Looking for help with quickest way to get out of debt

curlyhair1

Hi,

Ive been a student the past few years and in that time had two children.
To cut a long story short me and my other half have accumulated a moderate amount of debt. Thankfully ive been offered a job i should be starting in the next couple of months.

We want to clear our debts asap to be able to get a mortgage.

Im looking for a) the best/quickest way to clear our debts and b) see if theres any way of getting a reduction in some of the debts.

We have three debts on a debt management plan.

1) £108 Barclaycard paid off at £5 pm
2) A loan which was originally £5000 and now at £4000 handled by Apex (not sure if its been bought off Lloyds or its being managed on behalf...) paid off at approx £25 pm
3) An overdraft which i would estimate 80% of is fees added on my Lloyds which is dealt with through Idem servicing. This is paid at about £18 pm.

My question is if theres any way to get the overdraft reduced seeing as the majority of it is charges or if its worth eventually offering f&f on the two larger debts.

On top of these debts we have a number of debts not on the DMP which we make the minimum payments each months..

Capital one £1860 30% APR
Capital one £1550 26% APR
Lloyds CC £4500 16% APR
TSB CC £2550 24% APR
Next Directory £700 25% APR.

Not including the £40 to the DMP we are paying around £350 pm in minimum payments.
All suggestions welcome. Thanks!

sunshine81

Hmmm, I don't know anything about DMP's but in terms of giving suggestions to help with debt repayment are you able to post a full SOA? Found at http://www.stoozing.com/calculator/soa.php

Whatever it is, it can be done (by the way I got an email saying Next were reducing the interest rate from 24.99% to 22.9% from 28th Oct)

determined_new_ms

When I was clearing my od my bank wouldn't reduce it each month so what I did was each month lived off £100 less until I was in the black. Then I saved the same amount each month until I had the od amount in savings. At this point I had the od facility withdrawn. It was scary not having that security blanket but it's been several years now and I've never missed it.

HappyMJ

curlyhair1 wrote: »

Hi,

Ive been a student the past few years and in that time had two children.
To cut a long story short me and my other half have accumulated a moderate amount of debt. Thankfully ive been offered a job i should be starting in the next couple of months.

We want to clear our debts asap to be able to get a mortgage.

Im looking for a) the best/quickest way to clear our debts and b) see if theres any way of getting a reduction in some of the debts.

We have three debts on a debt management plan.

1) £108 Barclaycard paid off at £5 pm
2) A loan which was originally £5000 and now at £4000 handled by Apex (not sure if its been bought off Lloyds or its being managed on behalf...) paid off at approx £25 pm
3) An overdraft which i would estimate 80% of is fees added on my Lloyds which is dealt with through Idem servicing. This is paid at about £18 pm.

My question is if theres any way to get the overdraft reduced seeing as the majority of it is charges or if its worth eventually offering f&f on the two larger debts.

On top of these debts we have a number of debts not on the DMP which we make the minimum payments each months..

Capital one £1860 30% APR
Capital one £1550 26% APR
Lloyds CC £4500 16% APR
TSB CC £2550 24% APR
Next Directory £700 25% APR.

Not including the £40 to the DMP we are paying around £350 pm in minimum payments.
All suggestions welcome. Thanks!

You shouldn't have both a DMP and minimum debt repayments. Everything should be in the DMP.

That's quite a bit of debt at around £16,000 for someone that does not work.

To reduce the debt quickly you need to have considered going bankrupt or getting a debt relief order to clear the slate and start again. If you have no assets it's something worth considering. You could both do that or either one of you could do that depending on whose names the debts are in and how much that person earns. Then you can spend the next few years saving as much as possible towards your home deposit.

Pixie5740

Is your DMP self managed or is it through one of the debt charities such as Step Change or CAP UK?

It's possible that the new debts could be added to the existing DMP. There's also the possibility of a DRO or bankruptcy as HappyMJ has suggested but I think you really need to research and investigate those options. If home ownership is the ultimate end goal you might find that bankruptcy makes getting a mortgage in the future that bit more difficult.

rockm87

Hi and welcome.

Unfortunately there is no 'quick' way out of debt, it took you a while to accumulate it so it will take a while to get rid of it.

The best thing to do is to properly look at your finances, and see what is going in and coming out, then you can get advice and a proper overview of what you can afford to cut down and pay off.

http://www.stoozing.com/calculator/soa.php

complete this and post.

curlyhair1

Thanks for replies.
It's not worth me doing a soa as I'm not working yet. The debts not on the dmp are my husbands and the debts on the dmp are mine.

I'm talking about having the possibly of having £1000 pm to pay towards the debts when I start work, don't want to go down the bankruptcy route as a) I can afford to pay the debts when working and b) we want to buy a house in the not so distance future...

curlyhair1

My other half earns £2000 on a good month and £1700 on a bad month. I'll be working part time and earning around £1000 per month. There's no excuse not to get the debts paid off ourselves. Was just wondering the best way. Which first etc bearing in mind the minimum payments each month we would have to continue to pay.

SeduLOUs

Meet all minimum payments, then throw any extra money you have at the debt with the highest APR. That's all there is to it.

Sazzie23

SeduLOUs wrote: »

Meet all minimum payments, then throw any extra money you have at the debt with the highest APR. That's all there is to it.

Best advice you can have, only thing to add, move any to 0% if you can but cut the cards up so you are not spending in them.

SeduLOUs

Sazzie23 wrote: »

Best advice you can have, only thing to add, move any to 0% if you can but cut the cards up so you are not spending in them.

Agreed, but I suspect it's unlikely they'll be able to get any decent balance transfer cards for a little while. I couldn't get near one for ages, and suspect the main reason boiled down to my debt to income ratio. Could try the eligibility checker for partner and see if anything looks promising...

It's also worth asking cards if they can reduce the APRs - if you're making payments on time they may be willing. A few % here and there can make a lot of difference overall, and I've had some lenders drop the rate by 5% at a time when I've asked.