So here goes - this is bad but I need to so something about it

Humdinger1 · 18 March 2023 at 2:16PM

jondebtz said:

Hello,.

Bit nervous about this but it's time to sort it out. We have big debts and have been getting our heads around our current situation.The debt built up over many years. We funded several rounds of IVF, our wedding, house renovations etc and now we are at the stage where we have to deal with it. Thankfully we have a good enough income to get out of the hole we are in.....I think!

Here is our current SOA.

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2[b]

Monthly Income Details[/b]
Monthly income after tax................ 4093
Partners monthly income after tax....... 1460
Benefits................................ 515
Other income............................ 400[b]
Total monthly income.................... 6468[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 520
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 106
Electricity............................. 100
Gas..................................... 186
Oil..................................... 0
Water rates............................. 32
Telephone (land line)................... 12
Mobile phone............................ 80
TV Licence.............................. 12
Satellite/Cable TV...................... 59
Internet Services....................... 0
Groceries etc. ......................... 500
Clothing................................ 50
Petrol/diesel........................... 300
Road tax................................ 5
Car Insurance........................... 58
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 100
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 36
Buildings insurance..................... 10
Contents insurance...................... 9
Life assurance ......................... 33
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 20
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 100[b]
Total monthly expenses.................. 2638[/b]
[b]

Assets[/b]
Cash.................................... 2000
House value (Gross)..................... 250000
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 0[b]
Total Assets............................ 260000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 47000....(520)......1.8[b]
Total secured & HP debts...... 47000.....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Updraft consolidation..........28000.....630.......0
Barclayard 1...................12800.....234.......6.9
Barclaycard 2..................4800......108.......6.9
Parents........................5000......0.........0 - no pressure on this one
Drafty.........................1300......167.......0 - horrendous - something like 188%apr
Tesco CC.......................3500......35........0
Creation card..................4000......40........0
MBNA...........................10400.....325.......19.9
Halifax loan...................6800......132.......6.9[b]
Total unsecured debts..........76600.....1671......- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 6,468
Expenses (including HP & secured debts). 2,638
Available for debt repayments........... 3,830
Monthly UNsecured debt repayments....... 1,671[b]
Amount left after debt repayments....... 2,159[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 260,000
Total HP & Secured debt................. -47,000
Total Unsecured debt.................... -76,600[b]
Net Assets.............................. 136,400[/b]

Please be gentle. I am deeply ashamed. We have more debt than anyone I have ever known

@jondebtz just read your first post. Please don't feel ashamed as you are tackling it and will get there. CN I say that at one point I had 140k of debt so if you're happy to count me as someone you know, your total is not too bad....subscribing to cheer you on, love Humdinger x

foxgloves · 19 March 2023 at 4:14PM

You are 42? Then you have potentially very many debt-free years ahead of you! My lightbulb also pinged on while in my early 40s...about 43-ish..I'd been in debt since the age of 19. Along the way, I met & married the very lovely but even more endebted Mr F, who was slightly slower to jump on board with the debt-busting, but soon wanted in on the action once he saw I'd got rid of my 24-year old overdraft & had started tackling my spawn of the devil flexi-loan. At the age of 46, I paid off the last chunk of our debt - having by then joined our finances together & discovered budgeting..And you know what? It soon became very clear to both of us that budgeting didn't prevent us doing things, it was actually an enabler. Not frittering on assorted crud, weekly takeaways, endless lunches out, magazine & garden centre habit, you name it.... meant that we had more money to do more meaningful stuff. I always thought budgeting was for old people & squares! I became an utter convert. We now have no debt at all. Our income is nowhere near as high as yours, yet the freedom of knowing that on payday, all our income is our own, & no longer used to pay for stuff we bought so long ago, we can't even remember what most of it was, well...that feeling is priceless.
F

theoretica · 19 March 2023 at 5:33PM

Early on, you want to look up all the missing APRs so you know - then prioritise the debts with the highest APRs. You probably won't decide to cut your spending to essentials only, but do want to be mindful about where it is going. Some people find it useful to have a separate account with only the money they have decided to spend in, and not such easy access to the whole lot. As you say you have had a recent income increase - some people find it works to transfer the whole of the increase to debt as soon as it comes in, so you never get used to spending it.

ManyWays · 19 March 2023 at 5:59PM

When does your mortgage fix end?

jondebtz · 20 March 2023 at 3:21PM

Im so grateful for everyone’s posts, I’ve not logged on over weekend- needed to escape from it all! I’ll respond properly later on

[Deleted User] · 21 March 2023 at 6:55AM

Change the way you think of it - don't try and escape it - head-on is the only way forward.

It's very, very, hard work clearing debt and if you let your mind relax too much it'll become less of a priority.

Most people on this board have been where you are and we know just how hard this is 😔
When you start to see the numbers lowering you'll feel a huge sense of achievement.

[Deleted User] · 21 March 2023 at 7:01AM

drjohn67 said:

Consolidate debt further to remove the debts with the highest rates to a lowest rate loan.
Then based on the current repayments + surplus each month and it would be pretty quick.

40000 over 3 years is 1200 month.
If those premiums were added to the updraft consolidation then you would still be 2000 clear each month which you could use pay off the overall debt including the updraft consolidation even sooner.

Slashing current expenditure may not be needed for repayment purposes though rationalisation of expenditure based upon cost : value/pleasure : effort could free up more funds to accelerate repayment, for other beneficial investments/activities or simply serve as a greater contingency fund for the next few years.

I'm not really sure about this advice, it seems to goes against what everyone else here advises.
Consolidating further is not advisable.
Slashing current expenditure is needed for repayments.
Pleasure spending is a luxury, it is not essential.
Priorities are required in life and the way we conduct our business affairs has consequences.

enthusiasticsaver · 21 March 2023 at 7:19AM

The very fact the OP has had to resort to high interest rate consolidation loans indicates they won’t get low interest loans and as had been said multiple times on this forum consolidation is not repaying debt. It is akin to kicking the can down the road. There is no quick fix to repaying debt. Follow the rules below and you won’t go wrong.

Make a budget and stick to it.
cut back on expenditure or increase income
tackle the high interest debts first
start saving pots and emergency saving
stop using credit cards and overdrafts

EssexHebridean · 21 March 2023 at 9:26AM

[Deleted User] said:

drjohn67 said:

Consolidate debt further to remove the debts with the highest rates to a lowest rate loan.
Then based on the current repayments + surplus each month and it would be pretty quick.

40000 over 3 years is 1200 month.
If those premiums were added to the updraft consolidation then you would still be 2000 clear each month which you could use pay off the overall debt including the updraft consolidation even sooner.

Slashing current expenditure may not be needed for repayment purposes though rationalisation of expenditure based upon cost : value/pleasure : effort could free up more funds to accelerate repayment, for other beneficial investments/activities or simply serve as a greater contingency fund for the next few years.

I'm not really sure about this advice, it seems to goes against what everyone else here advises.
Consolidating further is not advisable.
Slashing current expenditure is needed for repayments.
Pleasure spending is a luxury, it is not essential.
Priorities are required in life and the way we conduct our business affairs has consequences.

It's already been comprehensively dealt with by other posters - it's incredibly poor advice in the OP's circumstances.

x_raphael_xx · 21 March 2023 at 6:10PM

Snowballing is the way to go!

Also, as @[Deleted User] said, change the way you think of it.
Turn it into a game if you can! See which one of you can do the cheapest weekly shop/save the most pennies.
Charts, spreadsheets, whatever gets you excited.

I like the 1% challenge here on the boards, work out what 1% of your debt is, then focus on that first chunk. It breaks it down nicely, so it's not so daunting. I'm currently working on my 5th percentage

So here goes - this is bad but I need to so something about it

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