Struggling with debt / need help

carlsagen wrote: »

Sorry no, She's paying the minimum on each card

If the minimums are 1% plus fees plus interest and if the whole balance is 0% interest and kept that way and no spending on the cards then it will take nearly 9 years to pay off if she maintains the same monthly payment. Trouble with having the minimum at 1%+ interest & fees is the actual minimum payment will decrease until it reaches the £25 minimum or what ever they are set to. If she is BT every few months then the fees are added again.

She cannot borrow her way out of debt, she needs to pay it down and paying 1% of the balance then it will take a decade or more. My calculator says she is paying £170 ish a month towards these debts and if she cannot keep this up then she wont be able to afford a loan.

At 6 % over 8 years a £18,000 loan is going to cost £235 a month - trouble is she wont get single figure interest rate loan for debt consolidation. So forget a loan - its not going to happen.

She needs debt advice, and she massively needs to curb her spending. I know that people will all say they've cut their spending as far as they can, but it's rarely true. The fact that she's now stuck in a refinance/minimum repayment cycle despite having barely any interest charged means that she is still spending too much compared with what she earns - her debt has likely increased over the past two years if she's now struggling to find 0% deals and can't consolidate. The loan was knocked back because banks can predict with almost certainty what will happen next (she will continue to increase her debt by spending more than she earns). Even smart people do it, it's human nature.

To avoid special payment arrangements and/or bankruptcy she is going to need to make spending changes that are very uncomfortable. It probably means things like no new clothes for anyone in the family, super-budget cooking, no takeaways, no £3 meal deals, and put a jumper on and lower the heating etc.

People almost always try to do everything else but avoid the real culprit (the spending habits).

carlsagen wrote: »

She might have an option of a family member getting a joint loan with her (not sure how that works).

Make sure she is very honest with the family member.

Not only will they be jointly and severally responsible for the debt, but they are very likely to be negatively impacted by the association.

carlsagen wrote: »

I recall we looked at step change, filled in a form and they wouldn't help because the disposable income after all the spending questions was filled in was too high. But of course it doesnt take into account the car / fuel / insurance etc for taking kids to school / work.

I know the advice is get rid of car and walk / bus. but like you say people cant do it and above the harsh changes needed.

The form should ask questions about insurance, how much soent on fuel etc.