New Girls SOA

HappyMJ

andyfromotley wrote: »

Hi jo and welcome.

You are in the middle of a financial emergency!! You are adding to your debt £550 every single month. This must stop immediately!! if it doesn't you will slide into a vicious debt spiral from which you cannot escape.

The changes i recommend above will put you back in the black each month. But your problems are much more serious than that. You have hefty debt and will need even more radical changes to resolve.

Some of your problems are structural. Your mortgage APR is high. Can you remortgage, including your secured debt? A 5 year fix of 2.5% gives payments of about £1400 cpm saving you in the region of £1000 pcm

You need to try and shift your card debt to 0% cards this will have a huge impact on your ability to repay them. If you are only paying the minimum with those APRs it will take you up to £40 years to pay them off!!

Finally (and in the nicest way possible) you need a hefty kick up the jacksey about how you view your current situation!! You are drowning in debt but seem to be a 'oh well' about it. Holidays? £900 on food? Paying for your kids school lunches because thats what they prefer? My kids would prefer to be driven to school by a chauffeur but tuff, we aren't millionaires! Don't think switching is a great idea? Really?? Are you kidding?

You are in a FINANCIAL EMERGENCY and ever single pound counts!! You have plenty of money and really can fight your way out of this, chin up shoulders back and crack on. Attack it with a passion. Oh and kick you're husband out of his debt denial. He is an adult with a family to look after. He's not another one of your kids! Screw that!!

It's not that bad and we're supposed to be non judgemental. You wouldn't want to see my SOA it looks much worse than that.

Although they are adding £545 to the debt each month they are paying £3,328.50 off their debts each month so it isn't as bad as you make out. Their net worth will be increasing each month.

An easy way to reduce outgoings would be to refinance the debt to reduce overall payments by £545. Although that isn't recommended it will reduce outgoings and make the SOA look balanced and nothing has really changed.

leeroy2009

that £900 on shopping needs to be stopped, even if you could get it down to £500.


credit cards are really really bad, even though the apr aint that bad on most.


Barclaycard would possibly give you a 3rd card, id be looking to get a application in right now to mbna as well for a balance transfer card.


I agree with the other poster - income is not a problem, simply too much debt that's attracting a hell of a lot of interest.


I also agree £900 a month on shopping is a joke, I have a feeling your buying all branded goods.


you have nearly 45k on credit cards, im going to guess them cards are also at the limits??


how has this happened? (you need to ask yourself that)


sorry but tinkering around with gas and electricity and phones tv etc is not going to help much at all, the shopping and credit cards are killing you.

pelirocco

HappyMJ wrote: »

It's not that bad and we're supposed to be non judgemental. You wouldn't want to see my SOA it looks much worse than that.

Although they are adding £545 to the debt each month they are paying £3,328.50 off their debts each month so it isn't as bad as you make out. Their net worth will be increasing each month.

An easy way to reduce outgoings would be to refinance the debt to reduce overall payments by £545. Although that isn't recommended it will reduce outgoings and make the SOA look balanced and nothing has really changed.

They aren't paying £3328.50 off their debts each month , a hefty chunk of that will be interest....if they are paying minimum on credit card debt would they even be reducing that debt by £545 per month ? The chances are the debt is increasing
Nett worth doesn't mean a lot if you haven't the cash to pay the bills , and they are an interest rise away from disaster , luckily they do have options but you can't sugar coat it

leeroy2009

totally agree with the above, the op I doubt has any psyical cash left over!! whats going to happen when they cant continue to pay for things on credit cards? etc


this needs tackling now or there is trouble ahead, 11k a year to the supermarkets?? interest rates probably rising within a year??

Jon_B_2

£900 on groceries is an absolute joke.

Agree with somebody else that this is a non standard SOA. Tinkering around the edges with utilities and broadband contracts isn't going to make a jot of difference. There is a lot of low hanging fruit that needs to be culled.

Still find it hard to believe that in such deep levels of debt people seem to think it is rational and normal to put £40/month towards a holiday, yet only £10/month into emergency funds/savings.

leeroy2009

whos are the Barclay cards? one each? if so you both could possibly get another one each, but its getting to the point now if the credit card companys would alow you any extra borrowing.


you need to get a application (both of you) in for a new card, try the eligibility checker for both mbna and baclaycard (both of you)

leeroy2009

totally agree jon, this is out of control (that's why shes finally came asking for help) and is actually in need of desperate help, this is serious..

HappyMJ

pelirocco wrote: »

They aren't paying £3328.50 off their debts each month , a hefty chunk of that will be interest....if they are paying minimum on credit card debt would they even be reducing that debt by £545 per month ? The chances are the debt is increasing
Nett worth doesn't mean a lot if you haven't the cash to pay the bills , and they are an interest rise away from disaster , luckily they do have options but you can't sugar coat it

Okay simple solution remortgage property for 50% of it's value at 2.5% interest with a follow on rate of 4% on a 15 year mortgage. Clear all the debts reducing rates from 18.9% down to 4% and close all the accounts.

Repayments will be reduced from £3,328.50 to £2,681 after the introductory period on the mortgage has expired. Shortfall of £545 removed now with a £100 surplus and OP is completely debt free in 15 years.

leeroy2009

the above will work, if accepted and only if each and everyone of those cards are cleared and closed down (id keep one or 2 cards though)

pelirocco

It may be worthwhile redoing the soa with minimum credit card repayments , showing how much surplus ( hopefully ) you have , then allocating surplus in the best possible way . A of people say pay highest Apr off first , however if you can pay a smaller debt off quickly it frees up more money to throw at debt

OP you will still have to make cutbacks elsewhere , but if you have a clear plan and can see progress it will be a weight off your mind