OH had a lightbulb moment!

MiniLaura

Dont currently live with my o/h, hes a student and stays in halls - home every weekend.

He is doing post grad course of a year, ends in June 08. Guaranteed a years work with salary starting 19k at least.

He was working part time before course and ran up various debts. Now with only student loan as his income - requirements of course and coming home each weekend make having a part time job impossible!

Debts are at:

£3800 left on a loan - paying £129 a month interest 22%
£6500 CC - paying £192 a month repayments -interest rate high but not sure what
£1000 CC - paying £25 - £30 a month

Owes around £1200 in rent to halls

Incomings:

£373 per calendar month from SLC

Gets some cash from mother, nothing steady

She pays for a lot of his food, that he takes with him each week, does washing etc at home

Outgoings:

£192 to CC1
£25-£30 to CC2
£129 to Loan
£35 to mobile
£120 on travel (rough estimation) - weekend journey is approx £20 return - other costs are local bus costs - up to £3 a day
Other living/food costs - no real idea, just whatever is needed - id put about £100 a month at least - ive suggested spending diary but :S

Ougoings total at least £600 a month

He has tried before to switch around credit cards etc - but cant get big enough limit. Loan was a stupid mistake - with a company called beneficial finance- wanted money for computer and got this that and everything added on! Did take some of cc debt away but quickly built up again! A quarter of the original loan amoutn was insurance costs - which hasnt been claimed on, so hoping to get that back.

This brings me to point of the post:

• Consolidate again? His bank are offering to look at loan options for entire amount of credit - going to see them tomorrow - which will leave him with much lower loan repayment level - go to lowest possible amount and then when working can throw chunks at it, would be possibly cleared in a year/18 months

• Refinance loan, and maybe smaller credit card debt, to get a new loan without insurance and better interest rate? Again small repayments and fire chunks at debt - possible repayment holiday of three months, meaning term is over and summer job, thus affording payments.

• Struggle on, add more debt to cards to repay debt and cover all lvinig costs until working? Its maybe 6/7 months to go?

Any other ideas? Want to help but want to make sure im giving best advice possible.

madmich666

Hi, I personally would not advise consolidating the debts. Have you thought about contacting the credit card and loan companies with a list of incomings and outgoings and asking them to lower the monthly payments and freeze interest?? Thats something I have done recently for a family member. Im sure I saw template letters around the site somewhere.

Is it possible to reduce the mobile costs? Also the bus could that be reduced by walking, or at least walking a couple of bus stops along the route then get the bus to reduce the cost.

Hope this helps.

duchy

Does he really need to come home every weekend ? If that is what is stopping him getting a part-time job it might be worth considering how much it is actually costing him in terms of travelling expenses plus lost earnings added together over a month.
I realise you may see less of him-but as you say yourself-it's only a few months to go and it may make a huge difference to those repayments.

MiniLaura

Had thought about phoning, bf completely unconfident about phone and financial matters - will talk tonight and go to bank and see what options are - perhaps could talk in branch re credits cards etc. Had forgotton that option, so thanks! Will get copy of SOA to show them all ready.

Mobile phone - Hes like most men and must have new models all the time, has insurance included that lets him get out contract to get new phone! He gets all texts free at present and thinks hes getting a good deal.

Bus fares is for journey between two citites (150 miles)- cheapest possible fares are £20 a week. Local bus travel - lives about 10 miles ouside city centre so cant be helped there, doesnt use bus while at uni, walks everywhere so that helps.

MiniLaura

duchy wrote: »

Does he really need to come home every weekend ? If that is what is stopping him getting a part-time job it might be worth considering how much it is actually costing him in terms of travelling expenses plus lost earnings added together over a month.
I realise you may see less of him-but as you say yourself-it's only a few months to go and it may make a huge difference to those repayments.

Id happliy agree with you - I think every weekend was too much from start, and have asked him repeatedly to try stay there and get a job to help out. He argues that the cost of travelling home is balanced out by fact he gets clean washing done free, food to take up for following week and gets fed all weekend! Its his first time away from home and wont accept he could survive a lot cheaper by staying put and lving the lifestyle of a skint student!

(Land_of)_Maz

Can you visit him some weekends... Dundee i'm guessing?

MiniLaura

its aberdeen - and ive offered! I get free bus travel too! although he has lightbulb moment in sense of ohno too much debt and nothing to pay it with - its trying to get him to see cut backs to be made! At present he wants everything as it is, but less debt repayments, its how to do it without cutting back on other stuff in this case! maybe other people saying same thing to him will eventually get thru!

Zazen999

Hi
I would suggest that he hasn't actually had his LB moment yet; if those are his answers to your very good suggestions - sorry [not what you wanted to hear - probably].

PENNYWISE_3

why can he not go home every weekend & have part time job in home city?
plenty of people at uni did

needs to be pro active to start clearing debt, sounds a bit like he expecting magic money to reduce debts!

well done 4 helping him

(Land_of)_Maz

MiniLauraRocks wrote: »

its aberdeen - and ive offered! I get free bus travel too! although he has lightbulb moment in sense of ohno too much debt and nothing to pay it with - its trying to get him to see cut backs to be made! At present he wants everything as it is, but less debt repayments, its how to do it without cutting back on other stuff in this case! maybe other people saying same thing to him will eventually get thru!

Or his credit will get so bad that he has no options and no choice but to sit tight and work thru it, that can bring on a lightbulb moment proper, i suspect Zazen is right, it's a wee lightbulb but not a major biggy yet.

When he still thinks he needs a new mobile and insurance etc, and is unable to do his own washing/shopping (he could easily eat for the £20 he's paying for travelling) i think he's got a way to go yet. i think his desire to sort out his debt into something more manageable is commendable but maybe not a lightbulb moment.

Do halls of residence have washing machines?

If you do go to Aberdeen, wave on the way past, i'm in Stonehaven!!!

MiniLaura

True enough - hes realised he cant currently afford the debt he has - im just trying to think of best way to help him, and wondering what best solutions are to the problem at the moment?

If he didnt have the previous credit cards and loan, he would be doing ok on his incoimings/outgoings at present and im just trying to find a way to reduce the debt so he can cope.