quantumleap

Hi John,

In order to get the help and advice that you really need you should post a full statement of affairs. I would suggest that you hold off on the remortgage for a time, at least until you've been given some advice. Moving your debt like this is not always the best option.

John4702

Credit cards Balance Limit Current interest rate

Natwest 2440 10000 18
Abbey 10691 11100 22
Virgin 4290 4500 10 Ends June
Citi 1422 1820 6Fixed for life of
Morgan 2011 3400 6 Fixed for life of
Halifax 1771 2750 10 Fixed for life of
Marriot 8053 8800 4.94 Fixed for life of
RBS 5228 5750 18
MBNA 3923 4600 6 Ends June
COOP 3503 6500 18
Cap 3649 4000 18

Over Draft

Nat 450 9500 16
.
Loans

Natwest Approx 11000 NA Around 6
Family member helped me Natwest Approx 6300 NA Around 6
Saisburys Correct 200307 5901 NA Around 6
Loan Comp Correct 200307 3700 NA Around 6

Total 74332

hope the above makes sense, copied it from excel.

Ok Now bills

Mortgage 640
Gas 46
Electric 33
Water 37
Council Tax 100
Tv Licence 11
BB 25
Mobile 30
Telephone 10
Flat maintance 33.33
Flat Insurance13.75
Car tax 15.83
Food 250
Train Fair 250
Car insurance 50

total =1544

Now the interest on all credit costs me approx 378.66 at present rates.

total 1930

My income is 2200 my partner gives me half her wage for bills, which is fair as its not her debt or home.

total income 2550

2550 - 1930 = 620 left over

Now this debt has come about from 6 years over spending, since i moved out.

I have only been in a well paid job for a year and my partner has only lived with me a few months. No real big assests to ebay apart from a motor bike that is worth 1500, i guess i could do without the 2K car if pushed as i train to work, is it selfish/supid iwant to keep it though. Once the motor bike is sold i will have 73K of debt. everything that is worth ebaying was bought 7 years ago when i set up home, all rather old and warn now and is of far more use to me than its monetry value. rasing 500 by selling my tv and range of bits does seem futile if i am aiming to stay in and save money.

Any how hope the layout makes sense, if not please let me know.

Thanks for the help so far.

hypno06

Remember that by remortgaging, you would not be getting rid of £30000 of your debt, just shifting it. Your overall debt remains the same, and many will advise against making it all secured as you are at risk of losing your house.

Firstly, gather all the info together and do a statement of affairs as per the sticky above. Let us know what the debts consist of, APRs time left to run on loans etc and minimum payments.

Also, are you in arrears with anything?

Then start a spending diary and really take a good long look at what you are spending your money on. This will instantly tell you where you can cut back and you will be amazed when you see it in the cold light of day.

Try putting your debt figures in the snowball calculator on https://www.whatsthecost.com this will show you that there is light at the end of the tunnel, and it will even tell you how long the tunnel is.

Also, speak to CCCS or Payplan or similar and ask their advice. It may be that a DMP is advisable but if you go down this route make sure it is with one of the charitable companies who won't charge you for the privilage. In any event, you will get some good advice to take away with you which you can use to make your decisions with.

Big debts are scary (I know, I have one - see my signature) but they are workable with effort.

Good luck and keep posting.

sweetangel63

http://www.cccs.co.uk/

they have helped me with a budget plan and given me advise they have given me 2 options one token payments two. go bankrupt for now going with choice one......

good luck

angela

hypno06

Ok, so post crossed with your soa.

the first thing that strikes me is that your interest rates are very low so there is real opportunity to make inroads on your debt.

Try the snowball calculation, play around with the figures and seriously look at how much you are spending. With low interest rates as you have, even an extra few quid bunged at the highest paying card will make a good difference.

Focus, and you will get there.

warburtonrichard

John, what are the minimum payments on your cards and loan payments you have to make? You only say what is the interest on your SOA, not the payments you've got to make....
Warby

John4702

Sainsburys Loan 215 4th
Marriot card 120 8th
MBNA EB 20 8th
HBOS Card Services 36.29 9th
RBS 119 15th
Abbey National CC 10 16th
Co op 71 16th
MBNA EB 18 16th
Dad 150 17th
Nat Loan 266 19th
Citi 45 22nd
Cap one 78 26th
MS card Services 41 30th
Nat Visa 116 2nd
1305.29


All min payments above.

If i spend nothing other than bills in any one month then I approx brake even to what comes in and what goes out.

If i spend then i have to top up y current account every so oten, from a card to keep my head above.

Thanks

quantumleap

As has been said John, if you add to your mortgage you are only shifting the debt from unsecured to secured, which many on here wouldn't advise. The advice regarding the snowball calculator is useful. It'll give you an opportunity to understand what you can achieve and when.

Looking at you SOA I'm thinking you've consolidated at times and to be honest moving you debt to you mortgage is a similar move. You need to start addressing and reducing the debt rather than moving it. You also need to look into the reasons why you are in such debt and ensure they too are being addressed.

As you debt is quite significant you should perhaps speak to someone from the CCCS or CAB about possible options such as a DMP.

I'm sure others will be along to give you most specific advice.

I wish you well.

warburtonrichard

A couple of points from me then

Your Abbey card of £10,000 balance has a minimum payment of £10.00 a month against it, which seems low to me for an interest rate of 22% is this right?

Your MBNA cards in June will turn from very low minimum payments to £100+ minimum payments, so that's your really really deadline on this because that's when you're going to start to default on things

How much will your new mortgage payment be on your £140k mortgage?