Help getting rid of credit card debt

jock23

Hi,

Its safe to say that I haven't been the best with money since I left uni 8 years ago, amassing a fair amount of debt over that time. It has always been in a reasonable amount of control as I have a steady, decent paid job.

I recently finished a 5 year loan with my bank HSBC and now am left with a number of credit cards (6 to be precise) with debts totalling around £13000 spread over them. 4 of the cards are closed so that I cannot use them and just pay them off at minimum payment each month, 2 of them are open and I use occasionally if I struggle at the end of the month.

I really want to get a loan to clear all these debts, shut all the cards down and live like a normal person, but I can't seem to get one anywhere. I have only been late on 1 payment across all my debts in the last 2 years and have no other anomalies on my credit rating.

I think the fact that I have so much credit available to me (if I was to reopen the closed credit cards) is stopping people giving me a loan, but there isn't much I can do about that as I can't pay off the cards.

Does anyone have any advice? Would it help if I was to go into my bank and explained the situation to them, or would they still just look at my credit rating?

Thanks in advance for any help!!

Therese1

Well done for stopping the bus and asking to get off! Recognising and deciding to deal with your debt is a huge and important step : )

I am sure there will be much more detailed advise along later ( you have come to the right place) but my thoughts are:

Get all your info on the cards together to see exactly where you are. How much on each card and what is the interest rate. Then work out what mOney you have each month to give to the debt. Pay the minimum amounts to the 5 lower interest one and the rest -more than min -to the highest interest. When that one is cleared work down in the same way with the others. At first some folk like to pay off the smallest debt so that they feel good about a quick clearance -this may be an option but work out which way feels best for you.

Also if you can close all of the cards or leave just one open with a small credit then you'll have better chance of avoiding temptation to build on your debt.

To get more ideas on how to save on your existing spending post a Statement of Affairs -info at top _ and you'll get loads of hep.

Good luck

Tommymax81

Hi Jock,

Would you not be able to transfer some of the debt onto 0% cards?? A friend of mine was in a similar situation recently and the bank did agree to a consolidation loan but at a rate of 20%!! If your credit history is good then you should be able to get a good balance transfer deal.

Good luck

jock23

Well I have tried low rate or interest free cards yes, but I wasn't successful in the application. I can't see why apart from the amount of credit I already have?

orcocan

hello and welcome

the key issue here is that your outgoings are higher than your income, so you need to fix that issue first. Refinancing your debt, which seems to be your main concern, should not be a priority at all at this stage. Getting another loan will not really help you unless you fix the underlying issue FIRST.

I'd suggest you start posting your SOA here and lots of people will be able to give you good advice.

Good luck! :-)

jock23

How do I do that?

DVardysShadow

jock23 wrote: »

.... I recently finished a 5 year loan with my bank HSBC and now am left with a number of credit cards (6 to be precise) with debts totalling around £13000 spread over them [current situation: debt = £13000]. 4 of the cards are closed so that I cannot use them and just pay them off at minimum payment each month, 2 of them are open and I use occasionally if I struggle at the end of the month.

I really want to get a loan to clear all these debts [proposed future situation: debt = £13000], shut all the cards down and live like a normal person, but I can't seem to get one anywhere. I have only been late on 1 payment across all my debts in the last 2 years and have no other anomalies on my credit rating.

I think the fact that I have so much credit available to me (if I was to reopen the closed credit cards) is stopping people giving me a loan, but there isn't much I can do about that as I can't pay off the cards.

Does anyone have any advice? Would it help if I was to go into my bank and explained the situation to them, or would they still just look at my credit rating?

Your answer to having too much debt is to pay it off with another loan and have the same debt somewhere else?

If you can't pay off the cards, then most lenders would make the calculation that you could not pay off a loan. The only answer is to cut your spending to well within your income and use the surplus to pay down your debt. The only way to clear debt is to pay it off with money which is entirely yours in the first place.

orcocan

jock23 wrote: »

How do I do that?

Input all your details here
http://www.stoozing.com/msoc/soacalc.php

then you can export into MSE format and paste it here

jock23

Firstly, this isn't a post because I can't pay my debts. I have struggled whilst paying off my loan but now I am finished it is getting much easier. My aim at getting a loan was so that I could pay the debt off at a lower rate and quicker....

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1635
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1635
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 262
Rent.................................... 150
Management charge (leasehold property).. 0
Council tax............................. 115
Electricity............................. 60
Gas..................................... 53
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 17.5
Mobile phone............................ 27
TV Licence.............................. 14.5
Satellite/Cable TV...................... 0
Internet Services....................... 10
Groceries etc. ......................... 150
Clothing................................ 5
Petrol/diesel........................... 30
Road tax................................ 8.5
Car Insurance........................... 0
Car maintenance (including MOT)......... 17
Car parking............................. 0
Other travel............................ 70
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................................ 10
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1084.5

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 8500
Other assets............................ 0
Total Assets............................ 8500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 8250.....(262)......10.9
Total secured & HP debts...... 8250......-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Egg............................1038......25........15.9
Egg World......................2522......62........15.9
Barclaycard....................2100......76........15.9
HSBC...........................1976......50........15.8
Virgin.........................2143......51........15.9
Mint...........................3631......82........15.9
Total unsecured debts..........13410.....346.......-

Monthly Budget Summary
Total monthly income.................... 1,635
Expenses (including HP & secured debts). 1,084.5
Available for debt repayments........... 550.5
Monthly UNsecured debt repayments....... 346
Amount left after debt repayments....... 204.5
Personal Balance Sheet Summary
Total assets (things you own)........... 8,500
Total HP & Secured debt................. -8,250
Total Unsecured debt.................... -13,410
Net Assets.............................. -13,160

fatbelly

It's going to be a long haul to get debt free on that SoA. The expenditure looked reasonable to me if it's realistic. I did wonder about the lack of car insurance. If you pay annually you still need to divide by 12 and put a figure in.

Normally the advice is to overpay the debt with the highest apr first (snowballing) but if they're all the same then I'd suggest overpaying the lowest balance first.

When you get to zero and phone to cancel, ask if they have any 0% balance transfer deals, and keep an eye on this thread:

unofficial BT deals

tiny_courageous

A few thoughts

What's the HP for? The car, I presume?

Looking at your SOA, it's not too bad, you need to include car insurance, do you not have contents insurance?

You're only spending £30 a month on petrol - do you realistically need the car?

If you're not getting balance transfer offers, you could ask your current credit cards if they could freeze/reduce the interest and close the card so you can't spend any more on it. This can be an option if they ever put the interest rate up as well.