Unsecured Debt out of control

inalotofbother

Hi,


I am in a lot of trouble with unsecured debts, loans, credit cards, overdrafts etc... I honestly don't know where to start or what to do.
Debts are;
Virgin CC - £8.6k
Barclaycard - £12.9k
RBS CC - £2.5k
Halifax CC - £1.1k
Halifax OD - £2.5k
Co-op Loan - £7k
M&S Loan - £6k


It has now all got too much and even though I am making minimum payments it is staring to consume my life and I feel the hole getting deeper.
To add to this my partner and mother to our 3 children only thinks we owe a few grand on CC's and the OD.
Do I go debt management plan, IVA etc...?
I came across this thread and thought I would post as this is the first time I have written down any of this. Can any one help or start to advise? Thank you.

Tixy

Hi and welcome to the forum

It can be a big step to take to start to look at your debts and consider what options may be suitable.

As a starting point we recommend completing a statement of affairs - this helps see if you can currently afford your minimum payments after normal living expenses and without reusing credit. And it helps you to see if there are any easy changes you can make to pay more off your debts each month.

From there you can consider if you might need to take a debt solution such as a DMP or IVA.

Link to a SoA calculator http://www.stoozing.com/calculator/soa.php

thriftylass

Hello,

first of all well done on starting to deal with it. That takes a lot of courage. Someone knowledgable will come along soon to advise on IVA, DMP etc.

My advice is to fill out an SOA (statement of affairs) and post it here to see if there is anywhere you could make savings and pay that towards the debt.

Is it only your debt, joint debt. How was it created. What have you bought, can you sell it? Is it from living beyond your means or even just trying to get by day to day?

I would definitely speak to your partner as she'd probably rather appreciated the honesty and your willingness to sort this for the sake of your family. Plus then you get support from her and the kids too. Morally and maybe by cutting some spending.

Good luck

sourcrates

Hi,
With approx 40k of debt, i would consider an IVA, obviously i dont know your personal circumstances, so another option may suit you better.
Have a look on the National Debtline website, lots of good free info on there, will give you a better idea of your options.

National_Debtline

Hi there,

Welcome to MSE.

There are likely to be a few options available to you and there have been some great tips on this thread so far. Getting a SOA together is essential, and then you can assess whether you can continue with your contractual minimum payments or not. If you can, then there is no need to consider DMP’s or IVA’s as these options are for people who cannot maintain the contractual minimum payment. If this is the case then you may find it helpful to take some budgeting/financial advice to try and make your money have more of an impact on the balances owed.

If your SOA shows that the minimum payments are no longer sustainable (and you have been robbing Peter to pay Paul) then you can start to consider options where you pay less than the contractual rate. It is always a good idea to take full advice that is tailored for your circumstances, as there may be more options available to you than just DMP’s and IVA’s. However, I have included some details below to try and help you.

A DMP is an informal repayment plan that is set up by a third party company. You would make one regular payment to them each month and they would write to your creditors and make them a reduced offer of payment. It is not legally binding but most creditors will cooperate with a reputable organisation. It will run for as long as it is required to in order to clear the debts in full. You should never pay a fee for this service; there are free, reputable providers.

An IVA is a legally binding agreement that would normally run for 5-6years. If you make all of your payments successfully then at the end of the IVA the remaining debt is written off. It has a fee attached to it, but reputable companies should spread this across the course of the IVA (and not take the entire fee at the beginning). It can affect any property that you are named on, and may not even be suitable if you have a mortgage property (especially if there is a lot of equity). It is quite restrictive and if you cannot maintain the payments there can be serious consequences, such as bankruptcy (which will put assets, such as properties, at risk). It is very damaging to your credit file as it is a form of insolvency.

We do have factsheets about both of these options and a lot more available on our website, I hope this helps you in your decision,

Laura
@natdebtline