Debt options

StupidFool89

I’ve stupidly ran up a large debt on 2 credit cards as well as a loan and need to decide whether a DMP or a secured loan is the better option? Any advice on which is the better choice in both the short and long term?

[Deleted User]

They're massively different things, though the answer is probably neither.

Head to the DFW boards for advice on tackling the debt.

sourcrates

Moved for you.

StupidFool89

I’ve spoken to Payplan who have advised that a DMP is possible as the debt is becoming unaffordable. I spoke to an advisor about a Secured Loan and their rates are ok.

I can’t remortgage as I’ve consolidated a small amount in the last 5 years and require to wait before doing this at the end of my fixed rate, thinking I couldn’t borrow on my mortgage I have secured a new fixed rate already but still have this other debt

sourcrates

I see you`ve also posted in the stepchange advisors thread, its best just to stick to one thread on the same subject, as it avoids cross posting and the confusion associated with that, turning unsecured debt into secured is never a good plan, you really need to address the reasons why you racked up this debt in the first place, because if you don`t no amount of consolodation is going to help you, as you will just rinse and repeat all the time, as you have done already, eventually you will be out of options and looking at bankrupcy if you continue on this destructive path, time for a wake up call, and now !!

Your best posting your SOA so we can see the figures you have to work with, look in the sticky thread for the SOA calculator, format for MSE, and post on this thread.

StupidFool89

Thank you, I’ve already woke up which is why I’ve been looking at some of the options available but I was naive in the way I used the  CC’s to rack up the debt. I will look at the SOA thread to try and post that

StupidFool89

CC 1 £7000 at 17.48%

CC 2 £6400 at 19.3%

Loan £13000 at 11.9%

Payments of £550 each month combined and paying around £925 of general bills each month including a mortgage

DebtHurricane

As sourcrates has said, consolidation is very very very rarely a good idea. You’ve already consolidated and are in a worse situation for it. How would consolidating help you again? Without trying to be harsh here you need to get the idea out of your head that further debt will help. A DMP is a great way to repay debts at a rate you can afford whilst addressing your spending and learning to budget. Which is not easy at all, I’m still trying to learn myself! Good luck to you 

ryanm8655

Fill in a proper SOA and people will be able to advise. I would go for a DMP before a secured loan...

StupidFool89

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults........... 2

Number of children......... 0

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

Monthly Income Details

Monthly income after tax................ 1500

Partners monthly income after tax....... 850

Benefits................................ 0

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

Total monthly income.................... 2350

Monthly Expense Details

Mortgage................................ 290

Secured/HP loan repayments.............. 173

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax.......................... 145

Electricity............................. 65

Gas..................................... 60

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

Water rates............................. 41

Telephone/Broadband (land line)......... 22

Mobile phone............................ 35

TV Licence.............................. 160

Satellite/Cable TV...................... 66
(will be reduced when contract expires in March)

Internet Services....................... 24

Groceries etc. ......................... 125

Clothing................................ 30

Petrol/diesel........................... 100

Road tax................................ 40

Car Insurance........................... 64

Car maintenance (including MOT)......... 30

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

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

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

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

Medical (prescriptions, dentist etc).... 15

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

Buildings/Contents Insurance..........22

Life assurance ......................... 25

Other insurance......................... 0

Presents (birthday, christmas etc)...... 50

Haircuts................................ 50

Entertainment........................... 60

Holiday................................. 0

Emergency fund.......................... 0

Pension................................. 103[

Total monthly expenses.................. 1795

Assets

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

House value (Gross)..................... 135000

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

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

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

Total Assets............................ 139000

Secured & HP Debts

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

Mortgage............. 65000....(290)......2.49

Car PCP debt ...... 12500....(173)......0

Total secured & Car debts...... 77500

Unsecured Debts

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

CC BoS..................6400........145......19.3%

CC Virgin................7000..........92.....17.48%

L Post Office.........13000.......336......11.9%

Total unsecured debts.......26400.....573.......

Monthly Budget Summary

Total monthly income.............. 2,350

Expenses (including HP & secured debts). 1,795

Available for debt repayments........... 555

Monthly UNsecured debt repayments....... 573

Amount short for making debt repayments. -18

Personal Balance Sheet Summary

Total assets (things you own)........... 139,000

Total HP & Secured debt................. -77,500

Total Unsecured debt.................... -26,400

Net Assets.............................. 35,100

Created using the SOA calculator at www.stoozing.com. 

Reproduced on Moneysavingexpert with permission, using other browser.

SusieT

TV licence 160 a month?? 
Even if you only put that down to the monthly cost and all the other numbers are accurate you have enough to overpay £100 a month on the highest interest rate card, and pay some into an emergency fund so that you have something there if you need to replace or repair something.
The loan will be repaid in about 3 years, so if you can cut down wherever possible by things like checking for the best rate on insurances etc until then it will let you pay back the cards a lot faster.