Consolidating debt with bad credit

cb021286

This is my first post here, please be gentle with me!

About 18 months ago my husband and I split up after many years together. It was a very difficult time, and as well as that he earned double what I do so I was used to having additional financial support that was suddenly gone. A combination of buying things I needed to start my life over alone, and also going out too much to cope with the most difficult time of my life, means my credit card and overdraft debts now total about £3000. None of that is an excuse, just a reason.

I am now in a much better place mentally and would like to start tackling my debt and get my finances back on track. What would be the best way to clear a debt of that size? At the moment I am paying the minimum amounts each month, but I'm aware they'll never be paid off this way. I would like to consolidate the debt into a singular loan, but my credit history isn't great and I can't get anything from a lender.

I'm really clueless when it comes to finances and money managing and have always struggled with it, but I'd like to get myself straight so I can look to the future. Any advice appreciated!

[Deleted User]

Consolidation is rarely a good idea. For such a small debt, you just need to attack it - paying as much as you can to the highest rate debt while paying minimums on the rest.

Post an SOA and people can help you cut costs so you can pay back faster.

Willing2Learn

I agree, we need to see an accurate SOA (Statement of Affairs) for best advice.

Have a google of 'debt snowball', as that may be a method you can use on your debt-busting journey.

And welcome to the forum

cb021286

I did my SOA wrong so deleting this one until I can do it properly later!

But I have looked at the Snowball stuff and it seems like that might be the best way for me. It's reassuring to know that £3k is considered a small amount of debt and I can get it sorted by pulling my socks up and using the money I already earn.

Willing2Learn

Hi -sorry I haven't got time to look at your SOA properly, but just wanted to say that your overdraft is missing from your list of debts (and I assume you are paying monthly fees and interest for this facility).

Are you really spending £500 a month on entertainment? This could be cut back so that you can snowball your accounts...

Edit: Also, you should ideally be saving money every month toward an Emergency Fund (EF) as it is a vital component of every successful monthly budget. You really need to have contents insurance too, for your home to protect against the worst.

dan958

£500 for entertainment and £100 for clothing? I think at this point you will be best off wearing what you have and not spending that amount on entertainment. Also, you could stop the holiday fund for the time being, just until the debt is paid off.

It will be a tough and boring couple of months, but it will get the job done in no time at all.

beanielou

Do not consolidate.