New user with 30K debt

Kigu

Yet again more fantastic advice from you Westernpromise. I am so grateful. I have started a new thread thinking this one might get lost and have no replies so was feeling rather - well very - yours has helped me enormously.

I don't have any dead cards around - oh no all mine have debt on them I regret to say.



One question - is it a good idea to move bank accounts for a better deal on ODs? We've been with Nat West since 1978 and I always thought they'd be more sympathetic as we are so long standing. True or wishful thinking?

Kigu

Thanks to Phonix for this advice. I have always taken what I was given but you have shown me that I can negotiate.

tinalives

Hi Kigu,

Regarding christmas - we just explained to everyone that things are tight and that we feel it would be silly to get into more debt just because it's christmas. We got everyone to agree not to buy us anything so that we could concentrate on reducing our debt. Obviously there is always someone who insists on buying you something, but I just explained that it makes us feel awkward if they do that.
On the upside, there turned out to be several people who appeared grateful and agreed that it would make things easier for them too! We've had the same agreement running for the last couple of years now!

Also, please don't start a business whilst in financial difficulty - we started our business without having cleared our debt first and the first two years were almost unbearable (usual stress of running a business, financial worries, extra strain on the relationship etc etc.)

xx

Kigu

Thanks so much for this post. Very useful.

As for the business all the expense is over largely. Now it's onto selling. I have self financed - no loans at all - so it should be an asset. Plus I am continuing to work full time so it's extra. I work at it in the evenings and weekends. Could be a real plus if I get more customers. Web site will be up soon and then fingers crossed. Plus it helps me feel I am doing something positive about all this mess, and that's helping my depression. But thanks for telling me about your own situation - your advice is much appreciated. I do hope your life is on a more even keel now.

Penguin_2

Hi I am new here and have just posted my first thread regarding my debts - £21k.

You have my sympathies as although my debts are not as large I am seriously struggling to pay them off. Please could someone explain to me what "snowballing" is?

I couldn't find where this is mentioned?

Thanks - Penguin

Kigu

Snowballing is where you find some money to pay off your most expensive debt first, get rid of it and then move onto the next. have a look at this site - it's really useful.

http://www.whatsthecost.com/snowball.aspx

The only problem with it is it doesn't let you chooses to move the order around. For example I want to 'do' my overdraft first even if it's cheaper than store cards.

Thanks for your good wishes. I return them to you with interest!

Kigu

I have now - after hearing great advice from a number of really kind folks - got a number of possible approaches. Thing is I don't know which way to go. I would like, therefore, some advice on which route to take.

We owe:

£1692.12 to Laura Ashley.I pay at the moment almost £70 a month to them on a direct debit. This is 35.70 interest and 25.01 account cover.

£1200.25 to Principles. I pay at the moment £50 a month which is 26.79 interest and 17.74 account cover. This isn't a DD.

£560.00 to La Redoute. This isn't a DD. I pay £30 per month.

£7773 to Visa. We pay 18.78 per annum.

£9666 to Access with 1.466 per month.

£9632 to Egg with 1.167 per month.

Our Overdraft is £4400. This also incurs interest.

So we owe £34K but our credit rating is excellent I think. We've never been in trouble.

Route 1 is to ask for a consolidation loan. I'd only really like to consider a flexible one so I could pay it off asap. Cahoot is in my mind - or Goldfish. But how much would they offer me? They would only lend me £25K max. which still leaves a shortfall of 9K. Could I then take out an 0% credit card for 9 months? Or should I leave it and snowball?

Route 2 is to take out a 0% credit card from either Virgin or Halifax - or both. Could I get two? How much would they offer me as a credit limit I wonder? And then snowball. After the 0% period is up could I get another I wonder?

Route 3 is to take out a 0% credit card from Virgin. Move one of our debts from either Visa, Acess or Egg, plus as much store card debt as I can. Close that card and see what they offer a la Rochdale lad.

Any advice would be appreciated. Please be kind.

Penguin_2

Oh OK I will look into that I think.

I can understand why you want to do the overdraft first.

I read your story and really felt for you, I know how bad and depressed I am feeling about my situatio. Moneys too tight to mention!! I just can't really see a way out of it at the moment.

Kigu

I'm the same - I am seeing the doctor on Thursday as I am so worried. I know I/we are to blame (altho some was unavoidable) but that doesn't help the feelings of depression and panic. I think once I make a start I will feel better. We are both in this limbo of acknowledging the problem but not yet doing anything about it. Things will get better for both of us I am sure. Thye have to!

westernpromise

Kigu wrote:

One question - is it a good idea to move bank accounts for a better deal on ODs? We've been with Nat West since 1978 and I always thought they'd be more sympathetic as we are so long standing. True or wishful thinking?

All I know of NatWest is that they are chiselling scrotes...about 17 years ago I was in my first job and house and went £5 overdrawn the day before payday. So they wrote me a letter pointing this out, and charged me £20 for it. That charge ensured I went £10 overdrawn the next month -- which enabled them to send me another letter. For about a year my 'overdraft' was in fact their charges. They took about £400 in charges off me at a time was that was a month's net pay.

I hate banks :-) and have been avenging myself on the bugg3rs ever since.

To answer your question, you can have more than one current account. You just leave the NatWest account open, but inactive. When the promo deal ends with the otehr bank, you go back to NatWest. If you need to fill in any forms where the question is 'years with current bank' you just put '27', i.e. you answer as though NatWest is your main account.

NW will eventually get arsey if they can see an overdraft but no money coming in. So you do need to drip a bit of money into there now and then and make sure the overdraft reduces gradually. It keeps them happy and meanwhile you are hopefully saving a few quid.

Keep an eye out for Martin's updated 'best current account' articles that come out now and then, he is very quick at picking cheap O/D deals up and evaluating them when they come out.

Incidentally, I assume you've done all the usual stuff around optimising the household bills, yes? The best deal two deals I've had off this site are phone-related. One is https://www.call18866.co.uk, which reduces the cost of almost all calls to 2p. The other is https://www.mobileshop.co.uk, where I have just got a mobile phone contract for a year with no line rental, 1,000 free minutes and 100 free texts a month. Unless I've missed something, it's basically a free mobile service as long as you can provide your own handset. Taken together, I reckon those have saved me a good £1,000 a year.

Another way of saving a few quid is to subscribe to any newspaper you read rather than buy it as you go along. Not all papers do this, but The Daily Telegraph deal is £72 a year on this basis. Buy it as you go, and it's about £300 a year.