My debt is out of control, please help

cj500

Hi there,

Like many others I've decided to try to get my debt situation sorted so that I can manage it better. I have approximately £25000 of credit card debt, the details are below. I've been transferring balances about for the last few years but now things have come to a head. The monthly repayments are bad normally but shortly i will come to the end of several special offers so that the amounts required each month will go up significantly. I'm currently using a credit card to get cash to payoff the outstanding balances but this is a bad road to go down.

I am unemployed and receiving Jobseekers and help with my mortgage payments. I am currently training to become a driving instructor but I will not complete this for at least a year. I live in a part of the country where jobs are very few and very badly paid. I have alot of equity in my house but i cant get at it because i'm unemployed.

Here are my finance details:-

Current Mortgage £52,500.00
Current House price £175,000.00

Monthly Outgoings-

mortgage= £109.00
phone + broadband= £40.00
electric= £40.00
TV= £11.00
Petrol= £20.00
Food+Living= £200.00
oil= £35.00
Credit Cards= £577.00

Credit Card Details-
PROVIDER BALANCE
TESCO- £1700.00 13.9%
RBS- £5400.00 14.0% (Info From last statement says "Estimated Interest for July is £80.00" scary!)

Barclaycard- £3900.00 17.9%
SKY- £1900.00 0% until 1/9/07
MINT- £6000.00 0% until 1/9/07
HALIFAX- £1600.00 0% until 30/06/07
MARBLES- £4500.00 4.9% until 31/08/07

TOTAL MONTHLY OUTGOINGS= £1032.00


Monthly Incoming-

Housing Benefit= £249.00 to Halifax Mortgages
JobSeekers Allowance £226.00

TOTAL INCOMING= £226.00

As you can see I'm in it up to my neck, I realize that i'm luckier than many given that I own my own property but is there any way I can get at the equity given that I'm unemployed?

I have access to around £18000.00 from two further credit cards that have zero balances-
EGG- £7000.00
CAPITAL ONE- £11,000.00

if needs be I will have to start getting cash advances from these but obviously this to me is the worse case scenario.

I'm determined to be a driving instructor within a year but in the meantime can anyone give me advice as to what to do to reduce my outgoing amount each month going to my credit cards especially since from around September the amount is probably going to jump to around £900.00 per month.

Any advice you can give will be greatly appreciated, thanks

immoral_angeluk

DAVETHE_CARDBOARDBOX

To be blunt,,,, dont mean to be blunt, at that rate, get a job, some lodgers or sell up. Or youll be forced to sell up.

immoral_angeluk

Current Mortgage £52,500.00
Current House price £175,000.00 Personally I would think hard about selling up and downgrading to pay off your debt. As you're unemployed that's a hefty amount of debt on your shoulders

Monthly Outgoings-

mortgage= £109.00
phone + broadband= £40.00 Tiscali do phone and broadband for £17.99 a month + £10.99 line rental for 8mb unlimited broadband and anytime calls!
electric= £40.00 This seems high, check out comparison sites to cut it down.
TV= £11.00
Petrol= £20.00 IF you're not using the car much would it be better to et rid of it and use public transport?
Food+Living= £200.00 How many for?
oil= £35.00
Credit Cards= £577.00

Credit Card Details- What are the limits on these and do you have enough credit to be able to shift some of the larger balances on to lower interest cards? What's your credit rating like?
PROVIDER BALANCE
TESCO- £1700.00 13.9%
RBS- £5400.00 14.0% (Info From last statement says "Estimated Interest for July is £80.00" scary!)

Barclaycard- £3900.00 17.9%
SKY- £1900.00 0% until 1/9/07
MINT- £6000.00 0% until 1/9/07
HALIFAX- £1600.00 0% until 30/06/07
MARBLES- £4500.00 4.9% until 31/08/07

TOTAL MONTHLY OUTGOINGS= £1032.00


Monthly Incoming-

Housing Benefit= £249.00 to Halifax Mortgages
JobSeekers Allowance £226.00

TOTAL INCOMING= £226.00 You are currently overspending by £806 a month. So this is being funded by something, most likely credit cards. Call up your cards NOW and offer them a reduced payment until you get back on your feet. IT may be an idea in the long run though to look at either a DMP or an IVA through the CCCS or payplan.

As you can see I'm in it up to my neck, I realize that i'm luckier than many given that I own my own property but is there any way I can get at the equity given that I'm unemployed? You could sell and downgrade...

I have access to around £18000.00 from two further credit cards that have zero balances-
EGG- £7000.00 Do you get 0% balance transfers on these? If so USE THEM! IF not, CUT THEM UP SO YOU DON'T USE THEM!
CAPITAL ONE- £11,000.00

if needs be I will have to start getting cash advances from these but obviously this to me is the worse case scenario. NOOOOOOOOOO! Don't you'll end up paying a fortune for it and be in even more of a mess! If you're at all tempted cut up the cards now!

cj500

thanks for those, but whatabout loans or getting a remortgage while unemployed is that a no no?

What i'm trying to find out is that given i have an asset- my house- can i exploit this to manage my debt problems in the short term? Basically can I get funds from my property?

thanks

Tashja

There is stuff missing from your SOA too

Car Insurance, Council Tax, Water, Gas ???

Is there just you in your household ???

T xx

cj500

Hi T,
I paid my car insurance with my Tesco credit card, i dont pay council tax (i live in the Northern Ireland) water? i use oil (35.00) I live by myself, thanks for reply

angelavdavis

Hi There and welcome

EGG- £7000.00
CAPITAL ONE- £11,000.00


As IA says, phone them up and find out if they will give you a 0% balance transfer deal. Check what % they will charge as an admin fee. If they won't give you a deal or want to charge the earth in admin fee, close down the accounts and cut them up. Switching to 0% will at least help keep these down while you are looking for work.

Bottom line: You need to increase income.
- Do you have anything to ebay to get the credit card balances down a bit?
- Can you take in a lodger as suggested?
- How is the job-hunting going?

lynzpower

hi there :wave:

Im an avid believer in selling up, but in your situation with such a low mortgage at 109 ( is housing benefit paying this) I cannot see that selling up would make things any better.

I appreciate that jobs might be hard to come by, and poprly paid, but they have to be better paid than the poxy amount you get for JSA.

I suggest you take a job, any job to get straight. Get down the job centre and beg them to find you something. the longer you are out of work ( i know this from bitter experiecne) the harder it is to get back into it. Even working part time COULD mean you get to keep your housing benefit paying the mortgage- seek advice on this from the CAB or shelter.

I also suggest you call CCCS and speak to them about a DMP in the short term until you get work to pay your debts back. You should be able to arrange token payments of a pound a month until you get another job.

Have you ever bouced accounts, eg late payments, DDs that havent cleared, bounced your overdraft? If so, you can claim all these charges back too, have a look at the bank charges board.

In the meanwhile, youll need to open a new basci bank account and get your benefit paid into there. Stop paying your credit cards- and chop the cards up. You are in a hole, so stop digging. they cant take what you havent got. Yes youll get some phone calls, but as long as you have sent letters ( send them signed for) then you will just have to grow a thick skin and dont let thier nasty phone calls get to you.

Sorry I cant be more detailed, others will be able to help, but i cant see selling up right now will do you any favours whatsoever, as renting will cost you way more in the medium term.

cj500

Thanks Lynzpower,

appreciate you took the time to give me some good advice, I am going to go to my local CAB and ask about DMP etc all the best, thanks again:T
PS I'm glad that you have found a way through your debt:j

Conor_3

Pack in the Driving Instructors. It's a crock of rubbish. I know people who have done it and not one of them is going a year later because the work simply doesn't materialise because everybody and their next door neighbour seems to think it's a good idea.

You need to get a job and bloody quick. Thankfully thanks to the National Minimum Wage, any fulltime job will earn you at least £210 a week take home.

My advice is to sign up to a handful of agencies that supply factory workers. Yeah the job is crap and so is the pay but there's plenty of work. It'll give you instant work and breathing space whilst you look around for something better. The joy of agency work is that you can ditch it at no notice when you do find something better.