Dealing with mega debt - query

matt8787

Hi

Quick question.

- If you have mega debt (totaling ~£100k)
- split across two individuals (husband/wife)
- are homeowners (on mortgage)
- held on ~10 credit cards (making use of 0% deals / moving it around as and when necessary)

...but can just about manage to service the minimum monthly repayments on each card

.......do we just have to suck it up each month?

or is there a better way of dealing with it?

thanks

curlytop12

quick answer - speak to one of the debt charities asap- Stepchange ,national Debtline ,Christians Against Poverty etc, this is free and they have helped millions of people in worse positions than you,
DO IT TODAY ! good luck.

enthusiasticsaver

I do not see how you can get a better deal than 0% so you have two options.

If you can meet the minimum payments your best option would be to cut costs or increase income and pay more towards each debt and snowball until the cards are gradually paid off. If you have £100k of debt are you on high salaries?

Defaulting on any of these will affect your credit rating and mean you are unlikely to get 0% deals to move them to as the deals expire.

How did you reach that level of debt? Have you got anything to sell to reduce it?

dieselv2

Moving to a DMP to have lower payments may result in companies issuing defaults.

Complete an SOA and people here you help you as they may find areas you can cut down on that you never thought. Also do you still spend on credit cards?

NoMore

If your only paying the minimum, your barely reducing the capitol. At some point you will find the 0% deals will run out and then the debt will increase from there by interest alone.

Do something about it now and follow the advice of the previous posters.

DrWatson1

As others have said, you need to post an SOA as without it your questions are too vague - are you reducing or increasing the balances each month?

If you don't have a plan for paying the cards off within a reasonable amount of time, then sooner or later you are going to have to go down the debt management plan route. Sooner is better, as the sooner you get defaulted on these accounts, the sooner they will drop off.

MrsTinks

SOA link is here: http://www.stoozing.com/calculator/soa.php

Without the exact numbers we can't tell you what the best option might be - there may be areas you can cut down in so you can make headway, or you might need to look at debt management plans or other solutions. Until we have more detail we could be telling you the wrong thing

January2015

matt8787 wrote: »

Hi

Quick question.

- If you have mega debt (totaling ~£100k)
- split across two individuals (husband/wife)
- are homeowners (on mortgage)
- held on ~10 credit cards (making use of 0% deals / moving it around as and when necessary)

...but can just about manage to service the minimum monthly repayments on each card

.......do we just have to suck it up each month?

or is there a better way of dealing with it?

thanks

Everyone is different and, as others have said, posting an SOA will enable people to give you more informed advice.

As one half of a couple who had debts of over £100k at one point and where those debts were 9 CCs (which had all started as 0% and been transferred until the deals stopped being available to us), and 3 loans - our decision was to go for a DMP.

At the point we admitted we needed to do something we owed £95k (not because we had managed to reduce balances with our own income, but rather because we had sold one of our cars and traded down to an old, cheaper model). At this point we had never missed a contractual payment on anything, but we were literally just treading water and had, in the prior few months, found we needed to borrow cash from credit cards just to make monthly payments to everything and to manage to live.

Going onto a DMP has trashed our credit file, but clearly we needed somone/something to say stop and the force us to stop living on credit - so for us trashed credit files has been a very positive thing.

We had looked into other options - bankrupty or IVA. For personal reasons neither of these were right for us. Our DMP is going to be a long haul, but just two years in we have cleared over 25% of our debt. That would never have happened had we continued treading water and paying minimum payments which rarely covered all the interest.

Good luck with whatever you decide to do - it's great you've recognised you need to do something

National_Debtline

Hi

I agree with the comments from everyone else. From the information we currently have available it seems like it will either be a case of reducing your outgoings so that you can increase debt payments, or defaulting and looking at options such as a DMP or perhaps IVA depending on your circumstances and your SOA.

James
@natdebtline

matt8787

Thanks for the advice

To be honest, given the size of the debt, I'm resigned to it being a long long journey to get it paid off.

My #1 priority at the moment is ensuring the monthly repayments are manageable / don't have too much of a detrimental impact upon the livelihood of my family (which has obviously already been negatively affected by the debt incurred / sizable monthly payments now required).

I'd rather allow them to have a good life (e.g. holidays etc) and pay more in the long-run, than deny them the nice life they deserve.

Given the scale of the debt, even if I made a whole load of cost-saving measures, it'd probably only knock off 6 months or so from the repayment slog - but at the expense of them being able to enjoy normal things over the next 5-6 years.

nkkingston

I don't know, given the scale of the debt getting back on some of the nice things (ditch any TV subscriptions, cut length of holidays in half and have them closer to home, trim the grocery budget) being able to free up even a few quid a month to go towards paying off the actual capital will have a much more significant effect in the long run than it might on a smaller, quicker paid debt, especially if you do it while you've got access to the 0% deals.

Even if you don't want to cut back too much in the long term, if you're on a fixed rate for your mortgage I would definitely cut back for now and focus on paying the debt down before it comes up for renewal, so you can look around for deals and keep your outgoings as low as possible. Most providers don't credit check existing customers when they remortgage, but you don't want to end up on SVR.