Dreams of becoming debt free

macfanuk

Ok, so a bit of background.

On my 18th birthday, I revelled at the thought of being able to go to Dixons, with no cash whatsoever, and buy a £2,000 laptop on finance, paying £50 per month. Following this, I got sucked in and got a Dixons store card, which I transferred the entire balance of to my bank account, and various credit cards. I had no way of paying all of this back and was completely irresponsible. I got a job to start paying it off and was doing well, living at home with no real bills to pay.

Then one day, I decided to leave my job and take a year out. Buried my head in the sand, ignored my debts and ended up with numerous defaults on my credit file.

I eventually managed to clear most of my debts, through tough bargaining and being plain cheeky with some DCA's but really started to feel the consequences of how stupid I'd been 2 years ago when I started wanting to buy a house.

Anyway, having managed to get rid of my debts, I waited til the defaults fell off my credit report, started to rebuild by credit history and managed last year to buy my own house.

However, over the past year, I feel I'm beginning to struggle again, have spent a lot on credit cards in order to do things to the house, and between myself and my wife, we are paying out about £800 per month more than we're earning, just to pay the bills...then we have to buy food, petrol, etc.

Between us, we have about £22,000 of debt and this is really starting to drag me down. I just want it gone.

I have started to sell things on Amazon, making a relatively small profit but I'm putting every penny of profit into getting rid of this debt.

I work full time and I just feel like I've got no life because we can't afford to do anything.

I accept full responsibility for the situation we're in, but I am hoping this diary will give me some kind of accountability so we can get out of this mess and start enjoying life a bit more.

Debts as they stand
Littlewoods..................[STRIKE]1115[/STRIKE] 467.35
Very...........................[STRIKE]2940[/STRIKE] 1384.16
Woolworths...................[STRIKE]519[/STRIKE] 303.97
Argos Store Card...........[STRIKE]1400[/STRIKE] 986.17
Aqua Credit Card...........[STRIKE]1571[/STRIKE] 1329.00
Capital One Card.............[STRIKE]470[/STRIKE] 90.29
Barclaycard....................[STRIKE]787[/STRIKE] 384.03
Bank Loan.....................3300.00
Car Finance...................[STRIKE]9100.00[/STRIKE] 8900.00

Mara_uk7

Hiya and welcome, Youve come to the right place

Please sit down and pay attention to the following safety briefing .. the emergency exits ... oooops wrong script

Post up a statement of affairs and let the dog see the rabbit so to speak. There are loads of people in here either in or have been in the same situation, advice will be forthcoming ..and encouragement

Good Luck !

macfanuk

Mara_uk7 wrote: »

Hiya and welcome, Youve come to the right place

Please sit down and pay attention to the following safety briefing .. the emergency exits ... oooops wrong script

Post up a statement of affairs and let the dog see the rabbit so to speak. There are loads of people in here either in or have been in the same situation, advice will be forthcoming ..and encouragement

Good Luck !

Thanks, much appreciate it. I will do a statement of affairs asap and post it up.

macfanuk

This makes for extremely scary reading...

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1400
Partners monthly income after tax....... 0
Benefits................................ 226
Other income............................ 0
Total monthly income.................... 1626

Monthly Expense Details
Mortgage................................ 353
Secured/HP loan repayments.............. 225
Unsecured debt repayments............... 794
Rent.................................... 245
Management charge (leasehold property).. 0
Council tax............................. 125
Electricity............................. 57
Gas..................................... 62
Oil..................................... 0
Water rates............................. 31
Telephone (land line)................... 15
Mobile phone............................ 0
TV Licence.............................. 13
Satellite/Cable TV...................... 28
Internet Services....................... 30
Groceries etc. ......................... 200
Clothing................................ 0
Petrol/diesel........................... 200
Road tax................................ 12
Car Insurance........................... 40
Partners Car Insurance.................. 85
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 45
Buildings insurance..................... 0
Contents insurance...................... 20
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2580


Assets
Cash.................................... 3000
House value (Gross)..................... 62000 (50% shared ownership)
Shares and bonds........................ 0
Car(s).................................. 16000 (My car and Partners car)
Other assets............................ 0
Total Assets............................ 0


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 54000.....(353).....4.59
Hire Purchase (HP) debt ...... 9000......(225)......unsure
Total secured & HP debts...... 63000..... 578.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
Littlewoods....................1115......188........0
Very...........................2940......135........unsure
Woolworths.....................519.......33.........unsure
Vanquis Credit Card............2059......93.........unsure
Argos Store Card...............1400......65.........unsure
Aqua Credit Card...............1571......65.........unsure
Capital One Card...............470.......50.........unsure
Barclaycard....................787.......20.........unsure
Bank Loan......................3300......145........unsure

Total unsecured debts..........13642.....761.........-


Monthly Budget Summary
Total monthly income.................... 1626
Expenses (including HP & secured debts). 2580
Available for debt repayments........... -984

WifeandMummy

Hello and welcome good luck with your debt free journey, i'm no expert and im sure much more knowledgeable people will be about soon to offer advice but a couple of things on your SOA that stand out to me is..

SKY / Cable TV - I would consider cancelling this and using freeview, you can always get them again in the future once things are sorted.

Groceries, is it just the 2 of you in the house, can you save any money here?

Car Insurance, your partners insurance seems pretty high, can she get this cheaper elsewhere? is it possible to go down to one care at all?

Also I would budget for haircuts, entertainment, gifts etc as I assume you do pay out for these.

Also I would make a point of finding out the APR's, it helped me to know exactly how much APR i was paying on each debt as I was able to prioritise my debt with the highest APR.

Good Luck!!

WifeandMummy

Also you may want to post your SOA on the main DFW board as more people may see it x

macfanuk

WifeandMummy wrote: »

Hello and welcome good luck with your debt free journey, i'm no expert and im sure much more knowledgeable people will be about soon to offer advice but a couple of things on your SOA that stand out to me is..

Thanks for your post.

WifeandMummy wrote: »

SKY / Cable TV - I would consider cancelling this and using freeview, you can always get them again in the future once things are sorted.

We are currently tied into a 2 year contract with Sky but as soon as we're out of it, we will consider cancelling.

WifeandMummy wrote: »

Groceries, is it just the 2 of you in the house, can you save any money here?

Possibly - In with the groceries, I've allowed for the dogs food which is about £45 a month. In terms of cutting back, I find it hard to do unless we go down the route of ready meals which are a lot cheaper, or pasta all the time. Would appreciate further advice on this area though.

WifeandMummy wrote: »

Car Insurance, your partners insurance seems pretty high, can she get this cheaper elsewhere? is it possible to go down to one care at all?

My wife has only been driving for 6 months so her insurance is the lowest it possibly can be - she's got a black box, etc. Going down to one car isn't really an option because of where I work and she needs a car so she's not isolated.

WifeandMummy wrote: »

Also I would budget for haircuts, entertainment, gifts etc as I assume you do pay out for these.

To be honest, we don't do much in terms of entertainment at the moment. My wife cuts my hair and she goes to the hairdressers probably once every 6 months. Gifts are also few and far between at the moment (the dogs get spoilt more than we do lol).

WifeandMummy wrote: »

Also I would make a point of finding out the APR's, it helped me to know exactly how much APR i was paying on each debt as I was able to prioritise my debt with the highest APR.

Yeah, this is along the lines of what we're thinking. I'm going to try and find out all the APR's tonight and will update my first post will a list of all debts in the order we're hoping to clear them.

I know it's ambitious but I really want to at least halve our debt by the end of the year (even if it means getting rid of my car and getting an old banger).

HOK3Y

Is there a reason your wife doesn't work? Student? Stay home parent? Sorry if I've missed this info in the thread. It would seem to be the best way to plug that gap if she is able.

Frozenace

I would use 2000 of the 3000 cash you have to pay off the 'Very' debt.
It's likely that you're paying close to 50% APR on it.

macfanuk

Sorry to have not stopped by for a while, have been trying to organize our finances and prioritize them a little.

HOK3Y wrote: »

Is there a reason your wife doesn't work? Student? Stay home parent? Sorry if I've missed this info in the thread. It would seem to be the best way to plug that gap if she is able.

My wife suffers from Asperges Syndrome and Dyspraxia, making it very difficult for her to get through an interview. We have set up a small business selling things on Amazon, with the goal of using all that money (after tax) to go towards our debts. My wife is currently looking after this as her 'job'.

Frozenace wrote: »

I would use 2000 of the 3000 cash you have to pay off the 'Very' debt.
It's likely that you're paying close to 50% APR on it.

Thanks, I'll look at this. I believe the Woolworths APR is likely to be the same too.

macfanuk

I feel I've made good progress this month by paying off £1355 of our total debt (this includes the normal monthly payments though).

What I want to know is, when I pay money towards debts, should I spread what I have available across multiple debts or focus on one debt at a time?

For example, I could clear Woolworths off in one go, or I could use that money to maybe pay £100 extra off 5 of the debts.