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Need advice regarding what to do with my credit card debts
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crazyhaggid
Posts: 159 Forumite
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?
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?
0
Comments
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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.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
Click on this link for a Statement of Accounts that can be posted on the DebtFree Wannabe board: https://lemonfool.co.uk/financecalculators/soa.php
Check your state pension on: Check your State Pension forecast - GOV.UK
"Never retract, never explain, never apologise; get things done and let them howl.” Nellie McClung
⭐️🏅😇1 -
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 0 -
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 (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her1 -
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.0 -
[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]Household Information[/b]Number of adults in household........... 2Number of children in household......... 3Number of cars owned.................... 1[b]Monthly Income Details[/b]Monthly income after tax................ 3000Partners monthly income after tax....... 546Benefits................................ 140Other income............................ 0[b]Total monthly income.................... 3686[/b][b]Monthly Expense Details[/b]Mortgage................................ 837Secured/HP loan repayments.............. 0Rent.................................... 0Management charge (leasehold property).. 0Council tax............................. 231Electricity............................. 130Gas..................................... 125Oil..................................... 0Water rates............................. 0Telephone (land line)................... 0Mobile phone............................ 12TV Licence.............................. 0Satellite/Cable TV...................... 0Internet Services....................... 26Groceries etc. ......................... 250Clothing................................ 5Petrol/diesel........................... 430Road tax................................ 25Car Insurance........................... 49Car maintenance (including MOT)......... 10Car parking............................. 0Other travel............................ 0Childcare/nursery....................... 0Other child related expenses............ 47Medical (prescriptions, dentist etc).... 0Pet insurance/vet bills................. 0Buildings insurance..................... 6Contents insurance...................... 3Life assurance ......................... 16Other insurance......................... 16Presents (birthday, christmas etc)...... 10Haircuts................................ 0Entertainment........................... 15Holiday................................. 50Emergency fund.......................... 0[b]Total monthly expenses.................. 2293[/b][b]Assets[/b]Cash.................................... 0House value (Gross)..................... 250000Shares and bonds........................ 0Car(s).................................. 500Other assets............................ 0[b]Total Assets............................ 250500[/b][b]Secured & HP Debts[/b]Description....................Debt......Monthly...APRMortgage...................... 156000...(837)......2.5[b]Total secured & HP debts...... 156000....-.........- [/b][b]Unsecured Debts[/b]Description....................Debt......Monthly...APRcard 1.........................10774.....288.......19card 2.........................11080.....325.......19card 3.........................15000.....380.......19Lease car......................3300......300.......0[b]Total unsecured debts..........40154.....1293......- [/b][b]Monthly Budget Summary[/b]Total monthly income.................... 3,686Expenses (including HP & secured debts). 2,293Available for debt repayments........... 1,393Monthly UNsecured debt repayments....... 1,293[b]Amount left after debt repayments....... 100[/b][b]Personal Balance Sheet Summary[/b]Total assets (things you own)........... 250,500Total HP & Secured debt................. -156,000Total 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]1
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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 broadband0
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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.Grumpelstiltskin said: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?
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.0 -
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?0 -
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.0 -
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.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?0
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