Where to Start

fatbelly · 16 December 2021 at 7:25PM

If you are disciplined, I think you can avoid a debt management plan and any other plan stepchange might suggest (breathing space, IVA).

You will get 0%/low% offers on the cards as you pay them off. As already said, overpay the highest interest ones first and the snowball calculator can help you to organise this

http://www.whatsthecost.com/snowball.aspx

You might need to work together as a family for a couple of years, cut down on clothing & entertainment (both look high) and use Martin's guides when the car insurance comes up for renewal, and on cutting the costs of mobile phones.

Sncjw · 16 December 2021 at 7:57PM

I saw on your original photo payments to cleaner that's not listed..

Also few other things

mcpitman · 17 December 2021 at 9:25AM

@polarexpress - can you update the SOA as suggested and populate the interest rates on cards and loans so we can suggest which order to pay them off in.

First thing is to get an Emergency Fund together, start at £1k, then build to 1 months worth of expenses (1 months income).

However, we probably need to get your outgoings sorted first.

Phones and comms is extortiante at £300 a month.

Everyone is here to help, don't take any affence to the advice given, sometimes some home truths can help.

TheAble · 17 December 2021 at 11:38AM

Lots of suggestions can be made as to how to get costs down etc but you definitely have to be honest with yourself about how you've accumulated such a large amount of debt. May well be a case of your lifestyle has simply expanded as your incomes have grown and it's all got a bit out of control.

enthusiasticsaver · 17 December 2021 at 12:01PM

Polar_Express said:

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 4750
Partners monthly income after tax....... 2425
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 7175[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 666.7
Secured/HP loan repayments.............. 338.79
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 159
Electricity............................. 66
Gas..................................... 50
Oil..................................... 0
Water rates............................. 40.64
Telephone (land line)................... 0
Mobile phone............................ 185
TV Licence.............................. 13
Satellite/Cable TV...................... 47
Internet Services....................... 42.08
Groceries etc. ......................... 450
Clothing................................ 200
Petrol/diesel........................... 150
Road tax................................ 26
Car Insurance........................... 117
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 300
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 29
Life assurance ......................... 28.31
Other insurance......................... 34
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 3157.53[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 230000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 230000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 135543...(666.7)....1.74
Hire Purchase (HP) debt ...... 0........(338.8)....0[b]
Total secured & HP debts...... 135543....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
barclaycard1...................17655.....400.......0
halifax card...................8642......301.4.....0
mbna card......................1771......48.88.....0
halifax card 2.................4196......200.......0
mbna card 2....................5299......300.......0
barclaycard2...................4608......300.......0
loan 3.........................2243......83.07.....0
loan 2.........................31898.....674.......0
Loan 1.........................21201.....642.9.....0
natwest card...................6135......226.......0
virgin card....................11350.....335.2.....0[b]
Total unsecured debts..........114998....3511.45...- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 7,175
Expenses (including HP & secured debts). 3,157.53
Available for debt repayments........... 4,017.47
Monthly UNsecured debt repayments....... 3,511.45[b]
Amount left after debt repayments....... 506.02[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 230,000
Total HP & Secured debt................. -135,543
Total Unsecured debt.................... -114,998[b]
Net Assets.............................. -20,541[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

It looks like you have fallen into the classic trap of many higher earners which is spending without budgeting or limits and because presumably until fairly recently you have managed to easily get credit and afford payments it has been allowed to escalate. You have a high income so if you can become better disciplined with your money then you can sort this out.

On the face of it the high amounts are groceries, clothing, mobiles and entertainment. On the other side though you are not budgeting for haircuts, presents or emergency savings. It also shows you as having a surplus each month which is clearly not the case so I would track down where that missing £500 is going to. What is the £300 on child related expenses? Were the loans for cars and if so why arent they showing under assets? Or are they PCP deals and you either need to hand them back at the end of the deal or pay a balloon? Why are you not saving for car maintenance and are you putting that on cards at the moment?

You need to fill out the interest rates on the soa. Then start to save for emergencies so you are not tempted to use the cards and cut them up or put them away as they have obviously been a crutch for you for a long time and that has made matters worse. Making the payments then spending on the cards is counter productive and even worse if you are paying interest as everything is costing you more. Do some research on the snowball method and start to pay the debts off and save for things rather than using credit. Not a quick solution unfortunately but presumably it took you a long time to get to that level of debt so it will take a while and a massive amount of discipline to get out of it. You have an advantage though in that you have a good income so once you have set a plan and started to budget rather than just borrow to pay for things it will gradually start to come down. Please do not end up taking out secured loans to consolidate the debt. You cannot borrow your way out of this.

Andyjflet · 22 December 2021 at 6:38PM

Wow, just downloaded the spreadsheet and you really need some breathing space. I have identified an immediate saving of £200 a month straight off which you can redirect in a snowball method to the MBNA. Cancel the following;

Cleaner
Spotify
Blue Rewards
Lotto
Window cleaner
Amazon
Nat Trust
Paypal

Vinknut · 22 December 2021 at 8:50PM

If that's an accurate SOA, how did all the debt accumulate?

If you're not honest with the SOA, we'll be chipping off the odd £50-100 here and there, and not addressing the reasons for the 100k+ debt in the first place.

Even going from your spreadsheet to the SOA shows a difference of over £506 (SOA) vs £1,139 (spreadsheet).

With that level of income, the debt is nowhere near unsurmountable, but it needs discipline and honesty with yourselves to deal with it.

EssexHebridean · 23 December 2021 at 10:27AM

@Polar_Express I see you've been active on the boards, but not returned to post further following the help and advice given here. I'd really advise you to not risk falling into the trap of burying your head in the sand on this issue - you have a LOT of unsecured debt, and at the level you are at now things will escalate extremely fast until you reach a point where there may only be far less palatable options than a DMP for you to address it with. I understand that Christmas may be foremost right now and would urge you to be mindful of spending over the break, and then immediately afterwards return to this thread and start thinking through how you're going to tackle your issues. In the meantime, have a very merry christmas.

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