15k credit card debt and more!

Missko

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double_mummy

Missko wrote: »

Hi all,

Monthly Costs:
Rent £300
Phone £20 pay as you go
Credit card & OD payments £286 (of which £173 is interest!!)
Petrol £50
Shortfall between mortgage and rent £100 (my mortgage is £700 and tenants pay £600 which is market rate according to zoopla)
Car insurance £50
house insurance £50
Food - who knows!! Too much! (Started a diary to record)
Hair £60 (yeah, I know!)can you reduce this even for a couple of months?
what about other outgoings? car tax and maintenance, birthdays, xmas, clothes, council tax, utilities, you need to post a full SOA so we can see exactly what you are spending

is there anything you can sell to make some money?

In theory this leaves about £800 for payments but it just hasn't happened so far...as I say, I've started a diary to work out where it's going....takeaways, buying lunch, etc is now all stopping!!!
get the bank statements out from the past couple of months and see where you are spending your money

Questions:
- am I right to say I shouldn't try and clear these debts by remortgaging? What about a mortgage holiday/switch to interest only for a short time? dont turn unsecured debt into a secured one it may be worth looking into going interest only for say 1 year that could free uo 4 or 500 a month
- should clearing the overdraft be No1 priority? Can/should I do this with new Barclaycard? clear which ever one is costing you the most money each month so the OD is 30 each month i bet the credit cards each cost you more than thatI still have 3k available balance on credit cards - should I pay for food, petrol etc using this to allow overdraft to repay itself (I usually use debit card and pay out of my overdrawn bank account!) again depends on which works out as more expensive
- given I don't know if I'll get work after January, SHOULD I clear these debts or keep some ready cash? Or just keep the credit cards but cleared? Or better to clear and cancel cards? you need to find a balance between both
- just how much poop am I in?!!! not as much as some people more than others



Thank you so, so much in advance.

good luck

katejo

Missko wrote: »

Hi all,


I've been lurking the past few days after my lightbulb moment...


Have been building up credit card debts for past 4-5 years whilst I was studying/training. The 0%s have now ended (and won't be extended - I have asked!!). I do have a new 0% balance transfer Barclaycard coming but not sure of limit yet.


PLEASE CAN I HAVE YOUR ADVICE ON CLEARING THESE?


HBOS overdraft: £2000 (at the end of each month) (costs £1/day)
4 Credit cards (all about to become 17%) total: £15,000
I currently have direct debits set up to pay the minimum each month but will now need to seriously overpay.


Monthly wage after tax etc: £1700


I have rented out my flat and moved away to get work (contract ends Feb 2015...!) My fixed rate ends in November and will default to SVR at buy to let rate.


Monthly Costs:
Rent £300
Phone £20 pay as you go
Credit card & OD payments £286 (of which £173 is interest!!)
Petrol £50
Shortfall between mortgage and rent £100 (my mortgage is £700 and tenants pay £600 which is market rate according to zoopla)
Car insurance £50
house insurance £50
Food - who knows!! Too much! (Started a diary to record)
Hair £60 (yeah, I know!)


In theory this leaves about £800 for payments but it just hasn't happened so far...as I say, I've started a diary to work out where it's going....takeaways, buying lunch, etc is now all stopping!!!


Questions:
- am I right to say I shouldn't try and clear these debts by remortgaging? What about a mortgage holiday/switch to interest only for a short time?
- should clearing the overdraft be No1 priority? Can/should I do this with new Barclaycard? I still have 3k available balance on credit cards - should I pay for food, petrol etc using this to allow overdraft to repay itself (I usually use debit card and pay out of my overdrawn bank account!)
- given I don't know if I'll get work after January, SHOULD I clear these debts or keep some ready cash? Or just keep the credit cards but cleared? Or better to clear and cancel cards?
- just how much poop am I in?!!!



Thank you so, so much in advance.

Don't forget that you may also have to pay tax on your rental income even though you have a shortfall! You only get tax relief on the mortgage interest not the whole mortgage.

Tixy

Hi and welcome to the forum

- am I right to say I shouldn't try and clear these debts by remortgaging? What
about a mortgage holiday/switch to interest only for a short time?

Are you still on a residential mortgage with consent to let? remortgaging would likely involve switching to a buy to let mortgage earlier, which may well cost more and you may struggle in terms of the rental already being less than the mortgage payments.

- should clearing the overdraft be No1 priority? Can/should I do this with new Barclaycard? I still have 3k available balance on credit cards - should I pay for food, petrol etc using this to allow overdraft to repay itself (I usually use debit card and pay out of my overdrawn bank account!)

I would use the barclaycard for the existing credit cards initially. They rarely offer money transfer deals to new customers, so you couldn't easily use it to pay off the overdraft.

First is to find out how much you can switch to the new card at 0%. Then it may be worth seeing if one of the cleared cards offers you a new 0% deal in a few months which you could move some more of the debt around.

But the key thing is going to be trying to find that £800 as well as the £286 to make some serious inroads to the level of your debt in the next few months, especially with your contract ending.

- just how much poop am I in?!!!

Well your debts are pretty high compared to your income, the good news is that hopefully you have quite a bit spare to put towards the debts a month. But obviously that is only guaranteed for a relatively short period of time.