We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Hello everyone another newbie!!

Deep breath.....

Hello im new and i wannabe debt free!

Ive been rubbish with money for ages, spending on credit cards, getting a loan to pay off credit cards, then spending on credit cards again - i'm sure everyones heard it all before!

I knew it was getting bad when I had 2 loans and 3 maxed cards. My total debt now is just over £20,000. I kept this from my husband for a long time (he thought it was around £10000). Recently i talked him into getting a secured loan for £20000, some to pay off his debts and the rest mine. Im ashamed to say i secretly applied for £30,000 not £20,000 (to clear the debt he didnt know about), thinking he wouldnt find out....obviously he did. Needless to say he wasnt best pleased to say the least, but mainly because i'd lied.

We are trying to now cancel the loan, although im not sure if they will let us without charging a fee...we only got the cheques through friday and havent paid them in or anything

Now ive thought about it, the secured loan was an easy way out and i probably would have slipped back into bad habits. It would have been over 5 years and although i would have more money each month, im sure i can clear the debts faster without it.

Its going to be tough, but i want to face up to it and get out of debt!

Heres my SOA (hope i do it right!):

Monthly Expenditure:

Household bills £380
Petrol £150
Shopping £120
Beneficial Loan £288
Cahoot Loan £250
Capital One CC £100
Halifax CC £30
Barclaycard £50
Argos Card £40
Store Cards £30

TOTAL £1438

Income: £1680

Leaves £242, and i haven't put anything in for "other" expenses either...my credit rate is pretty poor so getting lower rate cards etc is a no-go

Im not quire sure where to start, any advice would be much appreciated!
Thanks
Chez xxxxxx

Comments

  • southernscouser
    southernscouser Posts: 33,745 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Hi chezzz and welcome to the site. :)

    Definately think twice about this secured loan. I take it you understand the implications of it being secured. Also, I'm walking testament that consolidation doesn't work if you haven't addressed the main issue which is overspending. I must have consolidated 6 or 7 times and everytime you get deeper in the proverbial! :doh:

    You should have a cooling off period of 14 days or something like that if you choose not to keep the loan.

    There are other options available to you for example something called a DMP (debt management plan). This is an non binding agreement between you and your creditors, normally through a third party such as the CCCS (who are a registered charity), where you agree to pay a reduced amount to them each month. Hopefully they will also fully stop all interest which normally happens but not guaranteed.

    I advise you to phone the CCCS in the morning just to seek some free professional advice. I personally would also cancel the loan. I'm presuming it is over a long term and the early payment penalties are normally massive! :eek:

    Also for people to help you identify some savings on your expenditures can you breakdown your household bills and provide more info on the debts like APR's, credit limits, time to go on loans, etc.

    Best of luck. :beer:
  • tealady
    tealady Posts: 3,851 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Mortgage-free Glee!
    Hi, as well as looking at a DMP you need to address WHY you are spending so much money. I would also break down your monthly bills to see where the money is going. Hop over to the old style boards for some great ideas on how to live cheaply yet well. I would also keep a spending diary, every day write down everything you spend (put it on a speadsheet when you get home if you like), so you can see where the money goes. PLEASE take Southernscousers idea re the secured loan, if you really want convincing its a bad idea, check how mwny homes are being repossessed by banks because people are defaulting on secured loans, it is a last resort option for those who KNOW they can pay it back (redundancy and illness could happen to anyone). Sorry to sound so gloomy but you really need to tinkk long and hard before taking on secured loans.
    Find out who you are and do that on purpose (thanks to Owain Wyn Jones quoting Dolly Parton)
  • Hi Guys!

    Thanks for your advice! As i said we dont want the secured loan, trying to cancel it. I phoned them and asked and they said they had no obligation to cancel loans (even though it had only just come through), and usually they would charge 6 months interest for cancelling but advised me to write in and ask. So i have sent off a pleading letter! I hope they are nice...we havent paid the cheques in or anything so havent actually taken any money from them

    I thought DMPs were for those who cant afford their minimum repayments? I still have about £200 left over after my minimums so I dont think they would help me

    Here is my broken down SOA:
    (husband pays mortgage and this is for 2 of us)

    Council Tax £81
    Electric £30
    Gas £57
    Water £40
    TV/Broadband/Phone £60
    Mobile £30
    Pet Insurance £10.50
    TV License £11
    Car Insurance £40
    Contact Lenses £5.10

    Total £364.60

    Beneficial Loan £288
    Cahoot Loan £250
    Capital One CC £100
    Halifax CC £30
    Barclaycard £50
    Argos Card £40
    Style store card £10
    Debenhams store card £10
    New Look store card £10

    Balances

    Beneficial £7000 4 years to go (20-something% interest)
    Cahoot £6500 2 years to go (9.7% interest)
    Capital One £2200
    Halifax £1600
    Barclaycard £1700
    Argos £1300
    Debenhams £200
    Style £100
    New look £100

    Plus a student loan which is £100 out of my salary each month with 1 year to go
  • chezzz wrote: »
    Hi Guys!


    Here is my broken down SOA:
    (husband pays mortgage and this is for 2 of us)

    Council Tax £81
    Electric £30 try looking at u switch.com, you may be able to take this down
    Gas £57 as above
    Water £40 is this on a meter or set bill?
    TV/Broadband/Phone £60 this seams really high i have a freeview box (i paid £20 for it) and have got orange broadband i only pay £20 pm for it and get free calls
    Mobile £30 is this on contract? maybe you can switch to a cheaper call package
    Pet Insurance £10.50
    TV License £11
    Car Insurance £40
    Contact Lenses £5.10

    Total £364.60

    Beneficial Loan £288
    Cahoot Loan £250
    Capital One CC £100
    Halifax CC £30
    Barclaycard £50
    Argos Card £40
    Style store card £10
    Debenhams store card £10
    New Look store card £10

    Balances

    Beneficial £7000 4 years to go (20-something% interest)
    Cahoot £6500 2 years to go (9.7% interest)
    Capital One £2200
    Halifax £1600
    Barclaycard £1700
    Argos £1300
    Debenhams £200
    Style £100
    New look £100

    Plus a student loan which is £100 out of my salary each month with 1 year to go


    Hi and welcome to the site
    One of the first things I would recommend is cutting up all of your credit cards. There's no point keeping them when you're in this much debt - you'll only get yourself into a bigger hole. You also need to start trying to get a contingency fund on the go, so that if you have any big repair bills for the car, you don't need to panic.

    Do you have anything collecting dust that you can sell on ebay and make some money from?

    There will be loads of other people along to give some other ideas on helping out, I just can't think of any more at the moment
    Tiger-Lily arrived 20th May 2007 6lb 5oz

    Official DFW Nerd 197
    Proud To Be Dealing With My Debts :beer:
  • awaytogoyet
    awaytogoyet Posts: 147 Forumite
    Hi Chezzz
    I thought, by law, they had to give you a 'cooling off' period, during which time you could cancel without penalties???
    Have a look at the small print on the loan agreement, but also seek some professional advice (you should be able to get this free - I think think there is an Independent Financial Services Advice Centre & indeed an Ombudsman, who you will be able to refer the case to if the company decide not to play ball).
    Give the company chance to redeem themselves, but if they don't, I would strongly advise challenging the decision in this way & also getting as much publicity for the case as possible, which will be bad PR for the company concerned. The Govt are supposedly committed to cleaning up the FS Industry & helping people out of debt, at the mo!!!
    As others have said best to go the 'unsecured' route, to get out of debt & like many others here, I also am living proof that 'consolidation' is usually not the answer!!!
    Speak to the CCCS (Charity) - although an IVA might not be the right route for you, you'll get further good, objective advice.
    Do have a look at what, where, when & why you spend. It's really an addiction & I in no way mean that in derogatory terms - we're mostly all addicted to something.
    I got over my personal addiction, by firstly acknowledging it & why I was doing it & then immersing myself in a new venture which gave me the same adrenalin rush, but in a much more positive, constructive way.
    Not spending or Bargain Hunting, is the new 'Spending' - it's now quite cool to save money & get the best bargains - to many it's a great hobby! Make it yours also - with the help & advice & ideas from all the great people here - it can actually become good fun. I honestly believe if I now won the Lottery - I'd still be hooked on Boots Glitches, Ebaying, Car Booting, Composting, Recycling, Charity Shops, Making, Mending etc. etc. etc.
    Lots of luck to you
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245.1K Work, Benefits & Business
  • 600.7K Mortgages, Homes & Bills
  • 177.4K Life & Family
  • 258.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.