Stuggling to break free

Sixwix

Hi Guys

I could use some advice here, i've run out of ideas.

Due to some poor decisions in the past and an ex that liked to spend, i find myself in a situation that i can't quite get out of.

I have 2 credit cards that are maxed out to the total of about £14,000 and try as i can to pay them off, i find that interest it just killing me every month, i keep sliding back down.

I pay £300 a month to one and £70 to the other, but i'm getting nowhere and i find i'm cutting it so close every month.

I think my best option would be to maybe take out a loan to cover both of these and pay back monthly, i don't have a problem doing that and i've never missed a payment, however my credit score is making it difficult to find someone that would be willing to lend to me without asking for an incredibly high APR.

What would be the best way to increase my credit score so that they would be willing to lend, and whats the best way to tackle the cards in the short term?

DCFC79

Sixwix wrote: »

Hi Guys

I could use some advice here, i've run out of ideas.

Due to some poor decisions in the past and an ex that liked to spend, i find myself in a situation that i can't quite get out of.

I have 2 credit cards that are maxed out to the total of about £14,000 and try as i can to pay them off, i find that interest it just killing me every month, i keep sliding back down.

I pay £300 a month to one and £70 to the other, but i'm getting nowhere and i find i'm cutting it so close every month.

I think my best option would be to maybe take out a loan to cover both of these and pay back monthly, i don't have a problem doing that and i've never missed a payment, however my credit score is making it difficult to find someone that would be willing to lend to me without asking for an incredibly high APR.

What would be the best way to increase my credit score so that they would be willing to lend, and whats the best way to tackle the cards in the short term?

If you can get a loan a decent rate will depend on your salary and whats on you credit file (not your score as no 1 not even the pope can see it).

Lenders view your history.

Dobbibill

Consolidation loans rarely work, even with the best intentions. The forum is full of horror stories of debt doubling within a year or so.

Post up a SOA and the very helpful knowledgeable people will be able to help you make savings to throw more money at your debt.

Is it possible to get a CC with 0% BT offer?
It would be a big ask for the total amount of debt as a credit limit but some at 0% would be better than none.

sourcrates

Oh I wouldn't go down the path of consolidation, so many people have fallen into that trap.

Post an SOA and I'm sure we will be able to point you in the right direction.

There are a few options here.

Sixwix

Thanks for the quick reply, hopefully i've done this right.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1740
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1740

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 105
Rent.................................... 520
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 35
Groceries etc. ......................... 300
Clothing................................ 50
Petrol/diesel........................... 50
Road tax................................ 0
Car Insurance........................... 25
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 45
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0
Gym..................................... 32
Kickboxing Training..................... 50
Total monthly expenses.................. 1287


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 8000.....(105)......0
Total secured & HP debts...... 8000......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
CC1............................11700.....300.......19
CC2............................2700......65........20
Total unsecured debts..........14400.....365.......-


Monthly Budget Summary
Total monthly income.................... 1,740
Expenses (including HP & secured debts). 1,287
Available for debt repayments........... 453
Monthly UNsecured debt repayments....... 365
Amount left after debt repayments....... 88

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -8,000
Total Unsecured debt.................... -14,400
Net Assets.............................. -22,400

MrsSave

Are your groceries £300 for just 1 person? That seems very high. We spend less than that with 2 adults, a 3 year old and one on the way (have been buying nappies, wipes, etc stocking up).

Internet services could be reduced, as could mobile phone (if you're out of contract).

Does your rent include bills such as gas/elec/council tax?

How many pets do you have? Could the pet insurance be reduced?

Have you searched to see if you are able to get a 0% balance transfer cc. Even if you can get part of the debt onto it. As mentioned earlier, I'd be wary of consolidating your debt by applying for a loan.

Dobbibill

Sixwix wrote: »

Thanks for the quick reply, hopefully i've done this right.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1740
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1740

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 105
Rent.................................... 520
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35 - this is alot, ring your provider and ask for a better deal, even if you are not out of contract they can sometimes do it.
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 35 - this can be reduced, look around and switch, should save £10 easily
Groceries etc. ......................... 300 - this can be reduced, change shops/brands/batch cook
Clothing................................ 50
Petrol/diesel........................... 50
Road tax................................ 0
Car Insurance........................... 25
Car maintenance (including MOT)......... 0 - you don't ever change tyres, brake pads, oil?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0 - you never visit the dentist?
Pet insurance/vet bills................. 45 - this is expensive
Buildings insurance..................... 0
Contents insurance...................... 0 - nothing?
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 - you never buy anyone a gift?
Haircuts................................ 10
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 0 - nothing? what if your white goods need replacing
Gym..................................... 32 can this be reduced? special offer/different gym?
Kickboxing Training..................... 50 - does your instructor do a cheaper monthly deal, some sports charge per session, discount for monthly payments - doesn't hurt to ask
Total monthly expenses.................. 1287


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 8000.....(105)......0
Total secured & HP debts...... 8000......-.........- - how long is left on this, looks like it's over several years.

Unsecured Debts
Description....................Debt......Monthly...APR
CC1............................11700.....300.......19
CC2............................2700......65........20
Total unsecured debts..........14400.....365.......-


Monthly Budget Summary
Total monthly income.................... 1,740
Expenses (including HP & secured debts). 1,287
Available for debt repayments........... 453
Monthly UNsecured debt repayments....... 365
Amount left after debt repayments....... 88

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -8,000
Total Unsecured debt.................... -14,400
Net Assets.............................. -22,400

I've added my comments in red above.

I've looked at reducing the cost of your sport, as I'm weighing up comittment v's not spending money elsewhere to substitute it, especially if you compete.

Is it really worth having a car? How long do you have left on the payments? Would public transport be better?

Do you really have £88 a month left? Where does it go? Are you saving it?

The other option you have is overtime/second job. The more you earn, the more you can throw at the debt, the sooner it's gone.

Finally, make sure you address the reason you have the CC debt. It's all very well to cure the symptoms but if you don't find and remedy the cause then it will likely happen again in the future.

Joshuaa25

It seems like a lot to pay out for small payments, maybe taking a loan out at a higher interest rate wouldn't be that bad - Because you know it's a fixed term take it out over years or so. It would help if we knew how much interest is being added on, how about taking out a credit card with 0% interest on balance transfers take the card with the least on and do that and as much as you can with the other card (Unless the new balance covers both or the one with the most on?).

tlc678910

Hi,
Do you have a second bedroom - could you ask your landlirdif you could get a housemate? Alternatively could you rent a room while you get yourself straight?

TheGardener

Are you living with parents/friends? with all bills included?
This might sound harsh but - the gym and kickboxing need to go until you can afford them. £80 pm on clothes and social might need reassessing for now too.
You are spending more on food than you need to (I'd say nearly double what you need to) unless you need a special medical diet?
The pet thing - well I'm guessing you can't do much about that other than cancel it or reduce the package.

That fact there are no entries for insurance, car maintenance etc hints that you are not really setting a workable budget and are finding you have nothing left at the end of the month because of the 'one offs' you haven't budgeted for

You have a good income, you will be able to find a way to fix this.

Sixwix

Thanks for the replies.

So i rent a room in a house, all bills included except the internet, which is my own, and still in a contract for another 6 months so i can't reduce it.

The car i need to get to work/training, its a lease that i've had for 6 months, so no repairs on it needed anytime soon and no MOT/tax either.

My grocery shopping could be reduced, i just work odd hours and sometimes its convenience over cost.

Dropping the gym is an option, but the kickboxing isnt really, its the only social interaction i get given my work hours, it keeps me sane.

I don't have anything in the way of savings, and find it hard to actually have anything left at the end of the month, bad planning is probably my weakness.