tricky situation for us

Nugents · 18 January 2019 at 3:40PM

Hello,

So we are in a bit of a pickle at the moment.

Between us we have high debts of around 50K. We are doing our best to reduce these debts. The debts were racked up due to a house move, divorce, and general financial disorganisation for a number of years.

Our situation is a little different to some of the other people who post on here. We are in an OK position where we can afford the make the minimum repayments, plus a bit extra, as well as still having enough money for household, bills, shopping and all the other normal stuff. We are not in any arrears, nor have we missed any recent payments - we have some late payments from our old dis organised days but nothing since mid 2017.

Not all of the debt is at 0% and at the moment around £450 of our £1500 payment is going on interest. I have used the eligibility calculators and we are not eligible for a balance transfer card at the moment. We are on the electoral role and we have no defaults of CCJ's, so I can only assume that this is due to our high debt level.

So we are plodding on, ,making the payments and clearning around 1K per month, however it feels awful that we are paying so much interest.

We are not eligible for any debt management plans as we can easily afford the minimums, plus I wouldn't want to ruin our credit files uneccesarily in case we need to move house.

Is there any other option for us? I will keeping checking the eligibility calculators in the hope that things will improve.

MallyGirl · 18 January 2019 at 4:01PM

I would just make sure that you are operating on a tight belt and throwing everything extra that you can at the highest interest debt. If you keep doing that then, as you pay the worst ones off and move to the lower interest ones, progress will pick up pace. In time you will be in a better position and may start to qualify for 0% deals.

CakeCrusader · 18 January 2019 at 4:03PM

Hi.

The offers come and go, so keep checking!! Are you able to post a SOA (Statement of Affairs) so people can give you some help to cut back a bit? The more you throw at your debts the faster they go down and the less interest you pay. It might take a while and tightening belts is difficult, but it won't be forever. http://www.stoozing.com/calculator/soa.php

enthusiasticsaver · 18 January 2019 at 4:10PM

Undoubtedly your high debt is what is stopping you getting any 0% offers so carry on keeping tight track of your finances and aim to clear a few of the cards in the hope they will offer you some 0% deals. Posting an soa is a good idea. If you are able to pay £1500 a month then hopefully it will soon come down. Presumably you have stopped spending on credit cards now? Pointless otherwise.

EssexHebridean · 18 January 2019 at 7:32PM

Definitely agree with the advice to put together an SOA and work out where you can tighten belts in order to really hammer down this debt. Make sure that your budget is watertight too - so that everything you have to spend is planned for, if you have annual bills coming up then ensure that the money is set aside monthly ready so you don't have to pay less to the debt one month to cover - for example - car insurance. Similarly if you're paying things like that monthly then start to work towards making an annual payment as this works out cheaper.

If I were you I'd be looking at cutting all spending to the bone for three months , throwing every spare penny you can rustle up at the debt, and then revisiting the balance transfer card situation after that. If you're not already signed up to the MSE credit club then that's worth doing as well - makes it dead easy to check what you might be eligible for. £450 a month in interest is ludicrous - it's got to be worth a few uber-frugal months to bring that figure down!

Craig1981 · 19 January 2019 at 8:15AM

if not doing so already, make minimum payments on the 0% balances you have, and throw as much as possible to the the highest ones, work your way down from there
i
and as everyone has suggested, a few more cut backs will not go a miss either. basics like changing internet/tv suppliers, sim only mobile contracts, changing energy suppliers, insurances etc will also make differences

pelirocco · 19 January 2019 at 10:13AM

I am probably nit picking ,and being harsh , but you have said you are in an ok position because you can afford the minimum payments plus a little extra.This isn't an ok position,with debts of 50k ,paying minimum with a little extra is a very precarious position to be in

Nugents · 19 January 2019 at 11:56AM

pelirocco wrote: »

I am probably nit picking ,and being harsh , but you have said you are in an ok position because you can afford the minimum payments plus a little extra.This isn't an ok position,with debts of 50k ,paying minimum with a little extra is a very precarious position to be in

Hi

I meant that I am not in a position where we can't afford minimums as some people are. I totally agree that our level of debt makes us very vulnerable, however all we can do is continue to make the payments and bring the debt down as quickly as possible.

To clarify, our minimum payments are around £1200 and we pay an additional £500-600 per month on top of this.

ohdearhowdidthathappen · 19 January 2019 at 11:25PM

We're in a similar position, we owe about £45k after a recent extension. Ours is all on interest free, although the rate on the card with the biggest balance goes up in September, so we're focussing on that card first. We have a decent income and comfortably make the minimums.
Following advice on this board, I posted an SOA and have started a spending diary which helps identify weak spots.
Other things to do are to go through your banks statements and make sure you're spending the least you can for everything... is there a way of increasing your income?
If you carry on chipping away, you'll get there eventually, will be better when you're able to access 0% deals again though

getmore4less · 20 January 2019 at 7:05AM

Nugents wrote: »

Hi

I meant that I am not in a position where we can't afford minimums as some people are. I totally agree that our level of debt makes us very vulnerable, however all we can do is continue to make the payments and bring the debt down as quickly as possible.

To clarify, our minimum payments are around £1200 and we pay an additional £500-600 per month on top of this.

you started great with

So we are in a bit of a pickle at the moment

but then

We are ok
we are not like others
plodding along
...
all very kind of head in the sand with that sort of language.

Also you have 2 different payments, post #1 it was £1,500pm and last post it is £1,700-£1,800

You say you are doing £1kpm that will be around 4 years to clear
even if you got it all onto 0% that would still be 3 years.

There will be options but I think you needs some clarity for yourselves in what you are doing.

Might be reading too much into it but it looks like this £1,500-£1,800 is pretty easy for you, not a problem if you are happy with a 3-4 year plan but could you do it quicker?

Some serious budgeting(start with the SOA) to see if there is room to allocate more than you have been doing so far.

Review your rates and don't just rely on the eligibility calculators for BT cards there are other options to get the cost of debt down.

Is there a mortgage as well as this debt?
What goal would you like to clear this debt?
What plans do you have for the money allocated to debt once it is cleared?

Are either of you 40% tax payers?

Nugents · 20 January 2019 at 11:20AM

Thanks for posting, apologies for the figures, my partner manages the monthly payments and when I posted I didn’t double check. To clarify, our minimums are around £1200 and we usually overpay 500-600, so taking away the 450 interest we clear around 1300-1400 per month.

I must say, I feel that your head in the sand comment is unfair. We’re very aware it our situation and we’re both committed to sorting it out. The main bugbear at the moment is the interest. I was disappointed that you picked on my choice of words- “ plodding on” etc and felt that these were somehow indicative of our attitude. I actually do think that we are doing ok- were on top of our payments and we’re making Significant overpayments. Our difficulty is the interest.

We’re both quite happy to be on a 3-4 year debt free journey. We’ve been in debt forever so we know it’s not going to be a quick fix. At the moment we’re still able to have some money for leisure etc. We have children so going totally cold turkey would be unrealistic. We’ve totally cut out foreign holidays, uneccessary clothes shopping etc, but we do like to have a few quid to take the kids for an ice cream, or go for an occasional cheap pub meal etc. We’re also building some emergency savings as we have a dodgy old boiler and a car that wont last much longer!!

We do have a mortgage which costs us 450 per month. Our house is worth 220k and we owe 60k. We decided early on that we wouldn’t consider adding the debt to our mortgage.

tricky situation for us

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