09 Mar 2015

A question about : Sorting my financial life out

Hi all,

Posted on here a while back and as usual I haven't actioned much since my last post and after frank and honest assessment over the weekend I feel the time is right to sort my life out.

Basically I have credit card debt totalling Ј26,000 with the following lenders:

- HSBC
- Halifax
- MBNA
- MINT

I have held all of these cards for at least 3 years and have never missed a payment on any of them. Due to the time I've had them they are all averaging an APR of 18%-22%! The monthly repayments total Ј606 per month and unfortunately due to the rates I'm paying off a minimal amount of the balance which is heartbreaking.

It is a struggle to find this repayment but it is something that I can just about continue to meet and want to meet in order to clear them quicker. I am a homeowner with my girlfriend and have my own business but am earning over Ј45,000 per year at the moment even though there is no guarantee my income is regular, it's looking relatively comfortable at the moment.

I've tried the other options of applying for new cards and loans to re-finance but even though I tick the 'debt consolidation' purpose box I struggle to get anywhere, not only this but I'm aware that most card companies these days own one another so even though you think you're eligible, RBS owns mint and so you can't apply for any of their cards etc etc!

I just feel like I'm getting nowhere and have buried my head in the sand for too long. It's time to take action and work to clearing my debts so that within 5 years I can be free.

I considered the bankruptcy/IVA option but looking at these forums I don't like the idea that I won't be able to move house/obtain a new mortgage in the next 7 years. I'm 26 year old and want to think about having children and moving towards the latter years of that period.

In an ideal world I'd like to take a 25k loan over 5 years, pay off all the cards and still meet a similar repayment to my current one but knowing it's clearing the debt. However, as previously stated, no one as of yet will lend to me as I've got too much debt.

The other option is a debt management program. I understand how these work and that they will still affect my credit rating but am I right in assuming that even if I pay it back over say, 10 years (just hypothetically) that my credit file will be clear after 5-6 years opening up the options of moving again.

Sorry to waffle, in summary my 2 main questions are:

1) Are there any loan providers that people can think of where I can genuinely stand a good chance of being successful. I applied for one on here but realised after it's likely to be secured on my property which I don't like the idea of, even though I can meet the repayment.

2) How long will my credit file be affected for if I go down a debt management route.

3) What would everyone recommend I do?

One final thing - I really don't want to secure any loans etc against my home as don't have any equity.

Really sorry to waffle but desperately need help as I really want to finally sort my life out!

Many thanks in advance for your time and any assistance/experiences you can provide!

Best answers:

  • Looks like you and I are in a similar position so I'll keep an eye on your thread. I have just posted a similar story!
    Quote:
  • The first thing you need to do is sort out a budget. Use the Statement of Affairs (SOA) on the makesenseofcards.co.uk website and paste it into your thread. You'll need to estimate things like groceries but most things you probably pay monthly already, like gas, electric water etc. Annual items you need to work out the monthly amount, ie divide the annual amount by 12; weekly amounts you need to work out monthly (I do this by multiplying by 52 and then divide by 12 but I think you can do it by just multiplying the weekly amount by 4.13).
    Once you've posted up your SOA people will be able to help you with areas where you can save money in order to increase the amounts to can pay to your debts.
    Until you have a realistic budget you can't decide whether or not there is a need for a DMP, IVA or bankruptcy.
    Denise
  • Hi Tobmeister
    I was in a similar position to you at the start of the year but after throwing every spare penny against my debts and working all hours, I'm starting to see progress.
    Just a couple of thoughts:
    - As you're self employed can you not take on any more work to increase your income ?
    - Again as you're self employed, you're in a fortunate position to pay less tax than most people ! Have you made sure that your tax bill is as low as possible and then that would increase your net income ?
    Good luck..
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