Debt Free WILLabes!

Janner89

Hey folks!

We are determined to get on top of every thing financial after 8 years of struggle.

Since moving towns 8 years ago it's been hard to keep a job down, whether ill health, businesses shutting or hours cut for business operation reasons. Now I've been in steady full time employment for nearly a year we decided to sit and look at our debts. Turns out we owe just over 16k

We pay out £475 in loan/credit card repayments and just over £80 in monthly overdraft fees (Halifax charge a fortune). We tried to get a low interest loan to put all debt into one handy payment and for a lot less per month than what we're paying but to no avail. Our next step is a guarantor loan. It's a lot more a month than a low interest obviously but its still around £80/100 less than what we're paying out now.

What are people's experiences of these kind of loans? Is there any companies to avoid or indeed look in to? Or do you have alternative advice?

I've filled out a budget spreadsheet from this website to get to the figures I quoted.

BabyStepper

From what I've read on here, consolidation hardly ever works. It will take longer to pay off the debt as you are paying less per month, you haven't addressed the overspending that you're doing, you haven't paid it debt off but moved it instead, and the risk is that you will then keep spending on the cards and you will then have cards AND a consolidation loan.

So, bad idea. You need to get as much of the debt shifted to 0% as you can, so every penny of repayment counts, then do a budget, stick to it, and thrown everything you can at the debt.

Janner89

We wouldn't be touched for 0% anything. We have no credit options open anymore to use so the debt can't increase. Our income is just under £30 a month over our outgoings so we aren't overspending either,however we aren't paying all debt off, we owe family a few thousand which we can't budget for right now and a £3k overdraft that has all charges frozen indefinitely. This is all down to debt accrued in the past not in 2018.

BabyStepper

I think you have misunderstood my point. If you take out a loan of any sort, guarantor or otherwise, you have simply shifted the debt. The cards will still be available to you to spend again. This is the trap people fall into. Loans do not solve problems. An extra £100 per month is not going to make life massively easier, though it might help if you could resist increasing your debt.

If I were you I'd post my SOA and wait for help in how to start paying it off.

sourcrates

Please do not consolidate, and certainly do not consolidate with a guarantor loan, have you not read the threads on this forum concerning those kind of loans, the interest alone is normally 50% APR or more, and you are virtually guaranteed to default on the loan due mainly to the massive interest you pay, you will not be popular with your guarantor.

This is not the way to tackle debt, it’s the middle of the slippery slope to bankruptcy, don’t do it.

Post your SOA as advised above, you cannot borrow your way out of debt.

BabyStepper

Thanks sourcrates, you have made the point much more clearly!

Once you have your soa sorted and a budget in place, you will see ways of overpaying your debts and therefore reducing them. This will be a combination of reducing expenses and increasing income. After a while you will get some 0% offers and the whole process will build momentum as more of your payments will go towards the debt balance and less towards interest.

This is not a fast process but a long hard slog, during which time you will learn to live without using credit cards and gain a realistic understanding of what is possible lifestyle-wise with your income.

We are all on the same road and the support and advice here is better than anything you could buy. You just need to have faith that the good mse people do know what they're talking about.

All the best.

Janner89

Sorry I didn't mean to come across as confrontational!

What's an SOA?

kazwookie

Can you up your incomes? there are loads of temp Christmas workers wanted for various industries at this time of year, ie retail / factories etc.

Do you have a spare room you can rent to a lodger?

Can you sell stuff that is hanging around?

Do you have cars? can you manage with out?

Are you on the best deals for gas / electric etc?

Janner89

kazwookie wrote: »

Can you up your incomes? there are loads of temp Christmas workers wanted for various industries at this time of year, ie retail / factories etc.

Do you have a spare room you can rent to a lodger?

Can you sell stuff that is hanging around?

Do you have cars? can you manage with out?

Are you on the best deals for gas / electric etc?

I already work 45hrs a week Mon-Fri in a pretty physical job.
We rent and have young kids so can't sub let.
We have been selling bits on eBay and gumtree
No we can't. Where we live has no public transport.
I started looking into changing our electricity provider last night. We have oil for heating for which we use boilerjuice to get a better deal.

fatbelly

Janner89 wrote: »

Sorry I didn't mean to come across as confrontational!

What's an SOA?

Statement of affairs - calculator here

http://www.stoozing.com/calculator/soa.php

Please format for mse.

January2015

I would also recommend visiting the Stepchange website and filling out their debt remedy tool

Filling out the debt remedy doesn't mean you have to contact Stepchange or even actually go with them or their suggestions... but it does give you an idea of available support / solutions from a debt charity.

I would also add my view that consolidating is not a good idea, and definitely do not borrow money on a guarantor loan. That's a double no-no in my view. Consolidating does not solve the debt problem - it just moves it. You need to learn to manage within your budget and moving debt doesn't help you do that. Using a guarantor when you haven't learnt to live within your budget and are likely to hit the same problems again, is just a sure fire to lose a good friendship you have with the guarantor.