Statement of Account

IOUhowmuch?

Hello.

After an emotional upheaval a year ago I'm in now also in a financial mess and really need some good advice and encouragement.

First, this isn't my normal username. I'm a regular on other boards but close friends and family know the name I use and I'm currently too ashamed of myself to own up quite that publicly. I'm sure some regulars here might recognise my posting style, I'm cool with that but please don't out me publicly. Apologies for being such a wimp.

OK. Here goes

Monthly income £2,200

Debts:
Credit card 1 £4,896 @ 17.95% - making minimum payments, around £120pm
Credit Card 2 £1,887 @ 13.9% - making minimum payments, around £50pm
Overdraft 1 £2,500 @ 14.5% - making agreed payments of £250 per month
Overdraft 2 £500 reducing by £100 per month – within agreed limit so no interest…yet.


Monthly Expenditure
Rent £954
Mortgage (repayment) and endowment (as savings now) on previous home occupied by ex partner £270
Water (metered) 16
Electricity DD £37
Mobile and broadband £30
Telephone £12
Council tax £66
Food cleaning, etc £200 and reducing
Travel £30 and reducing
Going out etc I’ve restricted myself to £50 max
Charitable donations I want to continue £5

Complications:
I missed some payments on CCs and a store card, now caught up/paid off
Current home has inherited bab debt problem, including CCJs I think, from the previous occupier – Bailiffs and debt collectors have visited. I’m contacting them as the debts come to light, but don’t know how to disassociate myself and the address from those debts. It's hard enough dealing with my own.
Result is a crap credit rating and I was recently turned down for an unsecured loan at a much lower interest rate I’d hoped to use to pay off the CCs. I've sent for an experion report.

I’m at that borderline where I’m tightening my belt a lot and trying not to miss any payments, but the repayments and interest are a real struggle. I’m worried that one large unexpected expense will tip the whole thing out of control. I need to reduce the debts as quickly as I can and start saving.

Over to you experts and thanks in advance.

raq

just wanted to say " morning " and all the best. There is light at the end of the tunnel although at first it is difficulty.

Someone will be along with great expert advise.

oops_a_daisy

Hi there IOU
I make out your total outgoings to be £2190 so this doesnt leave you much to overpay your debts. The highest outgoing seems to be your rent - is there anyway you can find somewhere cheaper ? although if you have just moved in you will probably have at least a 6 month contract. You seem to have cut other things right down in a MSE style - keep going with this. Re the previous tenant and their debts, the debt is not associated with the address but the name of the person - just send back any mail unopened to the sender and have your council tax bill ready to prove who you are if the bailiffs call for the previous tenant. Check your credit report to see if you have somehow been linked with the previous tenant and if you have been linked then write to the credit reference agancy and ask them to dis associate you with them. The only other thing to mention is that you are overpaying your overdraft which is interst free while just making minimum payments on your higher interest debts - could you put this overpayment onto the interest bearing debts to bring them down ? I have made some notes next to your SOA.
The only other thing to mention is to start a spending diary so that you can see exactly where your money is going and it helps to keep you on the right track with your budgets.

All the best and good luck - OOPS

IOUhowmuch? wrote: »

Hello.

After an emotional upheaval a year ago I'm in now also in a financial mess and really need some good advice and encouragement.

First, this isn't my normal username. I'm a regular on other boards but close friends and family know the name I use and I'm currently too ashamed of myself to own up quite that publicly. I'm sure some regulars here might recognise my posting style, I'm cool with that but please don't out me publicly. Apologies for being such a wimp.

OK. Here goes

Monthly income £2,200

Debts:
Credit card 1 £4,896 @ 17.95% - making minimum payments, around £120pm
Credit Card 2 £1,887 @ 13.9% - making minimum payments, around £50pm
Overdraft 1 £2,500 @ 14.5% - making agreed payments of £250 per month
Overdraft 2 £500 reducing by £100 per month – within agreed limit so no interest…yet.


Monthly Expenditure
Rent £954 seems high - can you move to cheaper property ?
Mortgage (repayment) and endowment (as savings now) on previous home occupied by ex partner £270 can you freeze payments into this endowment and then start to repay later or is it worth selling it ?
Water (metered) 16
Electricity DD £37 are you on the cheapest ?
Mobile and broadband £30 can you go onto PAYG for £10 per month and move to cheaper BB
Telephone £12
Council tax £66
Food cleaning, etc £200 and reducing if you are a regular here Im sure you know all about oldstyle threads
Travel £30 and reducing
Going out etc I’ve restricted myself to £50 max
Charitable donations I want to continue £5 I know you want to continue but really you need to pay off you own debts first then re start this when you can afford to

Complications:
I missed some payments on CCs and a store card, now caught up/paid off
Current home has inherited bab debt problem, including CCJs I think, from the previous occupier – Bailiffs and debt collectors have visited. I’m contacting them as the debts come to light, but don’t know how to disassociate myself and the address from those debts. It's hard enough dealing with my own.
Result is a crap credit rating and I was recently turned down for an unsecured loan at a much lower interest rate I’d hoped to use to pay off the CCs. I've sent for an experion report.

I’m at that borderline where I’m tightening my belt a lot and trying not to miss any payments, but the repayments and interest are a real struggle. I’m worried that one large unexpected expense will tip the whole thing out of control. I need to reduce the debts as quickly as I can and start saving.

Over to you experts and thanks in advance.

Bambywamby

Good morning

Anychance of transferring the balance from one of your Cards to one with a 0% finance on transfers or alot lower APR?

Any chance of moving? a) to a home without such a chequered history (not always possible to know I realise) and b) without paying such a HUGE amount of rent. You could get a hefty mortgage for that amount of rent.

Other bits ...
Debts:
Credit card 1 £4,896 @ 17.95% - making minimum payments, around £120pm
Credit Card 2 £1,887 @ 13.9% - making minimum payments, around £50pm
Overdraft 1 £2,500 @ 14.5% - making agreed payments of £250 per month
Overdraft 2 £500 reducing by £100 per month – within agreed limit so no interest…yet.

Any way you can start paying over the minimum payment on the debts with the highest APR? They will take years to pay off otherwise. Even an extra £20 a month thrown at the debts will make a massive difference to the length of time you are paying.

Monthly Expenditure
Rent £954
Mortgage (repayment) and endowment (as savings now) on previous home occupied by ex partner £270
Water (metered) 16
Electricity DD £37 ....Can you switch to a provider with a cheaper rate? Are you been as energy efficient as possible? Turning lights off, not keeping electrical items on stand by, not using tumble dryer etc
Mobile and broadband £30 ...again is this the cheapest package you can get?
Telephone £12
Council tax £66
Food cleaning, etc £200 and reducing (Try Old style board for great tips on how to reduce)
Travel £30 and reducing ...can you get a bicycle?
Going out etc I’ve restricted myself to £50 max .....Cut it down to £40, you know you can
Charitable donations I want to continue £5

Can you get a second job? Have you got any junk for a car boot sale? Any books to put on amazon? Any goods to put on Ebay?

Good luck. Your debts are not huge and are manageable. Stay focused, keep positive and before you know it you will be back in the black.

Best wishes X X

IOUhowmuch?

Thank you all for your responses, I’ve made myself sick with worry as I’m normally quite careful and things just got out of control with rent deposits and the costs of setting up a new home. To see in black and white that someone thinks my debts are not huge and are manageable has really helped me take a deep breath this morning and get things into perspective. I needed help doing that. Thank you. :A

Turning to your suggestions, the rent is a huge expense for me, but I did my sums before I moved and in all honesty anything cheaper in the area I live in would save at the very most £80 per month and would not be anything like as nice as the place I have, which is a very small flat. I’m already in a relatively cheap part of the South East. If I move further away from work the transport costs would swallow up the savings in rent. From here I can just about walk or use the bus to get to work as an alternative to the underground and trains. I know it is the obvious thing to save on but it is honestly the last thing I want to give up if I can avoid it. The emotional stuff comes into play on this one. I feel safe here so I’m willing to take the financial hit for that for as long as I can.

The endowment, I’d not thought of selling or freezing it, I’ll look into it and check the cost of alternative insurance for the mortgage if it is worth selling. Thank you.

The overdraft, the bank is reducing the allowed OD by £100 per month, you know how they are, they promise you anything as long as you don’t actually need it. It was this which really caused me problems recently. as I was using that to reduce the CCs

Transferring the CC balances to a 0%, I’ll check that when I get the report on my credit rating and see how bad things are.

Electricity. I’m not allowed to change provider. I’ve recently been working out how to make best use of the economy tariff I have. Unfortunately I have to wait for the bills to come through to get meter readings so it is all trial and error. I have started switching off everything possible.

Phone and broadband, I’m tied in for the best part of a year yet, it was an 18 month contract for both. I thought it was a good deal at the time

Travel, That is reducing as I get used to walking more so hopefully with summer coming on the savings on that can go towards reducing the debt.

Food and stuff, yes I found the Old Style board and am learning a lot there. Current expenditure is about £100 less than it was a couple of months ago.

Going out. Yes I can and will reduce that. If I want to keep the flat then other things have to go. Ditto the charity. As you say, I can always restart.

A second job is an idea. I’ll see what I can do.

I do have things I can sell so will go and check out how to Ebay, thinking about it I might be able to clear enough to get rid of at least one debt.

Oops a daisy, I really appreciate the sound advice on the previous tenants debts. The first batch of debt collectors showed up just as I was waking up to my own financial problems so it really put the wind up me. I’ve put my council tax bill where I can get at it quickly. if needed. Thank you.

Bambywamby, I’d lost sight of the fact that any extra used to pay off the highest interest debt is going to be money well spent. I’ll tackle that one first with any extra money I can make/save. Cheers.

Thank you for all of your help, it really has helped me get things into perspective.

raq

i again

I am one of them I don't think your debts are huge. I am in debt and it doesn't matter if it's a £1 or £10k. Still a debt and having sleepness nights.

We are working through ours and my other half have had tones of overtime so this has been going against this. Our debt is round the £8,500.00 figure now. Sleeping much better lately aswell.

IOUhowmuch?

Thanks Raq.

Well done in getting yours down. I hope I can sleep again soon as well.

I'd got so frightened and was paniking like crazy that I might have to give up my home. I know I really should go cheaper but I desparately need the comfort zone it gives me for now. Debt is scary, but I can finally admit this morning that there are worse things

It just helps knowing your not alone doesn't it?

I just did the snowball thingy and it has really helped! I have a debt free date of June 2009 at current payment levels of £420 per month. Next 4 months are going to be horrible as I need to find a bit more.

Ebay here I come :eek:

IOUhowmuch?

Sorry, me again.

I just want to say thank you so much, all of you, for being here! Just having somewhere to turn to and having my virtual hand held has made so much difference to me in the space of a few hours.

Last night things could not have been blacker, I had instant refusal for the loan it took weeks for me to pluck up the courage to apply for, then I had no idea what to do next.

This morning, after some very hard work and deep breaths, some sensible advice, and a big dose of reality and I feel better than I have in ages.

Phew! NOW I know why this place is so very special.

:A :A :A :A :A :A :A :A :A :A :A