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  • FIRST POST
    • kgrant
    • By kgrant 10th Jan 19, 8:37 PM
    • 57Posts
    • 7Thanks
    kgrant
    Halifax debt - Need Advice
    • #1
    • 10th Jan 19, 8:37 PM
    Halifax debt - Need Advice 10th Jan 19 at 8:37 PM
    Good evening All

    At the moment I am looking for urgent advice as I am finding it very difficult financially. I am ok to pay my Halifax mortgage, but find it tough to pay essential bills along with paying all other main debts currently all with Halifax: personal loan, credit card and arranged overdraft. Before I speak with Halifax, I want to get advice with my debt options beforehand, so any advice would be much appreciated.

    The proposals I am thinking about are~

    1. For current account, I am reopening my old current bank account (switching back to no overdraft from - £1500íoverdraft) which should help me live on my income without any negative balance and then I want to try to clear the overdraft debt over the next year. However at the moment I lose £60pm interest and can just afford it. Should I add this debt to the existing credit card, apply for top up on my existing personal loan or try get a money transfer card to clear it soon as possible?

    2. For credit card, I pay the £40pm minimum payment and also have 0% credit card deal (finishing in Jan 2020) and looking for a balance transfer deal to move my debt next year. I know as my limit is £4,000 and I donít use it anymore this should be ok. However what would be best way to manage and to clear it soon as possible?

    3. For personal loan, I have 58 months left and I have fixed payments. The remaining balance for this is £10,700 on personal loan so should I leave this main debt as it is?

    Halifax might allow me to consolidate the 1-3 debts to a new loan is this a good idea? Or should I look at another provider as I owe personal loan for £12,000 (a car) + £4,000 on credit card (garden makeover, family holiday and Christmas) and continually in my £1,500 agreed overdraft would this make it easier to pay one payment each month?

    Can I ask has anyone similar experience or any advice for me in regards to getting debt free? With a ok credit score what would be my options and help to clear these debts in full and shorten the debt?

    Thanks in advance.
Page 1
    • Willing2Learn
    • By Willing2Learn 10th Jan 19, 8:50 PM
    • 1,977 Posts
    • 1,538 Thanks
    Willing2Learn
    • #2
    • 10th Jan 19, 8:50 PM
    • #2
    • 10th Jan 19, 8:50 PM
    … Halifax might allow me to consolidate the 1-3 debts to a new loan is this a good idea? Or should I look at another provider as I owe personal loan for £12,000 (a car) + £4,000 on credit card (garden makeover, family holiday and Christmas) and continually in my £1,500 agreed overdraft would this make it easier to pay one payment each month?

    Can I ask has anyone similar experience or any advice for me in regards to getting debt free? With a ok credit score what would be my options and help to clear these debts in full and shorten the debt?
    Originally posted by kgrant
    Hi,

    I don't think consolidating debt is ever a good idea as it just doubles the debt....

    Meaningful advice, support and guidance is only possible if you give us all the necessary information.

    Please could you post up your SOA (Statement of Affairs) so that we can see your exact circumstance and advise accordingly. Please click on the button that formats for MSE before posting.

    Thanks

    Edit: http://www.stoozing.com/calculator/soa.php
    Last edited by Willing2Learn; 10-01-2019 at 8:56 PM. Reason: Add link
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • sourcrates
    • By sourcrates 10th Jan 19, 10:34 PM
    • 16,171 Posts
    • 15,292 Thanks
    sourcrates
    • #3
    • 10th Jan 19, 10:34 PM
    • #3
    • 10th Jan 19, 10:34 PM
    Can I ask has anyone similar experience or any advice for me in regards to getting debt free?
    Originally posted by kgrant
    Hi,

    Yes, donít consolidate, you donít get debt free by borrowing more money, you get debt free by trying to increase income, and reduce outgoings.

    If thatís not sufficient, then one of the available debt solutions may be appropriate, but before any of that can be discussed, we need to see your SOA.

    The link has been kindly posted above for you.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly". I have extensive experience of debt, and itís solutions, as well as the collection industry in general.

    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    • kgrant
    • By kgrant 11th Jan 19, 9:07 PM
    • 57 Posts
    • 7 Thanks
    kgrant
    • #4
    • 11th Jan 19, 9:07 PM
    • #4
    • 11th Jan 19, 9:07 PM
    Ok here is my SoA;

    Household Information
    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 2

    Monthly Income Details[/b]
    Monthly income after tax................ 1550
    Partners monthly income after tax....... 0
    Benefits................................ 70
    Other income............................ 0
    Total monthly income.................... 1620

    Monthly Expense Details
    Mortgage................................ 504
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 70
    Electricity............................. 30
    Gas..................................... 0
    Oil..................................... 50
    Water rates............................. 0
    Telephone (land line)................... 20
    Mobile phone............................ 15
    TV Licence.............................. 12.5
    Satellite/Cable TV...................... 20
    Internet Services....................... 20
    Groceries etc. ......................... 400
    Clothing................................ 20
    Petrol/diesel........................... 120
    Road tax................................ 25
    Car Insurance........................... 50
    Car maintenance (including MOT)......... 20
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 20
    Medical (prescriptions, dentist etc).... 10
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 20
    Contents insurance...................... 0
    Life assurance ......................... 120
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 20
    Haircuts................................ 5
    Entertainment........................... 10
    Holiday................................. 100
    Emergency fund.......................... 0
    Total monthly expenses.................. 1681.5

    Assets
    Cash.................................... 0
    House value (Gross)..................... 120000
    Shares and bonds........................ 0
    Car(s).................................. 8000
    Other assets............................ 2000
    Total Assets............................ 130000

    Secured & HP Debts
    Description....................Debt......Monthly.. .APR
    Mortgage...................... 98000....(504)......4.84%
    Total secured & HP debts...... 98000.....-.........-

    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Halifax Personal loan..........12000.....235.......12.9%
    Halifax Credit card............4000......50........0% until Jan 2020
    Halifax overdraft..............1500......60........3% approx
    Total unsecured debts..........17500.....345.......-

    Monthly Budget Summary
    Total monthly income.................... 1,620
    Expenses (including HP & secured debts). 1,681.5
    Available for debt repayments........... -61.5
    Monthly UNsecured debt repayments....... 345
    Amount short for making debt repayments. -406.5

    Personal Balance Sheet Summary
    Total assets (things you own)........... 130,000
    Total HP & Secured debt................. -98,000
    Total Unsecured debt.................... -17,500
    Net Assets.............................. 14,500

    Any further advice would be appreciated.
    • Karonher
    • By Karonher 11th Jan 19, 9:43 PM
    • 528 Posts
    • 2,187 Thanks
    Karonher
    • #5
    • 11th Jan 19, 9:43 PM
    • #5
    • 11th Jan 19, 9:43 PM
    Two things that seem very high are food and life assurance. For the second one have you put the annual figure?
    Getting ready for Christmas 2019

    Aiming to make £5,000 online in 2019.
    • TryinToDoItRight
    • By TryinToDoItRight 13th Jan 19, 11:02 AM
    • 7 Posts
    • 36 Thanks
    TryinToDoItRight
    • #6
    • 13th Jan 19, 11:02 AM
    • #6
    • 13th Jan 19, 11:02 AM
    Your food shopping seems high for 3 people - try switching to cheaper brands or shopping around for deals. We only have 2 in our household but basic weekly shop comes in at £40...butcher counters at asda and tesco have 5 meats for £10 etc.

    Life insurance seems high for the month...is this correct?

    There is no income listed for your partner - if circumstances allow would they consider even taking a part time job just to try and increase the money coming in? This would really help you make a dent in the debt and perhaps take a bit of stress off yourself?
    • TryinToDoItRight
    • By TryinToDoItRight 13th Jan 19, 11:06 AM
    • 7 Posts
    • 36 Thanks
    TryinToDoItRight
    • #7
    • 13th Jan 19, 11:06 AM
    • #7
    • 13th Jan 19, 11:06 AM
    Should have also added...maybe the holiday fund could be put on hold for this year? It would save you £100 a month which could go into paying off some of your debts.

    I have just under £15k of debt left to clear and with trying to clear the balance unfortunately a holiday is something we literally couldnt justify right now (despite all the extremely tempting adverts!).
    • sourcrates
    • By sourcrates 13th Jan 19, 3:41 PM
    • 16,171 Posts
    • 15,292 Thanks
    sourcrates
    • #8
    • 13th Jan 19, 3:41 PM
    • #8
    • 13th Jan 19, 3:41 PM
    Hi,


    You are currently, according to your SOA, insolvent, you have just enough money to fund your essential payments, but nothing left for the unsecured credit payments.

    Can i ask why your partner dosent work, that would solve the problem instantly.
    I assume, like most, your using credit to plug the gap right now, what happens when the credit drys up, which it soon will at over £400 a month, i`m guessing the true figure you borrow is a lot more.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly". I have extensive experience of debt, and itís solutions, as well as the collection industry in general.

    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    • enthusiasticsaver
    • By enthusiasticsaver 13th Jan 19, 4:32 PM
    • 7,659 Posts
    • 17,061 Thanks
    enthusiasticsaver
    • #9
    • 13th Jan 19, 4:32 PM
    • #9
    • 13th Jan 19, 4:32 PM
    As others have said ideally your partner should be working. Was that mortgage approved when you had two incomes? How old is your child?

    Quite a few high items on the soa. The groceries figure is high unless the child is almost an adult and even then it is high. Can you use discount supermarkets like Aldi and Lidl and cut out the extras for a while to see if that makes a difference as you have such a large shortfall. The holiday definitely has to go as you cannot afford that. Why such high life assurance?

    Even if you cut the groceries by 25% and forewent the holiday you would still be in deficit so you may unfortunately now be in DMP territory which means you need a basic bank account with someone other than Halifax. Is the debt rising because of the shortfall? You have to stop spending on credit and overdraft as this is making things worse.

    Consolidating will not help and will make things worse. Really you should not have taken out the personal loan as that 12.9% is an awful rate. What was that for?
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • sourcrates
    • By sourcrates 13th Jan 19, 5:36 PM
    • 16,171 Posts
    • 15,292 Thanks
    sourcrates

    Even if you cut the groceries by 25% and forewent the holiday you would still be in deficit so you may unfortunately now be in DMP territory
    Originally posted by enthusiasticsaver
    For a DMP to be advisable, the OP needs to have some disposable income, they have nothing, even cutting back the budget another £400 would only just leave enough for the essentials, nothing for the unsecured debts.

    Based on this SOA all the OP could do is offer token £1 payments to creditors on a monthly basis, but the situation would not improve unless their income could be increased.

    I hate saying this, but you are better off carrying on as you are and hoping the credit stretches far enough until the loan is re-paid, or until you can increase your income, the alternative, if creditors got litigious, may be to lose everything as things currently stand.

    No amount of consolidation would improve the situation as you have no disposable income to play with, how on earth did things get to this point in the first place ?
    Last edited by sourcrates; 13-01-2019 at 5:40 PM.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly". I have extensive experience of debt, and itís solutions, as well as the collection industry in general.

    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    • Sanctioned Parts List
    • By Sanctioned Parts List 14th Jan 19, 5:52 AM
    • 287 Posts
    • 766 Thanks
    Sanctioned Parts List
    I can't say I'm a fan of this cloudflare ddos protection page, which keeps deep-sixing my posts. Do UK-based users see it?

    I'd written a longer, better explained post but from what I can see, the SOA is only £60-odd under, excluding debt. The single biggest contributor to monthly loss of money is the car - OP needs to consider either selling it and buying a banger, or selling it and making do with a single car until such time as his finances are better established. Recovering some or all of that £12000 would go a long way to fixing the damage.

    Also - it's more important to protect now than protecting maybe, so it might be worth nixing the life insurance. Especially if death benefits are included as part of one's employment package, as some companies offer.

    • fatbelly
    • By fatbelly 14th Jan 19, 7:36 AM
    • 13,231 Posts
    • 10,290 Thanks
    fatbelly
    Neraly all the bits and pieces I was going to mention have already been said.

    I do think that biting the bullet now rather than later will save a lot of money in the long run - you have interest on the loan, charges on the overdraft, a fast depreciating asset in the main car and some of your money is disappearing into areas which may well feel nice but are not helping the present situation (holiday, life insurance, high food spend).

    (Contributing to a personal pension direct from wages is a better way to go than standalone life insurance)

    To extract the positives, you have equity in the house and the mortgage is reasonable. You have no priority debt. With not much tweaking you can pay your bills and have something for a dmp for the non-priority debts, though not a lot.

    I am not sure if your 'old account' is with a different bank. It needs to be as you are going to have to protect your income somewhere where the Halifax cannot access it. In the short term you will need to default on the loan, credit card and overdraft. It is unlikely Halifax will give you that advice.

    Actually I've just realised something but I don't think it fundamentally changes the advice above. On that income I would expect you to be receiving around £200 per month child tax credits as well as child benefit and it appears you are not (the CB figure is also a bit out as it should be £82.40 per 4 weeks). If you are in a UC area this will have to come through Universal Credit now.

    Check benefits here
    Last edited by fatbelly; 14-01-2019 at 7:39 AM.
    • kgrant
    • By kgrant 14th Jan 19, 11:14 AM
    • 57 Posts
    • 7 Thanks
    kgrant
    Yes, my wife is a housewife looking after our young son and I have large life assurance payment due to previous health conditions. Unfortunately my wife and I also need to have two cars and if I sell one for a “banger” then I could get into difficulty if I need to fix it hence I got the personal loan to buy a decent car with no issues instead of a HPI deal. In regards to ways forward I need to get tighter and yes I have a current account with another bank and I have reduced weekly food/drink, essential outgoings and bills so will be trying to switch everything across but I am finding it tight and don’t want to default on payments with Halifax. What should I do with my credit card and overdraft?

    I am looking genuine advice on what to do next so please see my main income and outgoing proposed details when using the new bank as below;

    Main Monthly income
    £1540 - Salary
    £70 - Working tax credit
    ———-
    £1620

    Main Monthly outgoings
    Mortgage - £505
    Personal loan - £235
    Credit Card - £50
    Overdraft fees - £50
    Car fuel - £100
    Essential food - £320
    Essential bills - £300
    ————-
    £1560

    Shall I cancel the overdraft card and try to put this into my personal loan payments? What is best to try to do first - 1. To clear overdraft or 2. clear credit card?

    Thanks.
    • enthusiasticsaver
    • By enthusiasticsaver 15th Jan 19, 11:22 AM
    • 7,659 Posts
    • 17,061 Thanks
    enthusiasticsaver
    The overdraft fees appear to be the killer. I think you will need to speak to Halifax and see what they can suggest as you cannot go on like this. It is difficult to just default as your mortgage is also with them but obviously that has to be the priority. They wont want you to default on the credit card, loan or overdraft either though. I am amazed that you managed to get so much borrowing with them and to a certain extent they are at fault in that they have continued to ply you with debt (obviously you are complicit in this too) so they should help you with sorting it out. Whether they will or not though is another matter. Make an appointment with them but make sure that you keep up with the mortgage payments.

    I am sorry but I don't agree with sourcrates that you continue as you are and let the debt escalate further. All your debt is with Halifax and IMHO they have been very remiss in letting you borrow that much on your income. I think you have to sort the overdraft out first but ask them to stop the fees.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • anfieldred
    • By anfieldred 15th Jan 19, 12:09 PM
    • 220 Posts
    • 2,634 Thanks
    anfieldred
    Regarding the overdraft fees - Halifax and Lloyds don't offer much support on this.

    If you're really struggling, they will sometimes (1-2 times a year 'give' you £25-50 to cover the fees for the remainder of the month). If you want the overdraft charges 'freezing' for a month or more, you'll have to do a full income/expenditure over the phone with them (takes about an hour), and they'll decide what they can do.

    I wasn't offered a loan, but instead a repayment plan to clear everything. I rejected it as it wouldn't have left me any better off, and dragged it out over a longer term. Instead, I've been reducing the overdraft by 50-100 a month as often as I could afford to online.

    One of the tricks I saw on here was changing your direct debits to later in the month if possible, so you're not as much overdrawn, keeping the fees down a bit.
    • kgrant
    • By kgrant 16th Jan 19, 8:15 PM
    • 57 Posts
    • 7 Thanks
    kgrant
    Yes I spoke with Halifax and have the income/ expenditure conversation. They did freeze the overdraft and credit card fees but this finishes on 11 February.

    With my monthly salary I really need to keep on repaying my mortgage but unsure how to clear my unsecured debts, so rang them back today. When speaking to the Halifax rep they said as I am currently a Halifax mortgage customer and have around 85% LTV they could help me with a unsecured consolidation loan so they have offered me an unsecured consolidation loan as below;

    Consolidation loan for £16,300
    £260pm for monthly repayments
    Interest @ 9% APR Over 7 years (84 months)
    £21,780 paid back
    12 months no credit once accepted
    Approx 3% Fees for early repayment

    Unsure if it is best solution but I think this might be my only option unless I can clear my £1,500 overdraft or stop the fees by some other means?!

    Any advice would be appreciated.
    • enthusiasticsaver
    • By enthusiasticsaver 16th Jan 19, 10:30 PM
    • 7,659 Posts
    • 17,061 Thanks
    enthusiasticsaver
    I am not a fan of consolidation loans, no one on here is but I have to say I think you should consider it not least because the rate is lower than your existing loan. You have to stop living on credit though or doing that will make things so much worse. Your second soa shows you should be able to meet the new loan payment if you don't have the overdraft to think about and the credit card will be drastically cut. No overdraft though, no credit cards and start saving as much as possible so you have an emergency fund. Remember you are not clearing debt, just moving it.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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