Consolidating large Debts

Red-Squirrel_2

andyfromotley wrote: »

Hi Nicola,

The thing you have to ask yourself is why you have so much debt? If it is just general overspending then you have a significant problem.

The only way to get sensible advice is to post an SOA using the link given by a PP.

You will gather that people here aren't huge fans of consolidation loans, particularly if you did just run it up on living expenses as people nearly always run it up again. At some point you have to get off the debt treadmill.

sourcrates wrote: »

Your talking hugh numbers here OP, assume you have a reasonable income coming in, but I find it incredable your still thinking you can continue to borrow your way out of debt, not worked well for you so far has it !!!

Where do you think this will end ?

Unless your prepared to cut up your credit cards, and close those lines of credit permanently, this spiral of debt consolidation looks set to continue.

The wise folk on this forum, who realised the pitfalls of consolidating debt endlessly, will look at your post in horror, as they will realise you are so far from your "lightbulb moment" it's scary!!!

You should really be looking at ways of paying your debts off without the need for further borrowing.

Sorry guys, you're usually so kind and helpful but I feel that these posts are a bit harsh to the OP and might not inspire her to stay on the board for help.

Andy, if you read her posts properly you can see how the debts were run up and that it wasn't unthinking overspending or living costs.

It looks like this person has been given duff advice (who by I wonder?) but is not a habitual casual borrower, not on a 'spiral' as this seems to be a one off, and she just wants it cleared. They don't strike me as likely to run up more debt after, the money was used for a very specific purpose.

Does that sound right to you OP? Have you had debts before or is this the first/only time?

andyfromotley

Hi Red,

I'm sorry if thats how it came over, that certainly wasn't my intention, i do always try to be helpful.

My point was that when people say they have £x CC debt, they always say it was for car/holiday/house but rarely when you drill down into it is this what all or sometimes even the majority of debt was in fact accumulated for.

However i take your point and Nicola, please let me reassure you that i wasn't having a go or judging you, take a look at my signature, i'm in no position to tell anyone off!!

sourcrates

Red-Squirrel wrote: »

Sorry guys, you're usually so kind and helpful but I feel that these posts are a bit harsh to the OP and might not inspire her to stay on the board for help.

Ouch..................I guess i`m judging a book by its cover, slaps wrist !!!!!

Problem is, you see so many similar posts, people wanting to consolidate stupid amounts of money, its easy to get cynical.

People come here for advise, but they have to be prepared to read things they may not like, or agree with.

Sometimes taking a step back from the brink is whats needed.

dancingfairy

Sad to say I believe your best option is to get your head down and pay off as much as you can and maybe consider things again in 6 months . I'd love to be proved wrong, that you got a decent loan at a really low rate and were able to pay the debt down quicker though, but I just can't see that you will.
Please let us know how you get on.
df

NICOLAWB

Thanks all.
It genuinely was used to completely gut the house.
We went to nationwide for the mortgage and the advisor mentioned you could remortgage if you do any work that increases the equity. It may have been in conversation and a flippant comment to them but we took this onboard and and went with it.
The reason I want to consolidate is not to respend on the credit cards but to try to dodge the massive interest rates we are now facing on the credit cards.
Its scaring me and keeping me awake most nights, after thinking we would be ok firstly by extra borrowing by nationwide. Then by going to the mortgage advisor who raised our hopes by saying it would be fine to remortgage with a different provider. Obviously both have now fallen through and yes we will obviously continue to pay them off and we will get there but if there is an easier way to get there then we would be stupid not to take it.
Thanks for all the help
Nicola

NICOLAWB

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1550
Partners monthly income after tax....... 2800
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4350

Monthly Expense Details
Mortgage................................ 1278
Secured/HP loan repayments.............. 210
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 160
Electricity............................. 80
Gas..................................... 0
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 85
Mobile phone............................ 100
TV Licence.............................. 25
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 60
Petrol/diesel........................... 200
Road tax................................ 0
Car Insurance........................... 50
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 25
Contents insurance...................... 0
Life assurance ......................... 50
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2893


Assets
Cash.................................... 0
House value (Gross)..................... 410000
Shares and bonds........................ 0
Car(s).................................. 10000
Other assets............................ 0
Total Assets............................ 420000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 263000...(1278).....0
Hire Purchase (HP) debt ...... 10000....(210)......0
Total secured & HP debts...... 273000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
credit cards...................41500.....700.......0
Total unsecured debts..........41500.....700.......-


Monthly Budget Summary
Total monthly income.................... 4,350
Expenses (including HP & secured debts). 2,893
Available for debt repayments........... 1,457
Monthly UNsecured debt repayments....... 700
Amount left after debt repayments....... 757

Personal Balance Sheet Summary
Total assets (things you own)........... 420,000
Total HP & Secured debt................. -273,000
Total Unsecured debt.................... -41,500
Net Assets.............................. 105,500

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

barbarawright

Well done for posting

£185 a month for phones? I realise this includes internet but surely you could get a better deal than that.

£25 tv licence? Are you paying off arrears or something? Presumably it will go down soon

No contents insurance?

andyfromotley

Hi nicola,

Apart from the items that Barbara has picked up on the SOA looks ok. Do you have £750 left over every month? If not then your SOA isn't accurate.
If it is then throw every penny you can at debt starting with the highest rate.

The difficulty is your upcoming maternity leave. How long were you hoping to take and at what rate of pay? Obviously a reduction in pay is going to impact your situation.

Some thoughts that may help, you have two cars and a car loan. Is it possible to sell one and pay down the loan? Difficult with kids i know, but a possibility.

Other than that work your cards really hard. Check them all for bt deals, ask the one with lower rates for a limit increase and move the more expensive to them, check to see if there are any other 0% cards you qualify for, lifetime low rate cards may be useful, obviously your aim is to get as much as you can onto the lowest rate possible, you sound pretty savvy so i suspect you could lessen your burden by doing this.

Either way i suspect this is going to require some significant belt tightening and tough decisions. Try not to let it keep you awake at night, your position is almost certainly only temporary, and do not let it cloud the joy of your new child. Good luck with it all.