We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Solutions to £11k Debt Problem

Blue_Carbon
Posts: 23 Forumite

Hi everybody, I'm trying to help a family member with their debt issues atm. They are currently sat on an £11k debt consisting of:
I'd suggested using a balance transfer card to shift away all of the credit card debt, but using the MSE eligibility checker, he was only approved for £1.5k balance transfer for 9 months. We've used this to get rid of the £1k debt at 29% and then the remainder used on credit card debt 1.
He has then spoken with Step Change and come up with a budget, however, as he still has money left over each month they haven't advised using a DMP.
He has then spoken with the credit card issuers about setting up a debt payment plan where they can reduce the interest rate to 0%.
Hopefully they can come up with a reasonable payment plan which he can then use to gradually pay down the credit card debt and then pay off the car loan as normal since it's comparatively not as bad.
I just want to check if we're on the right lines here? Is there anything we're missing?
Also he's concerned about being it affecting his credit score especially when it comes to remortgaging in 2 years (after the fix ends), but I don't think this should be a massive issue?
Any advice would be much appreciated
- £4k car loan at 6.9%
- £2.3k Credit card debt 1 at 31%
- £3.7k Credit card debt 2 at 26.9%
- £1k Credit card debt 3 at 29%
I'd suggested using a balance transfer card to shift away all of the credit card debt, but using the MSE eligibility checker, he was only approved for £1.5k balance transfer for 9 months. We've used this to get rid of the £1k debt at 29% and then the remainder used on credit card debt 1.
He has then spoken with Step Change and come up with a budget, however, as he still has money left over each month they haven't advised using a DMP.
He has then spoken with the credit card issuers about setting up a debt payment plan where they can reduce the interest rate to 0%.
Hopefully they can come up with a reasonable payment plan which he can then use to gradually pay down the credit card debt and then pay off the car loan as normal since it's comparatively not as bad.
I just want to check if we're on the right lines here? Is there anything we're missing?
Also he's concerned about being it affecting his credit score especially when it comes to remortgaging in 2 years (after the fix ends), but I don't think this should be a massive issue?
Any advice would be much appreciated
0
Comments
-
He really needs to put together his DMP and post that here - either in this thread identifying himself as the person under discussion or in a new thread of his own. That’s the easiest way of getting a dialogue together.Good shout to get some of the debt to 0% - he understands that he must NOT spend on that card (or indeed on any cards, going forwards really), yes? He also needs to diarise for 3 months time to see if he is eligible for any more transfers which might help. Ensure that he has also set the minimum payments to the cards he is not tackling currently at a level just above the required minimum - that then makes budgeting easier as the amount being paid won’t fall each month, and he can just let those tick along until the time comes to change the focus.He can stop worrying about his “credit score” - firstly it doesn’t exist for anyone other than him (this is why if you look at the three CRA’s they all tell you a different “score”) and secondly when it comes to time to remortgage his current provider will be able to offer him a deal. 2 years is also far enough down the line that he can make some headway on repairing his credit history anyway, which is even better news.Headlines - stop using credit, put together a robust budget with emergency fund savings, tackle the debts in order of highest interest rate first, paying any surplus each month to that one until it is gone, then moving on to the rest.Oh - and “stop using credit” means accepting now that when the car loan is paid off that is a sign that he then owns his car outright, not a sign that it’s time for a new car!🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her1 -
Yes I think you are on the right lines.
Obviously with money left over each month the question is where should it go and the answer is to the debt with the highest interest, which appears to be the credit card at 31%
He should be aware that by asking for payment arrangements at below-contractual rates he will be getting AP markers to show that he is struggling to repay credit. These markers are not default markers which disappear after 6 years. They stay until the whole entry drops off 6 years after the debt is settled.
If the loan is just an unsecured loan then it does not need to be given any priority. If he sold his asset (the car presumably) then he could use the money where he wanted. Loans are not hire purchase.
2 -
Hi there,
I can confirm that I am the debt addict who is wanting to rehabilitate and break free.
I have e attached my DMP.
I share 50% of the bills with my partner. She doesn't have any debt and I will be getting married in March and want to get a solid plan in place.
I've been offered a secured loan against the house as well but opted not to do that as although it wouldn't effect my credit score, i view the risk of my house getting repossessed a lot worse than lowering my credit score with payment arrangements.
I've submitted my income and expenditure with the 2 highest interest rate cards in an endeavour to bring the interest rate to 0%.
As mentioned by the OP, capital one have offered me a 0% credit card which will hold my Sainsbury's amount.
Thank you for everyone's advice so far, noted all of it and I don't want to get in anymore debt, or use credit cards in future when I'm clear if I can avoid it.
0 -
Hello - well done you for being upfront and looking to make changes, mostly when we suggest that a friend who is being posted on behalf of “enters the thread” themselves it never happens, so you are a refreshing change!The budget you’ve screenshotted isn’t the easiest to follow, but I did note that you mention sharing bills with your fiancée (and congratulations on your upcoming marriage!) - does that include groceries? If so then there are probably savings to be had there as £500 per month is a bit on the high side. Beware that budget may not also be entirely comprehensive- I didn’t spot any mention of clothing, and I don’t recall entertainment, either. Is the amount being budgeted for presents realistic allowing that I assume you buy for your fiancée’s birthday and for Christmas?
Allowing that you do have a surplus, it feels to me as though you ought to be able to continue covering minimum payments plus a bit more, and then focus the whole surplus towards the most expensive debt (so the highest interest) and make a fair bit of impact - allowing that it also sounds as though you are fired up and raring to deal with it - so channel that enthusiasm!🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0 -
Do you understand fully that:
If you default on debt, the damage to your credit record heals automatically after 6 years, whether you've paid it off or not.
If you make an arrangement which means paying less, you will get AP markers, which continue to damage your credit record for 6 years after the debt is paid off.
In either case you can re-mortgage with your current provider without a credit check. But your adverse credit record will make it very difficult to explore the whole market for 6 years with defaults and for much longer with AP markers.
Do you and your fiancee have any joint accounts other than the mortgage? If so, you need to close those now to avoid damaging her credit record.
Well done for coming on here but you and your fiancée need to have some heart to hearts about how to manage these debts going forward.
You may have a small clothing budget in there but you need house maintenance and you might want to go on holiday sometime in the next decade? You need to account for both.
And you need to seriously consider whether a car costing over £400 per month is the best use of your income. What's the deal?
If you've have not made a mistake, you've made nothing0
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 348.2K Banking & Borrowing
- 252.1K Reduce Debt & Boost Income
- 452.3K Spending & Discounts
- 240.7K Work, Benefits & Business
- 617K Mortgages, Homes & Bills
- 175.6K Life & Family
- 253.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 15.1K Coronavirus Support Boards