Debt help

Vickyh

Hi everyone

My husband and I had a meeting with HSBC regarding an account review (we were hoping on getting mortgage advice as our in laws were going to give us a gift of money)

We were told many home truths- and left feeling rather sick.

We are currently in our overdraft of £2200 and have a credit card bill under 9k- HSBC refused us a joint personal loan to consolidate the debt and told us that if we can turn our finances around to have another review in feb 2017- they might be able to help.

We are not sure what to do next- as once our bills and rent come out there isn't much left. We also get child benefit and child tax credits that add up to £150 (which they don't class as an income)- my son is 5 and is at school. We also have some store credit that i have always classed as bills so they are accounted for- our car payments of £90 will finish in July 2017.

At the moment my husband is a full time postie and i work part time at a major supermarket.
I am able to do more overtime and coming up to christmas i have already signed up to do overtime over the festive period.

I currently through on line banking move my wage over to pay bills (as i get paid every 4 weeks) and my husband get paid every week and which i use for rent (rent divided by 4 and I set that aside in another account)

I am not sure what else i can do- my in laws have withdrawn their offer of a deposit (rightly so) and have said they would pay our CC bill off :eek:

On a personal view i want to get our selves out of this mess rather than being bailed out.

Any advice would be grateful.

MrsSave

Hi, I'd start with filling and posting an SOA (link in sticky at top of dfw page). Then people can see exactly what your incomings/outgoings are and are able to give the correct advice. Don't worry, though, you can sort this.

ani*fan

Hello there :-)

Welcome to the boards. This is a great place to ask for help.

HSBC seem to have helped you to have our lightbulb moment. Turning down your request for a consolidation loan was a good move, it would not have been any benefit to you at all. If you hadn't realised there was a problem then you might have ended up with more debt as a result of this. They have done you a favour, hard as that is to swallow at the moment.

So to start sorting it all out, first of all write your statement of affairs. This means writing a list of all your bills, every single thing, all your outgoings including irregular ones like Christas presents, birthday presents, haircuts, etc . Then you need to list all your money coming in. And you also need an accurate total of your debt. You say you have £9k of credit card debt and £2.2k of overdraft. Your store cards need to be counted as debt too, as does your car loan. Add it all up and you'll see where you stand.

Then the trick is to reduce your outgoings, increase your incoming and pay as much as you can to the debt. This is where we can help. If you post your soa up here, others will come and offer help and advice on how to decrease your bills. Sometimes massive amounts can be cut off your bills. It all helps.

Then to increase your incoming, you've taken a step already with extra work over Christmas. Brilliant. There are other tricks, moving your debt to 0% if it's not there already, various things you can do, but take it one step at a time. Knowing how much you pay out and hwo much is coming in is a huge help.

Let us all know how you get on and best of luck. It can and will be sorted.

tlc678910

Hi,
I wondered if it is possible for you to get your part time hours up more towards full time or more. I guess this depends on when your husband works.

Does he start and finish early so he could collect your little one from school freeing you up from the time you have dropped your child at school right through to when your husband goes to work again?

I agree with your instincts that if you can pay this off yourselves then you can see if the offer of a gift towards deposit still stands. Paying your debt off instead turns what should be a happy gift to not so happy? I think it is an achievement if you can do this yourselves. If you can up your work hours (or your husband can) and start knocking chunks off it, you may then be able to move it to a 0% credit card.

If your family buy for lots of people at Christmas see if you can agree to buy for each other's children only and not the adults.
Tlc

Ilona

Hi, So you've got three months to get yourselves in a better position, it can be done. First off, as said above, complete a Statement of Affairs. This should show all money coming into the house, and what it is being spent on. People can them make suggestions about where you can cut back.
http://www.stoozing.com/calculator/soa.php

You can start by seriously cutting back on Christmas. Treat the kids by all means, but think very carefully about what you actually need, rather than what you want, there is a difference.

This can be fixed, it is down to changing your attitude towards money. it doesn't grow on trees it has to be earned, and carefully budgeted. By tightening your belt you can get rid of your debt. Good luck.
Ilona

sourcrates

Hi,

Without first seeing a statement of affairs, its tricky to advise really, but essentially you have two choices.

(1) You cut back to a strict budget, and throw every last penny at your debts to get them repaid as soon as possible.

or,

(2) You admit to yourselves you cannot go on as you are, borrowing your way out of debt is only going to make matters worse, you need to find a solution to your debt problem.

If its option (2) then i would suggest you call either stepchange, or National Debt line, who will be able to go through your budget, and your options with you.
There are 3 formal debt solutions laid down by parliament, they are :

Bankruptcy
Debt relief order
Individual Voluntary arrangement

There is also the informal, debt management plan, which is most commonly used.

The others all depend on your own personal circumstances as to weather they are suitable or not, if you go to the stepchange website, they have a "debt remedy tool", if you input your details, it spits out a solution for you, might give you some idea what might work for you.

enthusiasticsaver

Budgeting is the only way to get rid of debt and stay out of it. That means being really disciplined with money, use cash if it concentrates the mind better as it is sometimes too easy to just get the card out and it does not sink in you are spending more than you have coming in.

If your inlaws are helping you in getting rid of credit card debt I would not look at DRO, Bankruptcy or IVA as this will put a definite stop to any plans you have to take on a mortgage. Ironically you often find mortgage payments are cheaper than renting so the best thing initially is to do an soa and post it up here. Ilona has put the link further up.