Debt Advice Needed
Discussion
OK, so I've gotten myself into a bit of a jam. We've managed by various means to end up spending about £700 per month on debt. And yes that's before the rent, food, council tax etc.
What I need, apart from a miracle, is someone who can advise us on some sort of debt counselling or can consolodate this figure to something more sensible.
I know it's a lot to ask, so I throw myself on the mercy of the PH universe.
We both have steady jobs although both with employment agencies, me on staff, her as a temp.
Thanks in advance.
What I need, apart from a miracle, is someone who can advise us on some sort of debt counselling or can consolodate this figure to something more sensible.
I know it's a lot to ask, so I throw myself on the mercy of the PH universe.
We both have steady jobs although both with employment agencies, me on staff, her as a temp.
Thanks in advance.
autoholic said:
Yes, I thought of that but the Camaro is my daily and without that I can't go to work and if I sell the Dart I'd be lucky to clear 7k and that's such a drop in the ocean it doesn't seem worth it.
You're either looking to side step what you owe or pay it off, which is it? If it's pay it off then sell both the cars and buy a cheap banger and sink the cash from the cars back into what you owe. Then list what you spend money on and see where you can make reductions there. It's slow and takes ages but that's the practical way.Other than that you have the easy way (which I must admit is one I dislike) through IVA's etc. However be aware that you have to list assets and the cars are assets.
autoholic said:
OK, so I've gotten myself into a bit of a jam. We've managed by various means to end up spending about £700 per month on debt. And yes that's before the rent, food, council tax etc.
What I need, apart from a miracle, is someone who can advise us on some sort of debt counselling or can consolodate this figure to something more sensible.
I know it's a lot to ask, so I throw myself on the mercy of the PH universe.
We both have steady jobs although both with employment agencies, me on staff, her as a temp.
Thanks in advance.
Depends what the debt is for and the interest costs. What I need, apart from a miracle, is someone who can advise us on some sort of debt counselling or can consolodate this figure to something more sensible.
I know it's a lot to ask, so I throw myself on the mercy of the PH universe.
We both have steady jobs although both with employment agencies, me on staff, her as a temp.
Thanks in advance.
You need to pay it down now as much as possible (sell car if necessary) and then get as much of the debt as possible onto a low interest rate.
The daily is a reasonable daily with insurance at 300 pounds and 40 pound in petrol per 200 miles and only worth about 1500 pounds. The Dart is worth about 7000 pounds if I'm really lucky but the market for V8's is in the toilet at the moment. We've tried to par down as much as possible and keep to a very tight budget but this sadly isn't enough.
As I've said selling the cars isn't really that helpful, as the total debt is way bigger than selling them both. I posted here as not quite the last resort as I was hoping that somewhere on PH there might be a financial expert.
We are renting so IVA isn't the option I wanted to take, I have spoken to the creditors with varied levels of success. However, if I'm forced to sell the cars then we may as well declare ourselves bankrupt and bugger off with our rucksacks.
As I've said selling the cars isn't really that helpful, as the total debt is way bigger than selling them both. I posted here as not quite the last resort as I was hoping that somewhere on PH there might be a financial expert.
We are renting so IVA isn't the option I wanted to take, I have spoken to the creditors with varied levels of success. However, if I'm forced to sell the cars then we may as well declare ourselves bankrupt and bugger off with our rucksacks.
The answer is blindingly obvious but you don't seem prepared to face up to it. Sell the car that's worth most to clear as much debt as possible, and agree manageable repayment terms for the rest. Look into getting a different or 2nd job to earn more cash if possible. Stop living beyond your means and don't expect your creditors to fund your lifestyle. That's the only advice you'll get anywhere.
Write down your outgoings.
Write down your income.
Work out how to reduce the outgoings and increase the income until you're earning more than you're spending, then you'll be in with a chance. What's the highest interest rate you're paying? How much would £7k taken off that debt reduce your outgoings? If that's going to make a significant difference to the income minus outgoings occasion, then face it, you're going to have to sell your toy. It's not the message you want to hear, but its something you need to consider seriously and unemotively.
Write down your income.
Work out how to reduce the outgoings and increase the income until you're earning more than you're spending, then you'll be in with a chance. What's the highest interest rate you're paying? How much would £7k taken off that debt reduce your outgoings? If that's going to make a significant difference to the income minus outgoings occasion, then face it, you're going to have to sell your toy. It's not the message you want to hear, but its something you need to consider seriously and unemotively.
www.moneysavingexpert.com has an excellent debt reduction forum and planning tools.
LeoSayer said:
www.moneysavingexpert.com has an excellent debt reduction forum and planning tools.
I would agree - luckily I haven't had to use it, but the Debt-Free Wannabe forum is *the* place to go. Basically make up a Statement of Affairs (using their tool) listing precisely what you earn, what your outgoings are (EVERYTHING), and what assets/liabilities/repayments etc.You will need to be ruthless though, the usual advice is that all unnecessary spending goes, and I'm sure they will suggest selling the Dart, since it won't get growing in value any time soon and you will save the lost money on the debt interest.
edit: MSE has a decent budgeting spreadsheet too, it will help figure out where the money is going, and where savings can be made.
Edited by Gareth79 on Friday 26th June 15:34
autoholic said:
The daily is a reasonable daily with insurance at 300 pounds and 40 pound in petrol per 200 miles and only worth about 1500 pounds. The Dart is worth about 7000 pounds if I'm really lucky but the market for V8's is in the toilet at the moment. We've tried to par down as much as possible and keep to a very tight budget but this sadly isn't enough.
As I've said selling the cars isn't really that helpful, as the total debt is way bigger than selling them both. I posted here as not quite the last resort as I was hoping that somewhere on PH there might be a financial expert.
We are renting so IVA isn't the option I wanted to take, I have spoken to the creditors with varied levels of success. However, if I'm forced to sell the cars then we may as well declare ourselves bankrupt and bugger off with our rucksacks.
IVA ring fences you so your creditors leave you alone as long as the payments are met and I think you can write off up to 70 or 75% of the debt. On your last point, a friend of mine has just gone bankrupt, he says it was a real relief and he sounded like he was in a similar situation to you.As I've said selling the cars isn't really that helpful, as the total debt is way bigger than selling them both. I posted here as not quite the last resort as I was hoping that somewhere on PH there might be a financial expert.
We are renting so IVA isn't the option I wanted to take, I have spoken to the creditors with varied levels of success. However, if I'm forced to sell the cars then we may as well declare ourselves bankrupt and bugger off with our rucksacks.
How much is your total debt?
What sort of institutions have you borrowed from? Credit cards? Personal Loans? Overdrafts?
Of the £700 per month you are spending servicing this debt, how much is clearing the capital and how much is interest?
You have options:
1. IVA as mentioned above. Creditors may want to see a lump sum from you, they will not like you driving round in a 7k car one little bit and it is the creditors alone who have the ability to approve your proposal. What other assets do you have apart from your cars? IVAs will usually be on terms that you pay X as a lump sum and Y per month for a period of (usually) 60 months. If you fail the supervisor will petition for your bankruptcy. The creditors will want to see that they can get more pence in the pound of your debt than they would if they made you bankrupt.
2. Contact CCCS or the CAB. They are often good at negotiating with creditors about freezing interest, and getting them to accept lower payments to clear the debt.
3. Consider bankruptcy. I don't know what you do for a living but this may have implications for your profession and will obviously mean you will have difficulty in securing any finance in the future (think mortgages and the like).
Consider your lifestyle. You run two cars. Could you survive with one? cycle... share lifts to work etc. If you must run two they could definately be cheaper. You won't like hearing this but it is true.
Cancel any sky subscriptions, stop eating out/having take aways/going to the pub and try to find cheaper hobbies. Cycling, Walking, Reading a book. Rather than going out for a meal for £50 or whatever, hire a DVD for £3 and cook at home. You can have just as much fun doing this.
Don't take foreign holidays, think about things like camping holidays - will be much cheaper and as above can be just as much fun.
Remember the effect of paying off debt has a cumulative effect if you are paying interest. You may think (and you seem to) that paying off 7k right now is not much compared with your total debt, but it will reduce your monthly interest meaning you can start eating into the capital with the £700 per month you are currently paying.
You have to want to become debt free, and be prepared to take these measures to do so.
What sort of institutions have you borrowed from? Credit cards? Personal Loans? Overdrafts?
Of the £700 per month you are spending servicing this debt, how much is clearing the capital and how much is interest?
You have options:
1. IVA as mentioned above. Creditors may want to see a lump sum from you, they will not like you driving round in a 7k car one little bit and it is the creditors alone who have the ability to approve your proposal. What other assets do you have apart from your cars? IVAs will usually be on terms that you pay X as a lump sum and Y per month for a period of (usually) 60 months. If you fail the supervisor will petition for your bankruptcy. The creditors will want to see that they can get more pence in the pound of your debt than they would if they made you bankrupt.
2. Contact CCCS or the CAB. They are often good at negotiating with creditors about freezing interest, and getting them to accept lower payments to clear the debt.
3. Consider bankruptcy. I don't know what you do for a living but this may have implications for your profession and will obviously mean you will have difficulty in securing any finance in the future (think mortgages and the like).
Consider your lifestyle. You run two cars. Could you survive with one? cycle... share lifts to work etc. If you must run two they could definately be cheaper. You won't like hearing this but it is true.
Cancel any sky subscriptions, stop eating out/having take aways/going to the pub and try to find cheaper hobbies. Cycling, Walking, Reading a book. Rather than going out for a meal for £50 or whatever, hire a DVD for £3 and cook at home. You can have just as much fun doing this.
Don't take foreign holidays, think about things like camping holidays - will be much cheaper and as above can be just as much fun.
Remember the effect of paying off debt has a cumulative effect if you are paying interest. You may think (and you seem to) that paying off 7k right now is not much compared with your total debt, but it will reduce your monthly interest meaning you can start eating into the capital with the £700 per month you are currently paying.
You have to want to become debt free, and be prepared to take these measures to do so.
As has been pointed out, sell as many assets as possible to release some cash and pay down the debt.
How secure are your jobs? Do you have payment protection to cover redundancy?
Do you have any equity in your home? Could you remortgage, consolidate the debt over a longer period? While this will extend the time you have the debt, it will reduce your outgoings. You can then bank the "saving" and throw periodic lump sums at the debt to recuce the term.
If you are going down the consolidation route, do it now. If you start to miss payments further down the line, your credit history will go down and it will make it harder and more expensive to do this.
There is the IVA route but I am a firm believer that if you spend it, you pay it back!!
M
How secure are your jobs? Do you have payment protection to cover redundancy?
Do you have any equity in your home? Could you remortgage, consolidate the debt over a longer period? While this will extend the time you have the debt, it will reduce your outgoings. You can then bank the "saving" and throw periodic lump sums at the debt to recuce the term.
If you are going down the consolidation route, do it now. If you start to miss payments further down the line, your credit history will go down and it will make it harder and more expensive to do this.
There is the IVA route but I am a firm believer that if you spend it, you pay it back!!
M
Edited by anonymous-user on Sunday 28th June 19:45
There's no quick fix. It WILL take a long time to sort out. And it will be painful, but worth it in the end.
Make sure you always pay your rent and council tax first, and on time. These two are the number one priority. Credit cards, loans etc, can wait because they can't put you in jail, take your stuff or make you homeless.
Took me over 5 years of frugal living to clear my debts - I moved to a smaller place with lower rent, and I cut back on everything, and I mean everything, from fuel to TV to food. Now I'm back in a stable financial position, and believe me it was worth it and I learned a big lesson. Never going back to that situation again.
Make sure you always pay your rent and council tax first, and on time. These two are the number one priority. Credit cards, loans etc, can wait because they can't put you in jail, take your stuff or make you homeless.
Took me over 5 years of frugal living to clear my debts - I moved to a smaller place with lower rent, and I cut back on everything, and I mean everything, from fuel to TV to food. Now I'm back in a stable financial position, and believe me it was worth it and I learned a big lesson. Never going back to that situation again.
Contact CCCS - consumer credit counselling service - free service. If necessary they will help reschedule debts and will not charge you for the service. DO NOT GO TO A DEBT MANAGEMENT COMPANY. Citizens Advice are OK, but can be a bit "political". I also understand that they have a considerable backlog of cases in many areas of the country.
hth
hth
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