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Debt Advice Needed

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13

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  • fatbelly
    fatbelly Posts: 22,987 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    No.

    You have already seen that consolidation doesn't work and you have 5k more debt than when this thread started.

    Securing more debt against the house would be a massive mistake that would make your situation more difficult to get out of.

    Your new budget balances if you knock out entertainment and the new debt is at 0%. Keep the card debt at 0% for as long as possible. 

    I don't think you need a dmp yet but obviously you are nearer it than when you started the thread.
  • enthusiasticsaver
    enthusiasticsaver Posts: 16,062 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Looking at the figures from January the debt is now £5k higher.  Is that because of the gambling relapse or are you still spending on the cards to live?  You  need to stop using them altogether.  Have you cut them up and removed them from websites etc? As @fatbelly says consolidation does not work.  You have moved half the loan on to 0% credit cards which works when your budget is under control but it is very difficult if you are still adding to the debts.  

    Your priorities should be. 
    Stop gambling
    Live within your budget and do not use credit at all.  No more consolidations. 
    Focus on clearing the cards rather than overpaying the loans for now as the cards will charge a lot more than 9% if you do not clear them within the deal period. You have a deadline as the mortgage will go up next year so I would use this year to really get on top of the debts.  If the payments are unaffordable when the mortgage goes up next March then consider a DMP. 
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  • Gooner10
    Gooner10 Posts: 46 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Thank you both for your replies. Part of it was due to gambling relapse and the other thing was for my orthodontist treatment which I completely missed off original SOA. 

    I will focus on the Asda card until July and will do 100 to my emergency fund. Obviously it’s going to take a while to build this back up. 

    If I manage to get another 0% do you think to close the Asda card? 
  • RAS
    RAS Posts: 35,670 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Goober:
    If I manage to get another 0% do you think to close the Asda card? 
    YES, yes and yes.

    And if you haven't already, factor medical and dental into your SOA, going forward.
    If you've have not made a mistake, you've made nothing
  • Gooner10
    Gooner10 Posts: 46 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    RAS said:
    Goober:
    If I manage to get another 0% do you think to close the Asda card? 
    YES, yes and yes.

    And if you haven't already, factor medical and dental into your SOA, going forward.
    Thank you. I have added my dental treatment to my SOA which is 170 per month as I took it over 2 years. APR is 9%
  • Gooner10
    Gooner10 Posts: 46 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Hi All,

    I'm back again, I think I have made a mistake, I have been looking into secured loans and was offered a 26000 loan over 10 years with re payments of £280 per month, my current debts total around £750 per month. My only fear is when the 0% period ends on the 3 credit cards I have around October next year and if I can't get any more deals then I would be in a bad position and hit with hefty interest rates. Would you cancel the loan whilst I still can?

    I have updated my SOA and this is below:

    [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................ 2340
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 2340[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 502
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 110
    Council tax............................. 119
    Electricity............................. 100
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 30
    Telephone (land line)................... 0
    Mobile phone............................ 5
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 33
    Groceries etc. ......................... 200
    Clothing................................ 20
    Petrol/diesel........................... 25
    Road tax................................ 13
    Car Insurance........................... 30
    Car maintenance (including MOT)......... 30
    Car parking............................. 0
    Other travel............................ 25
    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......................... 37
    Presents (birthday, christmas etc)...... 20
    Haircuts................................ 12
    Entertainment........................... 40
    Holiday................................. 20
    Emergency fund.......................... 100[b]
    Total monthly expenses.................. 1481[/b]
    [b]

    Assets[/b]
    Cash.................................... 200
    House value (Gross)..................... 260000
    Shares and bonds........................ 0
    Car(s).................................. 1000
    Other assets............................ 0[b]
    Total Assets............................ 261200[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 94000....(502)......1.69[b]
    Total secured & HP debts...... 94000.....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Tesco Bank Loan................8000......380.......9.9
    Barclaycard....................3500......35........0
    Natwest........................5000......50........0
    Asda...........................700.......20........26
    Tabeo Loan Invisalign..........3600......170.......9.9
    Capital One....................5127......100.......0[b]
    Total unsecured debts..........25927.....755.......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 2,340
    Expenses (including HP & secured debts). 1,481
    Available for debt repayments........... 859
    Monthly UNsecured debt repayments....... 755[b]
    Amount left after debt repayments....... 104[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 261,200
    Total HP & Secured debt................. -94,000
    Total Unsecured debt.................... -25,927[b]
    Net Assets.............................. 141,273[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • RAS
    RAS Posts: 35,670 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Please do not shift unsecured debt to a secure loan.

    Default on consumer debt and there are limited consequences.

    Default on a secured loan and you could lose the roof over your head.
    If you've have not made a mistake, you've made nothing
  • Gooner10
    Gooner10 Posts: 46 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Thank you RAS.

    The main reason I considered it again was if I had of done it then I would have closed the cards down and really focus on becoming debt free. 

    I would also have extra money I can put in my emergency fund or pay off the loan. 
  • RAS
    RAS Posts: 35,670 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Are the debts that you've listed as 0% actually zero percent. If so, put everything you have against the ASDA account. And check the MSE pages for possible 0% transfers for the other debts.
    If you've have not made a mistake, you've made nothing
  • Gooner10
    Gooner10 Posts: 46 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    RAS said:
    Are the debts that you've listed as 0% actually zero percent. If so, put everything you have against the ASDA account. And check the MSE pages for possible 0% transfers for the other debts.
    Hi RAS,

    Yeah the Barclaycard, NatWest and Capital One credit cards are at 0% until around October 2026. 

    I did check that but I am not eligible for any 0% transfers unfortunately. I think because my credit score is pretty bad at the moment. Could it be worth looking at a secured loan to clear the Tesco loan and dental as would be lower interest rate at 5.99%?

    Many thanks

    Andrew
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