Please help me

Didsy

Hello,

this is my first time posting on here & I'm in a bit of a mess.

I have-

approx £8,000 debt on 2 different credit cards- both accruing interest at 18/19%

approx £12,000 outstanding on a loan at 11% (with 4 years left to go.)

about £10,000 on car finance (unsure of apr but have about 3 1/2 years left on it.) I need my car for work as I do shift work in a remote area not serviced by public transport.

I do have my own flat with a mortgage of appx £35,500 however my flat is now only worth appx £31,500.

I have sought advice from my own bank who advised a few things to improve my credit score (which I have done) in order for me to obtain either a loan to pay off my credit cards & existing loan (consolidate) or a balance transfer credit card to get rid of the apr on my existing 2.

I have checked on experian credit matcher & all the best balance transfer cards are through Barclaycard. However I already have a Barclaycard & they are declining to give me another-
reasoning that my existing credit limit is enough. The next best is only a 70% likelihood of success & the 0% rate only lasts a year. The next best only has a 30% likelihood of acceptance.

I've also looked at the loan section on experian- however all options are either a low percentage of acceptance or high apr.

i have also sought the advice of step change. (A debt management charity) who went through all my outgoings etc & advised a debt management plan. However as it stands I have never missed a payment or under paid on any borrowing. A DMP would obviously change that & there's no guarantee that the companies i owe wouldn't still come after me.

I suffer from pretty severe depression & solving my finances would be a huge step toward helping me recover. I have serious issues with my neighbours (mostly anti social behavior, which the council & police are currently dealing with.) & would love to move to a nicer area to escape them. Obviously finances wont allow this & i am feeling massively trapped as a result. This is worsening the depression.

Can anybody please, suggest anything to help, or suggest the best way forward for me? Should I start missing payments? Should I declare bankruptcy? Should I persevere?

BTW- I am single with no children & earn £26,000 per year. (Although i am currently on the sick through the depression. I do see a CPN & am awaiting an appointment with a psychiatrist regarding this.)

I do still have my parents but they wouldn't be able to assist financially & moving back in with them is simply not an option.

any suggestions/ ideas would be hugely appreciated- please, i am at my wits end & feel that no one is helping me.

Cherryfudge

Hello Didsy, I didn't want to 'read and run' though I'm not the most experienced person and hopefully someone else will be along who can be more helpful.

You'll find there are some brilliant people here with lots of compassion and experience.

I can see you are paying quite a bit for your credit cards etc. If B@rclaycard isn't going to help you get a balance transfer, would it be better to get whatever is second or third best rather than not get one at all? Reducing the amount that's attracting 18% interest has to be a good move.

A DMP would give you relief from the stress and it's often helpful to know there are people fighting your corner. However, I can understand you are reluctant to stop your excellent record of repayments. I know that companies will try to get more out of you but that's where companies like Step Change can help. And after all, companies would rather have something from you than nothing.

I'll subscribe to your thread and try to bump it tomorrow if no one else has posted. If I can't get back to it, do post again (just another post on this thread saying 'Would love some advice please' or somesuch). Mid evening is often a good time to post as more people will be on line.

All the best with it all: I know at the moment it looks huge to you but if you look around the diaries you'll see people with bigger debts, including people who've completely paid everything off - so it can be done.

Tahlullah

Hi Didsy, welcome to the forum. As Cherryfudge says, there will be others along who have a wealth of experience who will be able to offer support and guidance.

In the interim, you say you are on £26k pa, but are currently off sick. Are you still on full pay and if so, for how long? I ask because some companies only pay full pay for a set period and then it gets cut to half pay or just Statutory Sick Pay.

Also, it would help if you feel up to it, to give a Statement of Affairs. This allows us to look to see if there is anywhere you can make savings in your budgeted income to free up some more money. EG, are you spending too much on your telephone bill?

Once you look at your budget and have others assist with that process, it is the first step to saying 'I have a bit more money that I am going to pay towards this debt'. You can choose which debt you want to pay. The one with the highest interest rate? the one where you can see your payments making the most impact? The choice is yours, as currently you haven't defaulted.

You have made a first step towards controlling your finances. This hopefully will help with your health and stress levels.

If you can reduce the debt, you can perhaps look to re-mortgaging and moving area.

I will subscribe to this thread and wish you luck along the way.

Tx

ani*fan

Hi Didsy :wave:

Lovely to meet you and welcome to the boards. You're in absolutely the right place to get all the help you need.

I can understand your reluctance to get a dmp, no need to trash your credit rating if you don't have to. Plus, I think you have a great chance at sorting this yourself. It just needs a bit of work.

As Tahlullah mentioned, you need to post up a statement of affairs. This is as much for your benefit as for ours, you need to see where you are spending your money on essential things, and we can comment and help you reduce it. Then you'll know what's what. There are loads of good deals and bargains to be had, believe it or not this can become quite good fun. I always feel thrilled when I get something I really want or need for free. Start with your SOA.

I can only think you mentioned your mortgage as you were thinking of releasing equity to pay off your debt. This is a bad move as you end up paying interest for years and years. Once you have a plan in place to pay off your debt you'll feel much more empowered. It's easier to hang on if you know you'll be able to move in 12 months or so.

Is the loan from consolidating previously? I would advise against doing this again. Most who do this pay off the cards with a loan, then spend on the cards again, then end up with twice the debt. Not a great idea, there are other ways.

Your car is too expensive. I understand that you need one, but you don't need a £10k one and you can't afford it. Sell your car for the best possible price, pay off the finance and get yourself a much cheaper one. That's one debt almost gone.

Regarding 0% cards, the only way to improve your credit rating and get these offers is to make regular overpayments and get something paid off. This all takes time, but I think your credit cards should be a priority as they're the largest interest rate. Focus on the smallest one and make some small goals. In my experience, managing to get the debt shifted to 0% has been the biggest factor in whacking it down. You can get there, others have, like me, when I thought I had no chance. But you need to focus and make overpayments.

Let us know how you get on with your SOA then we can take it from there. I'm sorry to hear you have depression, I hope you're getting help from your GP with it. You're right that taking charge of your finances will help and you're on a good wage so no reason why you can't figure it out.

Best of luck. I've subscribed.

Cherryfudge

There - I knew there would be people along who can offer more practical advice than I can.

Some good advice coming in already: I have one little bit to add. If doing a statement of affairs is too big a step, do a bit at a time. That thing about eating an elephant (not that I like that image, I'd rather elephants stayed alive and I can eat lentils instead ) - but to eat an elephant you take one bite at a time. If the bite is too big, have half of it. If the SOA is too big, start by looking it up, it's on this site somewhere. Get pen and paper if you don't feel like spilling the beans to everyone. Find one or two areas you can fill in. Finding the information is time consuming but I think you're part of the way there already.

Will pop back and cheer you on

bobcat2

I would definitely agree with selling the car and getting a cheaper one if you can, its far too expensive a car to have on that salary, the amount owing is nearly 50% of your net pay.
I would focus on gradually getting the interests rates down on the credit cards, even if only a bit at a time. Do you still have any available credit with the Barclaycard as they offer some decent existing customer deals. If you log on to online banking you can see what is available and then do a balance transfer from the second card with your available credit. This would then free some available credit on the other card and you can transfer from the Barclaycard to other card when a balance transfer becomes available. Each balance transfer would pay off the higher 18% rate first and gradually you can reduce the amount of interest you are paying. This is what I would do.
I would also apply for the best available balance transfer card that has a good chance of being accepted. I would not worry too much if its only a 12 month offer as a year down the line you should be a better position and can balance transfer again before the promotional period ends.

I personally wouldn't look at any kind of DMP as you haven't missed any payments andif you can sell the car and get a cheaper one and get the interest rates down on the credit cards repaying the debt should be manageable on your income if you keep to a strict budget.
Keeping a spreadsheet of all your finances and seeing a month on month improvement, even if only small to start with can be really motivating and each month you'll be in a better position and be able to pay a little more back.

Didsy

Hi, thanks for all your advice.

Although i am currently on the sick i am still receiving full pay. The company I work for pay full salary for 6 months so I have a bit breathing space there at least.

I will certainly look into down grading my car although I strongly suspect I wont get back enough to clear my finance completely. In addition to that how would I finance another vehicle? Any searches on my file will lessen the chances of getting a good 0% card in the near future.

:embarasse Yes, the existing loan is from previous consolidation & I did EXACTLY what you said & kept spending. It's infuriating that I've done this to myself & I know I have no one else to blame but me.

I shall certainly work on a statement of affairs- Infact i already keep a spreadsheet for all my household outgoings as I get paid 4 weekly, not monthly so my outgoings can be different each month. I'll post it in a bit.

I would like to thank everyone who commented- even just hearing your words of advice & sympathy has gee'd me on to kick my debt in the !!!! !!!!.

Much love x

bobcat2

I found the main thing getting started paying off debts is just see a small improvement each month, so each month gets a little bit easier and you start moving in the right direction and make sure you stop the debts increasing.
If you go through your SOA you may find there are lots of things where you can save money, e.g. switching energy suppliers, marking sure you're getting the best deal for phone and internet etc can all make a big difference.
Not sure if it is a good idea or not but if you're on a repayment mortgage would it be possible to switch to paying interest only in the mortgage and use the savings to chip away at the credit card debts. The interest on the mortgage will be much lower it will save you money to repay credit debt before mortgage. May well be lots of reasons not to do this but would save you money..