I've got myself into a MASSIVE debt in 9 months...

Newyorkdreams

You know what weebit? I think you know what needs to be done and you will do it by your own plan. There is absolutely more to life than paying debt although I understand it's important and essential to be free from the perpetual cycle of repayments. I can totally understand why you would want a massive party although it could probably be done for less than £4k but that of course is your call. Life is more than debt repayments and frugality. You are just taking the more scenic route and in my opinion, there is absolutely nothing wrong with that given what you have been through.

Newyorkdreams

Also...don't feel like you need to justify yourself or your actions. You don't.

weebit

Newyorkdreams wrote: »

There is absolutely more to life than paying debt

Thanks, this line is what we're feeling too. We are going to tackle our debt better than we ever did. We're changing our lifestyle too. We used to go to gigs a lot (we're big rock/metal fans), and we used to feel nothing about paying £30/£40/£50 or more for a gig ticket for a band we like, but don't necessarily love. We've now put rules in place where we have to justify to ourselves spending that money. These include things like "have we seen them before?", "have we seen them recently?", "what's the likelihood of seeing them some time in the future (i.e. could this be their last ever gig?)". Using this method, we've decided against going to quite a few gigs but have bought tickets to a Bowling For Soup gig because it's going to be their last ever UK tour.

This is just one thing we've discussed with regards to cutting down our spending. I've been walking to the shops a lot instead of getting the bus (£1.40 each way saved), I've turned down offers to go to the pub, I've invested in some LED light bulbs to cut down on Electricity costs (40-50W bulbs replaced with 4-5W bulbs), We've started growing some of our veg, selling our unwanted stuff on eBay, using vouchers to get money off things we buy anyway or getting stuff for free (Clicksnap etc.), I've even gone as far as changing my shampoo from Pantene to Boots own and my Aquafresh is now Sainsbury's basic toothpaste (it tastes funny but i'm getting used to it)! All of this is helping to reduce our outgoings which ultimately means more money to give back to Barclaycard.

This whole debt has been a combination of not being sensible wit money for the past few years, coupled with a bad situation beyond our control which has exacerbated the problem.

We're coming to the end of our problem (finger's crossed!), and then the solution can kick in. I have a plan in min of how we're going to tackle it:
1. Pay off my wife's Tesco card first. It has a small balance of £120ish and a low credit limit of only £350, so we'll close that because it's not going to be useful to us.
2. Tackle my Barclaycard's regular balance of apx £600 at 29.9%
3. Attack my wife's Barclaycard of what will probably end up being £7000+ at £24.9%
4. Wait till after Christmas (once we're properly settled in our plan) and start hunting for new 0% balance transfer deals. If we're accepted for any, then close the account it originally came from.

Siouxsie32

You could also switch Current Accounts. Halifax are currently offering a £100 incentive and their Rewards Accounts pay £5 per month if you pay in £750 each month OR they'll give you 6 months interest free on an overdraft.

http://www.halifax.co.uk/bankaccounts/

There are lots of threads on here which will help you save money on bills and shopping. Have you done a SOA yet? That'll help you see where your money is going and potential areas for making savings. If you post it here, others can offer suggestions as well.

weebit

Update:
I paid off the wife's Tesco Credit Card today! I made the payment after the due date though so we'll probably be charged interest next month, but that will probably only be £2 or so. Still, that's on debt all but clear! We're going to close this account.

I've also found out today that Barclaycard increased my wife's interest rate from 24.9% to 29.9% a few months ago! So this is now definitely our priority to clear and should be able to pay at least £600/month to this, plus we're going to "move" some of the debt to other cards with a lower interest (e.g Virgin, Nationwide) by spend on these to just below the limit and making a payment to Barclaycard for the same amount. by doing this, that'll be around £600 moved to a lower interest rate without paying a balance transfer fee. it's not a lot, but it'll help.

Siouxsie32 wrote: »

You could also switch Current Accounts. Halifax are currently offering a £100 incentive and their Rewards Accounts pay £5 per month if you pay in £750 each month OR they'll give you 6 months interest free on an overdraft.

http://www.halifax.co.uk/bankaccounts/

There are lots of threads on here which will help you save money on bills and shopping. Have you done a SOA yet? That'll help you see where your money is going and potential areas for making savings. If you post it here, others can offer suggestions as well.

Thanks for the advice but I already have a Halifax Current Account but it's constantly in the overdraft by £1995. I only pay the interest very month on this.

Doing an SOA no won't be very helpful because when my wife returns, it won't be true anymore, so I'll make one after her return to the UK. I keep a spending diary so i know where things are going anyway, plus i'm always trying to spend as little as possible! And I'm in the process of moving my energy supplier and don't know my monthly payments yet.

Siouxsie32

weebit wrote: »

Update:
I paid off the wife's Tesco Credit Card today!

:T:T:T:T Well done! It's a long hard slog, but paying something off and shutting it down is always a good feeling!

Re the Barclaycard, I'm not sure what the deadline is, but when credit card companies jack the interest rate, you have a certain amount of time to reject it. What they will then do is close the account and keep the original interest rate until it's paid off. It may be worth giving them a call to see if that's an option.

I managed to get a Nationwide Flex Account which offers a 12 month 0% overdraft. I don't think it was a special offer so you could look into that. The fees on the Halifax overdrafts are killers!

weebit

Yeah, I really don't like my Halifax OD. It offers no incentive to pay it off over your other debts. Even if i paid £100 a month for 20 months, I'd still be charged £30 or £31 a month! But on the upside, I've worked out that the equivalent interest rate is around 18% APR (£365/year on £2000 is 18.25%), which actually works out as one of my cheapest debts which is still accruing interest. It will be one of the last debts I tackle unless I get into a situation where I can money transfer it to another Credit Card at a cheaper rate (e.g. 0% or a Life-of-balance deal).

I am worried obviously that Halifax can call it in at anytime, but I think this is unlikely because I've had the limit of £2750 for 5+ years and I always pay in £31/month to cover the interest (even in months where the fees are lower)

JustSmile_2

weebit wrote: »

I never want to be in a similar situation again!

.

And yet you want to throw £4-£5k on a wedding party? Your already married, would it not be more of a comfort to you both to start your life together debt free? Or at least working towards it! Does your wife want this party too? Im not judging you, I have no place to do so but i will say that having been in alot of debt myself, £4k on a party when I still had so much to pay back would have been simply out of the question.

Good luck with your journey & I hope your reunited with your wife very soon x

weebit

JustSmile wrote: »

And yet you want to throw £4-£5k on a wedding party? Your already married, would it not be more of a comfort to you both to start your life together debt free? Or at least working towards it! Does your wife want this party too? Im not judging you, I have no place to do so but i will say that having been in alot of debt myself, £4k on a party when I still had so much to pay back would have been simply out of the question.

Good luck with your journey & I hope your reunited with your wife very soon x

I've already addressed this previously. Although we're already married, it was a very small, quick ceremony with only 2 witnesses present. We didn't have the chance to celebrate with our friends and family.

weebit

Hi everyone,

I feel like I need to update this thread, if only for my own benefit if nothing else!

So good news, my wife's visa was granted at the end of September and less than a week later she arrived safely back in the UK! We're starting to get back on our feet and have now began to start paying off all our debt.

The first month was a bit tough because my wife didn't have any income in the previous month so we were living off my previous months' wages and credit cards, and subsequently our debt increased in the first month (and because of when our statements are produced, the overall debt showing on my spreadsheet at the end of November was the highest it's ever been. BUT, all of our statements for December have now been produced and it's showing a decrease of £611 so we're very happy with that!

So our start-point is at £35,231.70 as of November 2013.

my wife has been doing a lot of overtime at work and has volunteered to be emergency call-out several times. She earns a small amount of money just to be on-call even if she isn't called in, but if she does get called in, she could earn over £200 in a day! So far this month alone, she has earned £600 more than her standard wage.

I've made an SOA below. For the incomes, my income is only guaranteed until end of April when my current work contract ends, and I've takes my wife's basic salary before any overtime. Also, all household bills are two-thirds of the actual bill (we share a house with one other person who we split the bills with) I've put the total cost in brackets . I've also missed out anything which isn't regular such as presents and clothes because I prefer to think of these separately to regular payments.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1636
Partners monthly income after tax....... 1538
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3174

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 830
Management charge (leasehold property).. 0
Council tax............................. 87 (£130, spread over 12 months)
Electricity............................. 26.66 (£40)
Gas..................................... 27 (£41)
Oil..................................... 0
Water rates............................. 24.42 (£37.02)
Telephone (land line)................... 0 (we paid this up-front and won't need to again till June)
Mobile phone............................ 33 (£15 for mine, £18 for wife's)
TV Licence.............................. 13.84 (£20.78 till January, £12.12 afterwards)
Satellite/Cable TV...................... 21.12 (£32 Sky TV)
Internet Services....................... 6.66 (£9.99 till December, £19.99 afterwards)
Groceries etc. ......................... 240 (we try to get it under £100 each but it inevitably goes over)
Clothing................................ 0 (see note above)
Petrol/diesel........................... 20 (we share a car with our housemate and fill it up rarely
Road tax................................ 0
Car Insurance........................... 0 (we do pay this, but my wife does this and i don't know how much!)
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 210
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 38.2 (1 cat with PetPlan)
Buildings insurance..................... 0
Contents insurance...................... 14.25 (paid annually)
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 (see note above)
Haircuts................................ 0 (see note above)
Entertainment........................... 150
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1742.15


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax Current Account..........1995......31........£1/day
Barclaycard - Me...............1740......43........29.9
Halifax Credit Card............920.......20........15.95
Wife's mum.....................3450......0.........0
Barclaycard....................5100......155.......29.9
MBNA - Wife's..................6550......65........0 (see note below)
Council (Housing Benefit)..........780.......54.2......0
Rockwell.......................3640......20........0
Tesco CC.......................1400......25........16.9 (see note below)
MBNA - Mine....................2300......25........16.8 (see note below)
Nationwide CC..................2500......38........19.9 (see note below)
MBNA (ex-Virgin)...............4200......82........16.8(see note below)
Total unsecured debts..........34575.....558.2.....-


Monthly Budget Summary
Total monthly income.................... 3,174
Expenses (including HP & secured debts). 1,742.15
Available for debt repayments........... 1,431.85
Monthly UNsecured debt repayments....... 558.2
Amount left after debt repayments....... 873.65

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -34,575
Net Assets.............................. -34,575


Of the debts above:
MBNA - Wife's £6550 - £3000 at 0% till May 2014, the rest at 0% till November 2014)
Tesco CC £1400 - 0% till October 2014
MBNA - Mine £2300 - 0% till November 2014
Nationwide CC £2500 - £1600 at 0% till August 2014
MBNA (ex-Virgin) £4200 - £1400 at 0% till July 2014

Our plan is to pay a minimum of £1000/month towards our debts. We have a feeling December will be a struggle to do this, but from January we'll really start to get a grip on this thing! Hopefully by this time in 3 years, we'll be debt free! And I can't wait!