How do I pay off my overdraft?

kate705

Hi Cat,

I will put up the SOA later when I have found all my info, definitely!

We got into a habit of just spending....and not being careful. We converted our loft to another bedroom (although it isn't finished). We also went to NY last year with my son and daughter, I know what you must all be thinking! Our children are 16 & 22 but my son is not working at the moment, when he starts to contribute our situation will improve. My attitude to money has changed since I realised how wasteful we had been, I have started to use quidco, switched gas & electricity suppliers, have done 1 mystery shopping assignment and have tried to reduce shopping bills.

I have a long way to go.....thanks for the encouragement.

Verbatim

Like everyone else I'd agree that putting your overdaft onto your mortgage is a very bad idea. Firstly you're converting unsecured debt to debt secured on your house. If you can't pay through redundancy or illness you're in danger of losing your house. secondly you're committing to paying interest on the whole amount for the entire life of the mortgage. I expect the bank will be very keen for you to do this as it's very good for the bank but awful for you. It makes whatever you spent the overdraft on a very expensive purchase when you work out how much the compound interest will be.

count rostov's suggestion is a good one if your credit rating is good enough to get a low lob or 0% cc and transfer the debt. BUT with one proviso don't use the card to make any purchases or get cash. If you do they will take the payments you make to repay those first and the usual rate of interest will be applied to them too. Read Martin's pieces on credit cards. Cut them up as soon as they come in.

Also, as a previous poster said you need to understand how you're running up these debts, presumably spending more than your avvailable income. On the bright side once you have a sustainable budget and your debts are paid off you'll have a lot more available income as you won't be paying all the interest charges.

I hope it goes well at the bank and don't let them talk you into anything not in your best interests. Remember they're there to make money out of you not to help you.

kate705

Count, thanks for the information on Credit Cards I will talk to my husband this evening and decide on a plan.

I am so ashamed to tell you that during our reckless years we had 2 current accounts with Lloyds with the idea that 1 would be used for bills and 1 for living costs. We ran up overdrafts on both accounts and were charged interest on both. I had a 'LBM' at around this time and put both accounts together in an account that charged less interest (Premier Account, Lloyds). This is how we have ended up with an £8000 overdraft. I must have been deluding myself that because we didn't use credit cards we were ok!!!!!!

It has just been bad financial management really hasn't it? I feel much more positive today and I am going to apply for some jobs closer to home that will allow me more time for my family and I can take time for meal planning etc.
BTW I looked at your original post, good luck with the wedding and I love your lifestyle of free food...I have just thrown a load of nettles away...Dam!!

RAS

:spam: :spam: :spam: :spam: :spam: Debtfreelee reported

kate705

Hi Verbatim,

Thank you for looking at my situation.

I am determined not to add any more debt to my Mortgage and will not spend anything on the credit cards that I move the balance to..(I hope they accept me I have never had one before). I havn't a clue about cards so I will spend a long time later reading up on what to do in the credit card section. I am going to the bank on Tuesday with a new attitude this time, I feel wiser to their game! Your advice is much appreciated, Kate x

count_rostov

As Verbatim says, the vital thing is that you do NOT spend on the credit cards as the interest on purchases is really high and once you're out of the overdrafts you musn't sink in again. If you want advice on thrifty meals etc, whip over to the Oldstyle board, they have loads of ideas and there are some really resourceful cooks there. Lots of people with families bulk cook for the freezer so that they have ready meals if they're busy at work, but they're cheap and healthy.
Thanks for the wishes for the wedding - it's now only 3 1/2 months away and we need to get organising!
Lastly - ignore the debt management post above, they're a fee-paying organisation and I've reported them.

kate705

Here it is!!

Statement of Affairs and Personal Balance Sheet[/b]

Monthly Income Details
Monthly income after tax................ 1100
Partners monthly income after tax....... 1600
Benefits................................ 117.09
Other income............................ 0
Total monthly income.................... 2817.09

Monthly Expense Details
Mortgage................................ 809
Secured loan repayments................. 160.26
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 109
Electricity............................. 36.5
Gas..................................... 36.5
Oil..................................... 0
Water rates............................. 34.8
Telephone (land line)................... 34
Mobile phone............................ 35
TV Licence.............................. 11.61
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 500
Clothing................................ 20
Petrol/diesel........................... 200
Road tax................................ 25.40
Car Insurance........................... 37.83
Car maintenance (including MOT)......... 60
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 25.33
Contents insurance...................... 0
Life assurance ......................... 23.08
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 16
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2329.31

Assets
Cash.................................... 0
House value (Gross)..................... 200000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 201500

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 97000....(809)......6.19
Secured Debt.................. 8342.....(160.26)...15
Total secured debts........... 105342....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Overdraft......................8100......70........8
Next...........................350.......40........0
Total unsecured debts..........8450......110.......-

Monthly Budget Summary
Total monthly income.................... 2,817.09
Expenses (including secured debts)....... 2,329.31
Available for debt repayments........... 487.77
Monthly UNsecured debt repayments....... 110
Surplus(deficit if negative)............ 377.77

Personal Balance Sheet Summary
Total assets (things you own)........... 201,500
Total Secured debt...................... -105,342
Total Unsecured debt.................... -8,450
Personal net worth...................... 87,708

kate705

The loan is not secured but the SOA form wouldn't let me move it so the Lloyds loan for £8342 is in the wrong column. I don't know the exact interest on the loan, it will not show this on internet banking. I think it is 15%!!

kate705

Hi Everyone has anyone got any advice about my SOA and spending? Thanks Loads xx

Jaymz

Hey Kate,

Not an expert like some of the people on here but have been in debt and got myself out of it in the past

Your food bill is very high, how many people is it for? With meal planning and shopping carefully you could probably cut that nearly in half.

I'm sure others will be along soon to help