Assistance needed for my friend please.

lyle1993

Hi there guys, I don't post often on here so apologies if I've violated any rules 
So I have a friend who's contacted me as he's finally come clean to being fairly deep in debt. Here are the figures, I would be welcome to any suggestions so I can help him:
Take home pay: £1600 pm.

Credit account 1: 400 
Credit account 2: 1200
Credit card 1: 2000
Credit account 3: 800
Credit card 2: 700
Credit card 3: 250
Credit account 4: 750
Total: £6100 owed.

Other outgoing p/m; lives with parents, so only £200 for petrol and food. £819 goes on bills, mostly as minimum payments per month to above accounts.

Bad debt loans/bad debt credit cards are a no go at this stage.

Can anyone put forward any useful suggestions? I'm at a loss where to start! Thank you.

KatrinaWaves

You have described a £600 surplus, which he can use to pay down his highest interest debts, in addition to the minimum payments. 10 months of using that surplus to pay them down and they’ll be gone. 

£6k with that income isn’t that ‘deep’ at all. Like I said, 10 months and it could be gone. (Probably less as hes also making a chunk of payments in the minimums too) 

lyle1993

KatrinaWaves said:

You have described a £600 surplus, which he can use to pay down his highest interest debts, in addition to the minimum payments. 10 months of using that surplus to pay them down and they’ll be gone. 

£6k with that income isn’t that ‘deep’ at all. Like I said, 10 months and it could be gone. (Probably less as hes also making a chunk of payments in the minimums too) 

Thanks; so say next month, if the 750 is highest debt, use the 600 surplus to wipe that down to 150? Then onto the next highest interest? And so on and so forth?

KatrinaWaves

lyle1993 said:

KatrinaWaves said:

You have described a £600 surplus, which he can use to pay down his highest interest debts, in addition to the minimum payments. 10 months of using that surplus to pay them down and they’ll be gone. 

£6k with that income isn’t that ‘deep’ at all. Like I said, 10 months and it could be gone. (Probably less as hes also making a chunk of payments in the minimums too) 

Thanks; so say next month, if the 750 is highest debt, use the 600 surplus to wipe that down to 150? Then onto the next highest interest? And so on and so forth?

You got it! 

Naomim

I would suggest your friend doesn't actually have £600 surplus or wouldn't be asking for help.  Can you get them to complete an SOA and look at 6 months bills to be realistic on where the cash goes? Travel to work, lunches, coffees, restaurants,  takeaways,  gaming, it's all the little bits that add up.

Naomim 

macman

Minimum payments are £819 pm on a debt of £6,100?  I think someone is telling porkies...
What is the APR on each card/loan?

ThatKiss

macman said:

Minimum payments are £819 pm on a debt of £6,100?  I think someone is telling porkies...
What is the APR on each card/loan?

OP didn't say minimum payments were £819, they said bills including minimum payments. Agreed that even that seems on the high side though.
A full SOA would be helpful to see the true picture here.

macman

They said 'mostly'. OP's friend only has to shell out for 'petrol and food'. No rent, no utilities, council tax etc. Take home pay is £1.6K pm, so that leaves £1.4Kpm to cover anything else and make inroads on the debt. On that basis, it could be cleared in 5-6 months.
Which is why I'm suggesting that we don't have all the facts. 

Willing2Learn

Just in case you are having trouble locating the Statement of Affairs (SOA) link:

https://www.lemonfool.co.uk/financecalculators/soa.php