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I've been pointed to this site by a friend who suggested I look into other options of dealing with my £28k worth of debt other than just paying off the minimum each month.
Basically, as a result of a divorce I managed to put myself in a situation where my monthly pay-check for the past 5 years has gone towards paying off my credit cards rather than spending any money on my 2 children or recently my new arrival. I'm looking for help. I'm paying off all my debt at the moment and I will probably be able to continue doing so for a long time. But I'm unable to be able to reduce the debt I owe so each month the cash I earn drains out of my account.
Is there any sensible way out of this situation without damaging my credit rating? My debt is currently (roughly) as follows:
1. £12k Lloyds unsecured personal bank loan @ £289 / month which I've had for 4 years. 3 years still left to pay;
2. £9.5k Virgin credit card @ £202 / month which I'm basically only able to pay the interest off each month;
3. £4.3k Lloyds Bank credit card @ 88 / month which I've been paying off and adding to for about 3 years which I'm paying off at slightly over the monthly interest repayments;
4. £3.2 Egg credit card @ £77 / month which was used for cash withdrawals that I've been paying off for about 6 years;
5. £800 / month Lloyds overdraft
6. £500 / month going to the ex wife
7. £243 / month going to childcare vouchers
8. £127 / month mobile phone, gas insurance, life/car insurance
9. £250 / month food shop
10. £200 / month fuel
Out of a £2.1k wage into my pocket per month, that leaves me £150, any help gratefully received.
Welcome to CAG, to be perfectly honest I would look toward CCCS in your position and enter a dmp for the short term, if nothing else they should be able to cease interest on the majority of the accounts so at least the balances are reducing.
As soon as you have this sorted get a CCA in to each of the creditors and post a new thread for each for advice.
Its not a quick process and you will get sh*tty calls for a while but refuse to answer personal details and ignore any template letters, they are only presented to p you off and get you on the phone
Additionally, you should calcaulte how much you have paid in credit card charges over the years. If you have been paying charges of more than £12 each time then you can claim them back plus the interes which has been chalked up on them.
You should definitely look at the dmp options as well as advised b ut they won't want to advise you about actually recovering excessive charges. You will have to do that with our help here.
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Please start threads in the appropriate forums to continue
Please don't pm me about specific questions unless you have posted and it has not been dealt with or unless the matter is confidential. Please include a link to the post you want me to look at. If you have received a defence, contact me.
Advice & opinions of BankFodder, The Consumer Action Group and The Bank Action Group are offered informally, without prejudice & without liability. Use your own judgment. Seek advice of a qualified insured professional if you have any doubts.
They'll help you work out a budget and approach your creditors in an effort to cease interest charges. It should also give you plenty of breathing space as the creditors are obliged to respond to them once appointed.
Get this out of the way first and then start the ball rolling with reclaiming charges etc.
Most who come to Cag are already in default positions, being chased by DCA's or through the court - in your case you have an opportunity to come to amicable arrangements with a third party taking the strain (so to speak).
I noticed you posted again in the debt section, I could be wrong but I understood BF to mean start a new thread in the relevant section for each of your creditors if/when you start any reclaim process.... you'll get plenty of help with this
Is there any sensible way out of this situation without damaging my credit rating? My debt is currently (roughly) as follows:
1. £12k Lloyds unsecured personal bank loan @ £289 / month which I've had for 4 years. 3 years still left to pay;
2. £9.5k Virgin credit card @ £202 / month which I'm basically only able to pay the interest off each month;
3. £4.3k Lloyds Bank credit card @ 88 / month which I've been paying off and adding to for about 3 years which I'm paying off at slightly over the monthly interest repayments;
4. £3.2 Egg credit card @ £77 / month which was used for cash withdrawals that I've been paying off for about 6 years;
5. £800 / month Lloyds overdraft
6. £500 / month going to the ex wife Are you legally obliged to pay this?
7. £243 / month going to childcare vouchers
8. £127 / month mobile phone, gas insurance, life/car insurance Not technically a debt
9. £250 / month food shop Not technically a debt
10. £200 / month fuel Not technically a debt
Out of a £2.1k wage into my pocket per month, that leaves me £150, any help gratefully received.
Based on the info that you have provided you look in pretty good financial health really - not the best by any means but I've seen far worse.
That said I understand why you would want more disposable income, particularly given the fact that your salary is way above average.
My first advice to you is reduce your cost of living - my partner and I spend only £50 a month on food between both of us. Also, become consumer savvy - get on the comparison sites and look for the cheapest energy and insurance deals.
If you have any savings, ensure that they are in the highest interest accounts.
Now, lets get down to business and deal with the credit cards. As I have mentioned you have a very good take home pay and, provided that you have a good credit score (no ccj's, defaults or late payment markers) you should be able to balance transfer to new credit cards that offer you 0% interest for 12 months. This would allow you to repay the debt without huge amounts of interest. In 12 months time you could switch again.
With regards to the unsecured loan, has this money been used to buy an asset (a car for example)? If so, consider selling it to raise capital which could go back to repay the loan at a faster rate; however, make sure here is no penalty for doing so.
Even with regards to driving, go on the Internet and research how to drive in the most economical fashion - this will reduce your fuel bill like you would not believe. It sounds like a small measure but if it frees up only another £10, it's £10 more you can spend on your children
All of these measures will enhance your credit profile and would be extremely unlikely to damage it.
It is like anything, you need to feel the pain and then you will know you are achieving something. I may be young but I have spent five years at uni so have become expert in how to stretch every penny.
Best Regards,
TFT
09/07/09 Business Studies BA(Hons) 2:1
eCar Insurance overpayment - £325
Settled in full - 15/09/08 NatWest Student A/C bank charges - £260
Settled under hardship scheme - 08/06/09 Natwest Business A/C bank charges - £60
Settled in full as GOGW - 20/04/09 Santander Consumer Finance late payment fees - £60
Part settled for £48 - 01/03/08 Peugeot Finance late payment fees - £50
Settled in full before county court hearing - 01/09/09 Peugeot Finance overpayment of £247
Settled in full - 01/12/08 Valley Leisure - complaint about collections agent
£160 part refund of gym membership in compensation - 01/02/09 HFC Bank - complaint about payment deducted from my account on wrong date
GOGW £10 - 01/05/09
I forgot to add, another option could be to look at releasing any capital in any property you own; however, this would depend on your age, credit worthiness, whether you own a property and how much equity you have in it.
I assume you own a property because I didn't see any rent/mortgage payment in your outgoing's.
TFT
09/07/09 Business Studies BA(Hons) 2:1
eCar Insurance overpayment - £325
Settled in full - 15/09/08 NatWest Student A/C bank charges - £260
Settled under hardship scheme - 08/06/09 Natwest Business A/C bank charges - £60
Settled in full as GOGW - 20/04/09 Santander Consumer Finance late payment fees - £60
Part settled for £48 - 01/03/08 Peugeot Finance late payment fees - £50
Settled in full before county court hearing - 01/09/09 Peugeot Finance overpayment of £247
Settled in full - 01/12/08 Valley Leisure - complaint about collections agent
£160 part refund of gym membership in compensation - 01/02/09 HFC Bank - complaint about payment deducted from my account on wrong date
GOGW £10 - 01/05/09
£28k in debt.....Need help
I managed to put myself in a situation where my monthly pay-check for the past 5 years has gone towards paying off my credit cards rather than spending any money on my 2 children or recently my new arrival. I'm looking for help. I'm paying off all my debt at the moment and I will probably be able to continue doing so for a long time. But I'm unable to be able to reduce the debt I owe so each month the cash I earn drains out of my account.
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Originally Posted by NorthernBinder
