About to turn 30 years old and have 60K of debt!!!

enthusiasticsaver

Personally I don’t think you can afford to borrow another £5k for the car balloon. You also won’t get a debt consolidation loan at 6%. You have been down that road before and it normally makes things worse. I also don’t think you should move to interest only. You will have an interest rise to cope with when your deal expires so getting the balance down will minimise the damage.

I think you need a DMP but you need to think carefully about how to manage the car situation. You may lose your deposit but that is the price for taking out this sort of car finance. How much is the car worth? 

theoretica

Your wife not working is being very hard to afford at present.  If she needs to not work to support your daughter can you get this in part balanced through disability benefits for your daughter and carers allowance for your wife?  Or could she find some hours possible either at the weekend or during school hours?

One significant disadvantage of an IVA is that you should not treat your family loan differently from your others and keep paying only that one.

Davehal7

enthusiasticsaver said:

Personally I don’t think you can afford to borrow another £5k for the car balloon. You also won’t get a debt consolidation loan at 6%. You have been down that road before and it normally makes things worse. I also don’t think you should move to interest only. You will have an interest rise to cope with when your deal expires so getting the balance down will minimise the damage.

I think you need a DMP but you need to think carefully about how to manage the car situation. You may lose your deposit but that is the price for taking out this sort of car finance. How much is the car worth? 

Car is worth just over 10K and i already have a loan in principle at 6% from my bank for £15k which will allow me to pay the balloon of £5000 and then the bulk of credit card and overdraft debt 

if i move to interest only for 6 months i will save £240 a month which i can use to clear rest of the CC / overdraft then when it resumes in 6 months my payments will only go up to £5 more than what they are today 

We have just applied for DLA and if we are successful then wife will claim carers allowance too but this has only just been sent so will be 10-12 weeks before a decision is made 

failing that we are considering Wife to go back to work but she is currently off her feet after operation for next 6-8 weeks, its then an issue of trying to find child care that is affordable and not the same as wifes hourly take home which will typically be minimum wage 

TheAble

Davehal7 said:

enthusiasticsaver said:

Personally I don’t think you can afford to borrow another £5k for the car balloon. You also won’t get a debt consolidation loan at 6%. You have been down that road before and it normally makes things worse. I also don’t think you should move to interest only. You will have an interest rise to cope with when your deal expires so getting the balance down will minimise the damage.

I think you need a DMP but you need to think carefully about how to manage the car situation. You may lose your deposit but that is the price for taking out this sort of car finance. How much is the car worth? 

Car is worth just over 10K and i already have a loan in principle at 6% from my bank for £15k which will allow me to pay the balloon of £5000 and then the bulk of credit card and overdraft debt 

if i move to interest only for 6 months i will save £240 a month which i can use to clear rest of the CC / overdraft then when it resumes in 6 months my payments will only go up to £5 more than what they are today 

We have just applied for DLA and if we are successful then wife will claim carers allowance too but this has only just been sent so will be 10-12 weeks before a decision is made 

failing that we are considering Wife to go back to work but she is currently off her feet after operation for next 6-8 weeks, its then an issue of trying to find child care that is affordable and not the same as wifes hourly take home which will typically be minimum wage 

What often happens in these situations is that the loan is used to pay off the credit cards and then the credit cards are used to run up balances again. So you end up in more debt. Given that you have four loans already (and this will be the fifth) it's suggestive that you may have been down this road before...?

sourcrates

Davehal7 said:

Hi All, Posting here at last as I am desperate for some advice and support on how I can get out of Debt. I am 29 years old and have 4 children and currently have debts of around 60K.

@Davehal7

Just a reminder of your 1st post on this thread -

"I am desperate for some advice and support on how I can get out of Debt"

You have been on this merry-go-round before, yet, here you are again, you don`t get out of debt by continuing to play the borrowing game with the banks money, it has to stop..

You have had some good advice given, but now your nearing 30 years old, you need to think of the future, ideally you need a complete root and branch re-think of your finances, otherwise you`ll find yourself turning 50 and still be paying off silly loans and credit card debts.

This balloon payment on the car, should not be financed by borrowed money, stop paying your non priority debts, get some savings, pay for it that way, then, get yourself out of the box your in, and get into a debt management plan, work out what you can pay on a monthly basis to all your non priority creditors, and start making good decisions for once.

That is the only way you will ever get out of the mess you are in.

Yes it will take a while, but with possible increased earnings, future settlement offers, and a fair wind, you can kiss this debt goodbye a lot sooner.

Don`t wait until your nearly 40 as I did, before you realise this ride ain`t going to end unless you jump off it.

I wish you luck with it.

EssexHebridean

I think the problem you have is that you have left it too late to be able to do anything other than borrow if you are going to pay that balloon payment - would I be right?  

If you are going to get the loan for that payment, then at least make it a loan for a straight 5k only - the amount you need, and don't add to it any further, as the risk here as others have said is that consolidation almost never works. Indeed - you already know that don't you, because it hasn't worked before, has it? I know, "it will be different this time" - but can you honestly say that you weren't adamant when you consolidated before that "this is it - we're getting out of debt now!"? we honestly see so many people on here who have been down that road, and regretted it later - the last thing we want is to see you returning here in a few years time telling us that you are about to turn 35 years old and have £90k of debt - and honestly , that could well be where you're headed. 

My suggestion is to stop using the cards. Stop making all bar the priority payments for now. Get the car loan if you must - and I confess I can't see many other viable options for you right at the moment on that as second hand car values are currently so high, you're going to struggle to buy a "cheap runaround" that is going to be solid enough for your daily commute. Start properly, seriously living within your budget, making savings where you can and finding ways to earn odds and ends of other cash on top. You mention your partner having to stay off her feet for a few weeks  - see that as a good opportunity for her to fill her time doing things like online surveys then - she won't make your fortune with it but could certainly earn a bit extra. Anything extra earned needs to be stashed away in to the emergency fund for now.

fatbelly

Have you looked into a money transfer card for the 5k?

https://www.moneysavingexpert.com/credit-cards/money-transfers/

PS Get professional help with the DLA application/appeal - these are tricky forms and nearly always initially turned down, then overturned on appeal - local CABs often have people who specialise.

enthusiasticsaver

If that loan actually is 6% then presumably you will be paying off the Barclays, overdraft and as much of the Halifax credit card as you can as well as paying off the car balloon?  I strongly recommend you then stop using credit altogether as others have said the temptation is often to build it back up again so you have credit cards, overdrafts plus the loan.  Debt consolidation is a pit many have fallen into several times before. 

Floss

enthusiasticsaver said:

If that loan actually is 6% then presumably you will be paying off the Barclays, overdraft and as much of the Halifax credit card as you can as well as paying off the car balloon?  I strongly recommend you then stop using credit altogether as others have said the temptation is often to build it back up again so you have credit cards, overdrafts plus the loan.  Debt consolidation is a pit many have fallen into several times before. 

And actually close the accounts with each company, don't just cut up the cards. 

Davehal7

Morning Guys, 

Firstly i appreciate all the words of wisdom, this is something that is now really starting to get to me mentally and i know i need to make some tough decision's and life changes in order to get out of this mess. 

you are spot on i have been here before not quite to this extent but yes using consolidation loans and then racking up the credit card again is how a lot of this has occurred BUT this time i plan on closing my accounts all together to avoid temptation 

I have left it too late to now do anything with the car other than paying the £5000 that will come out my account automatically on the 1st September. 

Therefore i think I am going to have to compromise and go down the root of getting the 15K loan @ 6% in order to cover balloon payment and clear my barclays , overdraft and as much as the halifax credit as possible 

I will then close these accounts ASAP and stop using credit all together as suggested above and then all i will have left to manage is the loans and monthly bills 

I was thinking of then using the charter mortgage to switch to intrest only for 6 months and save £240 a month to go towards paying the rest of the halifax credit card off this does NOT show up on my credit file and now affordability checks are done 

I will then reduce outgoings as much as possible and wait until i can get a new fixed term mortgage before going on an debt management plan 

on top of my basic salary i do get commission which is uncapped and is a percentage based on overall sales for the month but there is a kick in level so some months i can bring home close to £4000 which is something i haven't included along with cash in hand work but these are adhoc and not guaranteed 

are we all in agreement that this is the best way forward for me given my situation and timing???