debt help

[Chris340gti]

morning all , so I've got into a little trouble with debts.

Its starting to feel a little all encompassing and starting to take over my thoughts..

Whenever I've tried to google it all that shows up is IVA's and bankruptcy websites, I don't need this I just need advice and what to pay off first etc.

I can just about afford to pay the bills and debts but ideally I need the best possible route so I don't sink under the weight in the meantime..

I do not want to go down the bankruptcy route, its just small loans and CC's

Citizens advice are they any good ??? or do I need a financial advisor??

thanks guys

[Freakuk]

I'd say go to your bank and have a frank conversation with them.

My wife was a senior manager for several decades of a major high-street bank and saw this everyday, they'll sit down look at your debts and help consolidate this into a single manageable payment plan.

[ferret50]

Can you balance transfer to a single credit card?

You may find one with a lowish single fee and be interest free for up to 30 months or so. But do NOT use it for additional spending!

[butchstewie]

OK this is the bit nobody likes because it can feel like airing dirty laundry in public but perhaps list whatever detail you're comfortable listing.

Some people take the view if there are 50 debts and you can get 5 paid off do that just because psychologically seeing the number of bills reduce be easier for some people.

Some people take the view pay off the highest interest bearing ones first because those are the ones costing the most.

Prioritise. Not paying your rent/mortgage will likely have a bigger impact than paying a store card late.

StepChange and Citizens advice will be worth a call.

[Colonel Cupcake]

There are a few schools of thought.

Concentrate on the debt that has the highest interest rate. Pay that off first. Then tackle the second highest and pay off extra with the money you would have used on the first debt and so on and so on.

Another way is to do the same with the smallest debt and work your way up.

[Digga]

butchstewie said:

StepChange and Citizens advice will be worth a call.

^This. It is precisely the sort of issue that they are well equipped to help with.

Good luck and keep buggering on. Do not let it grind you down.

[SchillingTwo]

If you’re not at the level of looking at bankruptcy or formal debt arrangements then a good place to start is to see if you can transfer any of the debt onto zero-interest cards and to pay off the ones with the highest APR first.

Are you certain that you are currently in surplus, as in you have more coming in each month than going out, including interest payments?

To check you need to do a proper budget, listing all your incomings and outgoings, and this means a true one, not what you’d hope to see in a good month but what you actually get in and spend now.

[Turn7]

Concentrate on the highest interest debt first …

Min payment one everything else until the highest rate is gone , then work back .

Cut up all cards now.

Be cautious with 0% transfers as they obvs carry a charge to start and don’t always allow full balance transfer , subject to credit scores.

Cut the unnecessary expenditure, Costa , takeaways etc.
If you can increase earnings , overtime etc, then increase payments .

It takes patience as it’s a slow process ,but it’s possible..

[mwstewart]

Aren't there debt consolidation products out there? In your situation I would focus on paying off or consolidating debts that will reduce your monthly outgoings the most, even if that leaves you with some of the higher interest loans. The step after that once you have a bit of breathing space (contingency) can be tackling the remaining liabilities in order of interest.

[Simpo Two]

Colonel Cupcake said:

Concentrate on the debt that has the highest interest rate. Pay that off first. Then tackle the second highest and pay off extra with the money you would have used on the first debt and so on and so on.

Yep. Also, go through your bank statement and identify every cost. All those little DDs for £6.99 and £15 all add up over a year. Multiply them all by 12 to see.

[Muzzer79]

Chris340gti said:

morning all , so I've got into a little trouble with debts.

Its starting to feel a little all encompassing and starting to take over my thoughts..

Whenever I've tried to google it all that shows up is IVA's and bankruptcy websites, I don't need this I just need advice and what to pay off first etc.

I can just about afford to pay the bills and debts but ideally I need the best possible route so I don't sink under the weight in the meantime..

I do not want to go down the bankruptcy route, its just small loans and CC's

Citizens advice are they any good ??? or do I need a financial advisor??

thanks guys

How much debt are we talking, in £?

How much are you currently paying off every month?

This is not to sensationalise - the amount and ability to pay will affect the advice you're offered because £5k of debt you're paying at £300 a month is different to £50k of debt at £100 a month, for example.

[Freakuk]

Get rid of the luxuries.... do you need Netflix, Sky, Spotify that alone is a big chunk per month.

Stop the Costa's, meal deals etc and make your own lunch etc.

[Dave Hedgehog]

citizens advice can be very good

there are also a lot of knowledgable people on the MSE forums, and a lot of good guides

https://forums.moneysavingexpert.com/categories

[SchillingTwo]

mwstewart said:

Aren't there debt consolidation products out there? In your situation I would focus on paying off or consolidating debts that will reduce your monthly outgoings the most, even if that leaves you with some of the higher interest loans. The step after that once you have a bit of breathing space (contingency) can be tackling the remaining liabilities in order of interest.

One problem with debt consolidation can be that it hides the source of the underlying problem rather than fixing it.

Sweeping monthly obligations up into one “simple, affordable monthly payment” spread over many years can see the now empty cards being used again for everyday expenses.

[CMTMB]

Create a spreadsheet (or use a template) with all your bills, debts, income and outgoings and track everything closely and accurately
Prioritise repaying the highest interest debts first
Look at refinancing options / debt consolidation if it's going to save you money in interest
Strip back any non essential bills / direct debits
Set yourself a sensible budget for 'spending money' and stick to it
Live a boring life for a while, it'll be worth it in the end

[Saleen836]

Firstly you could write to all your creditors and explain your financial situation and ask for them to freeze the interest and any charges on the debt, also include a realistic repayment plan for them.
There will be letter templates online to help with this

[Chris340gti]

wow thanks for all the good advice.

The problem is I've used all the 0% CC's but they've come to a end now and sadly a few more bills ( large gearbox fix for car ) came along which mean I could not pay off as much as id planned . So I think its in danger of spiralling .

Also work patterns, changes at work means the possibility of losing my enhance pay for weekends and OT, which would be a major kick in the balls. But this is not due to start ( possibly ) until next spring..

Think I'll go see citizens advice as sadly I'm just not very finance savvy..

and if any young ones are reading this please keep control of your finances, don't be blaise like me , as it takes over your whole life and you cannot think about anything else !!

thanks everyone

[butchstewie]

Citizens Advice and StepChange are there but nobody reading this thread knows if you're talking about £5K or £50K worth of debt and that does make a difference IMO.

If you don't want to list detail that's fair enough but if you haven't already done so I would suggest spreadsheeting the hell out of everything as sometimes seeing it written down can help with focus and can also be a bit of an eye opener.

I'm simplifying massively here but there is "stop spending and start paying off" debt where it's behaviour driven and a bit of grip fixes it and there is "you've got a real problem" debt where expert help and advice is probably much more helpful.

Nobody really knows which it is here.

[Mar5hall]

Chris340gti said:

morning all , so I've got into a little trouble with debts.

Its starting to feel a little all encompassing and starting to take over my thoughts..

Whenever I've tried to google it all that shows up is IVA's and bankruptcy websites, I don't need this I just need advice and what to pay off first etc.

I can just about afford to pay the bills and debts but ideally I need the best possible route so I don't sink under the weight in the meantime..

I do not want to go down the bankruptcy route, its just small loans and CC's

Citizens advice are they any good ??? or do I need a financial advisor??

thanks guys

Morning mate, sorry to hear you’re going through it. That “taking over your thoughts” feeling is rough, but the fact you’re on top of bills and asking the question means you’re in better shape than you probably feel.

Skip the bankruptcy/IVA sites for now, that’s not where you’re at. For actual advice, StepChange or National Debtline, both free UK charities with no sales agenda. Citizens Advice is solid too. StepChange has a free online tool that maps your whole situation and gives you a proper plan, worth doing before anything else.

On what to pay first:

• Priority debts always first: rent/mortgage, council tax, energy. Missing these has way worse consequences than missing a card payment.
• Then your loans/cards, either smash the highest interest rate first (saves most money) or smallest balance first (quick wins, keeps you motivated). Given how you described feeling right now, don’t discount the small-balance-first approach just because it’s not “optimal”, momentum matters.

On consolidating/balance transfers, can genuinely help, but two rules if you go that way:

1. Only makes sense if the new rate is actually lower than what you’re paying now
2. Once you move the debt, cut up the old cards. Don’t leave that credit line sitting there, that’s how people end up with the consolidated debt and new debt on top

Get StepChange to run the numbers on your actual figures first though, they’ll tell you straight if it’s worth it. You’ve got this, just don’t sit with it in your head, get it down on paper.

[Panamax]

Muzzer79 said:

How much debt are we talking, in £?

That's the first question.

And the second question is what car do you drive? If it's got significant value then it's almost certainly time for a substantial downsize. Getting some immediate cash helps to stop the interest running.