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Credit card debts
ChocolateTea
Posts: 6 Forumite
Good evening,
Firstly thanks for taking the time to help.
Firstly thanks for taking the time to help.
I am trying to improve my financial situation. Over the last 8 years we have accumulated a significant amount of debt. Total at the moment is around £30k which is majority on 0% interest credit cards. A smaller amount of 3k is to a family member.
We have recently been trying hard to save and pay - paid off £10k this year.
However with the cost of living and lack of overtime at work we are struggling to pay anything but the bare minimum.
I tried approaching family member to stop their £200 a month payment but that caused family friction.
Is there anything I can do? I do not want a DMP, I am scared to default as worried about job implications and future finances (remortgage due in 2027).
In all honesty, I shouldn’t have used cards to undertake home improvements (bought a doer upper). But we did and paying the price.
Is there any way to reduce the debts? They keep offering credit to me which I took but let’s be honest I really cannot afford.
Sorry for the ramble, pre Christmas reality check here.
Soa
[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]
Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1[b]
Monthly Income Details[/b]
Monthly income after tax................ 1850
Partners monthly income after tax....... 2770
Benefits................................ 175
Other income............................ 0[b]
Total monthly income.................... 4795[/b][b]
Monthly Expense Details[/b]
Mortgage................................ 1490
Secured/HP loan repayments.............. 202
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 185
Electricity............................. 235
Gas..................................... 0
Oil..................................... 0
Water rates............................. 80
Telephone (land line)................... 0
Mobile phone............................ 66
TV Licence.............................. 15
Satellite/Cable TV...................... 0
Internet Services....................... 45
Groceries etc. ......................... 650
Clothing................................ 20
Petrol/diesel........................... 45
Road tax................................ 35
Car Insurance........................... 48
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 150
Other child related expenses............ 65
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 45
Buildings insurance..................... 20
Contents insurance...................... 5
Life assurance ......................... 135
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 5
Entertainment........................... 100
Holiday................................. 25
Emergency fund.......................... 50[b]
Total monthly expenses.................. 3751[/b]
[b]
Assets[/b]
Cash.................................... 1000
House value (Gross)..................... 405000
Shares and bonds........................ 0
Car(s).................................. 20000
Other assets............................ 0[b]
Total Assets............................ 426000[/b]
[b]
Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 345200...(1490).....4.6
Hire Purchase (HP) debt ...... 20000....(202)......3.5[b]
Total secured & HP debts...... 365200....-.........- [/b]
[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
CC1............................16975.....205.......0
CC2............................1438......25........0
CC3............................730.......35........0
Loan ..........................3200......200.......0
CC5............................3288......150.......0
CC4............................6794......66........0[b]
Total unsecured debts..........32425.....681.......- [/b]
[b]
Monthly Budget Summary[/b]
Total monthly income.................... 4,795
Expenses (including HP & secured debts). 3,751
Available for debt repayments........... 1,044
Monthly UNsecured debt repayments....... 681[b]
Amount left after debt repayments....... 363[/b]
[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 426,000
Total HP & Secured debt................. -365,200
Total Unsecured debt.................... -32,425[b]
Net Assets.............................. 28,375[/b]
[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
1
Comments
-
Your soa says that you can afford your contractual payments plus £300 extra.
As the debts are all at 0%, there is no advantage in a dmp. At least not now. With a total of £1000 to throw at 32k of interest free debt you are on course to clear all of it in 32 months
Is there room to cut expenditure? Probably. You are spending £100 on entertainment and £135 on life insurance
Is a tv licence necessary? Is council tax paid over 12 months? Do you really spend £650 on food & housekeeping? Why is electricity so high?
I presume the £202 is hp for a car. When does that complete? Is it worth considering voluntary termination? Do you really have 20k equity in a car?1 -
How accurate is your SOA? You say you're struggling to pay more than the bare minimum, but your SOA shows you have £363 left over after making the minimum payments, so that suggests you're spending money on something that you haven't accounted for.
It can really help to go through your bank statements to find out exactly where the money goes. 🙂Credit card debt: £8530 £8071
Savings: £33631 -
Some of the SOA lines look a lot too low:Clothing................................ 20Car maintenance (including MOT)......... 15Car parking............................. 0Medical (prescriptions, dentist etc).... 0Presents (birthday, christmas etc)...... 20Haircuts................................ 5
£650 for groceries - well you may be able to reduce it a bit but its well within the guidelines for debt advisors.
I suspect a lot of your card debts are charging interest if those are the minimums ...
Could you do a revised SOA after having thought about things in more detail, and including the lender names and interest amounts?0 -
Also, if the HP is the car, why is the tax £35*12 = £420? That is neither the standard rate nor the rate including the additional rate (which would be £620.) HP suggests that the car is new enough to be on the 2017 system and not the older one where an emissions based charge could be £395 or £430. If it is in the £395 emission band (Band J), then £420 is probably sensible to cover an April increase.
I would suggest car maintenance should be more than the cost of the tax and not less than half of it as is currently the case.1 -
Exactly this. Your SOA isn't accurate at the moment. It's amazing how different our actual spending can be from what we think - you need to go back through your bank accounts and work out the accurate figures. Once you understand what you are really spending on, then the solution can be figured out.zedonk said:How accurate is your SOA? You say you're struggling to pay more than the bare minimum, but your SOA shows you have £363 left over after making the minimum payments, so that suggests you're spending money on something that you haven't accounted for.
It can really help to go through your bank statements to find out exactly where the money goes. 🙂Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.phpFor free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.0 -
But don't worry. Everyone's first SOA is wrong. Takes a while to get the hang of it and get all areas into the bright light of day.
Well done on having the reality check kick in just before Xmas instead of after.My Debt free diary
https://forums.moneysavingexpert.com/discussion/6492297/10-000-steps-1-step-at-a-time0
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