Loads of Debt - Nowhere to turn

almondp

Hello,

I've been a regular reader of this forum over the last 5 years although this is my first post as I've come a cropper.

Keen to hear what the money savers and debt free achievers out there might be able to suggest....

I've had about £22K debt over the last 4 years. £20k credit cards (x3) and £2k overdraft. It's not budged at all.

Interest rate on my cards keeps getting jacked up and I'm struggling to find any sort of way of paying any of this back. I simply don't see day when this will be paid back!

1) I can't get any 0% balance transfer credit cards because I've already got 3. I apply every 6 months or so and no luck. Moving at least one of my £4k cards over to 0% would give me some breathing room to start making over payments on the others!

2) I tried going to the bank for a homeowner loan (we have about £70k equity on the property) - and even though it meant we'd be much better off each month due to lower monthly debt repayments - the underwriters said NO (computer said NO!).

3) I've spoken to various companies about a consolidation loan. The rate was quite high and there was no guarantee I'd actually get it anyway.

4) Zopa said No.

5) Family can't help. I already owe them about £15k!!

My credit score is Very Good. (loads of credit, always paid on time) but I seem to have maxed out on my allowable credit so no one will lend me anything! So I have no room to wiggle whatsoever.

The bottom line is if there was some way I could get some kind of loan at a lower rate (than my cards) over about 4-5 years it would lower my monthly repayments and I'd be better off each month and i'd finally be reducing my debt! I'd have some wiggle room.

But there really isn't a solution out there?!

Anyone else in the same boat? It's hard to think there aren't any options and to continue with this debt hanging over me indefinitely....I need some kind of small solution to free up some wiggle room so I can start chipping away at the debt.

Any advice much appreciated.

A

sistafromanothermista

First things first. You need to post up an SOA and as you've been a lurker for some time you should know how important this first step is.
Sit down and go through bank statements from the last 3-4 months as well as all credit card statements as this will show the current apr's.
Step 2. Use the snowball calculator this helped me immensely on my long journey.
Consolidation isn't the way to go.

sourcrates

Unfortunately lending criteria is a lot more stick now than it previously was, I don't agree with consolidation loans anyway as in my opinion, it just gets you into more debt, do your SOA and we will see where, if anywhere you can make cuts, im afraid it might be that you need to stop paying the high minimums you are paying now, and consider some sort of debt repayment plan, either a DMP, IVA or some think along those lines, a solution which may seem unpalatable at the moment, but may be your only long term solution.

happy_bunny_2

Close your cards to spending.

You should have been given the option to do this when they put your rate up?

Or were the rates put up before those rules?

in_need_of_direction

I agree with sourcrates. Each time I consolidated, I ran up the cards again. Sometimes, you just need to draw a line in the sand. The soa will help see where savings can be made

almondp

Thanks all for replying.

I've just read SouthernScousers post on first time posters (should have read this first!) so I'm working on my SOA! Once I've done it - where to I post it? Here?

I rang up about a DMP once - but they mentioned I'd have a default on my credit report - as we're looking to move house in the next couple of years - this wouldn't be good.

Anyway, cracking on with SOA...

REALLY looking forward to becoming part of this forum - I've got a good feeling so far!

sourcrates

almondp wrote: »

Thanks all for replying.
I've just read SouthernScousers post on first time posters (should have read this first!) so I'm working on my SOA! Once I've done it - where to I post it? Here?

Yes here, you may have to re-evaluate your house buying hopes, until the debt is sorted though, your credit file should not be your main concern when you have 22k of debt, you would not get a mortgage with that level of unsecured debt anyway.

longtermplanner

almondp wrote: »

I need some kind of small solution to free up some wiggle room so I can start chipping away at the debt.

Your wiggle room is going to have to come from somewhere else. How could you increase your income - could you get a lodger? A second job? Look at the unappealing ways to reduce your expenditure, I assume you have already adopted the nice ones! You could always sell the house and clear the debts.

almondp

Ok, here's our household SOA -

MONTHLY INCOME

Monthly Income (After Tax) £4,500
Partner's Monthly Income £1,200
Benefits (Tax Credits) £135

TOTAL Income £5,835

MONTHLY EXPENTIDURE

Council Tax £181.00
Electricity £49.00
Gas £80.00
Water £44.20
Landline £30.00
Mobile/s £90.00
TV Licence £12.00
Internet £17.99
Groceries £600.00
Clothing £100.00
Diesel £150.00
Road Tax £12.00
Car Insurance £45.00
Car Maintenance £50.00
Parking £30.00
Other Travel £20.00
Childcare £1,120.00
Child Activites £100.00
B/Insurance £12.00
C/Insurance £12.00
Life Assurance £55.00
Haircuts £20.00
Entertainment £150.00
Sofa on Credit £131.00
Milkman £9.00
Take-Aways £40.00
Gym Membership £90.00
AV Streaming £15.98
Equifax £14.95
Birthdays £60.00
Bank Charges £100.00
Boiler Cover £20
W-Machine Cover £15
Simply Health £23
Work Lunches £100

TOTAL EXPENDITURE £3,598.77

CREDIT CARDS

Barclaycard -£11,900.00, £285.30 per month (29.9% APR)
Santander -£4,100.00, £36.87 per month (15.9% APR)
MBNA -£8,276.00, £272.00 per month (27% APR)
HSBC (Wife's) -£4,000.00, £40.00 per month (? APR)

TOTAL CC DEBT £28,276.00
Total Monthly CC Repayments £634.17

almondp

longtermplanner wrote: »

You could always sell the house and clear the debts.

We have about £90k "equity" in the house. We tried getting a Homeowner loan - to cover all our debts - although we were refused. Presumably because my account isn't well maintained - I keep going beyond my overdraft!

Bank told me to try again in 6 months.

I know for a fact I need to get control of my account and keep it clean. Although I struggle with this even.

almondp

happy_bunny wrote: »

Close your cards to spending.

You should have been given the option to do this when they put your rate up?

Or were the rates put up before those rules?

I don't remember being given the option to close the cards to spending. I just got a letter saying the rate had gone up.