Over 20K in debt, but still smiling (just)!

Johnny_Chaos

** UPDATE ** STATEMENT OF AFFAIRS **I've tried to do this as best I can, and when I've been unsure I have tried to round UP. I have not included my girlfriend's incomes (we live together) and so with regards to joint expenditure (mortgage, council tax, building and contents ins, etc) I have just included my half which goes into a joint account we have. Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1350
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1350

Monthly Expense Details
Mortgage................................ 425
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold flat)...... 0
Council tax............................. 50
Electricity............................. 15
Gas..................................... 25
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 15
Mobile phone............................ 35
TV Licence.............................. 10
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 150
Clothing................................ 20
Petrol/diesel........................... 60
Road tax................................ 10
Car Insurance........................... 35
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 15
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 5
Haircuts................................ 12.5
Entertainment........................... 60
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1002.5

Assets
Cash.................................... 0
House value (Gross)..................... 170000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 171000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 153000...(425)......9
Total secured debts........... 153000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Bank Loan......................12500.....197.......7.2
Halifax Credit Card............5000......100.......19
Egg Card.......................1500......35........21.9
Barclays Overdraft.............3000......0.........0
Total unsecured debts..........22000.....332.......-

Monthly Budget Summary
Total monthly income.................... 1,350
Expenses (including secured debts)....... 1,002.5
Available for debt repayments........... 347.5
Monthly UNsecured debt repayments....... 332
Surplus(deficit if negative)............ 15.5

Personal Balance Sheet Summary
Total assets (things you own)........... 171,000
Total Secured debt...................... -153,000
Total Unsecured debt.................... -22,000
Personal net worth...................... -4,000

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========This was my original post:

Yep, I’m 22K in the red, but still managing to just about sleep soundly at night!

Here’s what I owe:

12.5K Unsecured loan APR 7.2% Over 7 years. Only took this loan out last year so still have a long way to go.

5K Halifax Card 19.5% APR and 29% on cash advances, which admittedly I have done a few times.

1.5K Egg Card 21.9% APR Making min. repaying of about 35 pounds each month.

3K Barclays overdraft. Not sure of the APR, but my wage gets paid into this account each month, and by the end of the month I am up to my limit again.

So, in total, that’s 22K of unsecured debt!

I’d love to be able to wave a magic wand and get rid of the whole lot, and then make a fresh start, but I know that’s not going to happen: so instead I intend to get off my backside and do something about it!

Things going in my favour are a decent credit rating (no defaults, CCJs, etc) and I am in stable employment (22K a year, rising to 24K in September). I am a primary school teacher, and I’m guaranteed a pay rise for the next few years.

So, I’m paying about 350 per month in repaying my debts (only the minimum on the credit cards), and with mortgage, bills, petrol, etc, things are very tight (often I have to use my credit card to get by in the last week or two of each month), so ideally I’d like to decrease the amount I pay, and then maybe start paying more when I get a wage rise.

Do I get a whopping consolidation loan and pool it all together? Or do I stick with the 12.5K loan, and just try to pool the rest together in a low APR loan, and then maybe start paying more into my loans when I wage increases? Or is there another option, like an IVA or something (bearing in mind the detrimental effect this would have on my credit rating)?

Any advice would be appreciated, and – as I’m now a member of this forum – hopefully I’ll be able to offer others advice in the near future.

Johnny Chaos

tealady

Hi If you put up your SOA (see the sticky at the top for new people) them we can help you find ways to cut back and clear your debts. there is loads of advice on here but you need to pick whats right for you.

hypno06

Hi there, and welcome aboard!!

Please think very carefully about consolidating - it rarely rarely works.

How about looking at the snowball calculator at www.whatsthecost.com - it is a nifty little tool that gives you an initial debt free date based on your minimum repayments........

......then you start working out what you can afford to chuck at it as an extra, add that in and see what the new debt free date (DFD) becomes!

It is a real motivator, I find, because even throwing an extra tenner a month can make a real difference, without you even really noticing!

An IVA is probably NOT the way to go, and for most people it is the wrong thing - and a debt management plan, although MAY be the right thing, would trash your credit rating, so perhaps go for the "slog your guts out" route to start with and see how you go.

As it is now the end of the month - join in the "make £10 a day in June" challenge that runs on this board - the title says it all, but if you can make an extra £300 in a month, (and many of us are successfully doing this challenge month after month after month) that can be a very useful amount of extra "income" which can be either thrown at the debt to get that DFD brought forward quicker, or can be used for "treats" or savings etc!

poppyg_2

Well done and posting and welcome to DFW!

Yeah please don't consolidate it really doesn't work

If you post up a full statement of affairs with all your incomings and outgoings am sure people will be able to give some great advice to get those debts down

Bismarck

NO to the consolidation loan until you completely run out of options...it may be fiddly but keeping off that and an IVA is best for the long run. If nothing else, you'll be paying interest up front and limiting your options later down the road....many are the people who've consolidated and regretted - often because circumstances have changed....which they will!

Well done for your positive attitude - it will help a lot!

cheers

Johnny_Chaos

Thanks for those who've replied to my original post. I will post a full SOA later today.

Bismarck wrote: »

Well done for your positive attitude - it will help a lot!

I think a positive attitude is important. I think that, as people, we CHOOSE our reaction to our problems. I've known people with debts considerably less than mine, who sit and wallow in self-pity; and - worse - people validate their pity. If you tell someone that you're whatever-amount in debt, then they'll often say how sorry they are for you and wish they could help (and the real sadists will tell how good they are with THEIR money, and how they don't believe in credit cards, blah blah blah).

The other option is to say I'm not going to let this depress me - I'm going to get off my backside and do something about it. You can eventually turn your situation into a strength: it's an opportunity to learn about financial saviness and about how to make savings and extra income, and in the future you may be able to offer practical tips to others in a similar situation.

Anyway, I'm waffling. So thanks again to those people, and I'll get that SOA posted soon for you to tear apart.

Johnny.

Johnny_Chaos

OK, SOA added, so please forgive me for giving this a gentle bump back up.

~Beanie~

One thing that jumps out at me is £150 for groceries. Is this half or the total amount? If it is only half and there is just the two of you, you can definately get it lower!

Same for the internet, is that half the bill?

Johnny_Chaos

~Beanie~ wrote: »

One thing that jumps out at me is £150 for groceries. Is this half or the total amount? If it is only half and there is just the two of you, you can definately get it lower!

Same for the internet, is that half the bill?

Sadly, the groceries bill is for just me. We probably spend about 300 per month (Sainsburys once a week, usually spending anything from 60 to 100 pounds).

Another thing, which is stopping as from Monday: I often pop to the sandwich shop at work for a sandwich or a spud for my lunch, usually spending about 3 or 4 quid. I inevitable draw a tenner out of my account every day or two, and then the "loose change" left in my pocket is generally gone by the following day. Trust me, that's stopping!

The internet's just mine, as it's in with my mobile bill (Orange). I spend about 45 per month on mobile contract, calls and texts, and broadband.