When do you know you need to do something?

isitenough

We have large debts (over £40k) and while at the moment we are managing to pay them we are living on credit. They're not going up but at the same time, with all the rises in costs of fuel/food etc... they are not going down anymore. We do try to keep spending at a minimum and always get the best value when policies are up for renewal etc. OH has even swapped his car for a moped to curb the costs of having a 2nd car.

We have looked into DMP's and IVA's but OH (and myself if I am honest) is concerned about actually taking the plunge, saying that so many things will change and we won't be able to do anything (like take a cheap holiday once a year, go to the cinema once every 6 months or rent dvd's).
Does anyone have any words of wisdom to help sway us? I'm thinking it's the only way to go for us to be debt free but just need that bit of help getting my head round the idea. There are so many threads on dmp's and iva's it's all getting confusing. We know about what is involved regarding payments etc.. but what changes involving things like holidays and other leisure stuff? Can you still do things with the family?

Any advice would be much appreciated.

Merlot

Take a look at the CCCS website, they are very helpful and its free advice.

IVA, very few people are suited to a IVA, you need professional advice on this one, again from CCCS or Payplan.

£40,000 isn't a huge amount of debt if you are both working, can you post an SOA and we will see if we can help you reduce your outgoings, how about interest only on the mortgage for a while? can you balance transfer any of the large APR balances onto low APR cards, there are plenty of options open without effecting your credit rating.

I've just noticed that you are a housewife, just like me, but can you work to bring some extra in? Do you need the second car? Do you have Sky tv etc?

rubydoiwannabee

Hi (isitenough)
I am new to this website and although (with your status on this site) I would never feel able to offer you advice, here are my thoughts on your post.

My OH and I are in a very similar situation (25K) and had our LBM a few weeks ago when we realised that we might be at the point of increasing OD or CC limit, in order to avoid charges for going over the limits. Like you we live in CR the whole time, OD doesn't get paid off, just reduces when salaries go in and then slowly goes back up as the month goes on. CC was clear this time last year and now is high again. We are about to start a DMP because we need to start paying something off of the debt instead of the possibility of it increasing. I am worried about the impact on our credit history but feel we need to take some positive steps. I have worked out my personal budget with national debtline and it is very realistic, e.g. allows for savings for cars, xmas, birthdays etc. Not holidays though, but if you can make savings in these and in other areas, imagine having a holiday NOT paid for by CREDIT.

I am looking forward to living without CR and accepting that we have to live within our means.

I hope you find the right path for you, I would recommend the NDL for advice and guidance.

:>)

kizzykizzywizzy

Hi there, we got up to £20,000 debt at one point, we were getting to where we couldn't pay the minimums for much longer, & my Husband had to get a secondment to earn more money, that & , looking for low balance transfers or 0 % deals rather than leaving it where it is, every £1 off interest you pay each month could be a £1 less you owe. I was lucky to have a Virgin 0% card, which I only had to pay £5 min a month, think they've changed a bit now, but that allowed me to throw more money at clearing the overdraft. Which like you was always there & costing about £30 a month in interest, which also could be thrown at debt.
Dependant on your income, I believe you are a housewife, will that change in the future ? ( kids going to school ) I do a little part time catering asst job at the school now, that fits in with school hols, is this something you could do? It's hard when you do have small children to look after them & get a job that's worth doing ( ie you don't lose too much in WFTC ) also, after looking after 2 little ones all day & the house, the last thing I would've been able to do was go to work. i know some people juggle & manage it, but I just wouldn't have coped.
Big descisions ahead - hope you make the right choice, my incentive to not do DMP was that if we ever went to Florida again, we'd need a credit card - silly I know, but it spurred me on:p

isitenough

Many thanks for all the kind replies. Yes, I'm a housewife at the moment. I did go back to work briefly (at a childrens nursery) but the contract was only for a year so that didn't last. I did enjoy it although a struggle to fit everything in!
A school job would be ideal as the holidays are a concern as my husband has set hours and there is no-one around to look after the kids if I'm working. Around our way it seems to be 'who you know' not 'what you know' concerning school jobs and unfortunately I don't mix in the right situations.
I welcome going back to work full time when the kids are older though, which is another 3/4 years for my youngest (who's only 8).

We've just sold the second car and my OH commutes on a scooter now! Costs are low so we should see the rewards soon. We did consider public transport for his commuting, not only the costs were very high but it would take 1 1/2 hours to go 12 miles and that wasn't really acceptable.

We have Sky, on the minimum package and to be honest I know we shouldn't but I don't tend to watch a lot of the terrestrial channels so it's not an option I would consider losing. We've checked out Freeview but the limits are more of less the same. We don't drink alcohol or smoke and only take the kids to the cinema once in a blue moon so that's our only vice really.
I'm cancelling the window cleaner and will be keeping the shopping budget in check. We're saving Clubcard points for a holiday in a few years too. The AA will not be renewed either.
It's things like birthdays and xmas that seem to be tricky for us. Nobody is aware of our situation, although it would be easier on us if they knew, but it would be so embaressing and our parents think we're doing OK so it would be letting them down to say it to them. And they would try to help, which they've done already and allowed us to move house quite a few years ago. So when it comes to spending money at times like that, everyone else has a healthy budget and we feel we need to keep up, which is wrong and we've said we want to cut down but it's difficult. My sister and BIL don't have kids, good jobs and all the money you could want and don't seem to understand having children costs a lot!
I'm sorting out my CV for sending out so we'll see if anything happens on that front. I'll do anything (washing up, cleaning, anything) but it's got to fit into the hours for school (or evening). I've tried Tesco but they didn't even want me!

Bismarck

hi...mine's a kind of odd reply in that I was about to reply to you as though you were new to MSE...along the lines of "well done for considering your options...blah blah...and going through the basics..."

then it struck me about some of the questions I ask....they're almost like questions I feel should know the answers to and having been around for 6 months I don't know all that much...humbling really!

anyway....I get the feeling that the tricky decisions are going to hit more and more people as time goes on - I'd think you also need to look at when you'll be remortgaging/moving in the future and future job/career/salary expectations.....unfortunately I can't see food and fuel becoming cheaper any time soon.

Molanole

Hi there isitenough.

On DFW we normally ask people to post their statement of affairs. This helps the experts on here see if they can find savings which can be made in your monthly expenditure. It also helps you to identify where, if at all, money seems to be going astray. It's quite often those bits and bobs which should be left over after all the essentials have gone out that make the difference.

£40K is a large debt. I feel your pain, I've been there myself. But, it needs to be nipped in the bud now before it gets any bigger. I didn't take an IVA or DMP. All the while I can meet minimum payments and keep the defaults away then it seems sensible to stick at it. However, I don't really go on holidays and I don't have kids so I'm not much help to you there.

And as for birthdays and christmas. I notice that you're more of a regular on the competitions board and you probably do this already. But what about all those things that you win in the comps? i bet some of them will make decent presents.

Good luck. The more experienced DFWs will be along soon to help I'm sure.

Merlot

So at the moment in time if working isn't feasible, and I know what you mean by "it's who you know and not what you know", can I ask you to post your SOA, we are here to help you, but we won't be able to offer you much advice without an SOA, it can be very scary writing everything down, but you will feel alot better for doing so.

I will check in again once you have posted your SOA.

Well done, I just noticed your comp signature, any tips?

Merlot.x.

NUFCnutter

I think you know its a problem when you start worrying about it. It would hit me that you are living on credit, and not on what you have in your pocket, so that is obviously not that good. Why don't you post up a SOA and then some of the great people on here can advise you better. There is scope to have money for the odd trip out on a DMP. But the big plunge is really hard. Keep on hanging in there and let the people on here help you as much as they can.

isitenough

Enter everything and anything! Don't enter stuff you won't need like tickets to things etc.. but yes, lots of prizes make good presents (and have done!).
Will sort out the SOA and get back to you all.

tallyhoh

Do you still have a car as your OH goes to work on a moped. If so, is it really necessary?
My car is paid for but I worked out that with tax, insurance, service it was costing about £120.00 a month without fuel or repairs.