# Debt management without wrecking credit score



## SarahS23

Cutting a long story short, marriage ended last year and it's left me in over 20k of debt which I'm paying off monthly.all in my name,(naive yes!) and I've never defaulted on anything paying it all back by working hard but want to know if there's any easier way than what I'm doing 

It's currently a loan and the rest are credit card balances. All balances are on 0% and I'm paying the minimum payment whilst 0% to give me breathing space. 

Loan is due to finish May 2016 which is £450 a month, outstanding balance is £8600 on that for a settlement fee as I have checked today. 

I'm paying back £930 a month in debt repayment 

Anyone more clued up able to help me save money or any advice that's helped you?! 

All cards are cut up and I don't use them all I'm simply clearing debt and living within my earnings now. 

Sarah


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## djgregory

Ask your ex to pay half since they are his/hers as well.


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## SarahS23

djgregory said:


> Ask your ex to pay half since they are his/hers as well.


Doesn't work like that I'm divorced now and I'm stuck with it just need to work out how to pay it. He has no morals whatsoever he got off very lightly tbh but I wanted to be out of it and 20k was a small price to pay for freedom tbh.


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## Alfieharley1

Hi Sarah, to be honest I carnt really give any advice or help I'm afraid but by the sounds of
It you are doing the right thing. Paying off large and clearing the debt faster. Yes you may feel down in the dumps some month due to money but just think when your done you will have all that extra money on detailing products ..
Keep on trucking  or get your partner in to pay half the house bills


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## Kerr

It is wise to reduce debt as quickly as possible. Sadly that often means giving up on things you like and making do for a while.

You've got a nice car, but sadly I wouldn't be keeping a nice car if I had sizeable debt to worry about. 

I'd be selling the car and buying something cheap for a while until I got myself back on a steady platform again. 

Lots of other small thing to consider, but that stands out as a very obvious way to eat a huge chunk into the debt. 

Not a good scenario.


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## Andyg_TSi

I second what Kerr Said.

How much is your 5 series worth? - sorry for stating the obvious, but if its worth £8K, then there is your debt virtually cleared by selling the car - and being £950 a month better off

You can always get a cheap runabout and make do for the time being, then if you get something better later on & take out finanance, at least you know that the monthly outlay is on something for you.

Get the car valued & see what you can get for it


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## Steve

I think to be honest Sarah Kerr is on the right path.

I appreciate its hard but you can only do it one way just cut right back on the things you have. Nice car etc etc. You'd be surprised on what you would actually save. I know its a major keep in the teeth but needs must surely?

Its simple little things you need to look at and make changes.. i mean for arguments sake. I wouldnt mess about making lunches for work id just go and buy a sandwich etc. Ok so not much £3-£4 a day. Ok so £15 quid a week. add it up over a month... £60 - £70. 


So really just sit down work out what you can change and save the few extra pennys. I know its sounds stupid but you'd really be surprised what you can save by just working stuff out.



Otherwise its debt management plans and your credit file and life is over. ( speaking from working in collections and ex partners in worse situations than you).


I hope this helps.


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## Nico1970

First of all, I am sorry to hear of your circumstances.

Secondly, I have to say, 'Well done!' - you certainly appear to have grasped the nettle and decided to act in a confident and decisive manner.

You have already correctly identified that you need to pay of your debts and at as low an interest rate at possible. Credit cards at 0% for balance transfers are a great start in that respect. There are other more extreme remedies such as going bankrupt, but if you have a reasonable income and can service your debts, I wouldn't recommend going down that road at all. Much better to pay off all your debts and return to better financial health.

If you haven't already done so, you MUST draw up a weekly / monthly 'budget' of income and expenses. I assure you, by doing this and being completely honest with yourself, you will be exercising an incredible degree of control over your financial life. It's only by writing these things down that you can actually see how all those relatively low-cost items such take-aways, coffees, magazines etc. etc. actually add up to eat into your income.

The biggest thing with debt management is discipline. Before buying anything, and I do mean anything, you really do need to ask yourself - 'Do I need this?'. Make know mistake about this concept, '*need*' means exactly that - it's not want, it's not 'would like to have', it is black and white 'need' - the need to survive and keep yourself protected from the environment.

You may already be aware of Money Saving Expert - if not, visit Martin Lewis' website http://www.moneysavingexpert.com/ - you will find it is an incredible source of information.

Good luck..


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## PaulN

Fair play putting it down on a thread.... you will for sure get some good advice...

Its a bit scary if your Loan is £450 a month but your total repayments for loans and cards are £930 and your only paying off the minimum!!!!

Have you got a Mortgage if so hows that looking? For that size of debt id be looking at extending the motrgage, most will do it as a seperate chuck, more like a loan.

The bottom line is how long will it take to pay off your debts? ie next year youll have another £450 towards credit cars... btw dont cancel your cards you can balance transfer again nex year when the 0% interest period finishes.

Regarding Divorce and debts... they go hand in hand, lile your said its a small price to pay... 2 years on and my life has never been so good in every area...


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## Bero

Money saving expert is a good place for lots of facets of being debt free.


Reduce interest payments (moving to 0% deals or low rate life of debt cards).
Prioritise paying debt with the highest interest rate and minimum payments on lower interest debts.
Ways to minimise cost of necessities (gas, electric, insurance, food etc).
Ideas to reduce outgoings.
Ways to increase your income.

You sound like you have a pretty disciplined approach anyway, stick with it, will make paying the final payment all the more satisfying. :thumb:


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## chrisc

best thing i ever did debt management after getting bummed by all the banks while on sick for nearly 3 year.
In the 3 year i paid over 50 percent of what i owed and actually came out oweing more.
Dont just let it carry on like i did if i sorted it out straight away i would be debt free now.
They now get a fixed amount each month 0 percent intrest there laws that they after abiad to as long as you keep on top.
And like they said owt of value flog I did cars bike computers laptops etc.
Now i dont owe that much i get more satisfation knowing they get a set amount and its all dealt with buy debt management phone your bank for advise on one not just any random team


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## PaulN

Nico1970 said:


> There are other more extreme remedies such as going bankrupt, but if you have a reasonable income and can service your debts, I wouldn't recommend going down that road at all. Much better to pay off all your debts and return to better financial health.


Errrr pretty sure that may effect her Credit Rating....... An indiviual should never be allowed togo Bankrupt IMO.....

It makes a shambles out of everything we should believe and aim for in life...

Everyones missed one big question... Sarah, can you afford the £930? If you cant of course lose the car but if you can just bite down and get it cleared.


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## SarahS23

Kerr said:


> It is wise to reduce debt ad quickly as possible. Sadly that often means giving up on things you like and making do for a while.
> 
> You've got a nice car, but sadly I wouldn't be keeping a nice car if I had sizeable debt to worry about.
> 
> I'd be selling the car and buying something cheap for a while until I got myself back on a steady platform again.
> 
> Lots of other small thing to consider, but that stands out as a very obvious way to eat a huge chunk into the debt.
> 
> Not a good scenario.


Car stands me at very little and I'm not in debt for it, I got rid of a performance hatch for a diesel that will hopefully last me until I get debt free and then can save up for something decent. 
If I get a total **** box don't want to have to shell out maintaining it unfortunately.


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## SarahS23

Andyg_TSi said:


> I second what Kerr Said.
> 
> How much is your 5 series worth? - sorry for stating the obvious, but if its worth £8K, then there is your debt virtually cleared by selling the car - and being £950 a month better off
> 
> You can always get a cheap runabout and make do for the time being, then if you get something better later on & take out finanance, at least you know that the monthly outlay is on something for you.
> 
> Get the car valued & see what you can get for it


It stands me at 4.5k


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## Nico1970

chrisc said:


> best thing i ever did debt management after getting bummed by all the banks while on sick for nearly 3 year.
> In the 3 year i paid over 50 percent of what i owed and actually came out oweing more.
> Dont just let it carry on like i did if i sorted it out straight away i would be debt free now.
> They now get a fixed amount each month 0 percent intrest there laws that they after abiad to as long as you keep on top.
> And like they said owt of value flog I did cars bike computers laptops etc.
> Now i dont owe that much i get more satisfation knowing they get a set amount and its all dealt with buy debt management phone your bank for advise on one not just any random team


The punctuation, syntax, spelling and grammar police will have a field day! :wave:


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## TopTrainer

Sarah

The way your doing it is the right way, there is never any easy way out of this sort of situation. I was in it myself many years ago and had to do what you are now doing.

One bit of valuable advice though that I will give you is, that while its very satisfying to get to the end of it your creditors will have there final pound of flesh by rubbishing your credit rating for 5 years.

Seems totally unfair to me as you have had the decency to repay the debt if you declared yourself bankrupt you would not be penalised for 5 years !!! unless of course that has now changed.


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## SarahS23

PaulN said:


> Fair play putting it down on a thread.... you will for sure get some good advice...
> 
> Its a bit scary if your Loan is £450 a month but your total repayments for loans and cards are £930 and your only paying off the minimum!!!!
> 
> Have you got a Mortgage if so hows that looking? For that size of debt id be looking at extending the motrgage, most will do it as a seperate chuck, more like a loan.
> 
> The bottom line is how long will it take to pay off your debts? ie next year youll have another £450 towards credit cars... btw dont cancel your cards you can balance transfer again nex year when the 0% interest period finishes.
> 
> Regarding Divorce and debts... they go hand in hand, lile your said its a small price to pay... 2 years on and my life has never been so good in every area...


Hi no don't have a mortgage he was screwing me over big time so I never got that far I wouldn't have done so, but that's something I'm planning on doing once I'm sorted financially.

Rent is £650 a month.

Already using a spreadsheet and household budget and I do budget for everything, incoming and outgoing. Because I'm self employed I'm having to average my earnings to cover me, but the deficit of earnings currently means it's tight as I'm in a quiet time of year.

I work from home so I don't have those kind of expenses, and I don't have much of a life outside of work as I'm trying to get as much paid off as I can.

Only luxury I have to look forward to is a holiday in February which I've budgeted for, and as for night out etc I'm not even doing that.

The thought of being nearly a grand a month better off when it's gone is what keeps me going tbh.


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## SarahS23

PaulN said:


> Errrr pretty sure that may effect her Credit Rating....... An indiviual should never be allowed togo Bankrupt IMO.....
> 
> It makes a shambles out of everything we should believe and aim for in life...
> 
> Everyones missed one big question... Sarah, can you afford the £930? If you cant of course lose the car but if you can just bite down and get it cleared.


Yeah i can afford it, but leaves me virtually no disposable income.

I know it's a bit mental saying it on Internet, what I am paying a month but I'm using 35% of my monthly income on debt repayment, leaving me £175 for anything I need outside of what I pay.
I allocate money for diesel, food, kids stuff, kids clothes, repairs, all my bills etc and anything I need comes out of the excess but it's a right tight margin


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## SarahS23

TopTrainer said:


> Sarah
> 
> The way your doing it is the right way, there is never any easy way out of this sort of situation. I was in it myself many years ago and had to do what you are now doing.
> 
> One bit of valuable advice though that I will give you is, that while its very satisfying to get to the end of it your creditors will have there final pound of flesh by rubbishing your credit rating for 5 years.
> 
> Seems totally unfair to me as you have had the decency to repay the debt if you declared yourself bankrupt you would not be penalised for 5 years !!! unless of course that has now changed.


I've not actually missed any payments or arranged anything I'm just paying everyone as normal via direct debit. Credit rating is still as high as it can be as I check it using experian every few months and is still 'excellent'


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## Andyg_TSi

SarahS23 said:


> It stands me at 4.5k


Sarah,

So the loan is £450, but you're paying £930 a month to debt.

So the credit cards are costing £480 a month - and you're only paying off the minimum payments?

If you sold the car & got £4.5K for it & cleared some of the credit cards debts, how much a month would that save you………or how many cards would that clear…

Just thinking out loud, yes the CC debt isn't accruing interest, but its costing you £££ per month, any saving to the monthly outgoing is a bonus


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## Kerr

SarahS23 said:


> Car stands me at very little and I'm not in debt for it, I got rid of a performance hatch for a diesel that will hopefully last me until I get debt free and then can save up for something decent.
> If I get a total **** box don't want to have to shell out maintaining it unfortunately.


I doubt the 535d is any cheaper than a hot hatch to run. Even if it was slightly less by missing out dealer serving and the likes, it's still substantially more than a little Fiesta or something like that.

Running costs are pretty high and there is a few very expensive problems with the 35d too. You could have a bill for thousands around the corner, you never know. At least a cheap car has cheap bills.

We've had a few people ask for help on debt here. Every time the same kind of advice is given, then every time the same response if given. Nobody wants to give up their most prized and valuable possessions, or expensive interests and habits.

If harsh as it sounds, if you want to reduce your debt you need to cut your cloth accordingly.

As you still have finance on the car it makes it even more worthwhile to sell or you will be paying more money for even longer.

I didn't realise you had debts over and above the debt with your ex.


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## SarahS23

Andyg_TSi said:


> Sarah,
> 
> So the loan is £450, but you're paying £930 a month to debt.
> 
> So the credit cards are costing £480 a month - and you're only paying off the minimum payments?
> 
> If you sold the car & got £4.5K for it & cleared some of the credit cards debts, how much a month would that save you………or how many cards would that clear…
> 
> Just thinking out loud, yes the CC debt isn't accruing interest, but its costing you £££ per month, any saving to the monthly outgoing is a bonus


Yeah I am. Itd knock my payments down £200 a month I dare say but I still need a car for work and for the kids etc. By swapping cars I've already saved myself £150 a month in insurance saving and fuel and running costs so I'm quite happy with the BMW as it's already saved me money if you get me. I could get a banger and then end up spending that money on maintaining it


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## SarahS23

Andyg_TSi said:


> Sarah,
> 
> So the loan is £450, but you're paying £930 a month to debt.
> 
> So the credit cards are costing £480 a month - and you're only paying off the minimum payments?
> 
> If you sold the car & got £4.5K for it & cleared some of the credit cards debts, how much a month would that save you………or how many cards would that clear…
> 
> Just thinking out loud, yes the CC debt isn't accruing interest, but its costing you £££ per month, any saving to the monthly outgoing is a bonus


Ps car is worth more than £4.5k this just what it owes me I'd probably get £7k for it


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## SarahS23

Kerr said:


> I doubt the 535d is any cheaper than a hot hatch to run. Even if it was slightly less by missing out dealer serving and the likes, it's still substantially more than a little Fiesta or something like that.
> 
> Running costs are pretty high and there is a few very expensive problems with the 35d too. You could have a bill for thousands around the corner, you never know. At least a cheap car has cheap bills.
> 
> We've had a few people ask for help on debt here. Every time the same kind of advice is given, then every time the same response if given. Nobody wants to give up their most prized and valuable possessions.
> 
> If harsh as it sounds, if you want to reduce your debt you need to cut your cloth accordingly.
> 
> As you still have finance on the car it makes it even more worthwhile to sell or you will be paying more money for even longer.
> 
> I didn't realise you had debts over and above the debt with your ex.


I need a large car for work I have 3 kids and so I need something decent sized for work tbh. 
I don't have any finance on the car it's bought outright. 
Might just sell it and use it to pay some debt off tbh.


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## Kerr

SarahS23 said:


> I need a large car for work I have 3 kids and so I need something decent sized for work tbh.
> I don't have any finance on the car it's bought outright.
> Might just sell it and use it to pay some debt off tbh.


I'm confused. You said it stands you at £4.5k, but it's worth around £7k. That did read to me as if you owed £4.5k.

I didn't understand what that meant as if something's stands you to xxx up here, that's what you owe to it.

It certainly leaves you in a better position if there is no finance.

As horrible as it sounds, it is your biggest assets and the most obvious way to give you some breathing space.


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## empsburna

SarahS23 said:


> Might just sell it and use it to pay some debt off tbh.


I think that will give you a bit more breathing room, as hard as it is to swallow.


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## SarahS23

Kerr said:


> I'm confused. You said it stands you at £4.5k, but it's worth around £7k. That did read to me as if you owed £4.5k.
> 
> I didn't understand what that meant as if something's stands you to xxx up here, that's what you owe to it.
> 
> It certainly leaves you in a better position if there is no finance.
> 
> As horrible as it sounds, it is your biggest assets and the most obvious way to give you some breathing space.


No what i mean is i did a part ex on a car that I got very cheap and made a massive profit on so the car doesn't owe me it's value


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## Nico1970

PaulN said:


> ....... An indiviual should never be allowed togo Bankrupt IMO.....
> 
> It makes a shambles out of everything we should believe and aim for in life...


Whilst I don't disagree with you on the concept of being prudent (which I think is where you are coming from), I wouldn't summarily dismiss individual bankruptcy.

It is a very important safeguard for the individual in this country. We must remember that people get into serious debt for all sorts of different reasons. Clearly, people's circumstances can and do change - they become divorced (as OP said), suffer illness or are made redundant to name but a few 'life-changing' events from a financial perspective.

Regrettably, too, there are the psychological effects of debt - I know of several people who took their own lives, no doubt, due to the horrendous effect of believing there was no other way out of debt. Had these people known there were other ways, perhaps they would still be with us.

Remember too, that debt is a perfectly normal part of 'capitalism'. If it wasn't for debt, none of us would own a house or a car etc. unless we were exceptionally rich. Furthermore, debt, is the lifeblood of industry, it is how business expands and grows into new markets.

There is no question about, individual bankruptcy is an extreme remedy but for some individuals with certain circumstances, it may be the only option.


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## SarahS23

Nico1970 said:


> Whilst I don't disagree with you on the concept of being prudent (which I think is where you are coming from), I wouldn't summarily dismiss individual bankruptcy.
> 
> It is a very important safeguard for the individual in this country. We must remember that people get into serious debt for all sorts of different reasons. Clearly, people's circumstances can and do change - they become divorced (as OP said), suffer illness or are made redundant to name but a few 'life-changing' events from a financial perspective.
> 
> Regrettably, too, there are the psychological effects of debt - I know of several people who took their own lives, no doubt, due to the horrendous effect of believing there was no other way out of debt. Had these people known there were other ways, perhaps they would still be with us.
> 
> Remember too, that debt is a perfectly normal part of 'capitalism'. If it wasn't for debt, none of us would own a house or a car etc. unless we were exceptionally rich. Furthermore, debt, is the lifeblood of industry, it is how business expands and grows into new markets.
> 
> There is no question about, individual bankruptcy is an extreme remedy but for some individuals with certain circumstances, it may be the only option.


I agree and thankfully my income allows me to JUST repay what I need to. Can't say it hasn't crossed my mind but I know the implications of it and the way it impacts your future. And I am determined to get out of this mess and stick two fingers up at the ex to prove that I am better off without him regardless of the mess he left me in.


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## Natalie

Hi Sarah
Not sure if you're aware of this so sorry if I'm teaching you to suck eggs http://forums.moneysavingexpert.com/forumdisplay.php?f=76

Also have you done a statement of affairs? http://www.stoozing.com/calculator/soa.php

I know you've said your cards are 0% so not sure if this one will be applicable to you really? http://www.whatsthecost.com/snowball.aspx

Good luck


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## Nico1970

SarahS23 said:


> I agree and thankfully my income allows me to JUST repay what I need to. Can't say it hasn't crossed my mind but I know the implications of it and the way it impacts your future. And I am determined to get out of this mess and stick two fingers up at the ex to prove that I am better off without him regardless of the mess he left me in.


Sarah - fair play to you girl. You are sensible, disciplined and determined. I don't think you need any advice at all. *YOU* could advise all of us.

Keep her lit, as they say over here!


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## Andyg_TSi

SarahS23 said:


> Yeah I am. Itd knock my payments down £200 a month I dare say but I still need a car for work and for the kids etc. By swapping cars I've already saved myself £150 a month in insurance saving and fuel and running costs so I'm quite happy with the BMW as it's already saved me money if you get me. I could get a banger and then end up spending that money on maintaining it





SarahS23 said:


> Ps car is worth more than £4.5k this just what it owes me I'd probably get £7k for it





SarahS23 said:


> Might just sell it and use it to pay some debt off tbh.


short term pain for long term gain Sarah,

if you can get £7K for it, then thats great, pay £4.5K off the debt & get a car for £2.5K that still big enough for the kids/work, but even cheaper to run than the BMW - road tax/insurance/fuel savings etc

Save yourself £££ on repayments. running costs. you seems quite savvy to me & there's loads of well maintained looked after cars out there that will do you short term while you sort yourself out

plus you'll be debt free quicker and able to move on quicker once its done with


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## SarahS23

Natalie said:


> Hi Sarah
> Not sure if you're aware of this so sorry if I'm teaching you to suck eggs http://forums.moneysavingexpert.com/forumdisplay.php?f=76
> 
> Also have you done a statement of affairs? http://www.stoozing.com/calculator/soa.php
> 
> I know you've said your cards are 0% so not sure if this one will be applicable to you really? http://www.whatsthecost.com/snowball.aspx
> 
> Good luck


Thanks Natalie very helpful


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## GleemSpray

First off, big ups for putting it out there in public, it shows strength and determination.

I think you are approaching it the right way in trying to reduce the debt quickly and also having a spread sheet to give you a rolling overview of your situation.

In your situation I would sell the car to reduce the debt quicker "if" you could find a different car that would meet your needs , be reliable and be cheaper to purchase and run, but that's quite a big "if". It is more worry to swap out a known vehicle when you have kids to ferry around.

Regarding bankruptcy / IVA's etc.

It *IS* sometimes a lifeline for people who are completely trapped in the circle of debt, but it is being irresponsibly promoted these days as a quick and easy reset button for life's financial problems. It isn't and there is no guarantee that your creditors will agree to a reduced settlement of x pence in the pound.

These schemes are being promoted by "Debt Management Companies" who are simply after fee payments for themselves.

The stain and smell of bankruptcy / IVA's will follow you around for life - not just five years.

You look at any loan or mortgage application form and I will bet you that it contains this question " _Are you now or have you ever been declared bankrupt or entered into an arrangement with creditors ?_ "

Avoid bankruptcy / IVA's if you possibly can and hold fast that dream of being a grand a month better off in the not so distant future.

Good luck.


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## Tricky Red

Sorry to hear that you ex has well and truly taken advantage of you. Congratulations on getting rid, you sound better off for it. 

It sounds to me like you are managing your debt responsibly. If you can avoid it, do not go down the route of IVA or bankruptcy; you will pay the price for it in the future with regards to borrowings or mortgaging at a much higher rate in line with the risk. 

I know of some that have entered bankruptcy after accruing debts that they knew were out of control but morally I find it all wrong. 

Good on you for facing up to the responsibilities - Go Girl!


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## Estoril-5

SarahS23 said:


> Ps car is worth more than £4.5k this just what it owes me I'd probably get £7k for it


i wouldnt hold onto a depreciating asset currently worth £7k, if i was paying nearly £1k a month of debt servicing.

buy a car for £2k. and instantly you have wiped £5k off your balance.

people are giving the correct advice. look at the bigger picture and not the right now.

:thumb:


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## PaulN

Nico1970 said:


> Whilst I don't disagree with you on the concept of being prudent (which I think is where you are coming from), I wouldn't summarily dismiss individual bankruptcy.
> 
> It is a very important safeguard for the individual in this country. We must remember that people get into serious debt for all sorts of different reasons. Clearly, people's circumstances can and do change - they become divorced (as OP said), suffer illness or are made redundant to name but a few 'life-changing' events from a financial perspective.
> 
> Regrettably, too, there are the psychological effects of debt - I know of several people who took their own lives, no doubt, due to the horrendous effect of believing there was no other way out of debt. Had these people known there were other ways, perhaps they would still be with us.
> 
> Remember too, that debt is a perfectly normal part of 'capitalism'. If it wasn't for debt, none of us would own a house or a car etc. unless we were exceptionally rich. Furthermore, debt, is the lifeblood of industry, it is how business expands and grows into new markets.
> 
> There is no question about, individual bankruptcy is an extreme remedy but for some individuals with certain circumstances, it may be the only option.


True... I didnt mean it quite so blazay, Its just too many people get into a bit of debt and thin ill just bankrupt myself and it will all go away..... It effects the other people being owed money too....

Anyway for health and other reasons i guess it has its place...


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## PaulN

SarahS23 said:


> Hi no don't have a mortgage he was screwing me over big time so I never got that far I wouldn't have done so, but that's something I'm planning on doing once I'm sorted financially.
> 
> Rent is £650 a month.
> 
> Already using a spreadsheet and household budget and I do budget for everything, incoming and outgoing. Because I'm self employed I'm having to average my earnings to cover me, but the deficit of earnings currently means it's tight as I'm in a quiet time of year.
> 
> I work from home so I don't have those kind of expenses, and I don't have much of a life outside of work as I'm trying to get as much paid off as I can.
> 
> Only luxury I have to look forward to is a holiday in February which I've budgeted for, and as for night out etc I'm not even doing that.
> 
> The thought of being nearly a grand a month better off when it's gone is what keeps me going tbh.


You seem to be doing well with keeping on top of this situation.. more so with 3 kids!!!

I can tell you the obvious thing which is what everyone else is saying flog the car.... But thinking out side of the box.... it would be intereting to see what if any type of mortgage you could get... working for yourself makes it much more difficult, but im sure you could get a decent place on a lower monthly repayment mortgage than your already paying rent which also would have covered all your debt.

It is a bit scary because im saying go futher into debt, in effect your mortgage would be £20k more than the house which may not be possible with current Mortgages...

Bear in mind im no expert on this........


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## m1pui

PaulN said:


> You seem to be doing well with keeping on top of this situation.. more so with 3 kids!!!
> 
> I can tell you the obvious thing which is what everyone else is saying flog the car.... But thinking out side of the box.... it would be intereting to see what if any type of mortgage you could get... working for yourself makes it much more difficult, but im sure you could get a decent place on a lower monthly repayment mortgage than your already paying rent which also would have covered all your debt.
> 
> It is a bit scary because im saying go futher into debt, in effect your mortgage would be £20k more than the house which may not be possible with current Mortgages...
> 
> Bear in mind im no expert on this........


She would also need to find the cash for a 10% or more deposit on a property she's looking to mortgage, and that's without looking as far as the idea of finding someone willing to do a 100+% mortgage. I'm assuming if she had that kind of money in the bank she would've just paid the debt off.


----------



## SarahS23

m1pui said:


> She would also need to find the cash for a 10% or more deposit on a property she's looking to mortgage, and that's without looking as far as the idea of finding someone willing to do a 100+% mortgage. I'm assuming if she had that kind of money in the bank she would've just paid the debt off.


Exactly. So I want to get myself debt free save up for deposit and by then the boyfriend will live with me anyway and we will get a joint mortgage with both of us in a good financial situation.


----------



## empsburna

I hope it all works out for you.


----------



## redrob

I don't have any advice Sarah other than, good luck and stick in there.


----------



## SarahS23

Thanks for the advice Im gonna get the beemer up for sale and see what else I can come up with


----------



## Webbo_VXR

All the best Sarah love the determination


----------



## Andyg_TSi

Sarah,

I notice you said you were self employed, why don’t you try and kill 2 birds with 1 stone.

You say you work from home & therefore don’t commute, other than, I assume, taking the kids places and/or shopping etc & picking up supplies for the business etc…..

Have you thought about getting a commercial vehicle instead of a car, something like, for example, a Mitsubishi pick up, with a double cab & enclosed back?

Being a commercial vehicle, any business use can be accounted for against tax within your accounts; Business mileage, Fuel, Servicing, Road Tax, Repairs etc etc.
You can even claim capital allowances for the cost of buying it.

Being a double cab, it’ll give you the space for the kids, provide family transport & accommodate business need, plus you can claim expenses for running it

Could be win/win, as you’ll be paying less tax as well as part of your outgoings

Just a thought……….

sell the beemer, take what you need to pay some debt, get yourself a decent Mitsubishi L200 double cab pick up, it'll still seat 5


----------



## SarahS23

Webbo_VXR said:


> All the best Sarah love the determination


Cheers webbo see you still have the VXR. I miss mine :'(


----------



## SarahS23

Andyg_TSi said:


> Sarah,
> 
> I notice you said you were self employed, why don't you try and kill 2 birds with 1 stone.
> 
> You say you work from home & therefore don't commute, other than, I assume, taking the kids places and/or shopping etc & picking up supplies for the business etc…..
> 
> Have you thought about getting a commercial vehicle instead of a car, something like, for example, a Mitsubishi pick up, with a double cab & enclosed back?
> 
> Being a commercial vehicle, any business use can be accounted for against tax within your accounts; Business mileage, Fuel, Servicing, Road Tax, Repairs etc etc.
> You can even claim capital allowances for the cost of buying it.
> 
> Being a double cab, it'll give you the space for the kids, provide family transport & accommodate business need, plus you can claim expenses for running it
> 
> Could be win/win, as you'll be paying less tax as well as part of your outgoings
> 
> Just a thought……….
> 
> sell the beemer, take what you need to pay some debt, get yourself a decent Mitsubishi L200 double cab pick up, it'll still seat 5


Never really thought of it tbh, don't know how that would work I'll speak to my accountant and see what he says?! I have no clue how he does it currently think it's mileage based.


----------



## Andyg_TSi

SarahS23 said:


> Never really thought of it tbh, don't know how that would work I'll speak to my accountant and see what he says?! I have no clue how he does it currently think it's mileage based.


if its mileage based, then the costs are aportioned between business & private use & you only claim for the business element

Example, you do 10,000 miles per year, 5000 business & 5000 private, so its a 50/50 split

Therefore 50% of all the costs of running the vehicle is an allowable expense through your accounts

Just keep mileage logs & at end of your accounting period work out how much the business use is as a % of the total miles, the business % bit is then allowable on Road Tax, Servciing, Fuel, repairs, tyres, etc etc etc


----------



## SarahS23

I hardly do any miles tbh I only drive to and from work be lucky if I do 100 miles a week lol. I work from home. But my business is less than a mile from where I live


----------



## nbray67

Sarah.

Having had to take out an IVA in 2001 after being left in a very similar situation to yours, the only thing I would say is DO NOT go down the IVA route while ever you have an excellent credit score, it's for people who are seriously behind with repayments on every bit of credit they have.

Yep, I cut my outgoings from nearly £1k per mth down to £300 towards the IVA but it will screw you for 6yrs minimum with regards to obtaining credit in the future. I eventually sold my house 2yrs into it and repaid the whole IVA, £24k of it BTW, in full at 100p for every £ outstanding.
Admittedly for me, it was the kick up the ar$e that I needed as now, my credit file and financial affairs are better than they have ever been. It does make you only spend what you can afford for the time you are without credit so not such a bad thing.

Being S/Emp doesn't help when it comes to borrowing money, i:e, consolidating the whole lot into 1 lump sum as banks will be cautious on the S/Emp front but have you approached your bank and discussed a solution with them? (sorry if you have already mentioned this in the thread). If your credit rating is excellent then you are in a better position than most that are in debt.

Don't let pride get in your way, this thread shows it won't, so, if not already done, pop into see your bank, you may be pleasantly surprised. They'll see your outgoings monthly from your account to all of your creditors and will hopefully be able to consolidate the debt for you and reduce the outgoings.


----------



## SarahS23

nbray67 said:


> Sarah.
> 
> Having had to take out an IVA in 2001 after being left in a very similar situation to yours, the only thing I would say is DO NOT go down the IVA route while ever you have an excellent credit score, it's for people who are seriously behind with repayments on every bit of credit they have.
> 
> Yep, I cut my outgoings from nearly £1k per mth down to £300 towards the IVA but it will screw you for 6yrs minimum with regards to obtaining credit in the future. I eventually sold my house 2yrs into it and repaid the whole IVA, £24k of it BTW, in full at 100p for every £ outstanding.
> Admittedly for me, it was the kick up the ar$e that I needed as now, my credit file and financial affairs are better than they have ever been. It does make you only spend what you can afford for the time you are without credit so not such a bad thing.
> 
> Being S/Emp doesn't help when it comes to borrowing money, i:e, consolidating the whole lot into 1 lump sum as banks will be cautious on the S/Emp front but have you approached your bank and discussed a solution with them? (sorry if you have already mentioned this in the thread). If your credit rating is excellent then you are in a better position than most that are in debt.
> 
> Don't let pride get in your way, this thread shows it won't, so, if not already done, pop into see your bank, you may be pleasantly surprised. They'll see your outgoings monthly from your account to all of your creditors and will hopefully be able to consolidate the debt for you and reduce the outgoings.


I've checked into it and don't want to add any interest to what I owe I'm trying to get as much of it down as possible. Could consolidate but then that will cost more in the long run. Ideally gonna try and repay the loan first and then use the loan payment money to pay off the balances in order of highest outgoing first to reduce my expenditure monthly as efficiently as possible..

Did wonder if I cleared one of 0% balances first then transferred loan onto a 0%offer but working out monthly payments to tie into it so I didn't pay anything but actually reduced my outgoings but the transfer fee might make it not worth it. Haven't decided yet with that one.

I'm working on a minimum income average so anything over and above this will be used at the end of tax year to pay off a chunk when it comes to it. Approaching a busy time of year so want to be able to reduce some of it as much as I can tbh. Just trying to work out the most efficient way to do so really.


----------



## nbray67

SarahS23 said:


> I've checked into it and don't want to add any interest to what I owe I'm trying to get as much of it down as possible. Could consolidate but then that will cost more in the long run. Ideally gonna try and repay the loan first and then use the loan payment money to pay off the balances in order of highest outgoing first to reduce my expenditure monthly as efficiently as possible..
> 
> Did wonder if I cleared one of 0% balances first then transferred loan onto a 0%offer but working out monthly payments to tie into it so I didn't pay anything but actually reduced my outgoings but the transfer fee might make it not worth it. Haven't decided yet with that one.
> 
> I'm working on a minimum income average so anything over and above this will be used at the end of tax year to pay off a chunk when it comes to it. Approaching a busy time of year so want to be able to reduce some of it as much as I can tbh. Just trying to work out the most efficient way to do so really.


Really then, what you are currently doing is your best course of action.
Obviously, selling and downgrading the car will shift quite a chunk of your debt.

0% balance transfers will also help, the nominal 3% handling fees are worth paying when your saving on the accrued interest.

Nice to see a sensible head on somebody's shoulders with 'debts' as much as this. I let mine get out of control at the time but eventually paid every penny back when I sold my house. To many people nowadays borrow money with the best intention of repaying it but then go to debt advice agencies while still 'living it up' week in week out.

Hats off to you for staying decent and proper!!


----------



## SarahS23

nbray67 said:


> Really then, what you are currently doing is your best course of action.
> Obviously, selling and downgrading the car will shift quite a chunk of your debt.
> 
> 0% balance transfers will also help, the nominal 3% handling fees are worth paying when your saving on the accrued interest.
> 
> Nice to see a sensible head on somebody's shoulders with 'debts' as much as this. I let mine get out of control at the time but eventually paid every penny back when I sold my house. To many people nowadays borrow money with the best intention of repaying it but then go to debt advice agencies while still 'living it up' week in week out.
> 
> Hats off to you for staying decent and proper!!


One thing I am is determined and one thing i have are morals. Just a shame my ex husband didn't. I've learned the hard way and I plan on never being in debt apart from a mortgage in the future after all of this tbh. 
I've never bought a car on finance and never plan to iv guess it's taught me a lot being so naive and trusting. 
Live and learn.

I'm sure I'll have the last laugh.


----------



## Alfieharley1

SarahS23 said:


> I'm sure I'll have the last laugh.


Karma is a b****


----------



## SarahS23

Alfieharley1 said:


> Karma is a b****


Yep and tends to know peoples addresses lol


----------



## Alfieharley1

Lol I hit the thanks button. Should have a like button


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## SarahS23

Haha I use it as a like button anyway ha


----------



## Cookies

Just read through this and it's truly admirable that you're digging down and finding the grit and determination to be able to deal with the hand you're holding at the minute. 

The end is in sight for you and you'll be able to hold your head high once you come through this. Keep doing what you're doing. I genuinely dont think you need advice at all as you have this well and truly sorted.

It's nice to know there are decent hard working people ou there. As Nico said earlier, Keep her LIT!!!

Cooks


----------



## liamsxa

sell the car and buy a honda jazz for 1500 simples


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## swirlyboy

I wouldn't be trying to pay the debt off at a rate in which it affected my life too much, I would keep the car and maybe drop the level of repayments you are currently making and spend some money on yourself.

I appreciate the sooner you pay off the debt, the less interest you pay, however, I wouldn't want a small reduction in interest to affect my life too much.


----------



## SarahS23

swirlyboy said:


> I wouldn't be trying to pay the debt off at a rate in which it affected my life too much, I would keep the car and maybe drop the level of repayments you are currently making and spend some money on yourself.
> 
> I appreciate the sooner you pay off the debt, the less interest you pay, however, I wouldn't want a small reduction in interest to affect my life too much.


However I can't as I'm paying the minimum.


----------



## Kerr

swirlyboy said:


> I wouldn't be trying to pay the debt off at a rate in which it affected my life too much, I would keep the car and maybe drop the level of repayments you are currently making and spend some money on yourself.
> 
> I appreciate the sooner you pay off the debt, the less interest you pay, however, I wouldn't want a small reduction in interest to affect my life too much.


The best way to manage debt is to spend more money?

That sounds like a very dangerous plan to me and how people get completely out of control.

Sarah understands that she isn't in the best position and wants to decrease the pressure she is under. £950 per month paying the minimum payment off on credit cards and load repayments that still have two years to go, she is paying the minimum she is committed to.

Avoiding paying interest on the credit cards is really a must. At 0% it isn't an issue as yet, but once the 0% period ends and you are looking at 20% interest on thousands on pounds, things are going to get out of hand.

Spending more money and leaving yourself money to spend in the short term will come back to haunt her much worse for the long term future.

Your advice is completely wrong for managing debt. It's the complete opposite.


----------



## Webbo_VXR

SarahS23 said:


> Cheers webbo see you still have the VXR. I miss mine :'(


No I got rid just haven't changed the pic yet (don't know how to lol)


----------



## Les Brock

I feel for you, I was in a similar boat, I took out loans etc for her Cars, our Caravan, building works etc etc.....As well I just delt with that stuff

Got divorced and as they were in my name, albeit in a joint account, I was solely responsible ....She walked away with a nice payout, I had to pay all the so say joint debt that we both benifited from out of my half

So to all of you out there if you are getting a loan for a new car, conservatory or whatever make sure you both sign the loan paperwork or it might all land on your shoulders in the future as you never know what is round the corner !!!!

if you both sign you are jointly liable

leason learnt tha hard way !!!


----------



## SarahS23

Les Brock said:


> I feel for you, I was in a similar boat, I took out loans etc for her Cars, our Caravan, building works etc etc.....As well I just delt with that stuff
> 
> Got divorced and as they were in my name, albeit in a joint account, I was solely responsible ....She walked away with a nice payout, I had to pay all the so say joint debt that we both benifited from out of my half
> 
> So to all of you out there if you are getting a loan for a new car, conservatory or whatever make sure you both sign the loan paperwork or it might all land on your shoulders in the future as you never know what is round the corner !!!!
> 
> if you both sign you are jointly liable
> 
> leason learnt tha hard way !!!


Good advice. It's ****e


----------



## swirlyboy

Kerr said:


> The best way to manage debt is to spend more money?
> 
> That sounds like a very dangerous plan to me and how people get completely out of control.
> 
> Sarah understands that she isn't in the best position and wants to decrease the pressure she is under. £950 per month paying the minimum payment off on credit cards and load repayments that still have two years to go, she is paying the minimum she is committed to.
> 
> Avoiding paying interest on the credit cards is really a must. At 0% it isn't an issue as yet, but once the 0% period ends and you are looking at 20% interest on thousands on pounds, things are going to get out of hand.
> 
> Spending more money and leaving yourself money to spend in the short term will come back to haunt her much worse for the long term future.
> 
> Your advice is completely wrong for managing debt. It's the complete opposite.


I'm confused, the total debt is £20k, around £9.5k is on a loan being paid at £450 per month with just under 2 years left. So leaving a credit card debt of around £10.5k, yet paying £480 per month is only covering minimum payments?

My comments came from experience, I spent my youth spending money I didn't have, it was wonderful, I had a brilliant time. Left me with a 6 figure debt that took 3 years to repay, from experience I wish I had taken 4 years to repay it and not sacrificed things to such a great extent.


----------



## SarahS23

swirlyboy said:


> I'm confused, the total debt is £20k, around £9.5k is on a loan being paid at £450 per month with just under 2 years left. So leaving a credit card debt of around £10.5k, yet paying £480 per month is only covering minimum payments?
> 
> My comments came from experience, I spent my youth spending money I didn't have, it was wonderful, I had a brilliant time. Left me with a 6 figure debt that took 3 years to repay, from experience I wish I had taken 4 years to repay it and not sacrificed things to such a great extent.


It's there or there about yeah, I'm paying above minimum payments on 2 of them which is set at £100 per month.


----------



## m1pui

swirlyboy said:


> I'm confused, the total debt is £20k, around £9.5k is on a loan being paid at £450 per month with just under 2 years left. So leaving a credit card debt of around £10.5k, yet paying £480 per month is only covering minimum payments?
> 
> My comments came from experience, I spent my youth spending money I didn't have, it was wonderful, I had a brilliant time. Left me with a 6 figure debt that took 3 years to repay, from experience I wish I had taken 4 years to repay it and not sacrificed things to such a great extent.


You paid off over £100k in 3 years? That's bloody good going.

The credit card payment sounds about right. It's usually about 3-4% of the balance per month as a minimum payment


----------



## Andyg_TSi

swirlyboy said:


> I'm confused, the total debt is £20k, around £9.5k is on a loan being paid at £450 per month with just under 2 years left. So leaving a credit card debt of around £10.5k, yet paying £480 per month is only covering minimum payments?
> 
> My comments came from experience, I spent my youth spending money I didn't have, it was wonderful, I had a brilliant time. Left me with a 6 figure debt that took 3 years to repay, from experience I wish I had taken 4 years to repay it and not sacrificed things to such a great extent.


But that would've been an extra 12 months of interest payments and additional costs.If you don't care about that its fine, it's your perogative.

However, with kids to feed/clothe and other costs, Sarah is in a position she want to get out of quickly, in order to free up cash to provide a better life for herself & her kids. Having nearly £1K per month tied up in debt servicing to the detriment of your home/social life is pretty scary, especially if unexpected bills crop up.

The sooner its paid/cleared the better & if she clears the loan early, she'll pay less interest & cost less

If sacrifices have to be made short term to clear the debt, then this is what I'd do, rather than extending the loan period and it costing more.....


----------



## SarahS23

Andyg_TSi said:


> But that would've been an extra 12 months of interest payments and additional costs.If you don't care about that its fine, it's your perogative.
> 
> However, with kids to feed/clothe and other costs, Sarah is in a position she want to get out of quickly, in order to free up cash to provide a better life for herself & her kids. Having nearly £1K per month tied up in debt servicing to the detriment of your home/social life is pretty scary, especially if unexpected bills crop up.
> 
> The sooner its paid/cleared the better & if she clears the loan early, she'll pay less interest & cost less
> 
> If sacrifices have to be made short term to clear the debt, then this is what I'd do, rather than extending the loan period and it costing more.....


That's exactly why I haven't gone down the refinancing my loan option even though it's been there for me through my bank loan currently. I want to be debt free sooner rather than later and if I can do so quickly that's the key. I just wanted to know if how I was doing it was the best way.

Decided I am going to sell the beemer and use a couple of grand to get a run about and pay a chunk off the loan, reducing the term by another 10 months so I can get it done quicker. It appears the most sensible option to free up some income so then I can work on the credit cards one by one.


----------



## PaulN

Fair Play Sarah.... most ask for this kind of advice and never actually want to hear the hard truth.....

How long have you been seperated/Divorced if you dont mind me asking?


----------



## Nico1970

SarahS23 said:


> Decided I am going to sell the beemer and use a couple of grand to get a run about and pay a chunk off the loan, reducing the term by another 10 months so I can get it done quicker. It appears the most sensible option to free up some income so then I can work on the credit cards one by one.


I think that's a sensible move Sarah.

Well done..


----------



## Kerr

SarahS23 said:


> That's exactly why I haven't gone down the refinancing my loan option even though it's been there for me through my bank loan currently. I want to be debt free sooner rather than later and if I can do so quickly that's the key. I just wanted to know if how I was doing it was the best way.
> 
> Decided I am going to sell the beemer and use a couple of grand to get a run about and pay a chunk off the loan, reducing the term by another 10 months so I can get it done quicker. It appears the most sensible option to free up some income so then I can work on the credit cards one by one.


How long do your credit cards have 0% interest for?

It might be wisest to look at them before the 0% period ends and they become far more expensive than the loan repayments.


----------



## alan hanson

best advice i can give you isnt financial (apart from sell the car) is go and kick him in the balls hard and watch him squirm, will at least make you feel better. does he pay towards the children?


----------



## SarahS23

alan hanson said:


> best advice i can give you isnt financial (apart from sell the car) is go and kick him in the balls hard and watch him squirm, will at least make you feel better. does he pay towards the children?


£80 a month. It's a joke.


----------



## Alfieharley1

SarahS23 said:


> £80 a month. It's a joke.


That is ridiculous. As a father of 2 children I know if I left my other half id be paying a hell of a lot more for my children to have a quality life style and what they need!

that £80 is for 3?

I know he is the father of your children but sounds like a absolute b - end


----------



## SarahS23

Alfieharley1 said:


> That is ridiculous. As a father of 2 children I know if I left my other half id be paying a hell of a lot more for my children to have a quality life style and what they need!
> 
> that £80 is for 3?
> 
> I know he is the father of your children but sounds like a absolute b - end


He's the father of my youngest. He's brought my oldest two up with me but hasn't seen them since. Said didn't want to see them as weren't his despite being with me 9 years and they were very young when we met.


----------



## SarahS23

And yes he is a 🔔🔚


----------



## alan hanson

what a see you next tuesday, is 80 the most you can get from him legally?


----------



## Kerr

alan hanson said:


> what a see you next tuesday, is 80 the most you can get from him legally?


The CSA would claim 15% of his take home pay for one child.


----------



## SarahS23

Yeah he doesn't earn much. Hence the debt!


----------



## Andyg_TSi

SarahS23 said:


> Decided I am going to sell the beemer and use a couple of grand to get a run about and pay a chunk off the loan, reducing the term by another 10 months so I can get it done quicker. It appears the most sensible option to free up some income so then I can work on the credit cards one by one.


Well done Sarah on taking the right step.

Just want to echo what Kerr said in an earlier post.

Please review your interest free periods on each of the credit cards, if you can balance tranfer to another 0% card deal when your current ones run out then thats great.

If you can't then i'd be very tempted to leave the loan as it is & pay off as much of the credit card debt with the £5K you're taking out of the Beemer sale.

Having £1000's on credit cards at 24%+ APR will be crippling if you cannot get another 0% card deal and will, enevitably cost you more to repay than the loan.

At least you know with the loan that the interest is already calculated up front and included in the monthly repayment figure.


----------



## SarahS23

Andyg_TSi said:


> Well done Sarah on taking the right step.
> 
> Just want to echo what Kerr said in an earlier post.
> 
> Please review your interest free periods on each of the credit cards, if you can balance tranfer to another 0% card deal when your current ones run out then thats great.
> 
> If you can't then i'd be very tempted to leave the loan as it is & pay off as much of the credit card debt with the £5K you're taking out of the Beemer sale.
> 
> Having £1000's on credit cards at 24%+ APR will be crippling if you cannot get another 0% card deal and will, enevitably cost you more to repay than the loan.
> 
> At least you know with the loan that the interest is already calculated up front and included in the monthly repayment figure.


Good plan. Thanks for that


----------



## zsdom

If you're getting rid of the car I personally would put that money towards the credit cards but carry on paying what your paying now, your minimum payment would drop with the lower balances but with you paying the same will clear a little quicker.

I dont know if its been asked already but have you looked into the possibility of consolidating over a longer term to lower the monthly payments


----------



## SarahS23

zsdom said:


> If you're getting rid of the car I personally would put that money towards the credit cards but carry on paying what your paying now, your minimum payment would drop with the lower balances but with you paying the same will clear a little quicker.
> 
> I dont know if its been asked already but have you looked into the possibility of consolidating over a longer term to lower the monthly payments


I have and don't want to do that as want to clear it as quickly as possible tbh which is why I haven't consolidated as want to be debt free paying as little as possible additionally to what I owe.


----------



## Cookies

I think you're doing the right thing Sarah to clear it as soon as possible. Good advice here is to try and clear the cards as the interest is so high. Your loan is a fixed amount with fixed interest. 

I bet you'll 've sorry to see the car go though. Just remember it'll be a short term change though and you can look forward to car shopping!

Good luck btw. 

Cooks


----------



## SarahS23

Cookies said:


> I think you're doing the right thing Sarah to clear it as soon as possible. Good advice here is to try and clear the cards as the interest is so high. Your loan is a fixed amount with fixed interest.
> 
> I bet you'll 've sorry to see the car go though. Just remember it'll be a short term change though and you can look forward to car shopping!
> 
> Good luck btw.
> 
> Cooks


Cheers


----------



## slineclean

just brain storming ? but cant you declare yourself bankrupt?


----------



## Kerr

slineclean said:


> just brain storming ? but cant you declare yourself bankrupt?


That really is only a thing to consider when you are in way over your depth with no realistic way of ever getting out.

Sarah lets her property and if for any reason she has to move out, she'll never pass a credit check to let another place and won't get a mortgage.

Being declared bankrupt causes serious issues for a long time.


----------



## GleemSpray

slineclean said:


> just brain storming ? but cant you declare yourself bankrupt?


Just like that !

Quick phone call and a couple of signatures and all your debts will be wiped away.

The people you owe money to will just have to accept their losses and might go bankrupt themselves as a result, if they are a small business or a sole trader.

But Hey!, Who Cares ? That's their problem, Right ?

Main thing is that it frees you up to go spending again.

.... and that is why this country is going down the tubes so quickly. The " _have it now _" generation have no understanding about collateral and debt, its just all plastic cards and new toys.

Fortunately, Sarah has shown she has a lot more brains than that and has a plan for a solid recovery.


----------



## hotwaxxx

I feel for you and I may be late to the party but have you ever considered Zopa?

They are a peer-to-peer borrowing company who lend money (up to £25k) which you pay back within 5 years. They charge interest, of course, but if you borrow less than £14,999 their rates are only 4.8% which is a hell of a lot of difference a credit card provider will charge you (usually 18.9% plus after your 0% rate expires). Plus there is no monetary punishment if you want to pay back the loan early either.

Just an idea if you are struggling. :thumb:


----------



## Guitarjon

Interesting thread, although sorry to hear it's about you Sarah! 

Get rid of credit cards! I've run up credit card debts numerous times and at the ripe age of 28 am almost debt free (again). I spent a lot of money at uni and decided, in my youthful days, it would be reasonable to swap engines and put expensive car parts in silly cars etc. I then bought a car in finance which added to the debt, always being able to pay it but every month dreading the fact that the day after pay day there would be no more money left. So I decided I wasn't prepared to continue skirting myself each month and spoke to a debt management company. They consolidated my debts and made the monthly payments much more manageable whilst freezing all interest (it was the interest that was crippling me monthly). I'll be honest, on my own I couldn't see a way out. I tried to get a loan to consolidate the payments myself but obviously Id maximised my personal borrowing limit and my credit file was taking a beating. 

The only thing I regret was listening to them when they said to stop making payments to the individual creditors as Id now be paying them and they'd send out the money to the relevent companies. However, this did not happen straight away as they failed to tell me it would take 3 months to sort out. Then I got missed payments on my record. Id actually paid the money but they hadn't released it all. Perhaps I should have been more persistent and complained more to the debt consolidators but I'll live and learn. I continued to pay my debts off until I got to a point where it was possible for me to offer to pay a lump sum to reduce the cost.

Now I'm almost 100% debt free. I feel so much better for it. I still have a negligible debt but nothing to worry about. I don't have a financed csr which was bloody hard for me to get rid of but it helped. Funnily, I sold the financed car to get money to pay off the debts but bought a silly expensive to run jaguar with the money I had left so wasn't left with a bad car... Just saying, I've now since seen the light further and traded that in for an even cheaper e61. 

It's the hardest thing in the world when somebody says you have to sell your car (if your like me and you obviously are being in detailing world). Full respect for you for making the decision to. 

I guess what im trying to say is that debt, even if it is being managed, doesn't always make you feel good or see light at the end of the tunnel. It's wise to shift it when you can but some times you need to get creative and make sacrifices. 

I've now become very frugal. I wouldn't spent £63 on some trainers I wanted earlier. I've never felt so confused about trainers. In the past Id have thought nothing of it. Today I had to battle with myself to justify them. Sadly I opted for the £19 ones...


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## mayhem85

I was advised to go bankrupt at 21, had a new born, fiancee and a council flat oh and 48k worth of debt. I worked 3 jobs for almost 8 years which made me really ill and still had no money to live on. It was some of the hardest times of my life. I was very proud to pay it back and now my situation is very different. If i had gone bankrupt i would have had a couple of rough years but wouldnt have almost destroyed myself in the process. I missed alot of important points in my childrens lives because i had to work. I think the stigma of bankrupcy is worse than the reality of it.


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## GleemSpray

mayhem85 said:


> I was advised to go bankrupt at 21, had a new born, fiancee and a council flat oh and 48k worth of debt. I worked 3 jobs for almost 8 years which made me really ill and still had no money to live on. It was some of the hardest times of my life. I was very proud to pay it back and now my situation is very different. If i had gone bankrupt i would have had a couple of rough years but wouldnt have almost destroyed myself in the process. I missed alot of important points in my childrens lives because i had to work. I think the stigma of bankrupcy is worse than the reality of it.


I understand what you are saying, but it is important to realise that bankruptcy and IVA's wrecks the life's of your creditors and the people employed by them.

When you sign those forms and the people you owe money to get paid just 10 pence for every pound you owe, it leads to redundancies and bankruptcy and debt for them, even though they have done nothing wrong.


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## andy665

GleemSpray said:


> I understand what you are saying, but it is important to realise that bankruptcy and IVA's wrecks the life's of your creditors and the people employed by them.
> 
> When you sign those forms and the people you owe money to get paid just 10 pence for every pound you owe, it leads to redundancies and bankruptcy and debt for them, even though they have done nothing wrong.


I agree with this, however I watched a very good friend of mine go through hell before he went bankrupt.

He worked for 4 years trying to pay off creditors, in the end he was left with just credit card debts but the more he paid the more they wanted, they wanted to constantly ramp up the payment s and in the end he just could not take the harassment (and it was harassment - I saw the drawer full of letters) and took the bankruptcy route - he was ashamed and humiliated but he felt the only choices he had were this or suicide - it was not a nice thing to watch a good friend go through


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## GleemSpray

andy665 said:


> I agree with this, however I watched a very good friend of mine go through hell before he went bankrupt.
> 
> He worked for 4 years trying to pay off creditors, in the end he was left with just credit card debts but the more he paid the more they wanted, they wanted to constantly ramp up the payment s and in the end he just could not take the harassment (and it was harassment - I saw the drawer full of letters) and took the bankruptcy route - he was ashamed and humiliated but he felt the only choices he had were this or suicide - it was not a nice thing to watch a good friend go through


 It can be impossibly difficult for people with large debts. The one good thing about entering into an arrangement is that you can get some degree of shelter and protection from such harassment by creditors.

What bothers me is the complacent advertising of IVA's, which deliberately give the misleading impression that you just sign a few forms and use a loophole in the law to skip merrily away with a clean sheet. I think they encourage young people to "have it all right now ".

It catches people up later in life when they want a mortgage or a bank loan and they then realise the stain that is still attached to their name. Same with unsatisfied CCJ's.

Flip side of this, as many will know, is that if you have no debts + have money or property, then you have massive clout when it comes to securing good interest rates on mortgages or loans. You can reduce the price of property you are buying if you are able to dangle a wad of ready cash too.

It makes you think about life when you see people who are in real danger of going under, because they cant put their hands on that few hundred quid that they have to find right now to pay bills or stave off the creditors.


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