New and need help please

couldhavetriedharder

This is my very first post on MSE. I need some help to work out how to pay back a lot of money that I owe please. I no longer work due to health reasons, and at 59 probably won't get another job now, but do have a small pension and my husband gives me some money by standing order each month. I have tried to apply for bank loans and 0% cards, but because I don't work, they will not take into account my income, is there another way?
I have not and cannot tell my husband about this as he has helped me in the past to get out of debt and he will be fuming (to put it mildly) if he knows I have got into debt again.
I have worked out a budget, and should have a little money left over each month, but it will take me a long time to pay off, even if I am very careful.
Is anyone else in a similar situation to me please, and if so, how did you manage your debt?
Any help/thoughts would be very much appreciated.

matttye

You should seriously consider telling your husband. You're not working so presumably don't have a lot of spare income to put towards your debts. What are you going to do if your creditors won't accept your offers and take you to court? Bailiffs could then be knocking at the door and that's obviously the worst possible way your husband could be made aware of the debts.

"A problem shared is a problem halved."

Tixy

Hi and welcome to MSE.

First off what is the current situation with your debts? are you already behind on payments? are you paying anything to them at the moment?

How much do you owe in total?

couldhavetriedharder

Hi Tixy
Thanks for replying. I'm not behind with my debts. I managed to pay some off each month. I owe:

7592.24 to MasterCard (through Nat West bank)
6875.80 to Virgin credit
960.07 overdrawn in bank
Total 15428.11

I'm really fortunate (and I know this) that I only pay for food, Sky, dentist, holiday account (we pay £80 a month each) and other incidentals like hair cut, petrol etc.
I have 1080.00 coming in with pension and husbands money to my account.
I pay out of this in direct debits:
Sky 65.00 (which I got reduced from £79)
Denplan 24.73
Holiday fund 80.00

and then I need, petrol, hair, food (for 2 people)

I know I am not as badly off as a lot of people, but I know, with help, I can get this sorted out and pay it all off without telling my husband.

matttye

couldhavetriedharder wrote: »

Hi Tixy
Thanks for replying. I'm not behind with my debts. I managed to pay some off each month. I owe:

7592.24 to MasterCard (through Nat West bank)
6875.80 to Virgin credit
960.07 overdrawn in bank
Total 15428.11

I'm really fortunate (and I know this) that I only pay for food, Sky, dentist, holiday account (we pay £80 a month each) and other incidentals like hair cut, petrol etc.
I have 1080.00 coming in with pension and husbands money to my account.
I pay out of this in direct debits:
Sky 65.00 (which I got reduced from £79)
Denplan 24.73
Holiday fund 80.00

and then I need, petrol, hair, food (for 2 people)

I know I am not as badly off as a lot of people, but I know, with help, I can get this sorted out and pay it all off without telling my husband.

What are the interest rates on each of those debts?

IMO it's always a good idea to clear overdrafts first because they're repayable on demand. After clearing the overdraft, you should then focus on clearing the highest interest rate debt first and then the lowest one.

The overdraft is also the one that could potentially mess up your credit report (if the bank demands you to repay it and you can't) and set off alarm bells for your husband if you try to obtain credit in the future and can't do so.

Tixy

Have you done a budget for the petrol / hair / food etc? and are you sure there are no other costs that you pay for? how much have worked out what you have left a month to put to the debts?

Depending on what you are spending on food you could also try the downshift challenge to try to cut that cost a bit.

I'm guessing you might have maybe £500 - £600 a month left for your debts a month (assuming your petrol costs are not particularly high) is that about right? If so and if your circumstances stay the same I would guess you can get on top of this debt yourself (that assuming you are no longer spending on whatever got you in to debt in the first place).

Do you know the APR for each of your debts? If so then you can work out the best way to repay them to pay the least amount in interest and how long it will take to clear them by using the snowball calculator - http://www.whatsthecost.com/snowball.aspx

(e.g if you could afford £600 a month and the APRs were all 22% it would take 34months to repay the debt).

If the APRs are signficantly different then do you have any spare unused limit on the lower Apr card?

All that said - I would still suggest you do consider telling your husband. Do you know what the money was spent on to run up the debt? was it costs your husband was aware of / joint items for both of you?

AndyJR81

what are your current payments coming to each month? I had an almost exact same total when I started paying mine down 4 years ago and was having to pay around £400 a month to meet minimum contractual payments.

I went down the Debt Management Plan route, and have recently consolidated by using my local Credit Union with the debt total a much more reasonable £5,500. I'm now paying £141 in contractual payments, and getting a little green tick every month for paying it on time.

If the payable amount is whats causing you problem (i.e. clearing you out each month), and you don't mind your credit score being diminished (by the sounds of it you aren't getting credit anyway) then I'd consider speaking to the CAB and seeing if a DMP might suit your needs. You should be able to have interest frozen. I'd also recommend joining your local credit union, and putting some money in each month, and then when you've chopped a good bit off your £15K see if they would be prepared to help you with a consolidation loan, which has a reasonable 10.9% interest rate. Of course if you are not fussed about your credit rating for the future you could just stick with the plan until its paid off in full.

If its not the cash flow thats the issue, then the advice above to pay off the O/D first and then pay more off the highest APR card is the way to go.

I'd consider giving debtline a call, they are a charity set up to give advice on exactly our sort of situation and I found them extremely useful when negotiating final settlements

As a final note, you really do need to have a heart to heart with your husband. I'm sure he will be upset, but not a fraction of what he will be if he finds out that you have done it all behind his back. If you have any joint accounts, you will be financially associated and so anything he applies for would take your credit history into account.

Good luck and let us know how you get on.

couldhavetriedharder

Thanks Tixy
I have just followed your link (snowball calculator) and did not know what to put in for amount to pay each month on my current account so put £20 or else it didn't show. I used £550 as the monthly repayment figure.
The results were to pay back in this order:

Current a/c (18.28 Nominal Annual, EAR 19.89 - used Nominal as not sure, is that correct?) 311.38 x 3 months then 41.70 (which is what you said)

then
MasterCard: (17.9 APR) 438.53 till Feb 2015

then
Virgin (1.2408% per month x 12 = 14.89? is that right?)
from March 2015 550.00
paying back the minimum on the others.

I worked out the following:
Sky 65.00
Denplan 24.73
Holiday 80.00
Food 250.00 ( I will try and cut back on this)
Petrol 40.00
Hair and incidentals 40.00
Total: 499.73

1080 less 499.73 = 580.27

Does this look the right thing to do to you?

You help has been invaluable to me and I feel like I'm getting somewhere at last. Can I print off the snowball calculator or save it?
Thank you so much for your help.

midnight_express

You could get rid of the car and sky. What are the incidentals ?

couldhavetriedharder

Thanks AndyJR81. That's certainly given me a lot to think about and I will find out more about Debt Management and Credit Union. How does Credit Union work? Do you have to pay money in regularly for some time before you can use it against any debt? Do you get interest on the money?
I think I will give debt line a call as well to see what they say. I have listed more details of my situation above.
Thanks so much for your help.

couldhavetriedharder

Hi midnight express. Can't get rid of the car I'm afraid as I wouldn't be able to get to places very easily and it only costs me petrol. Sky is watched by my husband also. Incidentals are in case I need something extra like a prescription.