Advice and Help before taking out further Debt

HairyHandofDartmoor

Kattin I think you are doing the right thing in not taking the secured loan. If you didn't change your lifestyle then I really don't see how the secured loan would help.

The only way forward is what we are all trying to do which is to reduce your outgoings as much as possible and try and pay off the debts. You will get lots of expert advice on here, I know.

trying-very-trying

KK, welcome to the site and having had your LBM.

I have to say that I considered consolidation, before finding this site. So glad now I didn't go down that route. The only thing that keeps me feeling anywhere near good about this mess, is the knowledge that at least we have a warm dry secure roof over our heads. They can't touch the house!!

The biggest step is sorting out a manageable budget. If you go to https://www.cccs.co.uk (others are available) you can draw up a budget using their guidelines about what is acceptable for your situation, and see if you think you could stick to it. They will also show what your options are to help deal with your debt.
At first I though my budget would be unacheivable, but with the help and advice from the wonderful people on this site, I'm now 3 months in and managing fine.(hope I haven't spoken too soon).

You say that your partner has already taken out a remortgage, was this to clear earlier debt??
The biggest single help in this situation is changing your mindset.

To answer the questions you asked about dmp
You can't count holidays into your budget, but if you make any saving on the budget, it is up to you how you spend it. Likewise with any overtime you may earn. It is up to you whether you throw this at your debt, or use it for little luxuries. The same can be said for any extra money that you get, i.e ebaying stuff.

PayPeanuts_2

You need to gently explain to your partner that if you can't afford your current debts with your lifestyle it is your lifestyle that needs to change first.

A good DMP should allow money for Christmas and birthdays and other special occasions. It will not be excessive but it will be enough. You should also consider how you will be fixed if interest rates go up again?


Good luck in whatever you decide to do

mrsspendalot

I think there are enough savings to be had on your SoA without having to go for a secured loan.

Do you have kids? If not, £300 for food is excessive. I spend little over £200 feeding a family of 5.

your mobiles are high - just because you are tied into a contract doesn;t mean you can't downgrade your package (as far as i know)

your utilities are high - go on uswitch and see if there is a cheaper provider

shop around for all insurances, we have got life cover for £8.06 and home contents cover for £6.50 a month - go through quidco for cashback

cancel charity contributions for now

cut your cigs etc. budget by at least half - you just can;t afford that right now.

Then take a look on www.whatsthecost.com and enter your debts in the snowball calculator and see how long it would take you to repay your debts.

Jacks_xxx

Hiya honeybun, :wave:

I'm really sorry that you're feeling rotten, and it took my OH a while to catch on that things would have to change or we would lose our home - so I can totally sympathise there.

But from where I'm standing there's a lot of wiggle room in your SOA so consolidation is crazy talk!

My hubby and I earn slightly less than you guys, and we have two teenage kids, but we've cleared £60k of debt in the past 13 months and we have 35K to go. We'll be debt free by May 2010 by the Snowball calculator's reckoning.

But we had to make some changes to do it - as we simply couldn't afford the lifestyle we were living - hence the debt. I'm not going to lie to you - we tightened our belts a lot and really thought about whether all those things we thought of as basics (like lenses, mobiles, two cars etc) were really all that essential.

Whether you carry on as you are, consolidate, or go for a DMP or IVA you will have to make some lifestyle changes at some point, and IMO it's best to do it now, while you stil retain some control.

It's sad that OH doesn't see it your way yet. Has he not thought about what losing your home is likely to do for his lifestyle? :eek:


There is plenty you can do solo to improve your situation. (I had to at first. until hubby got with the programme.)

The first thing to do is to punch all the debt details into the snowball calculator, and see your situation clearly. Get a :coffee: and all your paperwork together and click this link:

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

This should motivate you to make the lifestyle changes necessary to get you out of this hole. (It's scary, but you shouldn't be afraid to do it. It willl arm you with the info necessary to make changes.)

kattin wrote: »

SOA

monthly income:-

My salary £1440
Partners salary £1200

Total Income £2640

monthly outgoings


Phone £25
Mobile Phones £70
SpecSavers £13
NSPCC £5
PC world cover £8.99
3G phone cover £6.99
Broadband £24.99
Food £300
Cigs etc... £350


By my reckoning you can cut all of these down - or out - and throw a lot more money at your debts. the question I asked myself as I went down my list was "Do I need it?? Do I need it more than I need my house?"

We all agreed on some things that it would break our hearts to lose, (My hair appointments, Hubby's fitness costs) and we ruthlessly slashed everything else.

• PHONE £95 a month just for phone service is a heck of a lot! Tell the mobile phone company you're struggling and ask to renegotiate your deal if you are locked in - if not consider how much you actually need a mobile and get rid. (We did.)
• FRILLS PC World cover and phone cover? They've got to go - as has the NSPCC unfortunately.
• Specsavers? What's that for?
• BROADBAND You can get your phone and broadband combined for less than this with Sky, Virgin and Talk Talk to name but three - sort yourself out a better deal.
• FOOD - You can cut this back. See the September Grocery Challenge and DeBelle and MRSMICAWBERS thread on feeding 2 for a month on £60 for ideas, and the whole of the Moneysaving Old Style Board in general.
• CIGS ETC. First of all find out where this is all going and then cut back hard

If you dump the mobiles, drop the unnecessary cover and the NSPCC, get a combined broadband and landline deal, cut £100 a month off the food budget and anothr £100 off the Cigs Etc budget, and you could have as much as an extra £350 to throw at your debts.

That would make a massive... huge... enormous difference!

Personal Loans:-

RBS balance £130000 APR 11.5% 45 months remaining
Co-Op balance £3400 APR 6.1% 35 months remaining
Amberloan Balance £11500 APR 6.5 38 months remaining
Yorkshire Bank Balance £12500 APR 4.12% 56 months remaining

Credit Cards

Unison balance £10938.42 Cash APR 26.75% Purchases 15.94%
Capital One Balance £4000 Cash APR2.59% Purchases £2.59%
RBS balance £850 APR 0%

Store Cards

Harvey Nichols Balance 282.55 APR 21.9%
House of Fraser balance £487.59 APR 29.3R%

What a mess!!!!:eek:

Can you get a couple of 0% cards to shuffle some debt onto?

Get along to CAB and ask them to help you get your creditors to freeze your interest.

Failing that..Pay them in the order that the Snowball says, using the extra funds culled from your new budget and cancel them as soon as they're paid off.

(The storecards can be gone within 2 months and then you can start hammering that Capital One card - which has a heinous APR of about 36% by my rough estimate

Other things to consider: Can you sell some stuff on eBay to make more money? Have a clear out.

How badly do you need two cars?

I think at the point you're at sweetie, it's make these changes yourself now - or have someone else make them for you a little way along the line.

Sorry if I've been a bit too firm / bossy, but having made the consolidation mistake LOADS of times I'm a bit evangelical now I've seen the light!

Take care,

Love Jacks xxx

In_Search_Of_Me

see it's doable as Jaks says! You can do it - just tell OH you will not sign for the loan agreement & he then cant go ahead! It's tough but we can do it! How are you feeling today?

kattin

Thanks to everyone

We talked things over alot last night and my OH as agreed to go down the CCS route as our lives are more important than our lifestyles!

This whole thing as made me quite ill and i have been drinking and smoking more as a result...instant savings to be made there.

Unfortunately we are reliant on 2 cars but will look to cut back drastically!

I will keep you posted.

Your support as lifted that heavy cloud from over me and i can see some light!:beer:

trying-very-trying

Glad to hear you're feeling better. It will take time, but I'm sure you will get there. It's so much easier if your partner is supporting you.

Mr_I_Need_It

Hi everyone,

Just wanted to say thanks firstly to Kattin for starting this post and to everyone who have taken the time to make suggestions.

I have just had great news that my wife of 2 weeks is pregnant, I also just woke myself up to my ever increasing debt of £26,400.00 which made me want to curl up in a corner and cry!

I was just about to apply for a consolidation loan which seemded to make so much sense until I remembered this site. After reading the above suggestions I've completed the snowball form and can see a way out in less than 5 years easily which is so much better than the 15 years the loan would have been over.

I'm going to take a good look at my spending habbits this week and take control.

So thanks and good look Kattin and everyone else.

mrsspendalot

Hi Mr I Need It, and welcome to MSE. Congrats in the pregnancy and on realising you need to tackle your debts. When you feel ready, start a new thread and post your own SoA and we will try and help you to reduce your costs in readiness for your expanding family!