Will this be ok?

bsms1147

sourcrates said:

Even if you repaid 2k a month extra to your debts, assuming you can do so without penalty, it would take at a conservative estimate, around 4 years to repay the 80k, depending on how much interest etc was charged over the same period, and thats if you can be rigid and stick to the plan.

A slightly better option would be to save the 2k a month, then when you have enough saved to repay the smallest debt, do so, and so on, and so on, its called snowballing, and gives you more options to be honest.

Surely by delaying/deferring the point at which you pay a debt (whether smallest or lowest interest or whichever one you choose) you'll have accrued more interest on that debt in the meantime while you aren't paying it off (which wouldn't be offset by any interest earned on on in a savings account having saved up that 2k/month)

enthusiasticsaver

Dave Ramsey advocates paying off the smallest debt first and snowballing but personally I think the most expensive (highest interest rate) ones should be tackled first. Depends on what motivates the OP most though and will keep them on track. I am not a fan of people in debt saving rather than paying off debt as surely paying it off asap saves money on interest. 

sourcrates

Saving was the wrong choice of words, allow me to correct myself, my point was throwing all spare money at the smallest debt Ramsey style, is an option you should look at.

Once defaulted, all interest and charges stop.

A sold on debt can be settled for much less than a live one accruing interest.

The saving made by having an offer accepted offsets the initial dose of interest leading up to default.

Charges/interest etc can all be reduced/refunded by inteligent use of the complaints procedure.

Its just one option, if you cant pay your debts, don`t struggle is the message i`m failing miserabley at trying to get over, just do what is best for you.

DD265

I've seen people do it either way:
Paying smallest to largest can be really motivating because you get to cross debts off the list faster.
Highest interest rate to lowest is the least expensive way to pay off debt so costs less over the term.

I personally prefer smallest to largest, but I've mostly managed to keep my debt interest free and when it isn't, the interest rate is <5%.

With any luck for OP, the smallest debts will have the highest interest rates if they post an SOA. There's also the consideration of if/when it would be possible to get a 0% balance/money transfer credit card to move some of the more expensive debt to 0% interest, but consolidation loans are not recommended on this forum (been there, done that, didn't work out).

bsms1147

sourcrates said:

Once defaulted, all interest and charges stop.

A sold on debt can be settled for much less than a live one accruing interest.

The saving made by having an offer accepted offsets the initial dose of interest leading up to default.

Charges/interest etc can all be reduced/refunded by inteligent use of the complaints procedure.

Ah, it wasn't clear in your first post that you were suggesting they default. 

Its just one option, if you cant pay your debts, don`t struggle is the message i`m failing miserabley at trying to get over, just do what is best for you.

But it sounds like they can afford to repay these debts. Yes the debts are high (currently £64k not 80k), and it'll take some time, but £2,000 surplus per month (+ more if the SOA is trimmable) is doable and I'd aim for that rather than defaulting or similar.

joshjjx If you post your SOA, including the debt amounts and APRs, then the advice can be better tailored to your situation.

sourcrates

I think i`m responding to the wrong thread, confused your post with another, old age and to much time on my hands lol.

Fireflyaway

I definitely wouldn't go bankrupt, you have enough money to pay your debts. 2k spare a month is ok and you may be able to make more savings by cutting back on household expenses. Groceries can often see the biggest savings. What I'd also do before you start on the debt is get together an emergency fund. The other thing that could work after a while is offering a final settlement. You might be able to negotiate to pay less than you owe and settle with a smaller lump sum.