Looking for opinions on how to tackle our debt

lisastevo

Hello everyone.

Since the Coronavirus hit, I've really tried to grab the bull by the horns and try to come up with a plan to pay down our debt.

I am Self Employed and the pandemic has cancelled all of my work for the foreseeable future. I also have a part time job at a supermarket which brings in £900 a month. I have completed my SOA just using this figure as I cannot rely on my Self Employed income anymore.

The debt you will see on my SOA is basically because of having really bad luck with cars over the past 5 years and needing a car for my work and having to do around 35,000 miles a year on average I have to keep replacing them. We have always been really good with credit between us and never defaulted or missed payments therefore we have always been eligible for 0% promotions and have high credit limits so are able to switch between them when the deals end. With the current climate I am panicking that when the deals end this time we are going to be stuck with the high interest on the cards if no deals become available.

I should also add that we are in a Shared Ownership property hence the mortgage and rent payments. We own a 40% share.

I am looking for some advice on what to tackle and in what order to try and minimise any potential interest. I have written how we are paying the monthly bills on the credit cards each month, we always overpay the minimum but I always struggle to know what I should prioritise so looking for help with that.

Please find my SOA below. Any help and thought would be much appreciated.

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... 2

Monthly Income Details[/b]

Monthly income after tax................ 900

Partners monthly income after tax....... 1890

Benefits................................ 140

Other income............................ 0

Total monthly income.................... 2930

Monthly Expense Details[/b]

Mortgage................................ 379

Secured/HP loan repayments.............. 28.26 (Sofa's at 0%, still got 3 years to go)

Rent.................................... 404.43

Management charge (leasehold property).. 30.86

Council tax............................. 170 (paid over 12 months)

Electricity............................. 34.5

Gas..................................... 34.5

Oil..................................... 0

Water rates............................. 30

Telephone (land line)................... 0

Mobile phone............................ 96 (still both in long contracts, will reduce to SIM only once they end to try and save money)

TV Licence.............................. 13.37

Satellite/Cable TV...................... 46.5

Internet Services....................... 20

Groceries etc. ......................... 300

Clothing................................ 10

Petrol/diesel........................... 120

Road tax................................ 19.66

Car Insurance........................... 67

Car maintenance (including MOT)......... 50

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 0

Buildings insurance..................... 0

Contents insurance...................... 13.75

Life assurance ......................... 42.27

Other insurance......................... 20.23

Presents (birthday, christmas etc)...... 25

Haircuts................................ 15

Entertainment........................... 20

Holiday................................. 40

Emergency fund.......................... 35

Total monthly expenses.................. 2065.34

Assets

Cash.................................... 0

House value (Gross)..................... 124000

Shares and bonds........................ 0

Car(s).................................. 4000

Other assets............................ 0

Total Assets............................ 128000

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 59000....(379)......2.49

Hire Purchase (HP) debt ...... 1100.....(28.27)....0

Total secured & HP debts...... 60100.....-.........-   

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

MBNA 1 CC ........................7840......90........0 (0% Promotion ends Sept 2021) Min payment is £78 but paying £90

MBNA 2 CC.........................1290......30........0 (0% Promotion ends Nov 2021) Min payment is £25 but paying £30

Virgin Money CC...................4500......150.......0 (0% Promotion ends Nov 2020) Min payment is £45 but paying £150

OH HSBC Loan.....................12608.....316.......7.9 (Final Payment Nov 2023)

OH Virgin CC...................1800......25........0 (0% Promotion ends Mar 2021)

OH MBNA CC.....................3800......40........0 (0% Promotion ends Mar 2021)

Tesco CC..........................7190......80........0 (0% Promotion ends April 2021)

Total unsecured debts..........39028.....731.......-  

Monthly Budget Summary

Total monthly income.................... 2,930

Expenses (including HP & secured debts). 2,065.34

Available for debt repayments........... 864.66

Monthly Unsecured debt repayments....... 731

Amount left after debt repayments....... 133.66

Personal Balance Sheet Summary

Total assets (things you own)........... 128,000

Total HP & Secured debt................. -60,100

Total Unsecured debt.................... -39,028

Net Assets.............................. 28,872

Many thanks

sharpe106

Probably a good idea to try and pay your debts down relying on 0% credit card being available all the time is not a good plan. 

Quick look you can reduce sky, obviously mobile phone in the future will help, Anyway to reduce to presents? as that £300 a year? Might be able to save £50 a month or so over those in the short term so every little helps as Tesco say. 

The virgin loan is coming to the end soon so you need to look to see what percentage that will be.  Probably about the 20% mark so I would be addressing the OH loan that paying interest on and that loan to begin with in case you can't switch it to 0% credit card. 

MalMonroe

If I were you I'd contact Step Change or one of the other debt help agencies tomorrow. You have prepared your SOA already (I'd never put mine on here because lots of people who come to give you 'advice' are so very judgy!) and you're ready to get help. I always tend to recommend StepChange because they're the ones who helped me and put me on the right road. I was in despair 7 years ago and they helped me turn my life right around. 

This link is really helpful, their advice and phone number are free and they really do help, without any judgement or criticism : https://www.stepchange.org/

You won't regret phoning them. Just one free phone call. Helped me so much when I just didn't know where to turn or what to do. I'm not wealthy now by any means, but I'm debt-free and in much better control of my (small!) finances. 

Time2Go_25

A lot of people on this site are very helpful, sometimes people get told things they don't like to hear, in general especially on this board people are not unduly judged.
Are you sure you have £133 free each month?
You probably need to be looking to clear as much as possible from the Virgin CC as it ends in November, stop over paying on the others as use that to pay off more of the Virgin one. Are you able to shift any of on a 0% to one of the other cards.

sharpe106

There is no need for step change at the moment as they are managing the debts and they can afford to pay them back at the moment.  

CapricornLass

I think MalMonroe's idea of contacting Stepchange is a good one, as there doesn't appear to be a lot of fat to be trimmed from your budget, and hopefully you will get personalised advice.  

One thing I was going to suggest - for you to think about- is that you forget holidays for a little while.  TBH £480 a year is pushing it even for one Sun holiday break a year, as you have to think of petrol/entertainment/trips out when you get there.  I don't know how much you have in your emergency fund, but if the answer is 'not a lot', I think I would add your holiday fund to that for the moment.  That way, if the washing machine or the fridge breaks down, you have the money to hand to pay out immediately for a new one without resorting to additional borrowing.

Good luck.

TheAble

This puts car costs in a lot of perspective. 35k miles a year is a huge number and it will take its toll on a vehicle. People often equate the cost of petrol with the cost of driving but the two things in reality are very different. Something to ponder on when considering whether to go back to the self employed work in the future.
But for now, focus on the Virgin credit card - you really want to get that paid before the 0% is up. Then move onto the next closest expiry and so on. Cancel the Sky if you can. And have a chat with your mobile phone company about that bill, see if anything can be done. Good luck.

TheAble

sharpe106 said:

There is no need for step change at the moment as they are managing the debts and they can afford to pay them back at the moment.  

It's not a bad idea tbh. They are managing now but things could get tough when those 0%s come to an end. Worth getting a little advice.

kimwp

Do you have the interest rates for when the promotions are up?

enthusiasticsaver

Obviously the Virgin money cc is the most critical as that expires in November.
As your self employed work has dried up can you get rid of one of the cars and use the money raised to pay off part of the card? Can you cancel sky? I would put holidays on hold until your income increases. Can you do more hours at the supermarket?
I don't think you need a debt solution at this stage but if you cannot get a 0% deal as the cards expire that may be the best option. You need to really start paying these cards off rather than keep balance transferring them though. You can't afford two cars. 

sharpe106

TheAble said:

sharpe106 said:

There is no need for step change at the moment as they are managing the debts and they can afford to pay them back at the moment.  

It's not a bad idea tbh. They are managing now but things could get tough when those 0%s come to an end. Worth getting a little advice.

If they want to keep getting 0% card offers not much step change can do. Might as well wait till the 0% offers come to an end then contact them.