Determined to be debt free

Donna83

The money for presents is only for the next couple of months. I have ordered vouchers and not paid what I should each month so for September and October I have to pay that but then I can amend the outgoings from November :-) so that's a positive!! It's too late to amend the order as well so I have to stick to what I ordered. If I had paid it each month as I should it would of been £50.00 a month which would be more reasonable. On the plus side the vouchers will cover everyone's presents, not just the children so I don't have to worry about Christmas xx

pleasedelete

When do all the 0% cards stop being interest free? The repayments on some of the debts are very low and that can't be sustainable.

You can't move house and get a new mortgage as your debt to income is simply too high. You possibly wouldn't even be able to get your current mortgage with the new affordability.

Realistically you won't be able to pay the debt off with the income that you have.

You need to increase your income substantially. Is that possible?
Do you both really earn exactly £1100?. Will your benefits be affected by the proposed changes?

Selling your house and renting would pay some debt but you still possibly wouldnt get a new mortgage as you would still have a debt in excess of your annual income. You owe almost twice your total annual income excluding benefits.

Is bankruptcy an option for you?

What did you spend the £42,000 on? That is important as you need to know why you have accrued this debt.

Can you move the children to a nearer school? if there isn't one then are you eligible for transport?

What was the £9k loans for? Can you sell whatever it was?

Donna83

The 0% on a couple of the cards is due to end at the beginning of next year. I've noticed that I didn't put the correct interest on the 2 highest cards, they are both 6.9% for the life of the balance so similar to a loan really. The amounts are correct though. We both get the opportunity to earn extra every now and again but that will go straight off the debt. The debt was caused from home improvements and then my husband being out of work for a good few months. We have said that the option may be to sell our house and rent for a while until we get the debt down. We couldn't really move the children as the schools nearer to us are not very good. We are currently going through the house and ebaying/selling items and we have just put my husbands motorbike up for sale. Whatever money we get from that will go off the debt. I've been doing surveys too and managed to cash in £55.00 this week, certainly a one off but that will be going straight off the debt. We do need to move but can make a do for a while, the last thing I want to have to do is think about bankruptcy. xx

andyfromotley

Hi donna welcome,

You are on a bit of a knifedge with your finances. Thats a lot of debt and it isnt going to dissapear quickly at all. You will be in particular trouble when your interest free periods run out as you will be very unlikely to shuffle all of it onto 0% cards.

Option one is to seek debt releif. Obviously this will put buying a new house of the agenda for years. Your credit history will take a huge hit. you may want to discuss your options with National Debt line or Stepchange. (only ever speak to debt charities).

Option 2 you can work towards paying down your debt. Some thoughts to help you,

1. Stop being 'rubbish with money'. It hasnt worked for you so far. Its a life skill which can be learnt. (i am many others on here are doing that)
2. Your income is low. you both earn around £15k Assuming a full time job. This is about £11k below the national average. You must both make it your number one priority to increase your earnings get promoted, get trained, change jobs, second jobs, third jobs. Income is king! Spend everyday working out how to earn more. Cleaning and ironing for 40 hours per week at £10 ph (cheap!) will bring in £20k per year!!
3. If you sell your house (which may suit you anyway then you can clear all of your smaller debts. This frees up another £390 per month
4. Build up an emergency fund of £1000
5. Learn to budget for EVERYTHING. I and many others on here use YNAB.

If you do all of this and more and treat this like the FINANCIAL EMERGENCY that it is then with hard work and no major disasters you could fight your way out of this.

Would it be easy? Hell no? But you could do it the more you pay off the more you have available for debt repayment. Within a couple os years you could have it down to maybe £10-15k clear in 3-5 years.

Check out these forums, Dave Ramsey and Mr Money moustache for inspiration.

Hope this gives you food for thought.

Jon_B_2

Agree with what others have said. I am getting the impression the OP does not understand what a precarious position they are in. Forget about buying a new house.

To make this clear:

YOUR UNSECURED DEBT IS MORE THAN YOUR COMBINED ANNUAL SALARY!

This is not a situation to be taken lightly and I would say it is quite rare that I see posters with unsecured debt totalling more than the combined annual income.

You need expert advice and possibly a LBM?

fatbelly

I don't see a great problem here, and talk of selling the house or bankruptcy (even dmp) seems extreme. The mortgage payment at £390 I suspect would be less than rent.

The op is meeting the monthly payments on the latest soa (post 9) and if they stop paying £390 per month on presents and entertainment then can make inroads via snowballing

http://www.whatsthecost.com/snowball.aspx

When the loan finishes, another £360 per month is available

Yes it's going to take discipline. But someone who can shop for 5 people on under £60 per week can surely do this.

ReadingTim

Donna83 wrote: »

We do need 2 cars unfortunately as my hubby works from early in the morning and daughters school is not a walkable distance.

If you're only putting a tenner into each car, both of which are being used for two journeys per day five days a week, you can't be doing very many miles, which suggests the distances are either walkable, or at least cycleable.

Your're making excuses to justify a lifestyle you can't afford.

Brightspark87

Hi, think this is a difficult SOA. Perhaps you should do what I did when I first started - which is 'normal month' (without the present spending) and then a 'spendy month' - this helps to see the difference and then I added that amounts into the normal SOA as an 'average' month to ensure I was saving enough to pay for it? Does that make sense?