Remove ads

Introducing the LemonFools Personal Finance Calculators

advice sought please

Help and discussions for strategies to get out of debt
cheshirecat
Posts: 13
Joined: August 12th, 2018, 3:07 pm
Been thanked: 1 time

advice sought please

#158991

Postby cheshirecat » August 12th, 2018, 3:13 pm

Hi

I have found this board again after a number of years away and I am in really big need of advice.
I have accrued an enormous amount (eye watering in fact) of unsecured debt over the last few years and whilst I have been aware I need to address it, I have not done so.
A change in my personal circumstances has forced this issue and I need to start working out how on earth I can begin to sort it out.
May I ask - is it usual to post an SoA as a starting point?

Thanks in anticipation (and with some relief)

PaulBullet
Lemon Pip
Posts: 53
Joined: November 7th, 2016, 8:26 am
Has thanked: 9 times
Been thanked: 12 times

Re: advice sought please

#159170

Postby PaulBullet » August 13th, 2018, 10:55 am

Yes the best start is a SOA

Paul

PinkDalek
Lemon Quarter
Posts: 2945
Joined: November 4th, 2016, 1:12 pm
Has thanked: 635 times
Been thanked: 655 times

Re: advice sought please

#159326

Postby PinkDalek » August 13th, 2018, 5:53 pm

cheshirecat wrote:May I ask - is it usual to post an SoA as a starting point?


Available via viewforum.php?f=4 > financecalculators/ > financecalculators/soa.php

Welcome back.

cheshirecat
Posts: 13
Joined: August 12th, 2018, 3:07 pm
Been thanked: 1 time

Re: advice sought please

#160631

Postby cheshirecat » August 19th, 2018, 6:36 pm

Thank you

I shall get onto it

cheshirecat
Posts: 13
Joined: August 12th, 2018, 3:07 pm
Been thanked: 1 time

Re: advice sought please

#160632

Postby cheshirecat » August 19th, 2018, 7:05 pm

[tt]Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details

Monthly income after tax................ 2895
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2895


Monthly Expense Details

Mortgage................................ 557
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 50
Gas..................................... 46
Oil..................................... 0
Water rates............................. 12.5
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 9.7
Satellite/Cable TV...................... 0
Internet Services....................... 12
Groceries etc. ......................... 250
Clothing................................ 20
Petrol/diesel........................... 50
Road tax................................ 24.5
Car Insurance........................... 18.9
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 12
Buildings insurance..................... 37.22
Contents insurance...................... 0
Life assurance ......................... 7
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 20
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 50
Total monthly expenses.................. 1391.82



Assets

Cash.................................... 0
House value (Gross)..................... 80000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 82000



Secured & HP Debts

Description....................Debt......Monthly...APR
Mortgage...................... 48509....(557)......3.99
Total secured & HP debts...... 48509.....-.........-


Unsecured Debts
Description....................Debt......Monthly...APR
Halifax loan 1.................10489.....227.......3.9
Halifax loan 2.................7941......196.......12.9
Halifax mastercard.............9113......93........19.2
virgin card....................8532......106.......17.5
barclaycard....................16485.....370.......15.9
Total unsecured debts..........52560.....992.......-



Monthly Budget Summary

Total monthly income.................... 2,895
Expenses (including HP & secured debts). 1,391.82
Available for debt repayments........... 1,503.18
Monthly UNsecured debt repayments....... 992
Amount left after debt repayments....... 511.18


Personal Balance Sheet Summary
Total assets (things you own)........... 82,000
Total HP & Secured debt................. -48,509
Total Unsecured debt.................... -52,560
Net Assets.............................. -19,069


[/tt]

Alaric
Lemon Quarter
Posts: 2199
Joined: November 5th, 2016, 9:05 am
Has thanked: 4 times
Been thanked: 430 times

Re: advice sought please

#160652

Postby Alaric » August 19th, 2018, 9:24 pm

cheshirecat wrote:
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax loan 1.................10489.....227.......3.9
Halifax loan 2.................7941......196.......12.9
Halifax mastercard.............9113......93........19.2
virgin card....................8532......106.......17.5
barclaycard....................16485.....370.......15.9
Total unsecured debts..........52560.....992.......-



I thought the usual recommended solution in the absence of being able to transfer balances to a lower rate was to snowball. In other words reduce the monthly payments on the lower APR loans or cards to the minimum required and throw all available cash at repaying the highest APR. Though you may not be allowed to reduce the payments on the Halifax loans.

But perhaps you have enough of a good credit rating to get favourable balance transfer offers.

UncleIan
Lemon Slice
Posts: 595
Joined: November 4th, 2016, 3:35 pm
Has thanked: 287 times
Been thanked: 207 times

Re: advice sought please

#160735

Postby UncleIan » August 20th, 2018, 12:09 pm

I can't see much fat to trim in your spending.

Any stuff you can sell/car boot etc?

Amount left after debt repayments....... 511.18


If this figure is true, i.e. you really have an extra £511 left at the end of each month, then personally I would save a couple of months into an emergency fund of £1000 for when the car packs up or the boiler goes phut that you then don't have to reach for the credit card.

Take your credit cards out of your wallet.

Then snowball

Unsecured Debts
Halifax mastercard.............9113......93........19.2
virgin card....................8532......106.......17.5
barclaycard....................16485.....370.......15.9
Total unsecured debts..........52560.....992.......-


Throw the £511 at the Halifax mastercard, so in 20 months that will be paid off, and you'll then be able to put the £93 + the £511 on the virgin one. That's 15 months, then that's an extra £700pm to throw at the barclaycard.

It also depends how long the loans are for, as when they finish that's another £400pm you can throw at the cards. So at some point it could be over £1100 hammering at the barclaycard, that would be making serious debts.

It's going to be a long slog, years not months, but it's doable, just concentrate on the goals of paying off each card and each loan in turn.

Pendrainllwyn
Lemon Pip
Posts: 92
Joined: November 4th, 2016, 9:53 pm
Has thanked: 57 times
Been thanked: 61 times

Re: advice sought please

#160759

Postby Pendrainllwyn » August 20th, 2018, 2:16 pm

All sounds like very good advice to me. It does look like a long slog. If it were me I would create a series of mini milestones, say every time you reduce the outstanding debt by 2,500, and having a small celebration. Best of luck with it.

Pendrainllwyn

PaulBullet
Lemon Pip
Posts: 53
Joined: November 7th, 2016, 8:26 am
Has thanked: 9 times
Been thanked: 12 times

Re: advice sought please

#160765

Postby PaulBullet » August 20th, 2018, 2:30 pm

Council Tax - Are you getting the single person deduction?
Life Insurance - Why do you need this?

Easy Money making stuff

Rent a room - do you have a spare room?

Ebay - Most people have loads of junk other people love to buy

Paul

malkymoo
2 Lemon pips
Posts: 169
Joined: November 23rd, 2016, 9:45 am
Has thanked: 10 times
Been thanked: 27 times

Re: advice sought please

#160822

Postby malkymoo » August 20th, 2018, 6:25 pm

The building insurance seems a bit steep. I suggest shopping around before the next renewal.

nmdhqbc
2 Lemon pips
Posts: 190
Joined: March 22nd, 2017, 10:17 am
Has thanked: 18 times
Been thanked: 42 times

Re: advice sought please

#160825

Postby nmdhqbc » August 20th, 2018, 6:43 pm

cheshirecat wrote:Electricity............................. 50
Gas..................................... 46


Seems high. Depends on size and efficiency of the house though of course. If you haven't already price comparison site it. Thermostat down a few degrees.

cheshirecat wrote:Buildings insurance..................... 37.22

Seems high for a circa 140k house. Mine was never more than £150 a year for a similar valued house. Shop around.

cheshirecat wrote:Presents (birthday, christmas etc)...... 25

I'm sure these people would prefer you got out of debt than receive these gifts.

cheshirecat wrote:Haircuts................................ 20

At that price can I assume you are a lady? If not then you can buy some clippers for 1 months budget and not pay again until you're out of debt.

robbelg
2 Lemon pips
Posts: 185
Joined: November 4th, 2016, 10:43 am
Has thanked: 72 times
Been thanked: 55 times

Re: advice sought please

#160829

Postby robbelg » August 20th, 2018, 7:02 pm

Can you get another loan? - even at 12.9% it would be better than the credit cards.


Rob

PinkDalek
Lemon Quarter
Posts: 2945
Joined: November 4th, 2016, 1:12 pm
Has thanked: 635 times
Been thanked: 655 times

Re: advice sought please

#160875

Postby PinkDalek » August 20th, 2018, 9:13 pm

nmdhqbc wrote:
cheshirecat wrote:Buildings insurance..................... 37.22

Seems high for a circa 140k house. Mine was never more than £150 a year for a similar valued house. Shop around.


Fair point on the premium and shopping around but rebuildings costs are not based on property prices. I've seen many a place where the insurance cover (as verified by appointed professionals) is twice the value of the property, which includes land.

PinkDalek
Lemon Quarter
Posts: 2945
Joined: November 4th, 2016, 1:12 pm
Has thanked: 635 times
Been thanked: 655 times

Re: advice sought please

#160878

Postby PinkDalek » August 20th, 2018, 9:19 pm

robbelg wrote:Can you get another loan? - even at 12.9% it would be better than the credit cards.


Alternatively is remortgaging a possibility, given the apparent equity in the property, which may not be impossible given the loans appear to be unsecured, and it might therefore spread the repayments further into the future? I know little of mortgages though and wonder if the existence and level of the unsecured debt would make remortgaging an no go area.

cheshirecat
Posts: 13
Joined: August 12th, 2018, 3:07 pm
Been thanked: 1 time

Re: advice sought please

#161360

Postby cheshirecat » August 22nd, 2018, 10:31 pm

Hi all

Many many thanks for all your replies.

I shall try and respond to each in turn but bear with me

cheshirecat
Posts: 13
Joined: August 12th, 2018, 3:07 pm
Been thanked: 1 time

Re: advice sought please

#161362

Postby cheshirecat » August 22nd, 2018, 10:33 pm

Alaric wrote:
cheshirecat wrote:
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax loan 1.................10489.....227.......3.9
Halifax loan 2.................7941......196.......12.9
Halifax mastercard.............9113......93........19.2
virgin card....................8532......106.......17.5
barclaycard....................16485.....370.......15.9
Total unsecured debts..........52560.....992.......-



I thought the usual recommended solution in the absence of being able to transfer balances to a lower rate was to snowball. In other words reduce the monthly payments on the lower APR loans or cards to the minimum required and throw all available cash at repaying the highest APR. Though you may not be allowed to reduce the payments on the Halifax loans.

But perhaps you have enough of a good credit rating to get favourable balance transfer offers.


I doubt very much that with my current level of unsecured debt that I would have a sufficient rating to be offered anything more preferable than the current rates I am paying.

cheshirecat
Posts: 13
Joined: August 12th, 2018, 3:07 pm
Been thanked: 1 time

Re: advice sought please

#161364

Postby cheshirecat » August 22nd, 2018, 10:36 pm

UncleIan wrote:I can't see much fat to trim in your spending.

Any stuff you can sell/car boot etc?

Amount left after debt repayments....... 511.18


If this figure is true, i.e. you really have an extra £511 left at the end of each month, then personally I would save a couple of months into an emergency fund of £1000 for when the car packs up or the boiler goes phut that you then don't have to reach for the credit card.

Take your credit cards out of your wallet.

Then snowball

Unsecured Debts
Halifax mastercard.............9113......93........19.2
virgin card....................8532......106.......17.5
barclaycard....................16485.....370.......15.9
Total unsecured debts..........52560.....992.......-


Throw the £511 at the Halifax mastercard, so in 20 months that will be paid off, and you'll then be able to put the £93 + the £511 on the virgin one. That's 15 months, then that's an extra £700pm to throw at the barclaycard.

It also depends how long the loans are for, as when they finish that's another £400pm you can throw at the cards. So at some point it could be over £1100 hammering at the barclaycard, that would be making serious debts.

It's going to be a long slog, years not months, but it's doable, just concentrate on the goals of paying off each card and each loan in turn.


Loan 1 settles in 50 months and loan 2 in 53 months. My plan was to throw any surplus to the mastercard, as this is the debt with the highest interest but that kind of goes against the snowball principle does it not?

cheshirecat
Posts: 13
Joined: August 12th, 2018, 3:07 pm
Been thanked: 1 time

Re: advice sought please

#161368

Postby cheshirecat » August 22nd, 2018, 10:38 pm

PaulBullet wrote:Council Tax - Are you getting the single person deduction?
Life Insurance - Why do you need this?

Easy Money making stuff

Rent a room - do you have a spare room?

Ebay - Most people have loads of junk other people love to buy

Paul



Council tax - I can apply for the single person deduction once my partner moves out which is early next month.
And I will sell any available stuff I have!
Renting a room may be doable, but not a preferred option, however I would give this consideration should the situation start to become unmanageable

cheshirecat
Posts: 13
Joined: August 12th, 2018, 3:07 pm
Been thanked: 1 time

Re: advice sought please

#161369

Postby cheshirecat » August 22nd, 2018, 10:40 pm

malkymoo wrote:The building insurance seems a bit steep. I suggest shopping around before the next renewal.


Will do - I agree, it does seem excessive

Alaric
Lemon Quarter
Posts: 2199
Joined: November 5th, 2016, 9:05 am
Has thanked: 4 times
Been thanked: 430 times

Re: advice sought please

#161372

Postby Alaric » August 22nd, 2018, 10:43 pm

cheshirecat wrote:Loan 1 settles in 50 months and loan 2 in 53 months. My plan was to throw any surplus to the mastercard, as this is the debt with the highest interest but that kind of goes against the snowball principle does it not?


That is the snowball principle. If you pay off some of the debt with the highest APR first, you save on next month's interest, so you've got more spare cash available. Hence "snowball" because the amount you can pay off increases with time.


Return to “Dealing with Debt”

Who is online

Users browsing this forum: No registered users and 0 guests