Pooling fees from multiple debts to pay off another?
Benjamin_Phoenix
Forumite 7 Posts
Afternoon all,
Hope everyone is well.
I would like some advice please if that's okay. While our position is not extreme (yet) I am feeling the pressure to some extent and I fear it will begin to weigh on my shoulders a bit to much in the coming months. Basically I am the only earner in my family due to my partner being a full time carer for our son (7) who has Cerebral Palsy and we have another little tyke running around who turns 2 in June.
My partner gets the usual carers allowance and such with which she covers the monthly food cost and I earn enough (£34,000) to cover all house bills and my own personal debt It dosent leave us with a lot at the end of the month but we've been getting by. Another issue is it's only just become £34,000, it was £32,000 pre New Year. Unfortunately, while that extra £2,000 gives me £100 a month, as a family we lose over £300 because it takes us over a threshold for tax credits or something.....super frustrating.
Now it's my personal bills that are becoming the problem - long story short, I was scammed when I was a naïve teen and it's just unfortunately grown with me and cascaded, I'm 33 now. I went to college late and graduated from uni in 2019. I'll give you the breakdown and then ask my question:
Breakdown (As of today)
Lender Balance Remaining Monthly Fee
Zopa £8,424.33 £495.55 (Fixed)
Capital One £1,126.08 £47.03 (Minimum)
Barclaycard £871.30 £39.74 (Minimum)
Vanquis £1,603 £95.33 (Minimum)
Fluid £2,780.88 £110.24 (Minimum)
PayPal Credit £1,986.61 £75.22 (Minimum)
Klarna £1,104.55 £46.03 (Fixed)
So I pay out around £900 give or take a month at the moment. It pains when I see that leave my account when it could go towards the family. What I would like to know ----- is there any possible way I could for example pool all the fees I pay out and pay off one balance. For example:
- In March I could pool everything I pay out and be able to pay the Barclaycard balance in one fell swoop.
- Go back to the individual fees in April.
- Pool all again in May to pay of most of Capital One.
- Go back to the individual fees in June.
- And so on.
I would pay off everything quicker. Now I know that because I'm missing payments due to pooling everything I would incur fees. If I were to explain our situation to each lender would give me some leeway? I know it's unorthodox but I just don't know how else to get out of this pickle without declaring bankruptcy or something.
Thank you for reading.
Ben
Hope everyone is well.
I would like some advice please if that's okay. While our position is not extreme (yet) I am feeling the pressure to some extent and I fear it will begin to weigh on my shoulders a bit to much in the coming months. Basically I am the only earner in my family due to my partner being a full time carer for our son (7) who has Cerebral Palsy and we have another little tyke running around who turns 2 in June.
My partner gets the usual carers allowance and such with which she covers the monthly food cost and I earn enough (£34,000) to cover all house bills and my own personal debt It dosent leave us with a lot at the end of the month but we've been getting by. Another issue is it's only just become £34,000, it was £32,000 pre New Year. Unfortunately, while that extra £2,000 gives me £100 a month, as a family we lose over £300 because it takes us over a threshold for tax credits or something.....super frustrating.
Now it's my personal bills that are becoming the problem - long story short, I was scammed when I was a naïve teen and it's just unfortunately grown with me and cascaded, I'm 33 now. I went to college late and graduated from uni in 2019. I'll give you the breakdown and then ask my question:
Breakdown (As of today)
Lender Balance Remaining Monthly Fee
Zopa £8,424.33 £495.55 (Fixed)
Capital One £1,126.08 £47.03 (Minimum)
Barclaycard £871.30 £39.74 (Minimum)
Vanquis £1,603 £95.33 (Minimum)
Fluid £2,780.88 £110.24 (Minimum)
PayPal Credit £1,986.61 £75.22 (Minimum)
Klarna £1,104.55 £46.03 (Fixed)
So I pay out around £900 give or take a month at the moment. It pains when I see that leave my account when it could go towards the family. What I would like to know ----- is there any possible way I could for example pool all the fees I pay out and pay off one balance. For example:
- In March I could pool everything I pay out and be able to pay the Barclaycard balance in one fell swoop.
- Go back to the individual fees in April.
- Pool all again in May to pay of most of Capital One.
- Go back to the individual fees in June.
- And so on.
I would pay off everything quicker. Now I know that because I'm missing payments due to pooling everything I would incur fees. If I were to explain our situation to each lender would give me some leeway? I know it's unorthodox but I just don't know how else to get out of this pickle without declaring bankruptcy or something.
Thank you for reading.
Ben
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If you're not intending to borrow anything more any time soon - like needing a ew mortgage deal for example, then your credit history may not be of particular importance to you right now. And if THAT was the case, then you could simply stop paying any unsecured debt payments and start attacking them individually. This would likely have the effect of meaning you would get defaults registered, but once that happens, the interest stops, and that in turn makes it easier to clear the balances. Even a poor credit history isn't the end of the world for a new mortgage deal by the way - it just means you have less options.
Have you explored whether you have any likelihood of getting a 0% balance transfer card at all as suggested above? That might be another way of getting some of the debt shifted to a place where no interest is accruing, too.
Final thing for now - have you checked whether you are definitely getting all the benefits you are entitled to as a family? I know you said you've just tipped over the threshold for tax credits, but it's worth checking whether there is anything else you may be eligible for.
Well done for tackling this at this stage, before it turns into an even bigger problem - you're right to stop the rot now!
If you have more than £900 available we'll suggest snowballing, which is why we ask for the aprs of each debt
If you can't afford £900 then we'll offer an opinion as to the best way forward, which might be a debt management plan or something else
I know I can meet the payments (for now) - the problem is after house bills and the debts I've outlined it's not leaving us with a lot of anything. And the below does not include if I was to go in my account overdraft. Also the SOA is just my finances - my partner is not included. Which is also the reason food is 0 - My partner is the one that bears the food responsibilities. I pay for everything else and pitch in for food if needed.
@EssexHebridean I have looked into Balance Transfer cards - not a lot of options. And to be honest I don't really want to incur the transfer fees. It just adds to the debt in my eyes.
And yes that is my intention in a blunt way - stop paying everything and pay for one at a time. But I'm not sure if it's the way to go.
@fatbelly I'm not familiar with snowballing. Eager to hear more about this.
SOA below -
[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.................... 1[b]
Monthly Income Details[/b]
Monthly income after tax................ 2378
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 2378[/b][b]
Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 354.34
Management charge (leasehold property).. 0
Council tax............................. 86
Electricity............................. 119.82
Gas..................................... 119.82
Oil..................................... 0
Water rates............................. 55
Telephone (land line)................... 0
Mobile phone............................ 74
TV Licence.............................. 12.25
Satellite/Cable TV...................... 55
Internet Services....................... 48
Groceries etc. ......................... 0
Clothing................................ 10
Petrol/diesel........................... 40
Road tax................................ 0
Car Insurance........................... 44.88
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 30
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 42.06
Buildings insurance..................... 0
Contents insurance...................... 15.54
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 15
Entertainment........................... 27.03
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 1163.74[/b]
[b]
Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2980
Other assets............................ 8000[b]
Total Assets............................ 10980[/b]
[b]
No Secured nor Hire Purchase Debts[/b]
[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Zopa...........................8424.33...495.5.....21.5
Capital One....................1126.08...58.68.....26.4
Barclaycard....................871.2.....39.74.....25.44
Klarna.........................1104.55...46.03.....0
PayPal.........................1986.61...75.22.....25.9
Fluid..........................2780.88...110.2.....36.83
Vanquis........................1603.75...95.33.....20.84[b]
Total unsecured debts..........17897.4...920.7.....- [/b]
[b]
Monthly Budget Summary[/b]
Total monthly income.................... 2,378
Expenses (including HP & secured debts). 1,163.74
Available for debt repayments........... 1,214.26
Monthly UNsecured debt repayments....... 920.7[b]
Amount left after debt repayments....... 293.56[/b]
[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 10,980
Total HP & Secured debt................. -0
Total Unsecured debt.................... -17,897.4[b]
Net Assets.............................. -6,917.4[/b]
[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
But nothing at all for groceries? That's got to be a mistake unless you've got an all inclusive small holding of some sort. Even then it would be difficult. But on double checking I see that your partner deals with that. Aren't the bills also their responsibility? you should really add their income and outgoings so a true picture can be seen. Is that the same thing with the clothing? That £10/month is just for you and no one else.
Nothing set aside for an MOT? Got to be necessary with a car worth under £3k.
And what's the £8k other assets? Is it something that could help clear at least one of the debts??
2023 £1 a day £54.26/365
You say that Zopa and Klarna are fixed payments. So let's ignore those for the moment.
Of the rest you really need to tackle the Fluid payment - highest interest and so it's costing you the most each month. By putting as much extra on that you would clear it fastest and then have that money available to put towards the next highest - Capital One. That's what snowballing means to me at least. Each time you clear one you then throw all you've got to the next highest and each is then faster and faster to clear - like a snowball rolling down a snowy mountain gaining momentum - which is why some people also talk about avalanches.
That said - there's a psychological boost to drawing a line through something.Barclaycard is the smallest amount and if you do actually have almost £300 a month spare you could get rid of that in 3 months. Then you'd have nearly £340 extra a month to chuck at Fluid. If you were paying that plus the current £110 that one would be gone in about 7 months. And so on.
2023 £1 a day £54.26/365
Then I'd start by hitting the others, targeting one at a time (while just-over-min payments to the others) either by highest interest rate or lowest current balance, whichever works for you.
As time passes, those minimums will fall, as will the monthly interest costs. And hopefully you can catch a break with Barclaycard offering you a 0% deal, which will help with interest payments, even if it comes at a small one-off fee.
Good luck, you can lick this
The £8k in assets ---- Part is my ability to work from home - As a Software Engineer I need the set up that allows me to do that. The other is a personal collection that I am not willing to part with and imo has not reached it's full value - you could say it's an investment
Also you might what to set some of the DDs to a set amount just above the current minimum. So if you set your Capital One DD at £60 rather than the minimum it would start making a bigger hole in that debt each successive month. I've done this when I've got a large amount on a card I want to pay off by a set date as I have to spend less time thinking about it whenever I check my bank accounts & bills.
2023 £1 a day £54.26/365