Non-priority debts and budget summary

galeroke

My husband and I are currently drawing up a budget summary to send to creditors due to spiraling debt . We have 2 non-priority debts which we're not sure whether we should be making priority debts? Our mortgage / gas / electric / council tax payments are up-to-date. We have good salaries but have been living on credit and made poor financial decisions since a period of unemployment 10y ago.



1. a loan which outstanding balance is £725 and we only have 3 payments left. We have not defaulted on this loan, hence keen to get it paid off and then focus on the others ie make it a priority. Or should we include in non-priority debts and offer reduced payments but ultimately extend length of loan



2. a credit card with balance of £1500 which we (stupidly in hindsight) agreed a 6 month payment plan of £101 per month as we had arrears. It is still accruing interest. Can we default on this payment plan and include in our non-priority debts?


Finally, we have an arranged overdraft of £2450 which we basically live in. We have intially included it in our budget summary with a monthly payment offer to reduce it but does anyone have a template letter to send to our current account provider to offer a repayment but also request reduced interest / charges. Should we switch accounts too as we have cc debts with them?



Any advice on these would be greatly appreciated.

Karonher

If you are going to default and ruin your credit rating it would seem most sensible to do it for all non priority debts and free up some money each month as soon as possible.

Why struggle for another 3 - 6 months when there is nothing to be gained from it?

Willing2Learn

Why not post up your SOA so that we can see your exact circumstance? Then you can get more targeted advice, support and guidance. If you were to get 0% APR Money Transfer card, would that help you?

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

galeroke

Thanks for responses

1. I don't mean default on the payment plan entirely - I mean we would include them in our non-priority debts and offer the cc company a repayment we could afford and request a freeze on interest / charges (if we can do this????)

Our credit rating would not enable us to get a 0% transfer card

SOA:

My salary - £2000
Partners salary - £1850
Benefits - £137 (2 dependents < 16y)

Total - £3987 per month


Monthly Outgoings:

Mortgage/Rent - £811
Council Tax - £122
Gas & Electric - £120
TV License - £13
Sky & internet & phones (3 mobiles & landline) £170
Food - £500
Car Insurance - £81 (2 cars)
Petrol - £200 (cars essential for work commutes)
Life Insurance £20
Childcare £10
Plus School uniforms / school trips / household repairs / car maintenance / factor fees / contents insurance / unions fees / professional fees / road tax / gifts / clothing / entertainment
Total: £2567

Loan £725 (3 monthly payments left)
CCs / Store cards / overdraft: £49,000

ie approx 1400 for non-priority debts

any help gratefully appreciated

Willing2Learn

Hi,

We need a more comprehensive SOA. Please use the SOA link provided in my last post.