your help required to clear debts

debtincumbria

Hi,

Let me introduce my situation. I currently living with my partner at her parents and we are struggling with our money situation.

I have numerous debts from a failed business so have been unable to get credit for many years. From reading on this forum it seems that bankruptcy is the only vialble option for me to be able to clear these.

My partner has the following debts, some of which are student debt and some of it is credit we have taken in her name as I was unable to do so.

Credit cards-

Card		limit		balance	rate		payment

Barclaycard 	600		704.74	17.9		122
Rbs Visa	1500		1488.11	17.47		33
Hsbc Visa	1250		1198.12	17.47		35
Egg Visa	1500		1559.63	13.9		59.63 inc payment protection

Store cards

Ikea		900		717.74	12.9		35.89

Overdrafts

HSBC		1250		1243.72
RBS		1600		1613.64
Yorkshire	750		892.80

Loans

Loan		9367.80		7806.5	10.9		156.13 inc payment protection
Car loan	9105.40		7597	10.8		137.94
Computer	1431.36		1013.88	19.8		29.82
Laptop 1	849.98		849.98	0		nothing till 29 dec 05 then 29.5%
Laptop 2	1365.24		1319.78	26.9		22.73

Totals debt as of 21.7.2005 £28005.65

It seems that we are £320.81 over our limits in total and I’m sure we will be able to get this down. However what we don’t have is a plan to be able to manage this debt so that it can be paid off as soon as possible and this is what I need the help with. We have moved from our rented house 2 months ago to stay with my partners parents in order to try get on top of things and increase the amount of money we can pay off. Both of us work full time and she brings in a average of £600 I’ll be getting a average of £1020 per month.


We also have a small boost of £475 bond and £200 from the sale of some old bits and bobs on ebay. This is due to clear by the weeks end.

I would welcome any advice

Thanks in advance
HM

mountainofdebt

Well you seem to have done most of the ground work already in gathering all your debts but do you have any other expenses???

To be honest I think your best plan of action is to get all balances within the limits - no point in getting hit for going over your limit with unnecessary charges.

Then visit https://www.whatsthecost.com/snowballing.....insert your figures and it will tell you which debt to throw any extra money at.

debtincumbria

Thanks for the link i'll have a bash at it.

ffs

The longer you struggle to make repayments the longer your debt will increase. The sooner you default, and seek professional advice, preferably from the CCCS or any other non fee charging agency, the sooner you will be able to reverse this situation. Although it may take some time, your creditors will probably stop charging you interest providing you maintain the payments you make through a DMP.

Do not sell important possesions in order to replace income, this only prolongs the situation, and does nothing to help the underlying problem. One day you will simply run out of things to sell, and you will be no better off for doing so.

Do not borrow from friends or familly, once again, this will only prolong the situation.

I have made all the mistakes I've mentioned above, I hope you can learn from my stupidity.

Little_Miss_Winner

You owe nearly £10,800.00 for a car, and 3 computers! Why do 2 people need 3 computers?
And can you not sell the car, and get a cheap run-around for about £500 ? It would only be for a couple of years.
Just by doing these couple of things it would nearly halve your debt.

I am not a financial expert I am sure you will get lots of constructive advice on the post soon but heres my opinon;-

You need to apply for a new credit card, with 0% interest and put all the credit onto just this one card. Virgin do one, they also do something whereby they will pay money into your account so that you can pay the overdrafts off, and this figure is added to the card.

If you applied for a card and paid all your credit cards off, and overdrafts you would have approx £8,500.00, but this would all be interest free for 9 months, at the end of the 9 months you just switch cards to another 0% lender. This would mean that you no longer have 7 debts to pay (cc & OD) but just one.
This would mean that most of your debt is in one place, and would be easier to pay.

You will probably save fortune in interest payments only.

Something to think about?

delboypass

If you are staying at your folks you will probably have about £1000 a month to throw at these debts.

I doubt between 2 of you you would spend more than £400 but i allowed you up to £600 but you should really try and limit this to reduce all your credit cards as quickly as possible.

Definately snowball these debts and if you are paying them off £1000k a month then should be free in 2 years time.

If you are really struggling, then i would ask the creditors to freeze interest on your acounts but this will probably result in a bad credit history.

If you can, whilst snowballing, move the money between 0% cards so you can eliminate interest payments.

What you really must do is stop spending as much as you can. YOU MUST STICK TO A BUDGET (VERY TIGHT BUDGET)!!!

Its good to get rid of things on Ebay - i do it all the time and its amazing how much money you can recover to reduce your debts. i think ive sold off about £2k worth of stuff over 160 transactions.

Get rid of these laptops, why do you need 2?
Do you need hte car - a lot of expense - i cycle everywhere or walk. 30 minutes walk and i can beat my GF who drives - CRAZY BUT TRUE!
YOU HAVE 2 LAPTOPS AND A COMPUTER??? Hmmm maybe time to reduce these down to 1. they all do the same thing to be fair!
If you have bought that second laptop recently you can return it under the cooling off period. Tell them if they dont return it, your going to default on the payment - i reckon they will take it back quickly! (almost 1k gone already!)
Those laptops have very big rates on them as well.

Next time try saving up before buying luxury items and you will find that you dont get caught in these circumstances.

If you can, can you post a total incomings and outgoings for a month

Cheers.

Malestrom

debtincumbria wrote:

I have numerous debts from a failed business so have been unable to get credit for many years.

My partner has the following debts, some of which are student debt and some of it is credit we have taken in her name as I was unable to do so.

So you have listed your partners debts but not your own. Do you repay into 'your' debts from your wages every month? If you post all of your debts too, as well as your full monthly income & expenditure then we'll be able to offer better advice.

From what we've seen so far though I really have to agree with the other posters. You need to sit down and decide whether having three computers and a flash car is worth the indignity of living at your in-laws for the next five or ten years. :eek:

fairylights_2

I too am completely confused by the need for three computers, not least that one of the laptop loans has an interest rate of 29%. You need to deal with that debt somehow before it starts accruing interest ...

I'm only new at this, but you seem to have so many debts that are so close to limit, or just over them, but lots of things you DON't need to spend on. Get rid of the car and two of the three computers, and that'll help you sleep easier, even if it doesn't clear everything. It'll also give you breathing space to work out what you need to do next.

debtincumbria

Hi again,

delboypass wrote:

Do you need the car - a lot of expense - i cycle everywhere or walk. 30

I work 20 miles away, and I pick my partner up from work who works 20 miles away in the other direction, She gets a lift in at the moment.
Plus I visit my kids once a fortnight that live 90 miles away.

potogold wrote:

Why do 2 people need 3 computers?

The computer is used for my ccna that I am studying for, my partners laptop is for her studyies as she needs a portable pc. We helped her sister out earlier this year as her laptop she was using at uni broke and was £300 to repair, none of us had this so we got a computer for her on credit.
As for the flash car then you have not seen it, it may be dearer than a 2nd hand one but at least its very very economical (60mpg) cheap to run and has a manufactureres gtee on it, plus i got nearly £1000 of it (staff discount).

We have cut our expenditures right down and now are finding that due to reducing out living expense's we now have cash to service this debt and was looking for assistance in where we would be best putting this cash to pay off the debt in the shortest most efficient way.

Malestrom wrote:

So you have listed your partners debts but not your own. Do you repay into 'your' debts from your wages every month?

I do pay 'my' debts back each month where I can I have reduced 'my' debt from £30,000 down to £15,000 over 4 years though My current job does not allow my to do the amount of overtime I was doing to achieve the same results as previous years. I am however constantly trying to find other employment to be able to though every one I have spoke to including baliffs and the inland revenue have advised me that bankruptcy would not only be beneficial to myself as I would be able to start getting my life put back together but It will also benefit my health. I never wanted to go bankrupt I have sweated and grafted to get where I am now working 30 days 12 hour shifts back to bak where they were available. I now have to look at how long I can keep that up and I can no longer find the energy to do that It is the only option for me and I should have given it more consideration 4 years ago but I fooolishly thought I could pay everything back.

m

Malestrom

Bankruptcy would clear your debts but it won't clear your girlfriends unless you are both planning on becoming bankrupts. Also, until you are discharged (usually 12 months) you will have to pay your creditors each month via the official receiver so that they recoup some money from the bankruptcy. The amount you pay is decided by the OR and it would be illegal to use ANY of your wages towards your girlfriends debts until discharge. So, for 12 months you are unlikely to be any better off.

I don't think its foolish that you thought you could pay it all back, I think its very honourable and I commend you for your efforts so far. If you go bankrupt now then you have spent the last 4 years of your life working like a dog for nothing but that is your choice of course. Just my $0.02, no offence meant.

debtincumbria

we are not looking both to go bankrupt, my partners debts are managable now. Thanks to the chap that posted the info on snowballing I am now wiser as to where to put our cash to get them paid off.