Halifax debt - Need Advice

kgrant

Good evening All

At the moment I am looking for urgent advice as I am finding it very difficult financially. I am ok to pay my Halifax mortgage, but find it tough to pay essential bills along with paying all other main debts currently all with Halifax: personal loan, credit card and arranged overdraft. Before I speak with Halifax, I want to get advice with my debt options beforehand, so any advice would be much appreciated.

The proposals I am thinking about are~

1. For current account, I am reopening my old current bank account (switching back to no overdraft from - £1500’overdraft) which should help me live on my income without any negative balance and then I want to try to clear the overdraft debt over the next year. However at the moment I lose £60pm interest and can just afford it. Should I add this debt to the existing credit card, apply for top up on my existing personal loan or try get a money transfer card to clear it soon as possible?

2. For credit card, I pay the £40pm minimum payment and also have 0% credit card deal (finishing in Jan 2020) and looking for a balance transfer deal to move my debt next year. I know as my limit is £4,000 and I don’t use it anymore this should be ok. However what would be best way to manage and to clear it soon as possible?

3. For personal loan, I have 58 months left and I have fixed payments. The remaining balance for this is £10,700 on personal loan so should I leave this main debt as it is?

Halifax might allow me to consolidate the 1-3 debts to a new loan is this a good idea? Or should I look at another provider as I owe personal loan for £12,000 (a car) + £4,000 on credit card (garden makeover, family holiday and Christmas) and continually in my £1,500 agreed overdraft would this make it easier to pay one payment each month?

Can I ask has anyone similar experience or any advice for me in regards to getting debt free? With a ok credit score what would be my options and help to clear these debts in full and shorten the debt?

Thanks in advance.

Willing2Learn

kgrant wrote: »

… Halifax might allow me to consolidate the 1-3 debts to a new loan is this a good idea? Or should I look at another provider as I owe personal loan for £12,000 (a car) + £4,000 on credit card (garden makeover, family holiday and Christmas) and continually in my £1,500 agreed overdraft would this make it easier to pay one payment each month?

Can I ask has anyone similar experience or any advice for me in regards to getting debt free? With a ok credit score what would be my options and help to clear these debts in full and shorten the debt?

Hi,

I don't think consolidating debt is ever a good idea as it just doubles the debt....

Meaningful advice, support and guidance is only possible if you give us all the necessary information.

Please could you post up your SOA (Statement of Affairs) so that we can see your exact circumstance and advise accordingly. Please click on the button that formats for MSE before posting.

Thanks

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

sourcrates

kgrant wrote: »

Can I ask has anyone similar experience or any advice for me in regards to getting debt free?

Hi,

Yes, don’t consolidate, you don’t get debt free by borrowing more money, you get debt free by trying to increase income, and reduce outgoings.

If that’s not sufficient, then one of the available debt solutions may be appropriate, but before any of that can be discussed, we need to see your SOA.

The link has been kindly posted above for you.

kgrant

Ok here is my SoA;

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details[/b]
Monthly income after tax................ 1550
Partners monthly income after tax....... 0
Benefits................................ 70
Other income............................ 0
Total monthly income.................... 1620

Monthly Expense Details
Mortgage................................ 504
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 70
Electricity............................. 30
Gas..................................... 0
Oil..................................... 50
Water rates............................. 0
Telephone (land line)................... 20
Mobile phone............................ 15
TV Licence.............................. 12.5
Satellite/Cable TV...................... 20
Internet Services....................... 20
Groceries etc. ......................... 400
Clothing................................ 20
Petrol/diesel........................... 120
Road tax................................ 25
Car Insurance........................... 50
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 120
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 5
Entertainment........................... 10
Holiday................................. 100
Emergency fund.......................... 0
Total monthly expenses.................. 1681.5

Assets
Cash.................................... 0
House value (Gross)..................... 120000
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 2000
Total Assets............................ 130000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 98000....(504)......4.84%
Total secured & HP debts...... 98000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax Personal loan..........12000.....235.......12.9%
Halifax Credit card............4000......50........0% until Jan 2020
Halifax overdraft..............1500......60........3% approx
Total unsecured debts..........17500.....345.......-

Monthly Budget Summary
Total monthly income.................... 1,620
Expenses (including HP & secured debts). 1,681.5
Available for debt repayments........... -61.5
Monthly UNsecured debt repayments....... 345
Amount short for making debt repayments. -406.5

Personal Balance Sheet Summary
Total assets (things you own)........... 130,000
Total HP & Secured debt................. -98,000
Total Unsecured debt.................... -17,500
Net Assets.............................. 14,500

Any further advice would be appreciated.

Karonher

Two things that seem very high are food and life assurance. For the second one have you put the annual figure?

TryinToDoItRight

Your food shopping seems high for 3 people - try switching to cheaper brands or shopping around for deals. We only have 2 in our household but basic weekly shop comes in at £40...butcher counters at asda and tesco have 5 meats for £10 etc.

Life insurance seems high for the month...is this correct?

There is no income listed for your partner - if circumstances allow would they consider even taking a part time job just to try and increase the money coming in? This would really help you make a dent in the debt and perhaps take a bit of stress off yourself?

TryinToDoItRight

Should have also added...maybe the holiday fund could be put on hold for this year? It would save you £100 a month which could go into paying off some of your debts.

I have just under £15k of debt left to clear and with trying to clear the balance unfortunately a holiday is something we literally couldnt justify right now (despite all the extremely tempting adverts!).

sourcrates

Hi,


You are currently, according to your SOA, insolvent, you have just enough money to fund your essential payments, but nothing left for the unsecured credit payments.

Can i ask why your partner dosent work, that would solve the problem instantly.
I assume, like most, your using credit to plug the gap right now, what happens when the credit drys up, which it soon will at over £400 a month, i`m guessing the true figure you borrow is a lot more.

enthusiasticsaver

As others have said ideally your partner should be working. Was that mortgage approved when you had two incomes? How old is your child?

Quite a few high items on the soa. The groceries figure is high unless the child is almost an adult and even then it is high. Can you use discount supermarkets like Aldi and Lidl and cut out the extras for a while to see if that makes a difference as you have such a large shortfall. The holiday definitely has to go as you cannot afford that. Why such high life assurance?

Even if you cut the groceries by 25% and forewent the holiday you would still be in deficit so you may unfortunately now be in DMP territory which means you need a basic bank account with someone other than Halifax. Is the debt rising because of the shortfall? You have to stop spending on credit and overdraft as this is making things worse.

Consolidating will not help and will make things worse. Really you should not have taken out the personal loan as that 12.9% is an awful rate. What was that for?

sourcrates

enthusiasticsaver wrote: »

Even if you cut the groceries by 25% and forewent the holiday you would still be in deficit so you may unfortunately now be in DMP territory

For a DMP to be advisable, the OP needs to have some disposable income, they have nothing, even cutting back the budget another £400 would only just leave enough for the essentials, nothing for the unsecured debts.

Based on this SOA all the OP could do is offer token £1 payments to creditors on a monthly basis, but the situation would not improve unless their income could be increased.

I hate saying this, but you are better off carrying on as you are and hoping the credit stretches far enough until the loan is re-paid, or until you can increase your income, the alternative, if creditors got litigious, may be to lose everything as things currently stand.

No amount of consolidation would improve the situation as you have no disposable income to play with, how on earth did things get to this point in the first place ?

Sanctioned_Parts_List

I can't say I'm a fan of this cloudflare ddos protection page, which keeps deep-sixing my posts. Do UK-based users see it?

I'd written a longer, better explained post but from what I can see, the SOA is only £60-odd under, excluding debt. The single biggest contributor to monthly loss of money is the car - OP needs to consider either selling it and buying a banger, or selling it and making do with a single car until such time as his finances are better established. Recovering some or all of that £12000 would go a long way to fixing the damage.

Also - it's more important to protect now than protecting maybe, so it might be worth nixing the life insurance. Especially if death benefits are included as part of one's employment package, as some companies offer.