Clearing gambling debt

Foxywarrior

Hi to all, I am a newbie and this is my first post, so please be gentle!

To give you some background, I am a recovering compulsive gambler and with the help of Gamblers Anonymous, have not had a bet for over 12 months.

I built up a lot of debt despite a well paid job and it has taken me around a year just to pay off many payday loans I had accumulated.
I am now left with larger debts as follows.

Vanquis Credit card £2950, min payment £175pm
Mutual loan £2700, min payment £155pm
Provident loan £1660, min payment £90pm
Stepchange (DMP) £1450, min payment £180

Note that all balances apart from the credit card are reduced by the amounts paid as the interest was added at the start of the loans.

On a flat month I have approximately £250 disposable income after all bills, food and petrol. This can be boosted with overtime.
At the end of July I should have around £1000 surplus thanks to overtime, expenses and selling some unwanted goods.

Any advise as to the best way to prioritise my debts and how best to use the surplus cash would be appreciated.
Thank you in advance.

paulsharpe

Foxywarrior wrote: »

Any advise as to the best way to prioritise my debts and how best to use the surplus cash would be appreciated.

Well, certainly don't gamble it - i'm sure you don't need to be told that!

But otherwise, just save it. Put it in an ISA. £250 should be plenty to enjoy yourself, just be conscious of the fact that your repaying your debts when you tempted to go out by your friends. Once it's paid off, then you can spend what you like, but in the meantime, save, and save as much as you can. Put away at least a minimum amount each month, say £100-200, and if you have surplus put that away too. Whatever you earn, anything over say £250 should go into your savings, the rest into the ISA.

A year or two goes by quickly, and when you see all that in your ISA you'll be so glad!

Cycrow

a complete SOA would be useful to see where you might be able to save some money on

the £250 you have left, is that after the monthly debt payments as well ?
any spare cash should be first thrown at the credit card to get that cleared off first

paulsharpe

Cycrow wrote: »

any spare cash should be first thrown at the credit card to get that cleared off first

I would still suggest saving some, you never know what's round the corner (especially if you own a car!). And seeing as the interest is already paid then you won't be saving anything by paying off early, right? Peace of mind is always nice though, so the earlier you can pay it off the better.

Cycrow

paulsharpe wrote: »

I would still suggest saving some, you never know what's round the corner (especially if you own a car!). And seeing as the interest is already paid then you won't be saving anything by paying off early, right? Peace of mind is always nice though, so the earlier you can pay it off the better.

The credit card interest isn't paid only the loans.
the credit card is going to be costing alot in interest, alot more than you will ever get from savings.

Its better to clear the debt first, if you do need some money for some emergency, then theres always the credit card to fall back on
it'll work out cheaper in the long run

Foxywarrior

Thanks guys, just to clarify, the £250 disposable income is after all bills (including debt payments) are made.

[Deleted User]

pay off the highest APRs first

RAS

The Provident loan is probably the most expensive? Highest APR. pay that.

Do stepchange know you have taken on other debts? You risk them closing the DMP.

Foxywarrior

No, Stepchange don't know about the extra debt so yes I am guilty for that. One possibility I was pondering was paying off most of my DMP debt with the lump sum so just leaving two or three payments to clear and then utilising the £180 saved onto other debts so increasing those payments?

quidsy

Well done for getting a handle on your addiction. You are moving in the right direction.

IMO pay the highest apr first. I am a big fan of snowball calculators, they tell you the best way to clear your debt based on apr & min payments etc.

Set a budget for expenses & stick to it, even if it means eating beans on toast for the last few days of every month.

Your debts aren't that bad compared to some, me included so with some smart actions & some self discipline you will be in a much better position soon.

Shovel_Lad

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