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Debt Advice Needed

Gooner10
Gooner10 Posts: 34 Forumite
Part of the Furniture 10 Posts Combo Breaker
edited 1 January at 11:40PM in Debt-free wannabe
Good Evening All,

I am looking for some advice as I have got myself into a bit of a mess. So following divorce a few years ago, I found myself getting an addiction to gambling and its basically consumed my life for the last year and has got me into debt in the process. I have decided enough is enough and I need to stop, I have not gambled for coming up to a month which is a start, however I went through my savings (which was around £3,000) and run up credit card debts totalling £18,000. I have got a loan to pay those cards off with Tesco Bank, the APR is 9.1% not the best but it's all I could get, and it's over 5 years with payments at £370 per month. 

My question is what do you think the best course of action is, do I just carry on with the payments, ideally I want to get the debt paid off quicker than 5 years but realise this might not be possible. Or is it worth me getting a 0% spending card and throwing my spare cash each month at the loan? I will put my SOA below so you can see what my situation is.

Any advice would be greatly appreciated and I feel such a fool I have allowed myself to get into this mess.

Many thanks

Andrew

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1[b]

Monthly Income Details[/b]
Monthly income after tax................ 2341.81
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 2341.81[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 502
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 120
Council tax............................. 113
Electricity............................. 80
Gas..................................... 0
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 0
Mobile phone............................ 5
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 30
Groceries etc. ......................... 160
Clothing................................ 30
Petrol/diesel........................... 50
Road tax................................ 15
Car Insurance........................... 30
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 40
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 8
Life assurance ......................... 0
Other insurance......................... 30
Presents (birthday, christmas etc)...... 0
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 200[b]
Total monthly expenses.................. 1473[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 260000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0[b]
Total Assets............................ 261000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 100000...(502)......1.69[b]
Total secured & HP debts...... 100000....-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Asda Credit Card...............900.......0.........22
Tesco Bank Loan................18000.....379.......9.1[b]
Total unsecured debts..........18900.....379.......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 2,341.81
Expenses (including HP & secured debts). 1,473
Available for debt repayments........... 868.81
Monthly UNsecured debt repayments....... 379[b]
Amount left after debt repayments....... 489.81[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 261,000
Total HP & Secured debt................. -100,000
Total Unsecured debt.................... -18,900[b]
Net Assets.............................. 142,100[/b]

[i]Created using the SOA calculator at www.stoozing.com. 
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Comments

  • fatbelly
    fatbelly Posts: 22,104 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    That doesn't look bad. Nearly £500 to use to clear debt and actually £500 if you can lower your spend on new clothes a bit.

    I wouldn't have taken a consolidation loan but it looks ad if the deed is done.

    You should be able to clear the credit card in 2 months then just use it for buying food, and clear in full each month.

    How to treat the Tesco loan depends on how often they will allow overpayment.
  • RAS
    RAS Posts: 34,431 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Agreed. Consolidation wasn't the best option, but right now:

    Start reducing that credit card debt
    Read the details of your loan to find out if you can over pay, and come back.
    If you've have not made a mistake, you've made nothing
  • EssexHebridean
    EssexHebridean Posts: 23,847 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Gooner10 said:
    <snip>

    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 1
    Number of children in household......... 0
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 2341.81
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 2341.81[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 502 How long is the deal on your mortgage? You are on a nice low rate now but of course that will change at least a bit when you need to take a new deal.
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 120
    Council tax............................. 113 You get single person discount on this already I assume?
    Electricity............................. 80 Make sure that is accurate - check readings against bills to ensure that accurate billing means you are paying the right amount.
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 35 You may be able to save here by getting a water meter - we currently pay under £20 a month metered for two of us in a house with a garden.
    Telephone (land line)................... 0
    Mobile phone............................ 5 Excellent MSE price to be paying! 
    TV Licence.............................. 0 You either don't watch TV at all, or don't watch anything "as live" or on iPlayer?
    Satellite/Cable TV...................... 0
    Internet Services....................... 30
    Groceries etc. ......................... 160 Just have a bit of an audit to check this is right - even for a single person these days that really is pretty low, if you are achieving that level then great, but make sure your budget does cover everything!
    Clothing................................ 30
    Petrol/diesel........................... 50
    Road tax................................ 15 Hopefully you aren't paying this monthly as it costs more done that way! 
    Car Insurance........................... 30
    Car maintenance (including MOT)......... 10 This sounds remarkably little - even for a low mileage car. As well as the MoT Test think also servicing, tyres as needed, screenwash and wiper blades as needed, cleaning... 
    Car parking............................. 0
    Other travel............................ 40
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 8
    Life assurance ......................... 0
    Other insurance......................... 30
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 15
    Entertainment........................... 0 You need to budget something here - the odd meal with friends, a magazine, a quick stop for a coffee or whatever...
    Holiday................................. 0 You never go anywhere at all? No trips to visit family, or weekends away with friends, even?
    Emergency fund.......................... 200[b]
    Total monthly expenses.................. 1473[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 260000
    Shares and bonds........................ 0
    Car(s).................................. 1000
    Other assets............................ 0[b]
    Total Assets............................ 261000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 100000...(502)......1.69[b]
    Total secured & HP debts...... 100000....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Asda Credit Card...............900.......0.........22
    Tesco Bank Loan................18000.....379.......9.1[b]
    Total unsecured debts..........18900.....379.......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 2,341.81
    Expenses (including HP & secured debts). 1,473
    Available for debt repayments........... 868.81
    Monthly UNsecured debt repayments....... 379[b]
    Amount left after debt repayments....... 489.81[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 261,000
    Total HP & Secured debt................. -100,000
    Total Unsecured debt.................... -18,900[b]
    Net Assets.............................. 142,100[/b]

    [i]Created using the SOA calculator at www.stoozing.com. 
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
    See above for comments on your SOA.

    Yes - if you can get that remaining CC onto 0% that would be ideal. once the dust has settled on that application and you have established whether you can OP on the loan it might also be worth checking your eligibility for 0% money transfer cards to be able to shift some of the loan to 0% too. 

    One thing - you say you budget for various things monthly (car maintenance etc, but also and more vitally, your emergency fund) but you're showing nothing in cash assets - if your stated budget includes "big ticket" items having money set aside monthly you must be sure that does happen, otherwise when the time comes to pay those things the money isn't there!  

    Your monthly surplus on paper is excellent - I mean realistically you can pretty much have that remaining CC gone in a couple of months even if you can't get it on to 0%, and you really are well fixed to be able to dispose of that loan well ahead of the original term as well - so long as it does allow overpaying! 

    The biggest congratulations here clearly is for realising that you want to make changes and making progress on stepping away from gambling - that must feel both daunting but also a huge weight off your mind! 
    🎉 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 = £102,500.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • Gooner10
    Gooner10 Posts: 34 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    fatbelly said:
    That doesn't look bad. Nearly £500 to use to clear debt and actually £500 if you can lower your spend on new clothes a bit.

    I wouldn't have taken a consolidation loan but it looks ad if the deed is done.

    You should be able to clear the credit card in 2 months then just use it for buying food, and clear in full each month.

    How to treat the Tesco loan depends on how often they will allow overpayment.
    Thanks fatbelly, Tesco do allow overpayments. It says the below on their website: 

    When you make an overpayment it goes towards reducing the length of time you are borrowing for (unless you’ve asked us otherwise). This means there’s less interest to be charged, which means you could save money overall.

    The amount you could save is unique to your loan and will vary depending on how many payments you have left. We'll send you a letter within seven working days of making your payment, letting you know about any interest you've saved, your new balance and the term remaining.

  • Gooner10
    Gooner10 Posts: 34 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Gooner10 said:
    <snip>

    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 1
    Number of children in household......... 0
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 2341.81
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 2341.81[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 502 How long is the deal on your mortgage? You are on a nice low rate now but of course that will change at least a bit when you need to take a new deal.
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 120
    Council tax............................. 113 You get single person discount on this already I assume?
    Electricity............................. 80 Make sure that is accurate - check readings against bills to ensure that accurate billing means you are paying the right amount.
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 35 You may be able to save here by getting a water meter - we currently pay under £20 a month metered for two of us in a house with a garden.
    Telephone (land line)................... 0
    Mobile phone............................ 5 Excellent MSE price to be paying! 
    TV Licence.............................. 0 You either don't watch TV at all, or don't watch anything "as live" or on iPlayer?
    Satellite/Cable TV...................... 0
    Internet Services....................... 30
    Groceries etc. ......................... 160 Just have a bit of an audit to check this is right - even for a single person these days that really is pretty low, if you are achieving that level then great, but make sure your budget does cover everything!
    Clothing................................ 30
    Petrol/diesel........................... 50
    Road tax................................ 15 Hopefully you aren't paying this monthly as it costs more done that way! 
    Car Insurance........................... 30
    Car maintenance (including MOT)......... 10 This sounds remarkably little - even for a low mileage car. As well as the MoT Test think also servicing, tyres as needed, screenwash and wiper blades as needed, cleaning... 
    Car parking............................. 0
    Other travel............................ 40
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 8
    Life assurance ......................... 0
    Other insurance......................... 30
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 15
    Entertainment........................... 0 You need to budget something here - the odd meal with friends, a magazine, a quick stop for a coffee or whatever...
    Holiday................................. 0 You never go anywhere at all? No trips to visit family, or weekends away with friends, even?
    Emergency fund.......................... 200[b]
    Total monthly expenses.................. 1473[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 260000
    Shares and bonds........................ 0
    Car(s).................................. 1000
    Other assets............................ 0[b]
    Total Assets............................ 261000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 100000...(502)......1.69[b]
    Total secured & HP debts...... 100000....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Asda Credit Card...............900.......0.........22
    Tesco Bank Loan................18000.....379.......9.1[b]
    Total unsecured debts..........18900.....379.......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 2,341.81
    Expenses (including HP & secured debts). 1,473
    Available for debt repayments........... 868.81
    Monthly UNsecured debt repayments....... 379[b]
    Amount left after debt repayments....... 489.81[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 261,000
    Total HP & Secured debt................. -100,000
    Total Unsecured debt.................... -18,900[b]
    Net Assets.............................. 142,100[/b]

    [i]Created using the SOA calculator at www.stoozing.com. 
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
    See above for comments on your SOA.

    Yes - if you can get that remaining CC onto 0% that would be ideal. once the dust has settled on that application and you have established whether you can OP on the loan it might also be worth checking your eligibility for 0% money transfer cards to be able to shift some of the loan to 0% too. 

    One thing - you say you budget for various things monthly (car maintenance etc, but also and more vitally, your emergency fund) but you're showing nothing in cash assets - if your stated budget includes "big ticket" items having money set aside monthly you must be sure that does happen, otherwise when the time comes to pay those things the money isn't there!  

    Your monthly surplus on paper is excellent - I mean realistically you can pretty much have that remaining CC gone in a couple of months even if you can't get it on to 0%, and you really are well fixed to be able to dispose of that loan well ahead of the original term as well - so long as it does allow overpaying! 

    The biggest congratulations here clearly is for realising that you want to make changes and making progress on stepping away from gambling - that must feel both daunting but also a huge weight off your mind! 
    Thanks for your help Essex Hebridean. I think there might be a couple of amendments needed for my SOA. 

    Mortgage deal runs until March 2026. 

    Council tax is already with single person discount  

    Energy - I do have Smart Meter so pretty certain readings will be accurate. 

    Water - Have meter already but that price includes sewage too

    TV license - Don’t want any live TV just on demand things

    Groceries - Actually probably around 240 per month. 

    Road tax - Paid annually 

    Car maintenance - Probably underestimated here. Probably about 25 per month including MOT

    Entertainment - Do have a meal out with friends once per month, so probably around 50. 

    Holiday - I haven’t been anywhere for just coming up to a year. I had one weekend away a few months ago that was £100 for couple of nights. I don’t go away that often. 

    I’ve looked on MSE Eligibility Checker and I can get 22 months 0% on purchases and 19 months 0% on balance transfers with Barclaycard, is this worth going for? It says I am 100% pre approved. 

    I can also get 0% on money transfers for 12 months with Virgin, (4% fee) is this worth looking at?  

    Thanks for your help 😊
  • EssexHebridean
    EssexHebridean Posts: 23,847 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    If you can transfer that outstanding credit card balance to 0% then you might as well do so - and clearly if you can do it without paying a fee then that's even better! That then means your surplus can go straight to OP'ing the loan while you make a set monthly payment to the 0% card (set it a little above the minimum and absolutely do NOT use the card!)
    🎉 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 = £102,500.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • Gooner10
    Gooner10 Posts: 34 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    If you can transfer that outstanding credit card balance to 0% then you might as well do so - and clearly if you can do it without paying a fee then that's even better! That then means your surplus can go straight to OP'ing the loan while you make a set monthly payment to the 0% card (set it a little above the minimum and absolutely do NOT use the card!)
    Thank you. So don’t use card for purchases even with the 0% period? 
  • 13thlegion
    13thlegion Posts: 99 Forumite
    Second Anniversary 10 Posts Name Dropper
    It is very easy to make overpayments with a loan from Tesco. I'm in the process of doing that myself. What's good for morale is they give a total to payback figure, so including interest, and every time an overpayment is made they 'refund' the interest which makes it go down faster. My own story a 5 year loan will be done in 3. 

    This is a great time to dig into your budget and think about in unusual spends. Whilst your mind is keen and focused. So like your weekend away. That's £8.33 per month if you to do a trip like that once a year. 
  • EssexHebridean
    EssexHebridean Posts: 23,847 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Gooner10 said:
    If you can transfer that outstanding credit card balance to 0% then you might as well do so - and clearly if you can do it without paying a fee then that's even better! That then means your surplus can go straight to OP'ing the loan while you make a set monthly payment to the 0% card (set it a little above the minimum and absolutely do NOT use the card!)
    Thank you. So don’t use card for purchases even with the 0% period? 
    Best to step away from using consumer credit at all really. The exception to that is that if you have to make a purchase of a bigger ticket item using a CC purely for Section 75 protection - and just pay the transaction off immediately afterwards. Any cards that you have done balance transfers on though generally shouldn't be spent on. 
    🎉 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 = £102,500.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • kimwp
    kimwp Posts: 2,422 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    Watching iPlayer on demand requires a TV licence.

    That water bill is high if it's metered, I pay approx £16 including sewage. 

    It sounds like some of your SOA figures are estimates - you need to go back through your bank accounts to get accurate figures - it's amazing how wrong our estimates can be.
    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
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