Run out of options on 0% transfers due to the high interest rates, what do I do with my debt!

MargeryKempe

?

Hi all, I have been running up debt on 0% credit cards since about 2015 when I returned to work after 2nd child. I think my total debt is about £10,000 or slightly more but it is spread out amongst various 0% cards. I also have overdraft but that is all currently 0% as well and I am saving up to pay back my HSBC overdraft which will only be 0% for a year. I work part time and have just been approved for £100 universal credit per month. I have two teenage kids and a partner who earns a lot more than me but also pays 99% of the bills. I pay for all the food and clothes. 

I have got a £3700 ish MBNA credit card balance which is about to expire on 19th May when I will have to pay interest on it. Last Thursday (morning b4 the last interest rate hike!) I applied for the Sainsburys bank credit card balance transfer and was approved for about £1000 for a 0% transfer, however the online form went wrong and I’m now waiting for them to post me a form so that I can sign the credit agreement and stuff. I am on MSE credit club and it says I would not be approved for any other 0% balance transfers. What do I do? Should I look for a low interest loan or credit card to transfer to? Should I do one of those IVA things? my partner did one of those in the past (in about 2008). We are not buying a house atm but we might try again to buy next year so I wouldn’t want to mess that up. We don’t own a house and are renting in a v expensive area. We are both in late 40s.

i have started opening new current accounts to do the transfers to get the free cash but that wouldn’t be enough to pay off this balance quickly.

thanks so much for any help,

M

MEM62

The accepted wisdom is that you cannot borrow your way out of debt - so further loans are not the answer.  Have you addressed the overspending that led to this debt in the first place?  Whatever solution you go with is not going to help in the long run if you are still digging the whole deeper.  Post up an SOA and you will receive some very good advice from some very knowledgeable members of the forum.    

RAS

Whatever you do, do not touch an IVA. They are suitable for some people with a house or other large assets to protect. But there are very high fees attached and the regulation is poor, so it attracts companies who can earn nice referral fees selling them.

You need more information. You mention a partner? Are you married? Do you have any joint accounts? Which country do you live in, Scottish and NI rules are different.

You need to do an SOA, statement of affairs, to find out where your money has been going. Go to lemonfool.co.uk and get out the last 6 months statements and allocate every spend to one of the categories. Then list every debt, total, monthly and APR.

Since you seem to run separate finance, you probably need one for yourself and one for your family, but do make plain on the family one what payments yours and what debts etc. So:

Clothes £45 (me)
Clothes £10 (partner)

Debt
Tesco £900 £5 0% end Aug 2023 (me)
Tesco £1000 £6 0% end Sep 24 (partner)

sourcrates

There comes a point when you have excessive debt, when people stop lending to you, as you have gone as far as you can down that particular road.

The very first thing those in similar situations to yourself do is look for loans to consolidate, or randomly pluck unsuitable debt solutions out of thin air, as there mates mate once had an IVA so I think I should have one to.

I think you need to accept the borrowing and sidestepping has to stop, balance transfers are only ever a temporary measure, if that fails then you need to look elsewhere for a solution.

Now debt solutions are always circumstance dependant, so as you are currently renting, and have around 10k outstanding on credit cards, then debt management is more often a good choice for those in your situation.

It involves you repaying what you owe, at an affordable monthly rate, with hopefully all interest and charges stopped or suspended.

You should Google "debt management" get up to speed on the process, read our DMP support thread in the sticky section at the top of this forum, get some insight into what you need to do, feel free to ask questions, the more knowledge you have on the subject the better.

And forget all notions of continued borrowing, as that is not the way to tackle this.

MargeryKempe

I don’t want to continue borrowing. I just don’t know how to deal with this situation.

MargeryKempe

RAS said:

Whatever you do, do not touch an IVA. They are suitable for some people with a house or other large assets to protect. But there are very high fees attached and the regulation is poor, so it attracts companies who can earn nice referral fees selling them.

You need more information. You mention a partner? Are you married? Do you have any joint accounts? Which country do you live in, Scottish and NI rules are different.

You need to do an SOA, statement of affairs, to find out where your money has been going. Go to lemonfool.co.uk and get out the last 6 months statements and allocate every spend to one of the categories. Then list every debt, total, monthly and APR.

Since you seem to run separate finance, you probably need one for yourself and one for your family, but do make plain on the family one what payments yours and what debts etc. So:

Clothes £45 (me)
Clothes £10 (partner)

Debt
Tesco £900 £5 0% end Aug 2023 (me)
Tesco £1000 £6 0% end Sep 24 (partner)

Thanks this is really useful. I didn’t want to get an IVA but I didn’t know what to do which is why I came here for help. I am happy to try and pay everything back and do a finances spreadsheet. We recently had to do most of this in order to be approved for universal credit anyway so it shouldn’t be too hard. My partner is not in any debt and has loads of savings. I find it quite difficult to get him to tell me how much he earns and things like that. I am in England.

thanks,

M

MargeryKempe

MEM62 said:

The accepted wisdom is that you cannot borrow your way out of debt - so further loans are not the answer.  Have you addressed the overspending that led to this debt in the first place?  Whatever solution you go with is not going to help in the long run if you are still digging the whole deeper.  Post up an SOA and you will receive some very good advice from some very knowledgeable members of the forum.    

Ok thanks I will do that. Thanks for your help.

MargeryKempe

sourcrates said:

There comes a point when you have excessive debt, when people stop lending to you, as you have gone as far as you can down that particular road.

The very first thing those in similar situations to yourself do is look for loans to consolidate, or randomly pluck unsuitable debt solutions out of thin air, as there mates mate once had an IVA so I think I should have one to.

I think you need to accept the borrowing and sidestepping has to stop, balance transfers are only ever a temporary measure, if that fails then you need to look elsewhere for a solution.

Now debt solutions are always circumstance dependant, so as you are currently renting, and have around 10k outstanding on credit cards, then debt management is more often a good choice for those in your situation.

It involves you repaying what you owe, at an affordable monthly rate, with hopefully all interest and charges stopped or suspended.

You should Google "debt management" get up to speed on the process, read our DMP support thread in the sticky section at the top of this forum, get some insight into what you need to do, feel free to ask questions, the more knowledge you have on the subject the better.

And forget all notions of continued borrowing, as that is not the way to tackle this.

I understand that people like me probably annoy you. But as someone with lifelong mental health problems and autism being ‘told off’ is entirely unhelpful and is often counterproductive in my case. I’m not an idiot which is why I came here to ask for help. If I was going to randomly pluck a solution out of the air would I have posted here? Thanks , M

Grumpelstiltskin

I hope you applied for Universal Credit as a couple. 

Surely a couple should be open with each other about their income etc.

Does your partner pay his fair share of the household expenses?

MargeryKempe

RAS said:

Whatever you do, do not touch an IVA. They are suitable for some people with a house or other large assets to protect. But there are very high fees attached and the regulation is poor, so it attracts companies who can earn nice referral fees selling them.

You need more information. You mention a partner? Are you married? Do you have any joint accounts? Which country do you live in, Scottish and NI rules are different.

You need to do an SOA, statement of affairs, to find out where your money has been going. Go to lemonfool.co.uk and get out the last 6 months statements and allocate every spend to one of the categories. Then list every debt, total, monthly and APR.

Since you seem to run separate finance, you probably need one for yourself and one for your family, but do make plain on the family one what payments yours and what debts etc. So:

Clothes £45 (me)
Clothes £10 (partner)

Debt
Tesco £900 £5 0% end Aug 2023 (me)
Tesco £1000 £6 0% end Sep 24 (partner)

I’m not married I am cohabiting in a private unfurnished rental property and I have two children at secondary school.

MargeryKempe

Grumpelstiltskin said:

I hope you applied for Universal Credit as a couple. 

Surely a couple should be open with each other about their income etc.

Does your partner pay his fair share of the household expenses?

Yes and Yes. Because I get into debt he is worried that I will want some of his money I think. He pays everything apart from food, clothes for me and the kids, one of my kid’s phone bills and my own phone bill. I pay for their clubs and things as well, and one of the bus tickets for school. My parents had a horrible relationship with money so I never wanted to have a joint account and I don’t have any. My dad was I credibly controlling and used to yell at my mum every time she came back from the shops. She had to hand over her receipts etc.