Really need to clear my debts but debt charity cant help. What next?

BeingMe

Hi everyone. I posted a while ago as a start to solving my debt problem but ife got in the way.


Since then I have applied for a credit union loan to consolidate my debt. I was accepted but told the interest would be 36% so unsuitable for the purposes I needed it.


I then contacted Step Change who went through my income and expenditure with me. The net result is that on paper I have enough to cover my minimum payments so they can't help. In reality I am scraping by making just the minimum payments on £8,000 of debt with very high interest so I am clearing some of my accounts by just £1 or £2 a month.


I have in the past applied for loans and 0% credit cards to consolidate and reduce my debt but I've always been declined. the Step Change adviser recommended I check my credit score on Noddle. I've done that and it is saying that I score 2/5 which means I will often be declined for credit or be charged high rates of interest. I have never defaulted on a credit agreement before so I'm unsure why my score is so low.


I feel stuck between a rock and a hard place with no idea how to get myself debt free. Should I apply for a 0% card and just see if I will be approved? What else can I try? Any help at all will be very much appreciated. TIA.

heartbreak_star

Post us up an SOA and let's see where you can make some savings.

You probably can't get credit because of the amount of debt you already have - this happened to me, and was a blessing in disguise - consolidation is a massively slippery slope.

Good luck!

HBS x

BeingMe

How do I do a SOA? Should I repost the info I gave to Step Change? Thank you.

dancingfairy

How much 'spare' do they think you have over and above your minimum payments? Do you actually have this? Without seeing the actual budget then my thoughts are:
1) you need a spending diary to see why you can't make ends meet.
2) you are maybe underestimating some categories?
df

BeingMe

It looks like I have £223 on top of my monthly outgoings and minimum payments spare a month. I think I have underestimated my outgoings but also, I'm trying to set up a business and it is hard to estimate what this is costing each month and also my circumstances have changed dramatically over the last six months so I'm possibly better off now but not yet feeling the benefit of that.

[Deleted User]

BeingMe wrote: »

How do I do a SOA?

Use this.

http://www.stoozing.com/calculator/soa.php

Once all the figures are in, click Calculate, then Format for MSE, and Copy and Paste into a post.

Clicking Save Data will avoid you having to re-enter it, if you need to use it again.

BeingMe

{\rtf1\ansi\ansicpg1252
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\deftab720
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\f0\fs22 \cf2 \cb3 \expnd0\expndtw0\kerning0
\outl0\strokewidth0 \strokec2 Statement of Affairs and Personal Balance Sheet\
\
Household Information\
Number of adults in household........... 1\
Number of children in household......... 3\
Number of cars owned.................... 1\
\
Monthly Income Details\
Monthly income after tax................ 2277\
Partners monthly income after tax....... 0\
Benefits................................ 0\
Other income............................ 0\
Total monthly income.................... 2277\
\
Monthly Expense Details\
Mortgage................................ 0\
Secured/HP loan repayments.............. 0\
Rent.................................... 177\
Management charge (leasehold property).. 0\
Council tax............................. 72\
Electricity............................. 45\
Gas..................................... 45\
Oil..................................... 0\
Water rates............................. 28\
Telephone (land line)................... 43\
Mobile phone............................ 0\
TV Licence.............................. 12.12\
Satellite/Cable TV...................... 0\
Internet Services....................... 0\
Groceries etc. ......................... 300\
Clothing................................ 50\
Petrol/diesel........................... 80\
Road tax................................ 15\
Car Insurance........................... 38\
Car maintenance (including MOT)......... 20\
Car parking............................. 5\
Other travel............................ 0\
Childcare/nursery....................... 40\
Other child related expenses............ 85\
Medical (prescriptions, dentist etc).... 0\
Pet insurance/vet bills................. 0\
Buildings insurance..................... 0\
Contents insurance...................... 0\
Life assurance ......................... 0\
Other insurance......................... 0\
Presents (birthday, christmas etc)...... 60\
Haircuts................................ 10\
Entertainment........................... 0\
Holiday................................. 0\
Emergency fund.......................... 0\
Total monthly expenses.................. 1125.12\
\
\
Assets\
Cash.................................... 0\
House value (Gross)..................... 0\
Shares and bonds........................ 0\
Car(s).................................. 1500\
Other assets............................ 0\
Total Assets............................ 1500\
\
No Secured nor Hire Purchase Debts\
\
Unsecured Debts\
Description....................Debt......Monthly...APR\
All debt.......................7861......475.......30\
Total unsecured debts..........7861......475.......- \
\
\
Monthly Budget Summary\
Total monthly income.................... 2,277\
Expenses (including HP & secured debts). 1,125.12\
Available for debt repayments........... 1,151.88\
Monthly UNsecured debt repayments....... 475\
Amount left after debt repayments....... 676.88\
\
Personal Balance Sheet Summary\
Total assets (things you own)........... 1,500\
Total HP & Secured debt................. -0\
Total Unsecured debt.................... -7,861\
Net Assets.............................. -6,361\
\
Created using the SOA calculator at https://www.stoozing.com. \
Reproduced on Moneysavingexpert with permission, using other browser.}

I've combined some figures like child related expenses are all their hobbies and days out.

BeingMe

I realise that this SOA makes it look like I can easily repay my debts but the reality is very different. Clearly I am leaking money somewhere that I am not aware. I find all of this really confusing. I don't really know how much I spend on clothes a month because I buy new wardrobes for the children when the season changes and as and when they grow out if stuff. I don't feel I spend excessively though because I can't afford to.

Would it be worth applying for a 0% card just to see of I'll be accepted? I haven't applied for a couple of years now so might be accepted this time?

patman99

BeingMe wrote: »

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{\colortbl;\red255\green255\blue255;\red0\green0\blue0;\red255\green255\blue255;}
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\f0\fs22 \cf2 \cb3 \expnd0\expndtw0\kerning0
\outl0\strokewidth0 \strokec2 Statement of Affairs and Personal Balance Sheet\
\
Household Information\
Number of adults in household........... 1\
Number of children in household......... 3\
Number of cars owned.................... 1\
\
Monthly Income Details\
Monthly income after tax................ 2277\
Partners monthly income after tax....... 0\
Benefits................................ 0\
Other income............................ 0\
Total monthly income.................... 2277\
\
Monthly Expense Details\
Mortgage................................ 0\
Secured/HP loan repayments.............. 0\
Rent.................................... 177\
Management charge (leasehold property).. 0\
Council tax............................. 72\
Electricity............................. 45\
Gas..................................... 45\
Oil..................................... 0\
Water rates............................. 28\
Telephone (land line)................... 43\ Look for a better deal. I pay £26 all-in a month with Plusnet.
Mobile phone............................ 0\
TV Licence.............................. 12.12\
Satellite/Cable TV...................... 0\
Internet Services....................... 0\
Groceries etc. ......................... 300\
Clothing................................ 50\
Petrol/diesel........................... 80\
Road tax................................ 15\
Car Insurance........................... 38\
Car maintenance (including MOT)......... 20\
Car parking............................. 5\
Other travel............................ 0\
Childcare/nursery....................... 40\
Other child related expenses............ 85\
Medical (prescriptions, dentist etc).... 0\
Pet insurance/vet bills................. 0\
Buildings insurance..................... 0\
Contents insurance...................... 0\
Life assurance ......................... 0\
Other insurance......................... 0\
Presents (birthday, christmas etc)...... 60\
Haircuts................................ 10\
Entertainment........................... 0\
Holiday................................. 0\
Emergency fund.......................... 0\
Total monthly expenses.................. 1125.12\
\
\
Assets\
Cash.................................... 0\
House value (Gross)..................... 0\
Shares and bonds........................ 0\
Car(s).................................. 1500\
Other assets............................ 0\
Total Assets............................ 1500\
\
No Secured nor Hire Purchase Debts\
\
Unsecured Debts\
Description....................Debt......Monthly...APR\
All debt.......................7861......475.......30\
Total unsecured debts..........7861......475.......- \
\
\
Monthly Budget Summary\
Total monthly income.................... 2,277\
Expenses (including HP & secured debts). 1,125.12\
Available for debt repayments........... 1,151.88\
Monthly UNsecured debt repayments....... 475\
Amount left after debt repayments....... 676.88\
\
Personal Balance Sheet Summary\
Total assets (things you own)........... 1,500\
Total HP & Secured debt................. -0\
Total Unsecured debt.................... -7,861\
Net Assets.............................. -6,361\
\
Created using the SOA calculator at www.stoozing.com. \
Reproduced on Moneysavingexpert with permission, using other browser.}

I've combined some figures like child related expenses are all their hobbies and days out.

The only thing I can see that you can cut back on with 3 children is your phone.

Brightspark87

Can I agree with the others and do what I did when I first joined? you need to keep a spending diary - I kept all my receipts to see where this money is going.

Please try to continue all your minimum payments for now, to keep your credit report as clean as possible.

you would be surprised how the odd £5 adds up over the month! Clearly your expenses are way more than your soa. (not judging just saying!)

Also, although not that high your phone and food seems a little. Could you reduce this at all? how old are your children?

[Deleted User]

BeingMe wrote: »

Household Information
Number of adults in household........... 1
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2277
Partners monthly income after tax....... 0
Benefits................................ 0 - Nothing? Not even Family Allowance/Child Tax Credits?
Other income............................ 0
Total monthly income.................... 2277

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 177
Management charge (leasehold property).. 0
Council tax............................. 72
Electricity............................. 45 - This seems a bit high. Do you turn all lights off, when not needed, and appliances off rather than on standby?
Gas..................................... 45 - This seems a bit high. Only use heating when necessary. Turn thermostat down a degree or two. Close curtains in all rooms, when heating is running.
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 43 - This is bit pricey. Check U-Switch for a better deal.
Mobile phone............................ 0\
TV Licence.............................. 12.12\
Satellite/Cable TV...................... 0\
Internet Services....................... 0\
Groceries etc. ......................... 300 - You should be able to knock a bit off this. Try ALDI/Lidle. Drop a brand, etc.
Clothing................................ 50 - Could you ease back a bit? eg. only buy to replace worn out clothing.
Petrol/diesel........................... 80
Road tax................................ 15
Car Insurance........................... 38
Car maintenance (including MOT)......... 20
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 40
Other child related expenses............ 85
Medical (prescriptions, dentist etc).... 0 - Never?
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0 - You need this. Should cost about £10pm.
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 60 - This is £720pa. Could you reduce, eg. give token gifts to family and friends?
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0 - You need something in here, so you don't go to borrowing, when something breaks down.

Total monthly expenses.................. 1125.12


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 1500
\
No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
All debt.......................7861......475.......30
Total unsecured debts..........7861......475.......-


Monthly Budget Summary
Total monthly income.................... 2,277
Expenses (including HP & secured debts). 1,125.12
Available for debt repayments........... 1,151.88
Monthly UNsecured debt repayments....... 475
Amount left after debt repayments....... 676.88

Personal Balance Sheet Summary
Total assets (things you own)........... 1,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -7,861
Net Assets.............................. -6,361

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

You have £677 left each month, yet you have a debt with 30% APR :huh:

At your current rate of paying, that debt is going to cost you £2,093 in interest.

Putting £300 of your surplus to it, will reduce the interest to £1,068 (that's over £1,000 saved), and almost halve the repayment time, from 21 months to 12.

Putting £600 extra toward the debt, would have it cleared in 8 months, for just £700 in interest.