Evaluating My Debt

[Deleted User]

At the start of the year I thought I had less debt then I actually do, so I've put everything into a spreadsheet and added it all up again. I have a total of £6,761.66 of debt at today's date but only £3,934.68 of that is defaulted/arrears and is currently in re-payment plans.

I actually have £2K in my current account so I could clear some of these off like the Lowell and RBS debt which I'm in payment plans for £10 a month each. I'm currently paying back the Asset one at £30 a month and the other one that only recently re-surfaced at £100 a month. All my household bills and council tax are paid up to date.

I'm currently on furlough from work and there is the slim possibility that I might get laid off when the furlough scheme ends if work doesn't pick up. Therefore I don't want to drop my whole £2K on these debts only to be canned from work with no money left.

MallyGirl

what interest (if any) are you paying on the debts?

2022ismyyear

Hi @Deleted_User

I like the “toxic” and “non toxic” titles haha.

Before you decide to pay off anything off, do you have any money in savings apart from the £2000 in your current account. If it is a possibility that you might be laid off it maybe best to hold onto those funds as you may need them.

In regards to the Non Toxic debts can you provide a bit more information these such as the interest rates on  and if any of these are in a 0% period when do they expire. Also the ASG Boilers when is this due to be paid? This can help provide people with more information to provide you with some suggestions.

Thanks 

[Deleted User]

The Capital One credit cards are both 31% interest rate. I don't qualify for any 0% cards from anywhere. These are not in arrears, I've been paying them off every month by direct debit like normal. The ASG Boilers is paid back at £50.15 each month, again, this is not in arrears, that is the normal payment schedule.

The "Toxic" debts aren't accruing any more interest, in fact, RBS knocked a lot of it off when I entered the payment plan. The Lowell was an old O2 contract, no interest added. The Asset Management is a CCJ from a loan and the Bernicia is an old housing association debt.

All my other outgoings are all at a minimum. My broadband is £20 a month, my sim-only phone is £10 a month, all my clothes come from ASDA or eBay. I don't have Sky subs or anything else like that.

My income is currently £300 a week after deductions. No other savings apart from the £2K on my current account but I have just spent £1K on property repairs this month.

2022ismyyear

Great thanks for providing those details.

I personally would pay off both Capital One credit cards as they seem to be charging a very high amount of interest - that would leave you with about £1000 in your current account.

As furlough is running until the end of October I would then take this time to build an emergency fund by saving what you can out of that £300 a week that doesn’t put you in financial difficulty. To prepare yourself just incase you are made redundant so by October you will have built up a nice fund.

If you end up going back to work in October and your job is secure then you could look to clear the other debts which you have either in full or making overpayments this will then clear these a bit quicker.

ryanm8655

2022ismyyear said:

Great thanks for providing those details.

I personally would pay off both Capital One credit cards as they seem to be charging a very high amount of interest - that would leave you with about £1000 in your current account.

As furlough is running until the end of October I would then take this time to build an emergency fund by saving what you can out of that £300 a week that doesn’t put you in financial difficulty. To prepare yourself just incase you are made redundant so by October you will have built up a nice fund.

If you end up going back to work in October and your job is secure then you could look to clear the other debts which you have either in full or making overpayments this will then clear these a bit quicker.

Agreed with this.

Andyjflet

If there is even a small chance you might get laid off then you need to stockpile your cash to keep you solvent until you find more work.
So, until you are assured of continued employment I would only make the minimums and stash your cash to keep your living expenses maintained. Your four walls are always first.
Shelter
Food
Heat / Light

[Deleted User]

Thanks 2022ismyyear and Andyjflet, I've taken your advice onboard.