Deep breath, pulls head out of sand....

wanttosortthisout

Hi there,

So today I have decided I need to sort everything out, I have sat down and done a spread sheet of all our monthly outgoings, a list of debt and added them up (cried for a bit) and applied for mine and hubbies experian.

I've had a look at the forums and the details regarding 0% cards etc and am really stumped, here is the situation...

We are in £85672 worth of debt, £50K is on credit cards!

We have never been great with money, either of us, but obviously this is beyond out of control.

The 'good' news is that we both earn good salaries and our monthly income after tax is £5000. At the moment paying minimum payments on cc's and agreed loan repayments we are spending £2800 of that. Mortgage/ Council tax etc is £1110. Which leaves just over £1000 for food/ car/ school stuff, well you know.

My credit rating is on the floor mainly because of the level of debt, I have one default on my experian which was for a stupid catalogue that didn't do DD's and just didn't get paid..... everything else is satisfactory. I believe my husbands is slightly better but they are sending a pin through for him to log on as we used the same computer to register and it didn't like it!

We do 'own' our house and there is approx £30K equity in it. But we already have a secured loan....

I should also say that about 5 years ago we had a challenge and had a period of several months were we could not make the minimum payments- we paid everything up to date and have never missed a payment since. At the time several of the credit card companies decided to up our interest rates, several are at 35% but one, with a balance of £12600 is at 50%!

I've used the tool on here to tell me what I would be approved for and basically only the Capital One card with 6 months interest free came up with a max balance of £1200. Better then nothing though but I have been declined...

Hubbies has a couple of 50% chances but we haven't done anything yet as we would like to see the experian first.

Sorry this is long, any advise would be welcome.

January2015

Hi

I am fairly new to being a DFW (LBM beginning of January 2015). Our level of debt is slightly higher than yours, but our income is less than yours.

One thing I would say is do not consider consolidating onto a secured loan (been there, done that, got the noose around the house and built up the credit cards again )

I found completing the StepChange debt remedy tool really helped me. We also did a spreadsheet to work everything out ourselves, but the StepChange online tool made us think of things we hadn't considered and gave us a 'way out'. For us it was to set up a debt management plan (DMP) and we are in the process of doing this. This may not be the recommendation for you but definitely give completing the tool a go. There is no commitment to going through with it, and you don't even have to speak to anyone from StepChange even if you do go ahead - it all seems to be being done via email for us at the moment.

We've borrowed from peter to pay paul so to speak and all our debts are 'up to date' but that doesn't mean we can afford them and we just reached the point where we realised we are just sinking deeper and deeper by trying to pay them in this way each month.

Welcome to the forum and well done on taking the massive first step to the rest of your debt free life.

twiggy86

Hi there! Well done for stopping pretending to be an ostrich and posting on here!

The first bits of advise that people normally give is to post a statement of affairs on here - so that the kind people on here can try and advise on areas you can cut down. Appreciate that you've done a spreadsheet but I found that the SOA made me realise there were areas that actually I do spend but maybe not on a monthly basis so I hadn't considered/budgetted (e.g. car tax, dentist etc).

The second thing is to do a snowball (google "snowball whats the cost"). This will help you prioritise which debts to overpay - if you have room in your budget to over pay even just a little bit - it really is worth paying off anything you can. I actually paid 4p off my OD the other day - but that was so that psychologically it went down a hundred (if you know what I mean?!)

And keep posting on here!

wanttosortthisout

Thank you for replying, I really appreciate it.

Couple of things, what is DFW and LBM?

Also, a debt management plan is that the same as an IVA?

wanttosortthisout

twiggy86 wrote: »

Hi there! Well done for stopping pretending to be an ostrich and posting on here!

The first bits of advise that people normally give is to post a statement of affairs on here - so that the kind people on here can try and advise on areas you can cut down. Appreciate that you've done a spreadsheet but I found that the SOA made me realise there were areas that actually I do spend but maybe not on a monthly basis so I hadn't considered/budgetted (e.g. car tax, dentist etc).

The second thing is to do a snowball (google "snowball whats the cost"). This will help you prioritise which debts to overpay - if you have room in your budget to over pay even just a little bit - it really is worth paying off anything you can. I actually paid 4p off my OD the other day - but that was so that psychologically it went down a hundred (if you know what I mean?!)

And keep posting on here!

Thank you, I will have a look at those now.

heartbreak_star

wanttosortthisout wrote: »

Thank you for replying, I really appreciate it.

Couple of things, what is DFW and LBM?

Debt-Free Wannabee and Light Bulb Moment

Also, a debt management plan is that the same as an IVA?

Not quite - an IVA is a legal document, a DMP is an informal arrangement, I think.

Good luck!

HBS x

twiggy86

Here's a link to the dictionary for other terms which are used on here https://forums.moneysavingexpert.com/discussion/4896875


Took me a while to suss out what everyone was on about! Like DD (darling daughter) DS (darling son) DFD (debt free date)!

PinkPoppies

The snowball calculator mentioned above is a brilliant tool, here's a link to it- http://www.whatsthecost.com/snowball.aspx

If you are feeling overwhelmed by it all just remember that this is the hardest point- right now! With every little CC overpayment you make, and every payday that passes, it gets easier and you find yourself a bit more wriggle room.

Best of luck!

happy_bunny_2

wanttosortthisout wrote: »

Hi there,

So today I have decided I need to sort everything out, I have sat down and done a spread sheet of all our monthly outgoings, a list of debt and added them up (cried for a bit) and applied for mine and hubbies experian.

I've had a look at the forums and the details regarding 0% cards etc and am really stumped, here is the situation...

We are in £85672 worth of debt, £50K is on credit cards!

We have never been great with money, either of us, but obviously this is beyond out of control.

The 'good' news is that we both earn good salaries and our monthly income after tax is £5000. At the moment paying minimum payments on cc's and agreed loan repayments we are spending £2800 of that. Mortgage/ Council tax etc is £1110. Which leaves just over £1000 for food/ car/ school stuff, well you know.

My credit rating is on the floor mainly because of the level of debt, I have one default on my experian which was for a stupid catalogue that didn't do DD's and just didn't get paid..... everything else is satisfactory. I believe my husbands is slightly better but they are sending a pin through for him to log on as we used the same computer to register and it didn't like it!

We do 'own' our house and there is approx £30K equity in it. But we already have a secured loan....

I should also say that about 5 years ago we had a challenge and had a period of several months were we could not make the minimum payments- we paid everything up to date and have never missed a payment since. At the time several of the credit card companies decided to up our interest rates, several are at 35% but one, with a balance of £12600 is at 50%!

I've used the tool on here to tell me what I would be approved for and basically only the Capital One card with 6 months interest free came up with a max balance of £1200. Better then nothing though but I have been declined...

Hubbies has a couple of 50% chances but we haven't done anything yet as we would like to see the experian first.

Sorry this is long, any advise would be welcome.

When the hiked the rates, was there a balance on the card?

Was this recently or before they had to give you the opt out if you closed the card to spending?

I managed to get rates reduced and some interest refunded on a couple of cards the rate jacked. Had to take to the FOS mind. These were hiked before opt out was an option.

HB

retepetsir

If you can also complete an SOA then that'll be a great help as we can then see what goes where.

wanttosortthisout

happy_bunny wrote: »

When the hiked the rates, was there a balance on the card?

Was this recently or before they had to give you the opt out if you closed the card to spending?

I managed to get rates reduced and some interest refunded on a couple of cards the rate jacked. Had to take to the FOS mind. These were hiked before opt out was an option.

HB

This goes back to the head in the sand thing, I don't know. At the time of the 'challenge' they put it up to 35%, I actually only realised it was at 50% today when I finally looked at the statement- my paper work is in a real mess, in boxes and folders stuffed all over the place- at least Ive actually opened all the envelopes today....