Debt Advice Needed

Gooner10

Hello all, 

Just wanted to post an update. Unfortunately I had a gambling relapse again. I didn’t put any on credit thank god but my emergency fund was 1000 now it’s 300. Just can’t explain what happened and I feel such a fool. 

I managed to get the Tesco loan  to 9,000 with £9000 being on 0% 2 BT credit cards and one MT. My only concern is the Asda one has an offer but was only for 6 months and this finishes in July. Hopefully I will be able to get another by then. 

It’s always tempting to consolidate but the only loans I think I can get are secured and that’s a road I probably best not go down? Minimum payments on the cards are £60, £65 and £45 and have around £3,000 each on them. 

Should I continue to hit the loan with extra payments each month? 

ManyWays

The loan is at 9%, that isnt gruesome. I suggest rebuilding the emergency fund and have realistic amounts in your budget for entertainment and groceries. Trying to live on too tight a budget is a massive temptation to gamble again. Then clear down the card debt with any surplus.

If your gambling is online, look at Gamban; it's much more effective than Gamstop.

Gooner10

Thanks ManyWays. I’ve done an up to date SOA below. Is it possibly worth looking at consolidation? 

[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................ 2347

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 2347[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 502

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 130

Council tax............................. 113

Electricity............................. 80

Gas..................................... 0

Oil..................................... 0

Water rates............................. 28

Telephone (land line)................... 0

Mobile phone............................ 5

TV Licence.............................. 0

Satellite/Cable TV...................... 0

Internet Services....................... 30

Groceries etc. ......................... 200

Clothing................................ 25

Petrol/diesel........................... 50

Road tax................................ 15

Car Insurance........................... 30

Car maintenance (including MOT)......... 30

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...................... 10

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 20

Haircuts................................ 15

Entertainment........................... 60

Holiday................................. 0

Emergency fund.......................... 300[b]

Total monthly expenses.................. 1683[/b]

[b]

Assets[/b]

Cash.................................... 300

House value (Gross)..................... 260000

Shares and bonds........................ 0

Car(s).................................. 1200

Other assets............................ 0[b]

Total Assets............................ 261500[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 98000....(502)......1.67[b]

Total secured & HP debts...... 98000.....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Asda Credit Card...............3230......60........0

Virgin Credit Card.............3216......65........0

Barclaycard....................4405......45........0

Tesco Loan.....................9000......380.......9

Tabeo (Invisalign).............3800......170.......9[b]

Total unsecured debts..........23651.....720.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,347

Expenses (including HP & secured debts). 1,683

Available for debt repayments........... 664

Monthly UNsecured debt repayments....... 720[b]

Amount short for making debt repayments. -56[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 261,500

Total HP & Secured debt................. -98,000

Total Unsecured debt.................... -23,651[b]

Net Assets.............................. 139,849[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

tigergambit

Hey Gooner, are you in single bed accommodation? If not could you rent a room? Might help you to keep away from gambling if there was someone else around.

Gooner10

tigergambit said:

Hey Gooner, are you in single bed accommodation? If not could you rent a room? Might help you to keep away from gambling if there was someone else around.

Hi tigergambit, I’m in a 1 bed place unfortunately so that’s not an option sadly

enthusiasticsaver

When is that mortgage deal due to expire?  Mortgage rates are  much higher than 1.67% now and I strongly suggest you do not consolidate further or go down the secured loan route.  If you struggle with repayments you will need to look into a DMP and default but that will trash your credit record. 9% is not too awful so I think I would be overpaying the credit card with a deal expiring July as the rate will be much higher than the loan if you cannot get another deal.  Paying minimums only will not be appealing to lenders. 

It sounds to me though that your biggest issue is your gambling addiction so I hope you are getting help with that. 

Gooner10

Hi enthusiasticsaver,

Mortgage deal ends in March 2026 so going to go up a good few percent. 

Well I’ve just paid 300 off the Asda card, if I do that for next 4 months then that’s a chunk off when 0% finishes in July. How much would you try and pay off the other cards? £50 each maybe in addition to the minimums? Luckily Barclaycard 0% runs until November 26 and Virgin is February next year. 

enthusiasticsaver

Ok so you have a year before the mortgage will go up.  Paying a reasonable amount to Asda sounds like a good call.  You do not need to pay a lot over minimums just don't stick at minimums as that will be a red flag to a lender that you are struggling and could impact on you getting new deals.  Your soa shows you have no spare money to overpay although I assume that £300 to emergency funds is not being paid at the moment? 

Gooner10

enthusiasticsaver said:

Ok so you have a year before the mortgage will go up.  Paying a reasonable amount to Asda sounds like a good call.  You do not need to pay a lot over minimums just don't stick at minimums as that will be a red flag to a lender that you are struggling and could impact on you getting new deals.  Your soa shows you have no spare money to overpay although I assume that £300 to emergency funds is not being paid at the moment? 

Yeah that’s right, the 300 isn’t being paid at the moment. Maybe if I drop emergency fund to 150 per month and I over pay the other 2 cards by 50 each month?

Also when looking at secured loan the percentage for a 5 year fixed was 5.9% and payments would be about 450 per month for 5 years. As a last resort would you consider this? 

enthusiasticsaver

Gooner10 said:

enthusiasticsaver said:

Ok so you have a year before the mortgage will go up.  Paying a reasonable amount to Asda sounds like a good call.  You do not need to pay a lot over minimums just don't stick at minimums as that will be a red flag to a lender that you are struggling and could impact on you getting new deals.  Your soa shows you have no spare money to overpay although I assume that £300 to emergency funds is not being paid at the moment? 

Yeah that’s right, the 300 isn’t being paid at the moment. Maybe if I drop emergency fund to 150 per month and I over pay the other 2 cards by 50 each month?

Also when looking at secured loan the percentage for a 5 year fixed was 5.9% and payments would be about 450 per month for 5 years. As a last resort would you consider this? 

No I would never consider converting unsecured debt to secured on my home.  Supposing your mortgage goes up by an unaffordable amount next year plus you  will have the £450 on top of that. There is very little unsecured lenders can do if you are unable to afford the repayments.  Your home is the security on secured loans so they have the option of repossessing that in the event of defaults. 

I think you should drop the emergency fund payments to £100 per month and put any spare income towards the debt in the hope this helps you get another 0%  in July. I would overpay the one which expires in July as much as possible and set the others at a fixed amount for now just £5 or £10 above minimums.  It is the overall indebtedness you need to correct rather than worrying about individual cards and focus on the one which comes off 0% first ie Asda.