More debt to clear debt

John1298

fatbelly said:

John1298 said:

Hi everyone,

I have a situation.  I am currently in around 50k of debt.  Most of it I am paying a small token gesture, and interest is frozen.
However, 10k of it I am paying £700 a month, I can't get it lower (court ordered and family) and it is a chain around my neck, and I can't think of anything else. I am working 7 days a week, often 7am-9pm.  It also means I have zero left end of month.
The kicker is, in April I will have another £230 to pay monthly (new council tax bill).  

I have the option of taking on £10k more debt over 10 years, this would clear the £700 a month, and only cost me £170 a month.   This would free up £530 a month, which would be some towards clearing the other debt and the council tax etc, with even the possibility of saving a bit as I have no savings and no way to save.  However, it will of course cost me extra long term, but I could overpay to limit that, as my earning potential is increasing.

My gut feeling (and after playing with calcs) is to take the £10k, pay off the urgent debt and use the difference to get myself back on an even keel.

But this would increase my debt short term.

What would you do?

50k is a significant amount of debt, and token offers are not a sensible long-term strategy

You say that you have a court order to pay £700 on a 10k debt. Is that a ccj on a normal credit debt, or something different? You can ask the court to vary the order if £700 is not affordable. £170 would be acceptable if justified by the figuresThat would be one option.

There is no point trying to pay debt with debt due to interest.

The better option is to look for a strategy that deals with all your debt. Maybe run things past National Debtline

Thank you for your reply.

The token amount was suggested by stepchange.  Additional information, I have been attacking the debt and already cleared £18k, I am just taking on one or two at a time.

The court ordered debt was £340 (the Council Tax), I don't think it is a CJJ, it went to court, then the debt company contacted me for payments.  They said I had no choice, I pay £340 or they will come round and start removing things.  I have had no say in this one. It will be clear in 10 months and frankly, I can't wait

Brie

I think you need to have another look at your SOA.  It's a good first stab but doesn't look accurate or reasonable to me.  

You have nothing down for groceries or child related expenses and there must be some.  No child benefit?  No clothing or haircuts?  No water rates to be paid?

You have £20 for TV licence when it's more like £15 a month.  Do you actually need a TV licence??

And in your opening post you mention something about extra CT that needs to be paid in April.  Why?

If you have another go at this with the help of the last couple of months of bank/card statements that will give us a better view of things.

John1298

Brie said:

I think you need to have another look at your SOA.  It's a good first stab but doesn't look accurate or reasonable to me.  

You have nothing down for groceries or child related expenses and there must be some.  No child benefit?  No clothing or haircuts?  No water rates to be paid?

You have £20 for TV licence when it's more like £15 a month.  Do you actually need a TV licence??

And in your opening post you mention something about extra CT that needs to be paid in April.  Why?

If you have another go at this with the help of the last couple of months of bank/card statements that will give us a better view of things.

Thank you.
The SOA is accurate, it is because I have seperate finances with someone, and have only put in my responsibilities.  I cant change that (and would be happy to share why in DM).

The council tax due in April is the council tax bill that will shortly come through the door and need to be paid monthly.    

Smudgeismydog

I’m guessing your reference to ‘separate finances with someone’ is somehow why you show 2 adults in the household but only 1 income? 

John1298

Smudgeismydog said:

I’m guessing your reference to ‘separate finances with someone’ is somehow why you show 2 adults in the household but only 1 income? 

Smudgeismydog said:

I’m guessing your reference to ‘separate finances with someone’ is somehow why you show 2 adults in the household but only 1 income? 

Yes.  It is quite complicated sadly

fatbelly

So there is a Liability Order on the council tax debt and you have agreed with the bailiff to pay £340.

If you wanted to pay less you could see if you can talk to a decent human being at the council or just pay what you can afford and ignore the threats.

Either way you do need a long-term strategy

itsthelittlethings

John1298 said:

Smudgeismydog said:

I’m guessing your reference to ‘separate finances with someone’ is somehow why you show 2 adults in the household but only 1 income? 

Smudgeismydog said:

I’m guessing your reference to ‘separate finances with someone’ is somehow why you show 2 adults in the household but only 1 income? 

Yes.  It is quite complicated sadly

Are the debts yours or are they your partner’s too, and if they are your partner’s as well, can they afford to contribute?

John1298

itsthelittlethings said:

John1298 said:

Smudgeismydog said:

I’m guessing your reference to ‘separate finances with someone’ is somehow why you show 2 adults in the household but only 1 income? 

Smudgeismydog said:

I’m guessing your reference to ‘separate finances with someone’ is somehow why you show 2 adults in the household but only 1 income? 

Yes.  It is quite complicated sadly

Are the debts yours or are they your partner’s too, and if they are your partner’s as well, can they afford to contribute?

Just mine, its more a mental health thing

Brie

John1298 said:

Brie said:

I think you need to have another look at your SOA.  It's a good first stab but doesn't look accurate or reasonable to me.  

You have nothing down for groceries or child related expenses and there must be some.  No child benefit?  No clothing or haircuts?  No water rates to be paid?

You have £20 for TV licence when it's more like £15 a month.  Do you actually need a TV licence??

And in your opening post you mention something about extra CT that needs to be paid in April.  Why?

If you have another go at this with the help of the last couple of months of bank/card statements that will give us a better view of things.

Thank you.
The SOA is accurate, it is because I have seperate finances with someone, and have only put in my responsibilities.  I cant change that (and would be happy to share why in DM).

The council tax due in April is the council tax bill that will shortly come through the door and need to be paid monthly.    

ok - perfectly understandable.  and no explanation needed.

But.  TV licence.  Do you need it?  Does the other person pay for Netflix, Sky, whatever and does the household only watch those non live services and not use iplayer?  If so, you don't need a TV licence.  A lot of people do so un-necessarily.  But if the child is always watching CBBs or whatever live or if you like to watch Match of the Day or whatever is showing live on the Arts channel then best to leave it in place.  

ManyWays

is the house in your name only? 
have you looked at switching the mortgage to interest only for the next 6 months? This isnt normally a good idea at all but it is a LOT better than this large secured loan.

what is this family loan that they are charging you interest on? 

have you let the bailiffs into your house, or just made an arrangement without that?

a 10k 10 year secured loan at (I make it) 17% interest needs to be avoided. I am sorry but that SOA is bizarre, it may reflect your complicated situation with your partner, but you cannot assume that this will carry on for the next 10 years. So you cannot risk your house like this.