does my plan make sense

debtfree1day

Thank you for your email

so much good advioce in there - much of it I am doing, such as MS and making sure utility bills swiched to low cost providers etcetc

much I need to do - more ebay ...cd's dvd's...amazon etc etc, its time consuming but I will get on top of it

bank charges - not really - i never ever miss a payment - years of shuffling debt

its been 6 months of control now not days, but that just means for 6 months thingds didnt get worse now I need them to get better

BUT the thing I dont get is if I dont get some additional loans I can I make the payments each month. Against my SOA you wills ee I have £649 on one loan and £474 on another. That means I am paying off really cheap loans (6.3 and 7.9 i think from memory) BUT only scratching surafce incl min payments on the expensive 25% ones.....

Once the loans go out each month I am skint, and even with MS and extras coming in, its a long way short from making a real difference on the 25% csards I am desperate to get rid of........thats the point i cant get my head round

lisa
xxxx

debtfree1day

bump up for respon se

debtfree1day

still bumping

lynzpower

debtfree1day wrote: »

still bumping

the thing is sugar I dont think you are catching the point here

there are ome major savings here in your outgoings.

Utilities incl Council Tax 323.35 ( checked all these are the cheapest, it seems LOADS)
Phone 100 ( take this down to 50 max, goi on PAYG), saving 50
Mortgage 1373
Savings and Investments 126.7
TV license and sky 54.87 ( dump the sky saving 40 min)
life insurance 10.69
cis 22.7 thats the one Im cashing in monday ( cool theres 22.70
food 470 ( this can easily be shaved down to 270 I promise you, saving 200)
parking 50 ( must you pay to park, can this be claimed bac
petrol 90
school dinners 80 ( take pack ups saving 80)
kids going out 70 ( stop this saving 70)

my savings there total 462.70

therefore you have a spare 462.70 to clear off debt with.

lynzpower

Credit Card 3700 9.9%
Credit Card 6000 21.9%
Overdraft 2000 15.9 Limit is 4900 and normally on it, but just got partners wages
Credit Card 2600 23.9%
Credit Card 2370 17.9%
Credit Card 3400 5.9% Limit is 3600 so cant put anymore there
Credit Card 2550 24.9%
credit Card 2772 0% until oct 1st - limit 3000
Loan 18700 at about 8% i think, pay back 505 per month
Loan 9800 at about 6% i think, pay back 600 per month
Debt to Gambling 1315 0% pay back 500 per month
Debt to Gambling 15700 0% pay back nothing yet....not been touched since Feb
Overdraft 2300 18% ish - limit 2500
Overdraft 1300 9.9% limith 1500

I would aim the saving of 462 squarely at the CC that is costing you 24.9
In 4-5 months that card will be gone and settled.

this is when you will start really seeing the fruits of your labours.

Once cards start being "settled" you will start being offered cheaper debt to shuffle to.

then once this 24.% card is gone, you then have the 462 PLUS the min payment you were paying and that goes to the next highest APR debt which is the one at 23.9%

and so on and so on.

as your investments mature you can use these lump sums to pay off loans and cards as they come. you might want to think about sacrificing some of the gains on these investments and cashing them in early as your debts APRs are likely to be higher than the returns on your investments.

Its clear to me you have been borrowing to invest, which is clearly madness as youve ened up in a state like this.

You are in a hole, so STOP DIGGING.

Best of luck, its fairly clear you DO have the money to be paying the debts off- the faster you do it the less it will cost you

Lynz
x

Tashja

Looking at SOA you also have £600 sitting in a BS Savings account - use this on the 24.9 card too and like Lynz says that card will soon be gone freeing up the minimum payment.

I also notice you are still paying into savings - you really need to stop this as well as the changes Lynz has made.

From reading your posts though it seems you have decided on the mortgage option but just want someone to back this decision up for you - I don't think you will get that from the people on this board.

I also think if you do take that option we will be seeing you back here in a year or so

T xx

debtfree1day

thank you linz and tashia

I havent decided - in fact I have dcecided not to decide until july. There was certtinaly a human instinct to grab the money, but a couple of weeks wont hurt anyone either way

I have stopped paying into the savings - thats saved me £50 + £22

I also have a life assurance endowment which I pay £20 a month into BUT have a redemption figure of zero despite 3 yrs savings, IF I continue paying for 9 months it will be 4 yrs of payments and will be worth about £750 so will continue with that one

I cant get freeview here so I have decided to carry on with SKY +

but agree with hitting the big debts first.....do you have a template letter link where I can find a letter to dsend to the credit card companies begging for frozen interest? - OR am I better not to draw attention to my problems in the hope I can find some zero% deals in due course?

Cheers

Lisa

debtfree1day

Hi all. Reading through this tonight has given me mixed emotions

GRATITUDE to all those who contributed!

PRIDE that in the 6 weeks since this was written we have made some positive big strides forward

FEAR - Still havent really got a strategy.

In the last 2 months we have

1 - Cashed in decreasing term assurance and paid 100% of this money against credit card

2 - Cleared 1st Gambling Debt

3 - Canx £43 sky moved to £19 (no freeview here!)

4 - Reduced food bills by circa £100 a month and eaten more healthily!

5 - EBAYS, MS'd and QUIDCO / PIGSBACKed everyday

6 - Changed Elec suppliers, saving £18 a month

7 - Used Freecycle!

BUT the depressing thing is whilst total debt is down the monthly burden on credit cards and loans is roughly the same (minimum payments not reducing much as the minimum payment is only just > than interest, therefore total owed reduces very slowly). I still pay £500 a month in Interest - thats basically every penny I earn + my child maintenance from 1st marriage gone

Been on to CCCS and completed a Debt Remedy. The recommendation is a DMP.

It feels like the total opposite to what we are doing today - i.e throwing every penny, in the hope that as we clear some debts, new low rate opportunities will emerge which means we can surf and save interest and get out of this situation quicker.....The DMP, actually advertisers to all credit companies that we are not worthy of credit, hence 0% opp to surf debt to is highly unlikely

MORTGAGE (RE) is still option, but unfortunately all or nothing....Bank will lend us £52 on the basis we clear debts but wont lend us any less as with monthly debts they dont think we will be good risk.

I have to do something as we have less savings which are realisable to go at. Options

1 - DMP
2 - REMORTGAGE
3 - Carry on, but accept over next few month's some creditors wont get paid......and deal with consequences at the time

Anyway, we owe 10k less than we did 6 months ago!

Hope all are well

Lisa
x

pandapaws

Hi Lisa!

This is the first time I've read your post, and I think you've done great to bring the total debt down by 10k in 6 months. You can see from my signature that I am in a VERY similar financial situation to you, here's a few of bits of 'blind leading blind' advice that I can chip in:

1. DON'T REMORTGAGE!!! We had a mortgage of 190k, and last year remortgaged to 242k. But it didn't completely clear all of the debt, and for various reasons (mainly lack of discipline) we continued to build the debt up, so now we've got the big mortgage, AND even more debt than we started with!

2. BE COMPLETELY COMMITTED & MAKE SURE YOUR PARTNER IS TOO! We have had several semi-lightbulb moments, where we would decide we need to take action, but like a diet, we'd say we'll start on Monday or whatever! And whenever we got a bit extra cash from Ebay or anything we treated it like a bonus and would go on holiday or something. It's great that you're getting a bit from mystery shopping etc, but can you get that paid straight to a different account, and then pay it directly to one of your cards each month?

3. CANCEL YOUR CREDIT CARD DIRECT DEBITS & SET UP STANDING ORDERS. If you only pay the minimum payment, as you've realised, it will take forever and a day to pay the balances off. This is, obviously, because as the balance decreases, the payment decreases yet the interest stays at the same huge percetage. If you ring up each of your card companies (ask for a rate reduction while you're at it!), you can ask them for the sort code & account number to make payments to, what date your payment is due (it sometimes varies each month, and SOs take 4 days so set up the SO for 8 days before the earliest date they would require to be safe), and what the current minimum payment is. Then call your bank to set up the SO for that amount (so if your last payment on one card was e.g. £59.44, then set up the SO for £60), and cancel the direct debit once it is all set up. It's a bit of a hassle, I know, but it means that you will continue to pay the same amount you're paying at the moment but the debt will be cleared in a much shorter time. Martin had a page about it somewhere, not got the link, but maybe worth a look.

4. I wouldn't lose any of the savings plans that you've paid a lot into - it makes sense to keep them to fruition if you can, so long as the lump sums you get from them go straight to a debt when you get them! I don't really understand savings bonds and stuff, but I'm guessing that the extra £20 you'd save if you cancelled would give more money when you get the lump sum, than you're going to save by not paying it in the meantime.

5. Have a look on netmums.co.uk for ideas of places in your local area to take the kids that are cheap! I take my 2.5 yr old to a local retail outlet as it has a soft-play area that's free and there are loads of other things that you can do for minimum cash. Don't know if I'd go with the other posters ideas of explaining it to the kids, I think I'd rather keep it to myself and hubby as kids have a habit of blurting things out when you'd rather they didn't!

6. Could you move to a cheaper house? We completely dismissed the idea for ages, but recently put our house on the market as we decided that the benefit gained from having a nice house was less than the stress caused by having so much debt. It won't pay much off after all the fees, but we're going to buy something a bit smaller (hard for you with 5 kids, but surely do-able somehow) which will reduce the mortgage, cut the council tax in half and reduce petrol by about £200 a month. Depending on what part of the country you live in, would renting be an option? I know, automatic gut reaction, that's a terrible idea! But where we live, we pay £1485 a month for our mortgage on a house you could rent for £750/month so we did seriously consider it, just for a couple of years to get back on track. It is a drastic colution, but you're in a drastic situation!

7. Spend as much time on here as you can! It's working for me so far, time on here = time not spending money, and you can pick up all sorts of useful info & tips from others.

8. Stop parking! You said you're rural - where and why do you spend £50/month in car parks?! Not shopping centres, I hope...!

And finally - just stick at it!!! I also got the feeling that you're looking for someone here to reassure you that the mortgage is a good idea, but sadly that's not going to be me - sorry! Considering the amount of debt that you have, your snowball date of 8yrs isn't actually that bad. And once that's finished, the money you were using to pay debt can go to overpaying your mortgage instead, which means that in just 10 years from now, with a bit of effort, you could be completely and utterly debt & mortgage free!!! It might sound like a long time looking ahead, but think back to when your 15yr old was 5 - not that long ago, was it?!!

Anyway, I hope that some of this has been some use to you, (and sorry if any of it is bum info). Sorry for the length of the post (I don't do short!), but if one tiny bit helps then it has been worth reading! You're doing great - keep at it!!!

debtfree1day

Panda - thats a really good post. Some good suggestions in there

I am honestly not looking for the mortgage (re) as an easy option, but dont not what to do, as at present with all the penny pinching, ebaying, MSing and the like, we still dont have enough to cover the amount we need to pay off our debts, hence if I dont remortgage I think I am going to have toi do the DMP, which I understand will kill me chanced of getting zero percent or low rate credit cards to surf on to?

Also worried about what this will mean for mortgage. we are on good fixed rate until late 08, but then will revert to SVR unless we switch

I am commited and am looking into everything to increase income / reduce outgoings, but fewel the £500+ opf interest each month is my biggesxt problem, and the only 2 ways to beat this are to remortgage (still got interest over long time I know) or DMP (with subsequent long term impacts)

i dunno

Lisa