Help and Advice to be Debt Free Please

Artemis40

I need some advice on how to become debt free. I've got two maxed out credit cards and a car loan (£12,000, £10,000 and £11,000 respectively). I've been trying to keep up with the payments on my car loan which I've managed to do and for the first time, have failed to meet the minimum payment on one of the credit cards. Obviously, the next minimum payment will be even more unmanageable.

I've heard talk of IVAs and DMPs and even bankruptcy and am not sure which option would be the best for me. I have spoken to the credit card company who basically say that I have to pay. If I sell my car, this will not cover the car loan so will still be no better off.

I readily admit that my debts are my own responsibility, but am not going to get out of this hole without an IVA or a DMP - obviously I'd like to avoid bankruptcy altogether!

Some specific questions I have are:

What is the difference between a DMP and an IVA?
What effect would my having either have against the household (I share with family members who I do not wish to inconvenience or worry too much)?
Is it possible to have a DMP or an IVA on just the credit cards, as I am reluctant to sell the car which is my transport to work or would it have to be on all debts?
How long would either take to get me debt free?
What would the long terms effects of either be, i.e. would I be able to get a mortgage at a future date?

Any advice you can give would be gratefully received. Thanks.

Floss

First thing to do is read Southern Scouser's sticky for First Timers & get your details out to post an SOA (statement of affairs).

Then your whole picture can be seen, and the best advice given (rather than based just on a snapshot).

Oh, and grab a cuppa!

:hello:

Artemis40

Can't find the Southern Scourser's stick for First Timers and do you just mean a breakdown of what I owe (SOA?) - you can tell I'm new to this, can't you!!

Sagaris

Here it is: http://forums.moneysavingexpert.com/showthread.html?t=107280
And don't worry - we were all new here once - and some of us have never posted a SOA so you are very brave!

Artemis40

Thanks so much for that - have read it and am now off to find out all my APRs on my credit cards. I'll be back with a detailed SOA so you guys can help start me on my way - I hope. Speak soon and thanks for not judgeing.

Artemis40

OK, here's an SOA where I've included everything I can think of:

Monthly take home pay - £1518.00

Northern Rock Loan - (48month - Started Feb 07 ) - Total of loan : £17,604.76 (with LoanProctect) Monthly Repayment - £366.76 - APR 5.8%

HSBC Ovedraft (agreed) £1000.00 last checked it was £943.57 OD



Goldfish card - APR 17.9%

Present Balance£12,287.52Credit Limit£12,000.00Minimum Payment Due£244.00
MBNA - APR 15.9 %
Outstanding Balance£11,329.26 Credit Limit£10,800.00 Total Minimum Payment£687.72 due by 30/09/2007£450.00 inclusive of council tax, rent, utilities etc.
Mobile Phone: £78.00 this month Petrol £50 per month
Sky Tv - £22.50 (half shared with other user).

Total outgoings for this month: £1,898.98


I hope this makes it a bit easier for advice to be given.

Thanks again for your help.

Hippychick

Could you break down the £450 payment, that way we can see what this is spent on, your mobile is shockingly high, can you switch to a cheaper tariff or PAYG?

I would suggest you go on the CCCS website I think they have a debt remedy tool which you can enter info and will probably advise you which route either IVA DMP etc you could go down. Once you have done that it is probably worth arranging an appointment with one of their counsellor.

At present your outgoings are way more than incoming so you need to redress that balance by either earning more or spending a lot less.

Artemis40

I can't really break down the £450 payment as it's an all inclusive rent deal and is the one bill which cannot be juggled with. I will definately look at the site you've suggested and see what they say. I am working all the overtime I can to deal with this months outgoings, but as you can see, it's a fairly consistent problem which I will need long term help with. My girlfriend keeps telling me to change my phone tarrif and I will take both yours and her advice and speak to the provider, as it's a contract a payg wouldn't be cheaper as I would still have to pay the contract charges. Thanks for that and I'll get back after I've been on the CCCS website.