Becks in Debt - Debt Free Diary

Becks_in_Debt

:wave: Hi all, I joined this site back in March 07, and you have all been a great help to me. I have never set up my own diary and though now is the best time to do it.

Things are currently looking up for us yet the debt is due to get bigger in the next 14 days, so thought I would start from now.

As of March 2006 we owed £12,332.92, we went to CAB for help and things have got a bit better since then.

As of March 2007 the debt was £7,752.71, and we were aiming to get all debt paid off early 2008.

Me & OH argue constantly about money or lack of it so we have decided to try something new. We have took out a loan for £10k which should fingers crossed hit our bank in 14days time or there abouts. Our plan is to come to some kind of settlement figure with many of our creditors. Car Finance have offered us 50% discount for a one off payment and the Sofa Finance have offered us 70% discount for a one off payment, plus also many other creditors so we think we can cut the debt in half by doing this. So why have we gone for £10k and not £5k? we want to get ahead of ourselves, we want to pay off Council Tax for the year £1,030.00, get our gas/electricity up to date, currently owe them £886, and then move to a cheaper company, get 1 years car ins and house ins, get a new car as ours is rubbish, we have to start the engine with a screwdriver (long story), only bought it cheap to last a year so I could go back to work, it has lasted 6mths so not that cheap in the long run. PLus I want to change job's, but as the job I want to do I will need to be credit checked for I have 1year to improve my credit, in that time I will use some of the money to do a course or 2 then start looking for a job next year.
Also I have been reclaiming back Bank Charges from A & L for £1,891.70 and £780.39 (both inc interest), today I have been offered fom A & L £440.00 for the small account, I have accepted as this money will come in use and it is better than no money at all.
In June we should recieved the Cheque from A & L, Money for loan should be in the bank, all the original debts should be paid off leaving us with 1 payment a mth and OH is due a good pay day, so I hope this is the start of me and OH having some luck, happiness, less arguments and spare money.
We can only pay off a minimum of £2k at a time on the loan (in over payments), so I will be tracking our savings for paying off lump sums and also to see if this will help us be a happier family with less arguments.

Bestthingsinlifearefree

Becks_in_Debt wrote: »

:
Me & OH argue constantly about money or lack of it so we have decided to try something new. We have took out a loan for £10k which should fingers crossed hit our bank in 14days time or there abouts. Our plan is to come to some kind of settlement figure with many of our creditors. Car Finance have offered us 50% discount for a one off payment and the Sofa Finance have offered us 70% discount for a one off payment, plus also many other creditors so we think we can cut the debt in half by doing this. So why have we gone for £10k and not £5k? we want to get ahead of ourselves, .

Hi Becks,

Are you sure taking on / borrowing £10,000 pounds of debts is the way forward?

Could you not reduce costs and increase income rather than borrow £10,000 pounds?

Surely borrowing money is not the way to become debt free.

(not having a go just want you to really think about this strategy)

Good luck !

Best,

Snaggles

Hiya, just a quick thing about the council tax - you don't pay extra in interest for the priviledge of paying monthly, like you would do for, say, your car insurance. So there's no point financially paying them a lump sum. If you really want to cover a years council tax from the loan money, you might be better to stick it in a savings account, and then just draw out enough each month to cover the payment. That way you are earning interest on it, rather than the council earning interest on it!

It's the same with gas and electricity as far as I know - you don't pay interest even if you have a debit balance on your account with them, so let them carry on taking a monthly payment, but put aside the money to cover the whole balance. I suppose if you were wanting to change supplier though, to get a cheaper deal, you might have to pay it all off first.

Some might say stay away from consolidation loans etc, but you sound as if you have thought it through and are happy with what you are doing, and you have already done well in reducing your level of debt, so I don't think you will fall into the trap of running up more debt in addition to the loan.

Well done on what you have achieved so far.

Becks_in_Debt

Bestthingsinlifearefree wrote: »

Hi Becks,

Are you sure taking on / borrowing £10,000 pounds of debts is the way forward?

Could you not reduce costs and increase income rather than borrow £10,000 pounds?

Surely borrowing money is not the way to become debt free.

(not having a go just want you to really think about this strategy)

Good luck !

Best,

Thank you Bestthingsinlifearefree I know you are not having a go we are all entitled to express our opinions and we are all here to help one another with all the advice we can.
We have tried reducing things the best we can, we currently have no house insurance, which we do need, we dont really go out, we dont buy our selves clothes, we dont have home phone or contract mobiles, we only put in £10 a month each PAYG, this way if we can get a head start we should be able to get some saving together for next year's bills and start to enjoy ourselves abit more, we both work full time and ear good money between us, but we really do just need a kick start. Our montly repayments are what the debts total up to plus some of the council tax, that is withut having a huge payment for gas/electricity, t.v license (paying for the yr with the loan as well), so all in all we should be better off and atleast it is only 1 payment. OH work messed up his wages this month and paid him £800 less, which meant we have been banged with x8 unpaid charges totaling £280.00 just for that 1 day that is without all the other charges that will be coming out due to there being no money in there. For a £1 SO which didnt go through they have charged us £35, i dont want that happening again.

Snaggles wrote: »

Hiya, just a quick thing about the council tax - you don't pay extra in interest for the priviledge of paying monthly, like you would do for, say, your car insurance. So there's no point financially paying them a lump sum. If you really want to cover a years council tax from the loan money, you might be better to stick it in a savings account, and then just draw out enough each month to cover the payment. That way you are earning interest on it, rather than the council earning interest on it!

It's the same with gas and electricity as far as I know - you don't pay interest even if you have a debit balance on your account with them, so let them carry on taking a monthly payment, but put aside the money to cover the whole balance. I suppose if you were wanting to change supplier though, to get a cheaper deal, you might have to pay it all off first.

Some might say stay away from consolidation loans etc, but you sound as if you have thought it through and are happy with what you are doing, and you have already done well in reducing your level of debt, so I don't think you will fall into the trap of running up more debt in addition to the loan.

Well done on what you have achieved so far.

Thank you Snaggles, We need to pay the whole council tax as we have missed the first 2 payments and as we got behind with them last year they are requesteing full payment now, our fault so I cant complain.
We pay Powergen £100/£150 a month, which is no where near enough for what we owe them, I want it all paid off and then go to a cheaper company and get into credit ready for the winter, I hate the cold.
We have done really well in reducing the debt in the last year, and hopefully we can carry on with the good work but towards paying off the loan now, It prob isnt the best way to go about it, but me and OH have tried everything and we always argue about money, plus I feel like there is something missing in my life and hopefully doing a job that I want will fullfill me, and like I said I cant do that with my present credit status.

Bestthingsinlifearefree

Hi Becks,

Have you posted a statement of affairs (SOA)?
I remember your thread about your OH gambling etc. Is that under control?
I am just not sure debt consolidation / borrowing £10,000 etc etc is getting a "head start". It sounds like borrowing £10,000 is just getting more into debt.
If you both earn good money why do you need to borrow more? etc etc.

Sorry to sound such a bore but maybe post an SOA and take it on from there.

Best,

Becks_in_Debt

Thank you Bestthingsinlifearefree I will sort out a SOA to post on here.
His gambling I hope is under control, I have all access to money and as he slipped up a few times a few mths ago that will be staying like that, The house has been secured against the debt so I have made him fully understand the consequences if anything was to go wrong, I really hope he is not that stupid to risk everything. This is the only way I can think of giving me and OH a chance as many of times I have thought to walk away from it all due to the arguments, but I really hope it can work, we hadnt been together long before I got pregnant and we have always had some kind of problem to overcome, I would like to think that has made us strong.

sammy115

Yes sorry to be a bit thick, but aren't you gaining £3,000 more debt rather than halving your debt. SorryI would call a halt to the consolidation loan! Sharpish.

Lucy1982_2

Hi Becks.

Glad to see you started the thread! Good luck with the consolidation and remember if you ever feel yourself wavering, pop in here and we'll try to stop you!! But get it paid off as quickly as you can and hopefully it will work for you.

Have fun

Bestthingsinlifearefree

me and Mrs best had our little lad 6 months ago. Hardwork but a real joy. I have forgotten what a good nights sleep is:rolleyes:

It sounds like you both need to keep working on the relationship and the finances. You are right tough times can bring you closer. I guess you just need to keep talking and communicating and working as one team and trying to have fun / good times when you can.

I will keep an eye out for the SOA.

krisskross

Are you taking out a secured loan to consolidate your debts? You mention something about the debts now being on the house.

Becks_in_Debt

Thank you sammy, It is exactly the type of thing I would normally ask/tell somebody. Yes we will be taking out more debt but with what ever is left over we can do something to the house and add value to it, and then maybe in a few years time we can sell up and move to a cheaper area and get money back that way, plus i do want a different career and I will not be able to in the current situation, we will be better off each month by about £300, as long as I stay focused and put it in a bank to make up a lump sum to make a over payment or keep some for next years bills all should be good, I know it is wrong to but I am really thinking about making family life happier for not only me and OH but our DD