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Pooling fees from multiple debts to pay off another?

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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 
«1

Comments

  • molerat
    molerat Posts: 32,277 Forumite
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    edited 15 February 2023 at 4:36PM
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    That won't work.  They are not fees but contractual payments, miss them and your credit file will be trashed along with extra interest and charges being added. What are the APRs on those ? A 0% BT credit card may take a bit of the pressure off if you can get one.  Also paying a bit extra into a pension may reduce your income enough to get back into tax credits - something for those a bit more knowledgeable on the subject.
  • TheAble
    TheAble Posts: 1,621 Forumite
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    Yes if your employer offers salary sacrifice it would be worth exploring the possibility of sacrificing that extra 2k into your pension. There seems little point in taking it if it's going to make you worse off overall.
  • EssexHebridean
    EssexHebridean Posts: 21,716 Forumite
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    edited 15 February 2023 at 5:33PM
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    First things first - I'm going to suggest you go right back to the beginning and put together your SOA (Statement of Affairs) as that will (if you "format for MSE" once completed, and copy and paste it in here) give us a far better informed basis to be able to see what might be the best approach for you. The link to the SOA calculator is in my signature if that helps. We might even be able to come up with some additional savings that you might have missed on your budget too!

    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! 
    🎉 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
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • fatbelly
    fatbelly Posts: 20,962 Forumite
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    When we look at your soa we'll be looking to see if you can meet those £900 minimum payments, maybe with some tweaks.

    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


  • Benjamin_Phoenix
    Benjamin_Phoenix Posts: 7 Forumite
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    edited 15 February 2023 at 7:04PM
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    Thanks for the replies so far all.......

    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]

  • Brie
    Brie Posts: 11,232 Ambassador
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    Some big holes in this from what I can see.....2 kids but only £10 a month for clothing?  Might be possible if they are getting free hand me downs or all shopping is in a charity shop or similar?  

    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??
    "Never retract, never explain, never apologise; get things done and let them howl.”
  • Brie
    Brie Posts: 11,232 Ambassador
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    re the debts - well I've seen worse, much much worse.  So well done for dealing with them before they got extra super nasty.

    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.  
    "Never retract, never explain, never apologise; get things done and let them howl.”
  • Martico
    Martico Posts: 1,035 Forumite
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    edited 15 February 2023 at 7:26PM
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    Taking a look at the top line numbers (I get that your partner pays the groceries) on the debt, in your position I would pay slightly over min on all the cards and throw the rest at the Barclaycard. That's both one of the highest interest and lowest balance ones. It's also a card provider that does occasionally offer 0% balance transfers. Best to get that to zero as quickly as you can (3-4 months?) and leave it open, just in case.
    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
  • Benjamin_Phoenix
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    Brie said:
    Some big holes in this from what I can see.....2 kids but only £10 a month for clothing?  Might be possible if they are getting free hand me downs or all shopping is in a charity shop or similar?  

    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??
    Yes my partner deals with that sorry. I pay for ALL house bills - I take as much pressure of her as possible. She does a stellar job caring for our disabled son. I pitch in where I can for food and cloths but no please, I want to see what I can do with my incomings only. The SOA may be a little of kilter because it's impossible to know where I'll need to pitch in month to month but I think gives the best representation. MOT is a once year lump sum - which was done in January so will have no bearing. 

    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
  • Brie
    Brie Posts: 11,232 Ambassador
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    What Martico says!  

    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.
    "Never retract, never explain, never apologise; get things done and let them howl.”
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