Which is better to pay, credit card or loan

Paula1981

MattMattMattUK said:

Paula1981 said:

I was just really looking to see what people would pay off first if they had the spare cash

The most sensible answer will be pay the highest interest debts first, barring promotional rate expiry.

Paula1981 said:

debts are in my name as i couldnt get any finance in the business name. Im only open Friday-sunday to cut down over heads, i cant get a paid job because i dont have a single person to look after my kids & there is zero childcare on the island. my husband works down south to earn enough to cover the pub & wages. BD were going to look at options but more so a trust deed which my husband has already so he cant borrow any more money. They never called back with an update.

You are in a grey area because the debts are not business debts and I suspect that confusion is causing the issue with getting help. You might think of them as business debts because that is how you incurred the cost, but they are not debts legally owed by the limited company, but by you. Business Debtline will not be able to help you because the business has no debt (unless you have accounted for the business owing you the debt), but that is not something that can be helped with if you have. I suspect the issue with talking to debt charities is that you have told them that they are business debts when legally they are yours personally.

When you say "the island" are you in a tourist location, will the summer likely be a more profitable period? Do you rent or own the bar, if you rent could you negotiate a rent reduction? Have you been in touch with the local council's business development department? Whilst they will not be able to help you with the debts, they may well have other help, rate relief, grants etc. that could help, sometimes it can be surprising what is available.

When your husband covers the pub and wages, is he subsidising the pub as a loss making operation? With the wages you pay staff/yourself are you claiming the NI employment allowance? Am I right in guessing a Scottish Island? If so have you looked at the ICF? There are potentially other sources of help as well.

I know you are looking at the debt, but that may not be immediately solvable, however there could well be other ways to tackle the overall issues, increasing income, decreasing costs, grants and subsidies etc. It really is worth looking at it from every possible direction. 

I have never classed the debt as business, they are personal debt because they are in my name, which i told step change who still said to copmtact business debt because its a LTD company. I dont pay rent cause the LL is nice enough not to charge us. I dont pay business rates, I dont take a wage. I have spoken to the council & the business development team & highland & island enterprises, they have no grants & can offer nothing else & have no advice, they're words not mine. I have got a kids license so in theory the summer holidays should be good

hoverFrog1

Generally speaking you should pay off secured debts first as you can actually lose something if they default. If all the debts are unsecured then pay off the one charging the highest interest because that will save you money in the long run. Better yet, ask them to stop charging interest and ask if they'll accept a lower payment as a full and final offer. It's unlikely but always worth a try.