Need advice regarding what to do with my credit card debts

My OH used to run a business with her friend, her friend sadly passed away about three years ago. My OH tried to keep the business running but it was very hard with just one person, so she ended up not making much money/a small loss each month. I had a credit card and I just used this when bills popped up like car repairs or a kid's birthday/Christmas. When it was near it's limited I opened another one up and did a balance transfer, with of course the intention to clear it when things got better. I repeated this until I ended up with three credit cards. Slowly we ended up using up all the available credit. I now owe ~£37,000 on the three cards. It was a vicious cycle where the more I paid towards the cards each month the less money I had per month so the more I had to use the credit cards just to get by.

We are now in a position where I pay ~£1,000 each month just to the credit cards, looking at my monthly budget once I've paid all my direct debit bills I am left with just over £100 to live on which is not enough for fuel to get me to work never mind food. I am just wondering what I can do now. About 20 years ago I was made redundant twice in a short period of time and ended up packing in working full time to go and study. Whilst I was working I had two credit cards, when I started my studies the Citizen's Advice advised me to default on the cards until I was working again. I did this, however one credit card didn't default but instead set up an arrangement to pay on my card. Three years later when I had finished my studies I got a decent job and I was able to clear both cards. However whilst the default dropped off after six years from the date of the default the arrangement to pay hounded my credit file for six years from the date of the last payment. Due to this I couldn't even get a mobile phone contract. 

I need to do two things at the moment:

1. reduce what I am paying out each month
2. free or reduce the interest to let me actually clear some of the debt

I'm two years into a fixed five year mortgage and I'm not sure what I can do without destroying my credit rating, does anyone have any advice on a course of action?
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Replies

  • BrieBrie Forumite
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    You need to start by posting a statement of accounts so we can see where to help with the pinch points.

    Statement of affairs, an essential first step : http://www.stoozing.com/soa.php

    There will be a way to sort this out.  People here will be happy to help as much as they can.
    "Never retract, never explain, never apologise; get things done and let them howl.”

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  • crazyhaggidcrazyhaggid Forumite
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    This is my current statement of affairs:
    Bill Amount
    broadband £26
    car 1 insurance £29
    car 1 tax £25
    car 2 insurance £20
    Council Tax £231
    credit card 1 £341
    credit card 2 £360
    credit card 3 £363
    elec/gas £255
    Historic Scotland £8
    Home Insurance  £9
    kids club £10
    kid's comic £10
    kids music fee £19
    Lease car £295
    life insurance £16
    mobile phone £12
    Mortgage £837
    netflix £10
    Union dues £16
       
    Total per month £2,893
       
    Income after tax £3,000
    Spare after bills £107
  • EssexHebrideanEssexHebridean Forumite
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    Can you complete the actual SOA that's in the link you were given above, or the one in my signature please - what you've given above is a good starting point but there appears to be a a lot missing from it too - clothes, food, TV license just as a start...
    🎉 MORTGAGE FREE 30/09/2016 🎉
    SOA CALCULATOR (for DFW newbies): SOA Calculator
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  • GrumpelstiltskinGrumpelstiltskin Forumite
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    No child related expenses?

    5 of you and no haircuts?

    Never pay to park the car when you are using over £400 on petrol each month?
    If you go down to the woods today you better not go alone.
  • crazyhaggidcrazyhaggid Forumite
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    [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......... 3
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 3000
    Partners monthly income after tax....... 546
    Benefits................................ 140
    Other income............................ 0[b]
    Total monthly income.................... 3686[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 837
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 231
    Electricity............................. 130
    Gas..................................... 125
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 0
    Mobile phone............................ 12
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 26
    Groceries etc. ......................... 250
    Clothing................................ 5
    Petrol/diesel........................... 430
    Road tax................................ 25
    Car Insurance........................... 49
    Car maintenance (including MOT)......... 10
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 47
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 6
    Contents insurance...................... 3
    Life assurance ......................... 16
    Other insurance......................... 16
    Presents (birthday, christmas etc)...... 10
    Haircuts................................ 0
    Entertainment........................... 15
    Holiday................................. 50
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 2293[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 250000
    Shares and bonds........................ 0
    Car(s).................................. 500
    Other assets............................ 0[b]
    Total Assets............................ 250500[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 156000...(837)......2.5[b]
    Total secured & HP debts...... 156000....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    card 1.........................10774.....288.......19
    card 2.........................11080.....325.......19
    card 3.........................15000.....380.......19
    Lease car......................3300......300.......0[b]
    Total unsecured debts..........40154.....1293......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 3,686
    Expenses (including HP & secured debts). 2,293
    Available for debt repayments........... 1,393
    Monthly UNsecured debt repayments....... 1,293[b]
    Amount left after debt repayments....... 100[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 250,500
    Total HP & Secured debt................. -156,000
    Total Unsecured debt.................... -40,154[b]
    Net Assets.............................. 54,346[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • crazyhaggidcrazyhaggid Forumite
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    my water is included with my council tax, I don't have a TV licence and my landline rental is bundled with my broadband
  • edited 24 August 2022 at 6:30PM
    crazyhaggidcrazyhaggid Forumite
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    edited 24 August 2022 at 6:30PM
    No child related expenses?

    5 of you and no haircuts?

    Never pay to park the car when you are using over £400 on petrol each month?
    Hair cuts handled internally (MIL used to be a hair dresser and taught my OH), free to park at my work and OH's work.
    We have two cars hence the high fuel costs, my commute is ~60 miles everyday. OH leases her car as she used to use it for her business, I've added this as a debt as it's got 11 months left on it. Once its finished we won't be leasing again, my own car is very old and has a low value.
  • TheAbleTheAble Forumite
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    Does your OH still have the business or is she doing something else now? Just wondering if she can generate a bit more income somehow.

    Fuel costs still seem high even with a 60 mile daily commute. Is that £430 mostly generated by you?
    Sealed pot challenge 074
  • elsienelsien Forumite
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    Is this budget aspirational rather than looking back at your actual spending? £120 a year on Christmas and birthday presents is unusually low for three children, without buying for each other/other relatives. 
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
  • crazyhaggidcrazyhaggid Forumite
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    TheAble said:
    Does your OH still have the business or is she doing something else now? Just wondering if she can generate a bit more income somehow.

    Fuel costs still seem high even with a 60 mile daily commute. Is that £430 mostly generated by you?
    OH has given up her business and is working in a shop now. I think the fuel costs are about right I do 300 miles a week, ~1200 miles a month.
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