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1 year challenge to clear debts

(103 Posts)
IwanabeDebtFREE Thu 08-Nov-12 12:02:33

I owe 25K on a mixture of credit cards and an overdaft. I want to clear this in one year.

I have started some changes, food shopping/packed lunches which will save me at least 4000 alone.

I have listed out the debts with highest interest rate ones to be tackled first and am going to use snowball technique.

I am owed some PPI which I will repay debt with.

I have surrendered an insurance policy this morning which is uneccesary which I can get 4000 for

Going to Ebay and sell gold.

wish me luck the challenge begins and anyone else wish to join me welcome

ChicMama25 Mon 12-Nov-12 13:36:40

What we do is make up loads of shepherds pies, pasta bakes etc at the weekend (about once a month or two months) and freeze them. Then we supplement with salad for dinners. We shop at Lidl (honestly it is so much cheaper) and cycle everywhere.

Mum2Fergus Mon 12-Nov-12 13:44:56

Ive done a meal plan to use up whats fresh (and cant be frozen) in the fridge now, that will do us through til Wed, then have 4 rammed freezer drawers to get through...doing that bit of planning this afternoon. I have started to freeze what leftovers I can. I did a lot of batch cooking while pregnant/on matleave that I'll get back into once Ive a free drawer in freezer. Ive switched to a lot of value brand things too. We run 2 vehicles, mine was a rash purchase that I still kick myself about sad but I currently have it advertised for sale. Sadly, we do need 2 cars at the moment.

Fluffycloudland77 Mon 12-Nov-12 16:34:03

I still have all the letters from cc companies telling me they debt was paid and the account closed.

RarelyUnreasonable Mon 12-Nov-12 16:50:38

fergus I would try to pay off savings first and would pay the minimum on the loan and 0% CC. Snowball all your free money at the other CC.

Can you overpay on your loan? I'd attack that next until the 0% CC runs out. When the 0% runs out, apply for another one. If rejected, maybe you could add the balance onto a low interest loan that you can overpay on.

I would continue renting. Or look at buying on a new build development as they often offer gifted deposits (so you need less to put down) and will pay legal fees and stamp duty if you get a good deal.

Mum2Fergus Mon 12-Nov-12 16:57:54

It must be very fulfilling to browse through those Fluffy! My two successes to date are only evidenced online so nothing physical to show for it...other than the extra £60+ per month of course grin Ive also cut SKY back to back to package (much to DPs annoyance, but that was shortlived as he's now found a site a can stream matches via t'internet) saving almost £30 per month!

Fluffycloudland77 Mon 12-Nov-12 17:41:33

Not as much as you'd think.

Usually I think "what an idiot getting all that debt". Seeing how DH's ex has played the bankruptcy system I wish I'd maxed out a few cards in cash withdraws and gone bankrupt.


<NB this isnt a sensible plan>

Mum2Fergus Mon 12-Nov-12 18:52:43

Lol fair point! Have decided that anything over and above the £250 I squirrelled away on pay day will go towards the interest attracting part of my credit card grin

Fluffycloudland77 Mon 12-Nov-12 18:56:55

I worked with a girl who had a cc that was charging a lot of interest, 35%.

She missed or was late with a few payments and by doing this was able to claim hardship as she had a child. They reduced in % massively. I think her monthly bill was £200 but £190 was the %!.

I dont know if you can still do this but it might be worth looking into. Moneysaving expert would know the answer.

Mum2Fergus Mon 12-Nov-12 18:57:34

Funnily enough, the area Im looking at has 2 new developments onsite with a view to sales commencing early 2013 so will suss out their launch details. Just need to hang on to rental as long as I can meantime. It was just valued today and landlord had offered me first refusal on it. In all honesty I want to move but will try to eek out the process with landlord as long as I can blush

Mum2Fergus Mon 12-Nov-12 19:00:30

I doubt Id qualify for any hardship...we actually have a fair residual income, just havent been very wise with it in the past blush

aceupmysleeve Fri 16-Nov-12 15:21:48

I'm determined to clear my debts in the next 12 months too. I'd urge you all to contact one of the debt charities (Stepchange (used to be CCCS) or National Debtline or CAB), especially if you're paying high rates of interest. My debt is mostly on unsecured credit and over the years has reached £40k. I've been recommended for bankruptcy by Stepchange, but until I get that sorted I've arranged to pay token amounts of £1/month and got the interest frozen.

Bankruptcy might not be the best option for you (I rent so am not concerned about losing my home, but if you have a mortgage you would) but you could still consider other options, like an IVA. Generally you'd pay less overall if you used an IVA or Bankruptcy than if you just tried to pay off your debts without an arrangement. You could also negotiate a final settlement for less than the cost of your debts - some creditors will accept that.

If you have health problems or are vulnerable in other ways (I am disabled), the credit card companies have to take this into account if you're having problems repaying.

There should be no need to scrimp and save just to repay debt - I have just done a statement of affairs and they allow costs for a reasonable style of living - normal food bills, haircuts, a small holiday and cost of running a car. Sometimes they expect you to pay any surplus income for three years, but due to my low income I won't have to. They don't take any of your personal items or things in your household, only things they can realistically sell for a decent price.

Mum2Fergus Fri 16-Nov-12 18:05:06

Hi Ace, and welcome! Pay day for me next week and hope to have in the region of £500 left from last month. Will put half to savings and half as extra payment to cc.

Mum2Fergus Sun 18-Nov-12 20:49:07

So pay day on 20th and I will be able to put away £500, half to savings and half overpayment to CC...happy with that! Have just put 5 listings in Gumtree too. Freezer looking healthy so only withdrawing £50 cash for housekeeping this week instead of usual £100. How is everyone else doing?!

oohlaalaa Sun 18-Nov-12 21:14:19

I'm joining too. I have 9k of debts. I'm joining on 18th November, and going to try and give you all updates on 18th each month. It's already in outlook.

AbbyLou Sun 18-Nov-12 21:35:00

I would so love to be part of this thread. We have a lot of debt and started paying it all off about 2 years ago with a debt management company. With hindsight this was a bad decision as we have to pay them a monthly fee and seem to be getting nowhere fast. At the time we just wanted help quickly and they provided a solution.

Mum2Fergus Sun 18-Nov-12 21:48:14

Welcome Oohlaalaa, look forward to your updates...what are your plans for clearing the debt?

Mum2Fergus Sun 18-Nov-12 21:49:33

Abbylou, welcomw...have you sought advice to see if there is anyway to get out of your current plan?

AbbyLou Sun 18-Nov-12 21:58:47

I have looked tonight at the Stepchange website and like the look of it. I am sure we are not tied into our current plan and it seems you can transfer plans you already have - I thought you couldn't. Dh and I have made a pact to sit down on Friday night and go through all the paperwork to do their Debt Tool and see if we can move our DMP to them. That would save £65 a month in fees. We have also decided tonight to make a £50 a month overpayment onto the biggest debt still charging interest. It's not a lot but at least it will be cut into the actual debt rather than the interest. Hopefully once that £50 becomes the norm and we don't notice it we could increase it. We earn good money between us but because of bad decisions in the past we are so skint.

Mum2Fergus Sun 18-Nov-12 22:52:45

That sounds promising Abbylou, and well done commiting an extea £50 to the pot toio. Like you, I/we have good incomes however could have made better choices in the past sad

One of my Gumtree items getting picked up tomorrow smile

AbbyLou Mon 19-Nov-12 07:00:01

It's awful isn't it? I'm sure people look at us and think 'wow they must be pretty well off, both on good money etc etc'. The truth is we don't have any luxuries, only essentials. We work hard to make sure the kids don't ever feel it but never get nice new things for us. We are more determined than ever that we have to stop it though. This time next year dh will be about £100 better off salary wise and will finish off paying a debt to his dad for a new boiler which will save us £200 a month. We are just about coping now without that money so it will be great to put at least £200 of that into the debt a month.

oohlaalaa Mon 19-Nov-12 07:26:46

Mum2Fergus - I am already very very frugal. I'm fed up of it, I want to be able to afford a hair cut, and need to get my car serviced.

I'm not going down the how can I save even more pennies, but how I can earn more. I will continue to be frugal, but will need to earn an additional 9k in next twelve months too.

AbbyLou Mon 19-Nov-12 17:11:07

First step done. Dh has redone his car insurance through a comparison site and saved himself £30 a month - he has much better cover too.

Paintyourbox Mon 19-Nov-12 18:31:29

Iwannabe I recently made £400 for my parents by selling their old gold items.

Whatever you do DON'T sell it to any of those tv cash-for-gold places as they rip you off. Here is what I did:

1. Look at the hallmarks to find what carat the gold it (plenty of guides on google)

2. Weigh all of the gold (split it into the different carats)

3. Look at Hatton Garden Metals for their daily gold prices (they pay the actual value daily) and then work out what your gold is worth.

4. Go to a local jeweller (pref an independent one as they tend to pay better) and offer them the gold. As you know what it's worth you will know what price you are prepared to accept.

5. You can send it off by post but that does mean you have to pay special delivery so need to weigh up if its worthwhile for the few extra pennies you may get.


Mum2Fergus Mon 19-Nov-12 21:42:31

Thats great news Abbielou, well done! Are you going to look at the rest of your providers?

1 Gumtree item away tonight, only £10 but means I'll only withdraw £40 cash for housekeeping this week (instead of usual £100 Im going for £50 this week). Big one on Fri, have someone coming to view/test drive my car...its on for £7.5k grin

Mum2Fergus Mon 19-Nov-12 21:45:15

Oohlaalaa, what have you in mind to increase income? Know what you mean, it would be great to just use my money for something nice for a change. Ive no transferable skills that I could take from workplace and use at home to bring in more, so frugality is my only option at the moment!

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