15K in Debit, HELP

My boyfriend has debits of 15k.

9k on two credit cards (Both Barclays) and 6k on a loan.

He pays off the minimum each month on the credit cards and has a direct debit set up for the loan each month.

We are thinking about buying a house together August/September time, and i would like the debts cleared before we think about applying for a mortgage, to give us the best possible chance, as we are both first time buyers.

Any suggestions as to the best possible way to help him clear these debts, i have lent him some money and will continue too from my wages each month, but any other suggestions would be helpful.

Thanks
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Comments

  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276 Forumite
    Combo Breaker First Post
    The only way is for him to cut back on his other spending and put the money to his debts.

    What does he spend his money on? Does he live at home? If not, does he have a proper budget for all his expenses?

    I don't think you should lend him money - this is just more debt! Also, it will be much easier to dodge or stall repaying you. Also, it doesn't really help him to understand debt management.

    Can you give us some more information? Or better, get him on to this site and we can help him directly.

    :)
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • He does still live at home, and pays rent there, it is just over £200.00 a month.

    He does not drive, and because he works in London, he has to pay for the train, he buys an annual travel card, which costs him just over £3,000.00 a year. Because he works in London, of course he goes out after work to pubs with colleague and friends.

    But i will say this for him, since we have been together, he has cut back, he knows that for us to have a future he needs to save. He lives in Essex at the moment and i'm in Kent, and he wants to move to Kent to be with me, so of course, he needs to save and he is.

    Maybe lending him some of the money is a bad idea, and i know he does not want me to help, as it is his problem but i hate only seeing him every other weekend, and would love to get a place as soon as we can, so i thought helping him would help us!!!

    I'm not going to make excuses for him, but i feel sorry for him, he lost his mum back in 2002 and just lost it big time, this is where the debts have come from, and i know once he has them clear he will become a different person again. I wish i had been there for him, and i know none of this would have happened, but can't turn the clock back, only look forward.

    What else would you like to know? I don't think he would come on here, like i say he is embrassed about the debt and what he went through.
  • lipidicman
    lipidicman Posts: 2,598 Forumite
    If he hasnt ruined his credit rating yet, he may be able to get a better deal than Barclaycard (not hard to do really). Try a 0% or fixed low rate - see Martin's recommendations. This could make repayments easier, but dont let him think this is an excuse to start spending again. Prioritise repayments and stick to a plan!
  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276 Forumite
    Combo Breaker First Post
    I think the most important thing is that he needs a budget for everything he spends. If his only other spending is on going out (as his rent at home covers everything else) then he needs to set himself a spending limit.

    his budget could simply be rent + going out. He needs to deduct this from his monthly income and use all the rest to pay off his debts. All of it!

    He starts by paying the minimum off everything and then use what's left over to pay against the debt with the highest interest rate. This called snowballing and there's a calculator here

    If he could cut back on going out with his mates, then the debt will be paid back even quicker. It's not that he would never go out again - just limit it, until the debts paid off. The more he limits himself, the quicker the debts will go.

    If he has a good credit record, he could look at getting a new card with a 0% intereste period e.g. Egg, MBNA (look at the Credit Card board or Martin's Article). He could then transfer the balance off one of the Barclays cards to the new card. This would mean that no further interest would accrue and that debt could be paid off quicker.

    Come back with any more questions. There are others around on this Board and they may have some suggestions too.

    HTH
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276 Forumite
    Combo Breaker First Post
    Oops - and he should cut up the cards and not put another penny on them ;)
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Don't worry, i have told him, he is cutting both cards up and that he does not need credit cards, if we need anything and we do not have the money then we wil save. I have never had a credit card in my life and have managed fine, and that is the way i would like to continue.

    I feel getting into debt, just leaves you unhappy and not being able to enjoy your life on things you really want, like a holiday, items for my new home etc.
  • Munki_2
    Munki_2 Posts: 168 Forumite
    First Post First Anniversary Combo Breaker
    Sounds like you're beginning to feel a little happier about things sportyspice... am I right? It's amazing how talking about things on here can help you cope better with debt problems...

    All I can say is to reiterate (is that spelt correctly?) the idea of creating a budget and sticking to it. Every aspect of his spending needs to be looked through. Next time you meet up, get him to bring his statements with him and scrutinise things together.

    If you want to get a house together in kent, then I'm guessing you are both going to have to pull the drawstrings in a lot to afford it (not knowing what you both earn, I can't say this for sure though).

    My wife and I stretched our money as far as we could to afford our house on a 124k mortgage, and since then we've had a baby and my wife has cut down to working only saturdays. We were really struggling to afford things by this point and if it want for this site and the advice I'd received and information I had picked up along with a lot of sacrifices we wouldn't have our house now.

    Be sure to cut back on everything. If you are to get a joint mortgage then if you haven't saved up a deposit I would recommend you do so, so you have a bit of equity in the property when you buy it (this will be your safety buffer). This is why it's best not to be lending your b/f money to fund his lifestyle, but for perhaps you to save towards the deposit, and him concentrate on reducing his debt. It wont be easy. He will have to cut back on everything and understand that ALL spare cash gets thrown at his debt.

    If come aug/sept you find that he still has debts and you are still positive you want to buy a house together then perhaps then would be the time to decide if you use some/all the money youve saved as a deposit to help pay off the existing debt. Although I would not suggest this to him because it may prevent him being so determined to pay it off himself (not nastily, simply a psychological thing). Keep the fact you are saving quiet - well that's what I would do (no I think about it I quesiton whether that's being dishonest... hmm... oh well, it's up to you!)

    I would strongly look against getting a mortgage whilst you still have existing debts... unless you are sure you can both cover the payments comfortably. I had debts when I decided to buy our new house, and I decided to move the debt onto the new mortgage - I would not advise this though... try avoid securing unsecured debts onto a property. I was lucky that we managed to get the property cheaper than expected anyway... infact the amount the loan was... so that offset it (luckily). So try not to get a mortgage with an existing loan or you may find oyurself struggling more than you are now. Try to get the debt cleared... and perhaps hold out for a while longer until the debt has been cleared. You will get a better mortgage because of it. Imagine paying a few hundred on a loan/credit card repayments each month. Well that would be about half you would pay on a £100k mortgage each month. The mortgage lenders will look at your affordability and if you have the existing loans/cards you will hamper the amount of mortgage they will offer you.

    I wish you both all the best... I'm sure you will both work out a way to sort things out. Budget and be realistic, and I'm sure you'll get through it.

    Good luck :-)

    Munki.
    Nice to save.
  • g33za
    g33za Posts: 706 Forumite
    First Anniversary Combo Breaker
    If he travels into work his company may offer a travel loan to cover the cost of the travelcard that they take off the monthly salary, this might be a better option as it virtually requires no credit checks :)
    ummm...
  • He does not drive, and because he works in London, he has to pay for the train, he buys an annual travel card, which costs him just over £3,000.00 a year.

    An annual travelcard zone 1-4 (which covers a good portion of Essex ps I live in Essex too and work in London) costs only £1,216.00 pa so where did your boyfriend get the figure just over £3k from?? Which part of Essex does your boyfriend live in?
  • dougk_2
    dougk_2 Posts: 1,403 Forumite
    . I have never had a credit card in my life and have managed fine, and that is the way i would like to continue.

    .

    If you have never had a credit card I suggest you could apply for one at least.

    Part of the process of getting a mortgage is being able to prove you are credit worthy. Credit cards help to build up your credit rating.

    Why not apply for one with 0% balance transfer and move one of your b/f balance to that - this will have two effects. Firstly it will allow you to build up a credit rating and secondly reduce the current interest charges allowing the debts to be paid off quicker.

    If you cannot prove you are able to pay back credit getting a mortgage will be more difficult.

    Though this may all seem a backward step ity wil help you in the long run.
    Its not getting into more debt but moving an exsisting one to save money and build a history.
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