Clearing debt

Nayma12

I haven't posted on here for a while but am feeling fed with the level of debt I still owe and wondering if i will ever be debt free? I do realise that the debt is my own fault and wish I had gotten a grip on my spending years ago but still need and want to repay this money. Despite owing £45,000 to various credit cards in 2011, I am now down to £31,000 ( mainly due to receiving a lump sum from an investment as well as some overpaying). I am struggling to see how I will be able to repay the rest. I have no other (old) investments from which I will receive any money and with the rising cost of living and no pay increase for the last 4 years I have no additional income to throw at my debts outside of the minimum payments I am currently making. I sell on ebay whenever I can and I do earn up to £2,000 extra per year from other work I do but have just received a letter from the tax office to say they are about to increase the tax I pay on that from 20% to 40% which will leave me with less to put towards debts ( I will call them today to see if this is correct).


I am concerned about entering a DMP in order to repay the rest due to my credit rating. I realise it probably isn't great now but am concerned how this will affect my long term ability to get credit in the form of remortgaging our house for a better deal ( not Credit card credit - I never want to see any of them again as that's what has gotten me into this mess).


Also, my car is on its last legs ( just cost me £700 to get it back on the road - cheaper than replacing it I figured?). I cannot manage without it for work so will need to replace it soon but have no spare cash to do this at present( I am trying to put a little away for another car). I wonder how this would figure into a DMP?


Sorry if I am rambling but I feel really desperate. I have reached the highest point in my job without progressing to a much more senior position ( which I couldn't cope with now due the ages of my children and the increased workload with my husband away some of the week/childcare. This could change as they got older). I cannot make more money from my job to repay the debt and am looking for how I can repay £31000 back as quickly as possible. Are self-managed DMP's worth considering?


I'd be grateful for any advice. Thanks

KirstyO

I think if you are at the point of not making huge payments then a DMP might be sensible. If you are in it for more than 6 years, any defaults you pick up at the start will have dropped off, and I think others will agree that after you finish your DMP it will be a while before you want to get credit again anyway - you need to know what it feels like to be debt free and make informed choices on borrowing, not snap ones just because you're out of debt, if that makes sense?


At the very least I would speak to one of the debt charities and discuss it with them. They are very helpful and non judgemental. They can advise you what they would like to do to help you get out of debt and if you don't like the sound of it you don't have to do it. Speak to more than one of them if you want to.


A self managed DMP is a viable option, and of course if you started and then didn't want to continue managing it you could hand it over to a charity whenever you needed to.


It sounds like you have had enough. We've all been there, but look at the positives, you have paid of £14,000 of your debt in less than 4 years! That's amazing! It took me three years to get rid of around £2,000 so you're doing brilliantly.


If you were to go on a DMP you would be encouraged to save some cash each month anyway, they could advise a figure based on your circumstances, or you could approach them with a figure in mind. Either way you could use this towards your car. I know it might not be what you want long term, but it is possible to get a small 'runabout' style car on the used market for around the price you paid for your last repair. You have be eagle eyed and prepared to haggle, but it's certainly not impossible. I sold my old car last year, a 2004 Fiat Punto for just £375. It might not be ideal for you, and my car had done some serious mileage which lowered the price, but it was still functional. It had had new tyres and a new horn and new wipers not long before I sold it too. And if you only paid a few hundred for it, you could carry on saving and buy something of your choosing after the debt is gone


Just my penny's worth


Keep swimming x

Sazzie23

Hi Nayma

I think the position you are in is not uncommon, have you considered looking at the snowball calculator to see if there is an optimal way to get the debts down, and also posting a SOA to see if there are changes you could make. As you have already made a good dent in the debt, you should hopefully be able to get some 0% deals! which will help if you can keep pushing the repayments.

I think the snowball calc will show you how long to DFD, maybe that will help your motivations. I am midway in a DMP and suffering the same sort of will it ever end, how do I manage the old car, fix the gas fire, replace the sofa as the cushions have bust etc etc, but I use a spreadsheet which shows how much the debt is coming down and that keeps me going.

DMP,is an option, but think carefully before you do it, it's not an easy ride either.

Nayma12

Sorry it has taken me so long to answer. Thanks for the advice. I think i need to have a look at my budge again t see where i can cut back even more. Then, i'll have to assess what is best for me to do. Thanks again.