£28k in debt.....Need help

[NorthernBinder]

Hi,

 

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.

[gezwee]

Hi NB

 

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

 

Gez

[BankFodder]

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.

[BankFodder]

Please start threads in the appropriate forums to continue

[gezwee]

Hi NB

 

Sorry, just read my response again and its not really all that helpful if you don't know what the acronyms refer to

 

CCCS - Consumer credit counselling service

 

You'll find them here CCCS | Free debt help and debt advice from the UK's leading debt charity

 

DMP - Debt management plan

 

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

 

Best of luck

 

Gez

[mangle101]

1. £12k Lloyds unsecured personal bank loan @ £289 / month which I've had for 4 years. 3 years still left to pay;

 

Do you have loan protection? If so was it mis-sold?

 

 

 

 

Debt Free Since 1st September 2009:grin:

 

Target Savings For 2010 = £1000:-)

 

Savings So Far = £450:lol:

[ukaviator]

First post moved, the rest copied over to new thread for more help.

[the_freedom_trail]

Hi,

 

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

[the_freedom_trail]

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