Most effective way of clearing debt fast?

vinchenzo19

Hello all.
I am a single man (divorced with one child) and have accummilated approx £16000 of credit card and overdraft debt.
I also owe family members £5400.

I have very little expendable income each week (£20ish) so if ANYTHING goes slightly over budget, I get end up adding to the problem. This could be something simple like a extra shopping or kids clothing / school trips /fuel etc.

I don't smoke or spend wastefully and always pay over the minimum amount on my card debt.
The interest and overdraft fees are causing me problems at the moment.

I just want to shift as much debt as possible as quickly as possible but it seems to be going nowhere and it's getting me down now.

I am a member of the credit club on here but again that seems to remain the same every month.

Anyone here have any ideas to help please?

Many thanks.

Ilona

If it has taken you a while to accumulate this debt, you are not going to get rid of it quickly. Post a Statement of Affairs, listing all your incomings and outgoings, and the well informed people on here can make suggestions as to how you can cut down your spending, freeing up more to pay towards the debt.

You could contact Stepchange (a free charity), and they will work with you on a repayment plan.

People might have other suggestions, but basically you have to address the reasons why you have these debts, and become more disciplined with your budget planning.

Simply put, stop spending on frivolous stuff. Stop impulse spending, only buy what you planned for. Recognize the difference between a need and a want. Earn more if you can. It's quite easy really, but you might need to change your mindset.

ilona

Unicorn_cottage

Link for the statement of affairs - please format for mse

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

Is there any way you can bring any more money in?

jamets

Have you applied for any new credit in the last few months? Are there any late or missed payments on your credit reports? If not already on one, I would shift as much of the CC debt on to a 0% balance transfer card ASAP and make sure you cut up the old cards and close the accounts so you can't spend on them again in future.

A 0% card could make a big difference in terms of repayments.

vinchenzo19

Ilona wrote: »

If it has taken you a while to accumulate this debt, you are not going to get rid of it quickly. Post a Statement of Affairs, listing all your incomings and outgoings, and the well informed people on here can make suggestions as to how you can cut down your spending, freeing up more to pay towards the debt.

You could contact Stepchange (a free charity), and they will work with you on a repayment plan.

People might have other suggestions, but basically you have to address the reasons why you have these debts, and become more disciplined with your budget planning.

Simply put, stop spending on frivolous stuff. Stop impulse spending, only buy what you planned for. Recognize the difference between a need and a want. Earn more if you can. It's quite easy really, but you might need to change your mindset.

ilona

Thanks Ilona.
I got into the debt via having to move twice in the last three years and not having any savings in which to do it and had to basically rebuild my life as I had no furniture or basics.
I am pretty tight with money, it's mainly when I have an extra purchase to make that's no accounted for such as car repairs / maintenance or birthdays etc.

Can requests be made to credit card providers to reduce the interest rate I'm on perhaps?

vinchenzo19

jamets wrote: »

Have you applied for any new credit in the last few months? Are there any late or missed payments on your credit reports? If not already on one, I would shift as much of the CC debt on to a 0% balance transfer card ASAP and make sure you cut up the old cards and close the accounts so you can't spend on them again in future.

A 0% card could make a big difference in terms of repayments.

Hi Jamets,
No I haven't in the last 6 months as I'm just trying to keep clearing what I can and then try and get a better balance transfer card to help reduce the interest.
I won't be accepted for any worthwhile at the moment.

Fireflyaway

Do a written budget to see if you can cut down on anything. Can you get a better deal on gas or electric. Can you save on food shopping etc. Make as many savings as you can.
£20 a week is not enough to fall back on. Either your living costs are too high of your income isn't high enough.
Can you change jobs or work towards a better income? Work overtime or take a second job. Doesn't have to be permanent, just till the debt is cleared.
Check out dave ramsey on youtube. The snowball method may work for you.

pinknsparkly

I agree with the previous posters that if you can fill in an SOA you'll get some very helpful feedback on it!

I note that you say you always pay "more than the minimum" on your credit cards. My first thought is that perhaps you should reduce those payments back down to the minimum and put that extra money into a savings account. Once you've got a small pot of savings built up (pick a reasonable amount of money that would cover a few unexpected expenses) THEN go back to making OPs on your credit cards.

I know you say that applying for a 0% credit card is pointless because of your credit history but even if they only offered you to transfer £2000 for 24 months, that will still save you around £640 interest in that time (assuming a fairly typical interest rate of 16%) which is around £25 a month.

If you don't already do it, then meal planning can save you a TON of money. Can you get a better deal on your gas and electricity? Do you have anything you can sell on facebook or ebay?

vinchenzo19

pinknsparkly wrote: »

I agree with the previous posters that if you can fill in an SOA you'll get some very helpful feedback on it!

I note that you say you always pay "more than the minimum" on your credit cards. My first thought is that perhaps you should reduce those payments back down to the minimum and put that extra money into a savings account. Once you've got a small pot of savings built up (pick a reasonable amount of money that would cover a few unexpected expenses) THEN go back to making OPs on your credit cards.

I know you say that applying for a 0% credit card is pointless because of your credit history but even if they only offered you to transfer £2000 for 24 months, that will still save you around £640 interest in that time (assuming a fairly typical interest rate of 16%) which is around £25 a month.

If you don't already do it, then meal planning can save you a TON of money. Can you get a better deal on your gas and electricity? Do you have anything you can sell on facebook or ebay?

Thanks for the tips Pink, much appreciated.

Simple_Procedure

What stage of the debt repayment process are you at? Are you still up-to-date with original lenders or have debts been defaulted and moved onto Debt Collector Agencies?

Also what Country do you live in as there is a massive legal difference between Scotland and England.

enthusiasticsaver

I think if you have very little expendable income and are unable to move your debts to 0% cards then you may need to consider a debt solution like a DMP. That will at least get the interest frozen although your credit record will be affected for 6 years and you will not be able to borrow further. The caveat to that is if you are paying over minimums the debtors may consider you are able to continue as you are and posting an soa here will help people advise if this is the best course of action. I would say primarily you need some emergency savings so you do not end up borrowing more. You may need to cut back on the monthly payments to build these up. A common recommended amount is £1000 but if you are insecure rented accommodation I would aim for more than that. Incidentally if moving with no furniture then freecycle is a good place to get basics until you can afford it. Going into debt for furniture can be avoided. There are loads of places to get things for free to tide you over until you can afford to buy stuff.