Help...before I go crazy

angeldiva

I have been really stupid and ran myself up into a large debt I have one credit card with £9,000 on the monthy payments are around £190 (I cut it up two months ago) and a loan for £10,000 with the monthy payments being around £200, dont ask me how I got here, over the years things have gone up and up and up and I can imagine its going to take a lifetime to sort it all out again!

Thats nearly £400 coming out of my salary before I even start with the mortgage, TV licence, council tax, water, electric, food, travel, phone, and everything else. I just cannot afford it its got to a stage that when my electric bill came last month £90 I havent paid it, when I get my salary this month I will try and give them £30 and just pay them as and when i can - not ideal and I know they will chase me but I dont know what to do and as an example of this desperate situation the cereal diet has become a permanent thing in my life since food shopping is no longer an option!

Now a good idea would be to consolidate the card and the loan, but I can imagine that would be a huge loan to take out, and I dont know which one or who to choose and..... oh gosh im rambling!! HELP......

jen_jen_2

the first thing you need to do is a budget, how much do you need to spend on the essentials including electric and food and then whats left over for the loan and credit card.

from this info you will be able to see if you can afford another loan or if you should be looking at debt management plan etc.

people here are very helpful and honest so if you can put more details you will get lots of help.

and DONT PANIC

Magentasue

In the blue banner at the top of this page are links to CAB, CCCS and National Debtline. Have a look at their sites and download the info packs and complete the budget planner or use the one on here.

Basically they all ask you to add up your income = Total Incoming
Then you break down essentials like mortgage, council tax, electricity etc = Essential outgoings
Then do non-essentials like TV,mobile, entertainment = Non Essential Outgoings
Then Debt Repayment minimum payments = Debt Repayment

If you add together your essential and non essential outgoings and your debt repayment, you can see whether you can afford to repay your debt. if you post the amounts on here, people can make suggestions onhow you can save money.

If you can only afford the minimum repayments, it's going to take a long time to clear your debt. If you can't afford them - remember they have to come out of what is left after essentials - then you need to talk to someone from one of the free helplines to discuss your options.

If you choose to post your budget, it is helpful if you can say what the interest rates are for your debts. One of the best ways to reduce your debt repayments is to find ways of reducing the amount of interest you pay.

HTH

margaretclare

I agree with jen-jen - draw up a budget first. This will show you where the money goes to!

If you go for help to CAB they will talk in terms of 'priority' and 'non-priority' debt. This is a pretty good way to approach the problem. 'Priority' spending means the roof over your head i.e. rent or mortgage, council tax, electricity, gas, water, TV licence, telephone, food. Anything else i.e. credit cards, loans, storecards, catalogues, whatever, comes under the heading of 'non-priority'. In simple language, the things you absolutely have got to have to live, come first, anything else you owe (no matter how they rave and scream!) goes to the back of the queue.

Do not be tempted to pay cards, loans etc by missing your mortgage payments and council tax. Or your essential services like heating and lighting. Missing your mortgage payments endangers the roof over your head - as they say in all the ads for mortgages: 'your home is at risk'. And it is. Also council tax - this is serious, it's what's called a Crown Debt and remains one of the few debts that you can get sent to prison for.

Draw up your budget, work out exactly what comes in and what has to go out. This takes some work, but once you've done it you're in a far better position to see exactly where you are and what needs to be done.

Following that, you put your debts in order, the ones charging highest interest at the top of the list. If you have any spare income, you aim to pay the highest interest first. Don't be tempted to just pay the minimum required - you'll never get them paid off that way. Pay off the minimum on all except the highest interest, then when that's gone tackle the next one, and so on..

It also helps to keep a 'spending diary'. This is a small cheap notebook that you carry around with you and you write down everything you spend, and I mean everything. Every cup of coffee, every magazine...get the picture? When you've done this for a little while you'll begin to see where you can save money to throw at the debts. Taking a packed lunch instead of buying a sandwich, all those things can add up.

It does take some work and some effort, but it's worth it in the end, because you feel in control and you get your life back again.

Best wishes

Aunty Margaret

roger56

Most has already been said. A budget is vital. If you can use a spreadsheet then do so, it will help greatly with the sums.

Martins step by step debt guide is worth a visit for getting started:
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1103204730,72152,

Prepare for some difficult money decisions but don't panic or stress yourself out, you've recognised the problem and are starting on the road to fixing it.

Good Luck

Oh, one vital piece of advice - you say you haven't paid the electric.
Do at least phone your suppliers helpline and say you have payment difficulties and need help. Don't just ignore the bill, it will not go away - communicating your problem is vital.

angeldiva

Thank you all for your help and Roger for suggesting I phone the electric company! I am currently on hold for them! Thank god its a free phone number :O)

Your right! I have to properly make a plan, see what I can afford and DONT PANIC! lol

Perhaphs when i make the spreadsheet I will be able to put on more details...Thank you

dosh

Have you thought of putting your credit card and loan onto a 0% credit card (depending on your credit rating)

Example Virgin 0% - 9 months and then select minimum repayment.

Minimum repayment on £19,000. (BT and SBT) £5 per month.

It may give you some breathing space till you get yourself sorted out.

Malestrom

Even if the OP was able to get a Virgin card with a nineteen grand credit limit, which in itself is highly unlikely, I can't for the life of me see how the minimum repayment would be £5 a month on a £19,000 balance, or am I missing something here...?

Stonk

... or am I missing something here

You are! Virgin's (and MBNA's in general) enormous generosity (or enormous desire to prolong people paying them interest) is such that the minimum repayment on their cards is £5.

Stonk

... mind you, with all due respect to the OP who is approaching his tough problem in a constructive way, any company that gives him a £19K credit limit ought to be barred immediately from doing business!

Moses

Depending on how much your assets are worth if you sold your house. Try to look at re mortgaging see what you could possibly afford, if you are then in a possition to get hold of some cash this way. Negotiate with your debtors to clear the balances at a reduced rate. By talking about bankruptsy or IVA agreements. They might be keen to clear the debts you could go for upto 25% of the outstanding amounts. Try to gain some help from the CAB, but don't bury your head in the sand the quicker the better. There is no such thing as a non secured loan, if you get any deeper and are unable to afford payments they could take you to court and put a charge on your property, then preasure you into selling.
I just saved my property in the last 18 month's by doing this, it was a bit more complicated as my partner run up hundreds of thousands of pounds hiding debts from me, borrowing from one to pay another.
All the best
Pete