debt getting out of control

Amol0507

Hi, I am looking for advice. I currently have a few loans and credit cards that I am now struggling to pay back. I was hoping someone could point me in the right direction on how to manage these payments. My credit score isn't good and I have no idea what steps to take next. Its getting to a point were my monthly wages are gone on the day I get paid just on debts alone.!!

RAS

In which case you need a new basic (no credit check) bank account. Move your salary and any other income into it and manually set up DDs and SOs to pay for housing, secured debt, CT, insurance, essential utilities and stop paying consumer credit accounts.

The sky won't fall in. Also set up a savings account (instant access ISA?) and put into it anything you don't need to cover the above plus food, clothing, transport to work, and small contributions to medical and dental, hair cuts, leisure and holidays.

You won't be getting more credit, so build a good emergency fund whilst your creditors wheels turn slowly.

Tyjen

Some banks offer debt consolidation loans, which can help you combine multiple debts into a single monthly payment.

Grumpelstiltskin

Tyjen said:

Some banks offer debt consolidation loans, which can help you combine multiple debts into a single monthly payment.

And that is the worse thing you can do, all it does is move the debt from on place to another and leaves you in a position to get into more debt.

gwynlas

Please read advice on similar scenarios on this forum. 
You could provide a SOA for more specific advice on where you could perhaps make savings.
If you are very strong willed and prepared not to use credit cards then you could consider a debt consolidation loan but only if it leaves you enough to fulfil all yor other needs,
However if you are of the same mindset as so many of us have been you are better off stopping paying unsecured debts and following advice to build up an emergency fund. After your loans have defaulted which is unlikely to be until the New Year you can consider a debt management plan. Deppending on the number and type of creditors you could manage this yourself or use someone like Stepchange who will do negotiating for you.

Tyjen

Grumpelstiltskin said:

Tyjen said:

Some banks offer debt consolidation loans, which can help you combine multiple debts into a single monthly payment.

And that is the worse thing you can do, all it does is move the debt from on place to another and leaves you in a position to get into more debt.

I will have to disagree with you on that one, my daughter was in a lot of debt and I helped her in her debt consolidation, it avoided all the individual  interest she was paying on her said debts and she only had one monthly bill to pay, needlessly to say I cut up all her credit cards!

sourcrates

Tyjen said:

I will have to disagree with you on that one, my daughter was in a lot of debt and I helped her in her debt consolidation, it avoided all the individual  interest she was paying on her said debts and she only had one monthly bill to pay, needlessly to say I cut up all her credit cards!

Unfortunately not everyone does that, some continue their reckless attitude towards money, obtaining more borrowing on the pretext that it will be OK, but it never is OK, and before long they find themselves back at square one but with twice the debt they had before.

They also tend to do this multiple times, until the realisation that you "can`t borrow your way out of debt" hits them hard.

I`m glad it worked out for your daughter, but as a general rule its a very bad idea simply because of human nature, we always look for what we think is the easiest option, but the easiest is not always the best.

Sncjw

Also debt consolidations doubles your debt. They will be assessing the affordability on the current debt and the amount you are asking for so you are not garuntted to get it..also doesn't address the issue of spending. 

Op can you post a statement of affairs and we can help you make a plan. 

MEM62

Tyjen said:

Some banks offer debt consolidation loans, which can help you combine multiple debts into a single monthly payment.

@Amol0507 Please ignore this advice.  Consolidation loans rarely work.  At the very least, you need to get to understand and address the root cause of your current situation.  Post up an SoA and the boys and girls here will be able to give you some great guidance.  

Martico

Amol0507 said:

Thanks for all the advice everyone. Can you guide me in the right direction to posting SOA? This is all very new to me 

Here's a link. Anything that you pay annually, divide by 12. And (it's difficult to get right first time) try to be honest about every expense. Once filled in, click on "format for MSE" then copy and paste here. Good luck 

ManyWays

Those are very expensive loans, can you say who the lenders are? 

The car finance, who is the lender and is this HP or PCP?