Debt Fighter - needing advice!

Debt_Fighter

nomoneynomoney wrote: »

I was in a similar situation a few years ago, I managed all the minimum payments but I was living off credit. It was really hard to make the decision to default on everything but the stress of juggling it all was killing me. What should have been a nice time of life with my 3 young children wasn't - it was a nightmare.
I contacted Consumer credit counselling and they helped me to set up a DMP.
Payplan will help you to do your budget and will advise you how much you should allow for food clothing etc etc. and I think they have recommended allowances. I know that for a family of 5 I can allow £70 for clothing and footwear each month and food is nearly £500. When I started my plan I wasn't sure how much I spent on food etc so it was much easier for them to advise me of a realistic amount.When I saw your budget I did think £200 is much too low - where do you shop!

If you do not allow enough for the essentials then you won't be able to make the monthly payment into the plan. If you find that you are manageing then you can always increase the amount you pay when your reveiw is due.
I try to increase my payments each year so that everything is paid off quicker.

I started at 90k debt and now I'm at 70k

Hi, thanks for the reply, and well done to you - making great progress.

To be honest, I looked at my last statement to see how much we spent on food. It was £200 in Tescos. But that didn't allow for when we go to Farm Foods (once every 3 months) and spend £50 on frozen foods. So £200 probably isn't a realistic figure. £300 would maybe be more accurate.

But because we were just buying it on cards we didn't really know how much it was.

The best way to work it out accurately would be to go through 6 months of statements and add all the food shops up, then divide by 6 to get an average. I will do that later.

Plus, we have a new baby due in May, which will increase the cost (by a fair bit with nappies and things).

I think by allowing £600 or £650 for the plan, it will leave us with £200 food, £150 petrol, £100 other as listed, and also another £200 odd for us as a cushion until we get used to what we actually need to spend.

Once we've settled into the plan we can then increase payments.

tigerfeet2006

Don't forget to join your local freecycle group. This can be useful if things start to breakdown. https://www.freecycle.org

Donedoingdebt

Debt_Fighter wrote: »

The important thing for us is we are now determined to sort ourselves out before it got too bad. By that, I mean so far we haven't missed a single credit card payment - our credit history is unblemished.

Please be aware that once you enter into a DMP, then you are breaking the terms of your credit contracts & therefore your creditors will start defaulting your accounts.
Your credit file will then be shot to pieces for a further 6 years.
I'm not saying don't do it as it appears to be your best way forward. I'm just pointing out one of the consequences.

lindens

I notice that you have some 0% cards with some credit left on them. If they are 0% for balance transfers then can you transfer some of the debt of your highest % cards onto those 0% cards. Then pay off minimum on 0% cards only, and throw all your money at your highest %card.
Try www.whatsthecost.com
a snowball calulator and play around with the figures and interest.

hooby_groovy

hooby groovy - I'm dying to know how on earth you can have an energy bill of £30 per month! Please enlighten me!

No problem!:

1. Set your thermostat lower and keep going! - mine is on 15 and is that all the time, if its cold put on a jumper. We only have the central heating between November and March.
2. Time your heating - is your heating on when you are out, adjust the heat to mornings and evenings when its needed most (kids bath time for example). Adjust your heating at weekends so its on later.
3. Turn off all un-needed lights and appliances, if you're on the computer you won't need the TV on, minimise washing and only tumble-dry when absolutely necessary.
4. Turn-everything off at the mains when not in use - phone chargers and TV's draw power even if not being used, so pull the plugs from the wall.
5. Insulate - I've just paid to re-insulate my loft (grants are also available), this will repay the investment in 18 months, I've also lagged all the pipes, renewed the hot water tank insulation and had cavity wall insulation. All my lightbulbs are low-energy.
6. Think about your power - we had outside lights at Christmas (low-energy of course), I put them on a timer to go off at 10.00 - how many people had lights all night!

Thats just a starter, really its about thinking about how we use power and what we can save. In this country we're too wasteful and all we do is line the pockets of the fatcats in the energy industry.

We've got our monthly bill to £30, but I'm not finished yet, 2009 will see us get solar power (dependent on me getting a deal that gives me a decent return on investment), that should bring our energy use down again. In the meantime I'll still invest in lighting that uses less power and appliances that are energy efficient.

In terms of our family, we actually have windows open in cold spells, we don't miss the artificial central heating heat and now find houses that are heated stuffy. We very rarely get colds.

It can be done, you'll be like a mini-dictator at first parading around the house turning off lights and unplugging appliances that aren't being used, but I'd rather keep the cash in my pocket than British Gas's.

Debt_Fighter

Donedoingdebt wrote: »

Please be aware that once you enter into a DMP, then you are breaking the terms of your credit contracts & therefore your creditors will start defaulting your accounts.
Your credit file will then be shot to pieces for a further 6 years.
I'm not saying don't do it as it appears to be your best way forward. I'm just pointing out one of the consequences.

Fully aware of that yes. But i have no intention of getting credit anyway, and it's the only way we can get out of this now, so we're all for it. No point carrying on struggling to make just the minimum payments.

We've done that, and the last couple of years the debt has sayed at around £40,000.

lindens wrote: »

I notice that you have some 0% cards with some credit left on them. If they are 0% for balance transfers then can you transfer some of the debt of your highest % cards onto those 0% cards. Then pay off minimum on 0% cards only, and throw all your money at your highest %card.
Try www.whatsthecost.com
a snowball calulator and play around with the figures and interest.

There is little spare balance on the 0% cards to do this.

Debt_Fighter

hooby_groovy wrote: »

No problem!:

1. Set your thermostat lower and keep going! - mine is on 15 and is that all the time, if its cold put on a jumper. We only have the central heating between November and March.
2. Time your heating - is your heating on when you are out, adjust the heat to mornings and evenings when its needed most (kids bath time for example). Adjust your heating at weekends so its on later.
3. Turn off all un-needed lights and appliances, if you're on the computer you won't need the TV on, minimise washing and only tumble-dry when absolutely necessary.
4. Turn-everything off at the mains when not in use - phone chargers and TV's draw power even if not being used, so pull the plugs from the wall.
5. Insulate - I've just paid to re-insulate my loft (grants are also available), this will repay the investment in 18 months, I've also lagged all the pipes, renewed the hot water tank insulation and had cavity wall insulation. All my lightbulbs are low-energy.
6. Think about your power - we had outside lights at Christmas (low-energy of course), I put them on a timer to go off at 10.00 - how many people had lights all night!

Thats just a starter, really its about thinking about how we use power and what we can save. In this country we're too wasteful and all we do is line the pockets of the fatcats in the energy industry.

We've got our monthly bill to £30, but I'm not finished yet, 2009 will see us get solar power (dependent on me getting a deal that gives me a decent return on investment), that should bring our energy use down again. In the meantime I'll still invest in lighting that uses less power and appliances that are energy efficient.

In terms of our family, we actually have windows open in cold spells, we don't miss the artificial central heating heat and now find houses that are heated stuffy. We very rarely get colds.

It can be done, you'll be like a mini-dictator at first parading around the house turning off lights and unplugging appliances that aren't being used, but I'd rather keep the cash in my pocket than British Gas's.

Aside from point 5 - we already do all of this. I'm very strict on things being turned off.

We don't have double glazing, which obviously means the heat escaped easier, but we still don't rack the heating right up. I think our thermostat is on 17.

We can't now afford double glazing or insulation, but our house is always nice and warm even with the heating off - we cook by gas, which helps to warm things up. And we wear jumpers!

Our energy bills used to be around £55 per month until the prices shot up (I think 2 years ago) and our actual usage is now around £80.

TakeittotheLimit.

Hi Debt fighter:hello:
Much like you I`ve been paying the mininum payments and thought I could cope but was just fooling myself, a recent spell off work and couldn`t meet the payments so my once good credit record now shows late payments etc.

Have just decided to go with CCCS and start a DMP and the figures you quoted was much the same as myself even down to having nearly as many credit cards lol.
Found CCCS debt remedy item easy to fill in and it will give you an idea on how much you will be expected to pay on the DMP.

Debt_Fighter

Well I had the call from our Payplan advisor yesterday, and all went well.

I must say how friendly and helpful they are. Debt is something most feel ashamed of - me included. I felt I had failed my family because I was forever wondering what I won't be able to buy my kids as they grow up, and that I wouldn't be able to give them the standard of living we could a) afford and b) they deserve.

But after a 1 hour phonecall, it felt like the world had lifted off my shoulders with the encouragement I received. And that's without any money being paid off yet!

Our debt free date is June 2014, but I'm already convinced we can have it gone before then as the advisor allowed for things "as standard, according to the guidelines they are given" which I know we'll not be spending on. £20 a month for haircuts is one example.

A huge thank you to everyone here who has taken the time to reply to my questions - it's been invaluable.

We're now looking forward to tackling it head on and getting it sorted.

In the wierdest possible way we're both quite excited about it - sounds wierd, but knowing we've taken that first step, which I personally think is the biggest, is a huge comfort.

Thanks again, and I'll keep you updated!

:j

Debt_Fighter

Just a quick question.

I told my Payplan advisor that I had recently transferred £5000 from one of my cards to the other on a low interest rate for life offer.

He said that because of this, we need to wait 3 months before our plan can start as that is the time limit set out in the guidelines.

Not a problem with that, but does this also include purchases on cards, or is it just balance transfers?

If so we might struggle since we have been paying for our shopping on a card and have no spare money until our plan starts.