Need some advice

katesmommy

Hi all

I have a HUGE amount of debt and we were basically struggling to pay the bills each month, started using payday loans just to avoid defaults and getting more and more in debt.

I managed to get a job, it's not very good money but we have a small child who comes along so it's the best I can do (no-one to babysit, childcare too expensive). Basically, I'm a childminder but at the mindees' home.

So I now have an income on top of DH's but no idea where to start with repaying debt.

Here is the debt:

400 - Quickquid paid monthly @ 125 (loan)
990 - Wonga (due 01 Oct but keep rolling it over, originally for 600)
2000 - My Dad (can wait but he needs 1k back asap)
7700 - Natwest credit card
3700 - Nationwide credit card
2740 - HSBC overdraft (currently 40 over limit)
1500 - HSBC overdraft (repaid by wages then respent)
2200 - Natwest overdraft (currently 120 over limit)
1100 - Natwest overdraft (currently 100 over limit)
500 - Nationwide overdraft
400 - Nationwide overdraft

We have a 10,000 loan, a 4,000 loan and a 1,000 loan all repayable monthly which finish in 4 years.

Our income is:

1450 per month DH
215 per week from me
45 per week child tax credit
81.60 per month child benefit


Our essential outgoings are:

195 - HSBC loan
121 - Halifax loan
30 - Nationwide loan
621 - Mortgage
7 - Pet insurance
144 - Council tax (special payment schedule)
54 - Car insurance
25 - Phone/broadband
125 - Quickquid repayment
80 - Nursery (she gets funding but goes 1 extra session a week as I cannot take her to work with me on that afternoon)
90 - Gas/Elec
11 - TV licence (paid til Nov 2014)
25 - Home insurance (paid til Feb 2014)
35 - Water (paid til Dec 2013)

So as you can see, hubby's wages alone only JUST cover the bills (not even food!) on their own, but with quickquid we go over. Now that I am working it should help.

We spend 200 per month or less on food. 50 or less on petrol. Nothing on MOT or car maintenance (hubby does it at work). Nothing on clothes, entertainment, mobile phones etc. No sky tv.

Min payments on cards total around 300 altogether per month, we pay them then respend it to survive.

What is the best way to start?

Ideally I want to be able to get rid of the Wonga loan first as it is huge, but I need to be left with some money at the end of the month for essentials and food. I also want to repay Quickquid so that it's gone and no longer costing me £125 a month.

At the same time I need to save for our child's birthday (mid Nov) and Xmas and to pay my dad back at least 500-1000.

*Foolish*

Hi, didn't want to read and run and someone with more experience/knowledge will be along to give you some answers shortly I'm sure. But for me, looking at that, I'd say you need to speak with one of the free debt charities, StepChange, PayPal, National Debtline to name a few, with a view to entering a debt management plan or just simply for some advice.
Wonga will do a repayment plan, but the amounts are usually quite high.

You've come to the right place, best of luck.

sourcrates

Hi,
You have getting on for 40 grand of debt there, I think you need to start looking at a serious solution to this, im talking IVA or even bankruptcy, im thinking more along the lines of IVA though as you have a fairly good income, you really need to get some free debt advice from one of the debt charities about this, they can make a better recommendation than me, I believe stepchange has been recommended on here before, but you need to do this as a matter of urgency.

chrisbythesea

What did you spend it on ? How much equity do you have in your house ?

katesmommy

home improvements (majorly needed), surviving after losing my job and then having our child and not being able to work...

do I really need an IVA or DMP for the overdrafts? I can pay the credit card min payments.

the only equity we have is what we put in I suppose, 13000? We purchased for 118 and it is probably still worth the same. Paid maybe another 1000 off mortgage.

Vikipollard

Sourcrates gives some good advice there - you really need to speak to one of the free debt charities to see what they recommend.

You say you can make the minimum credit card payments but then have to use it again to survive. Do you think you can pay off the whole Wonga in October? Would be fantastic if you could, but is it doable?

It's also a point to note that overdrafts can be recalled at any time, so you need to factor them in to the overall plan and the charities will be able to help you with that.

Good luck whatever you decide to do and well done for facing up to the figures :T

katesmommy

I contacted StepChange and they suggested a DMP.

From what I can see, I make the normal minimum payments for the loans (so no defaults) and the credit cards amounts they have said to pay are also above the minimum.

Debt free in 2 years 9 months.

But what will happen when I want to remortgage in 4 years time (after loans paid off and DMP finished)?

[Deleted User]

Can you enter a DMP, when the accounts haven't defaulted :huh:

nicp60

Bedsit_Bob wrote: »

Can you enter a DMP, when the accounts haven't defaulted :huh:

I entered a DMP before defaulting on my debts. In hindsight I should never have gone into it, but that's a different story...

Can definitely be done, though.

AlexLK

Firstly and foremost, I think you need to get those pay-day loans paid off and NEVER use them again. So far as the loans / credit cards go could you ask for reduced payments?

Also it could be worth both yourself and your husband looking around for better paying work.

bargainbetty

Could you approach your mortgage company for a six month payment holiday? That might give you enough time to clear the Wonga and Quickquid loans in full, and get yourself back on an even keel.