Starting out

ukhack

We've gradually sunk into debt over the last 18 months or so, to the point where we now owe around £7550 in credit card debt across five cards, a £1000 overdraft and approximately £2150 in loans from family.

So, a total of £10,700.

We also have a credit agreement in place for carpets, which we're almost two thirds of the way through and are happy paying the required monthly payment for them.

Can someone advise me on a good debt repayment strategy for getting rid of our debts as quickly as possible? I know it's going to be hard work, but I really want to be debt free as quickly, and as safely, as possible. I'm fed up with having very little options - I'd love to move my credit card debt to a decent 0% balance transfer, but that's not going to happen because my credit rating is poor.

Should I concentrate on paying down the overdraft first, or do the moral thing and try to pay family off first?

Any help would be gratefully received!

ukhack

HappyMJ

I would pay the family off first. Why? You may need them again in the future and if you can show it's only short term they may be willing to lend you a little in the future...but please only for emergencies.

Then I'd get the overdraft paid off. This will give you a buffer in case of a shortfall in any one month. It should never be used but it can be again only in emergencies.

Next I'd get the highest interest charging debts paid off first and work my way down.

You do realize to pay this debt down quickly you need to really cut back your expenditure each month. That may mean going without some things like Sky or the latest Mobile contract for a year or two.

mum2one

I would suggest doing a statement of affairs - then look at snowballing your debts, - it works on your repayments/interest and payments made - it works out the quickest way to pay the debts off.

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

((link to the statement of affairs) also goes to the snowball))

I would go with paying something to the family, this shows willing, and you may never know if you need help again, -

I always think the overdraft is one you need to keep abreast of - as they can be withdrawn at any moment so play that by ear. xx