Time to wake up & smell the coffee - HELP!

Robflh

Hi DRFC1879

If my calculations are right, I make it that you are spending £1,440 per month. Of that, you are spending £666 purely on the debts you have £25,358

A new loan for £26,000 over 60 months will cost you about £530 per month, and that will leave you with £133 per month extra.

That is still not a lot of money but if you adjust you budget it should be enough, and in five years time you will be debt free.

Also, is you mobile contract or pay as you go? £24 a month is a lot when you do have a landline that you can use instead.

Storm

I don't think consolidation is the right way to go here - to get a £26K loan you'd have to secure it on your home, whereas at the moment the majority if not all the debts are unsecured. Also your figures Rob are based on a 7.9% apr on a new loan, which a) the OP might not be able to get as he's admitted he's got a default notice etc, and b) with the base rate going up & up this year the good loan deals are disappearing fast.

Have a look at opening an A&L bank account as they'll match your OD at 0% for the first year, and if your OH does this too you can get £50 cashback each by referring one another.

If you're regularly getting hit with bank charges then look into claiming these back - Martin's got an article on linked from the homepage & there's a forum dedicated to people going through the process too.

hypno06

Hello! Have a look at the old style board on here and get some ideas for cheap yet good meal plans to get your grocery shopping down to a minimum.

Also, have a look at the snowball calculator on www.whatsthecost.com - put your debts in there and it will give you a debt free date that you can use as a starting point. It also helps as a very good motivator and to see that there is light at the end of the tunnel.

Good luck on your DFW journey!

RAS

Agree with Storm. It looks like you have already consolidated twice and built up more CC debt since.

Yoy need put anything extra you can into the Sainsbury's card first.

What did you spend the money on? Anything that you could put up on e-bay to raise a bit to get the balance down , get the minimum down and give yourself somehting beyond the minimum to put towards it.

Also, shift to Alliance if you can (get OH to loan you enough to meet the in credit rules for a few days if necessary) and reclaim you bank charges. That should amake a nice hole in Sainsbury's debt.

DRFC1879

Thanks again for the advice from various people. I'll look into opening an account with A&L - the OH tried to do so with HAlifx a while back so that she could use it as a parachute account should HSBC shut hers down when she tried to reclaim charges but they wouldn't let her open one. Hopefully I'll have a bit more luck with A&L then I'll be able to do the bank charge reclaim thing.

My mobile is essential for work and I've cut back as far as possible on it. At least I can claim all my calls back on expenses. Ideally I'd like to consolidate as it's not overspending that got me into this hole per se - I racked up most debt when I was made redundant from a role I'd only had a few months therefore got no payoff, had to sell my car (for which I had £15k loan) quickly so lost a lot of money on it and then lived off CC's. Unfortunately, as previously mentioned, any consolidation loan would have to be secured on the house and I really don't want to go down that route. I'll check out whatsthecost.com and hopefully get some inspiration from there.

I have already sold just about anything I can on Ebay but I'll keep trying to find more stuff!

Thanks once again to everyone for your help.

Robflh

Hi DRFC1879

If you are sure, you cannot get a personal loan and you cannot manage the debts even with a trimmed budget then go for an IVA (Individual Voluntary Agreement).

It is based on how much you can comfortable afford to pay each month. Once the amount has been agreed you pay that for 60 months (72 if you wish to keep your house). The debt that is left is then written-off.

This is an example of someone I know that has an IVA and you may not get the same reduction.

Their debt is £32,000 and they pay £240 per month for 60 months. A total of £14,400, which means they will get £17,600 written-off (55%).

Unfortunately, there is a down side. HSBC has over 40% of your debt and that is way more (20 or 25%) then they need to be able to reject an IVA.

If they do that, you will have to go for a DMP (Debt Management Plan). As I understand it, you make smaller payments until the debt has been paid off but there is no interest to pay. That means all the payment each month comes off the outstanding debt.

Either of these two options will ruin your credit rating and I have no idea how long it would take you to repair the damage. However, both of them will get you debt free in a reasonable amount of time and you contact an IP (Insolvency Practitioner) to arrange either of them but you can do a DMP yourself if you wish to.

Personal, in your situation I would contact one just to find out what my options are.

apples101

Robflh;5791561

has stated that you require a IP to arrange an IVA and a DMP. this is incorrect. A DMP can be arranged by yourself or one of the free charities.

as for the IVA the chariteis mentioned throughout the forum CCCS and Payplan can arrange these also butthey do need an IP as it is a legal aggreement.

tightfistedmoneysaver123

Hi Robflh,
I have been reading the advice you have been giving to DRFC1879 and just wondered what your financial advice experience is ?

Robflh

Hi apples101

Sorry I thought www.payplan.com and www.cccs.co.uk were Insolvency Practitioners.

Your quite right IVA’s are formal agreements (legally binding) and DMP’s are informal agreements (not legally binding).

Hi tightfistedmoneysaver123

Like many others on these forums, I am trying to help other by passing on what I have, read, learnt, experienced or seen for myself. That does not make us experts and very few of us would claim to be. We are just trying to help others as best we can.

Never take what we write as gospel and always seek advice from financial experts before you do anything. The two above are charities and they will advise you for free.