Debt. How did you fix it

[chardonayforme]

I've managed to run up into debt and now I'm panicking abit about paying it all back. Can I ask if anyone here has ever been in debt? What was the best way to fix it? (Obviously paging it back but a kind of plan) I have come to the realisation I spend more than I have and spend more than what I get a month so it is a personal issue clearly and tonight I want to make a change it's on my mind 24/7 and is making me miserable.

Total all together I'm looking at about 1006 maybe a bit more
Between 4
Cc and finance agreement / pay monthly for items you buy
And I have about 280
Xx

Will a 0% effect my score for applying for one? Which is the safest do you know? I cut my capital one card up and haven't asked for a new one since. I may do the same with the other 1 now

Is there any way you could increase your income? I appreciate now may not be the time but there are some places that are recruiting.

I strongly advise not to get a loan if you already have multiple debts and bad credit. You could look at applying for a credit card with a 0% interest rate, there are several available for bad credit scores. Cut up the card so that you can't spend on it though!

Check how much you have guaranteed coming in each month. Then make a list of essential spending: rent, bills, food, things you are committed to spend or need to spend to live. Take this off the income and see what you are left with spare.

So what you are left with spare goes towards your debt (and lucky we are in lockdown so you're not tempting spend it on social or fun!). First you pay the minimum payment of each debt. Then if anything left over you put that towards the debt that is costing you the most - has the highest interest rate or fees.

If you don't have enough spare to pay the minimum payment of each debt then call the company/card provider, explain your circumstances, and ask for a payment break. Most companies - particularly under current circumstances - will be sympathetic to this.

As for credit score, clearing debts will help with this. Make sure you are on the electoral register. Pay bills on time. Don't run up new debts. Eventually you can build the score up.

Stepchange charity.

Don't panic OP, lots of us are in this position but it is fixable and there has been a lot of useful info on this thread. For me it's been coming to terms with how irresponsible I've been for a start, I'm really ashamed of how I've handled money. I used a 0% credit card and then life happened and I ended up with 4 more, mainly from moving debts around and switching once the 0% deal ran out. The other thing I did was after I'd moved debt over I then used the credit card again on an interest free deal and the whole thing just got out of control. I wasn't really thinking about what I was doing at the time, then I realised I was spending more than I was making and I had to take action.

For me the best way has been to take out a consolidation loan over a fixed term and at a fixed rate, so I know what my payment will be every month. I paid off the highest interest credit cards first and then the ones with the highest monthly payment out of my bank. With those 3 consolidated my monthly payment reduced by £150 which has made a massive difference.

Then I focused on the cards which were left, consolidated 2 of them and left the third which was the lowest amount. I've upped my payment to the 1st card to cover the consolidation and a bit more, then worked out how many months it'll take to clear the 3 debts - one is 12 months and the other is 18. So once they have gone I'll just have the loan payment to pay off, I'll save alongside my monthly payment and then pay a lump sum off it so that it doesn't run the long term I've taken it out over. I am paying interest, and will pay a fee for early settlement if that happens but the difference is that it's organised and predictable.

Next I have cut up my cards except for one, the one which shows up on my online banking so I have to see when I've used it every time I want to check my bank account.

Facing up to it is the key, you'll be ok OP and once it's all paid off you'll feel really good. Remember that you're not on your own.

I used to be in debt....only an overdraft but could never get out of it. Mum paid it off once and l went straight back in it...got myself a 2nd job and paid every penny off myself and have never been overdrawn since. Do a spreadsheet of dates payments go out, who they go to and the amount. As soon as it goes out mark as paid. Check your bank account every day so you know exactly what is in there. But well done for wanting to nip it in the bud. You can do this xx

I should just add that I was paying minimum payment on my credit cards and had started to get letters about only ever paying the minimum- companies (pre corona) were discouraging it which was one of the reasons I was feeling so bad about my debt.

There are loans available for people with poor credit, don't rule it out.

@barn. Where are these loans? I have not found any. If I got one I'd pay every single thing off and never look back !!
@Fishfingersandwichplease that's exactly like me
Infact I forgot to add I'm also in my 100 pound overdraft with NatWest !
With 0% interest cards are they paying the credit card your balance and you are then paying them on 0% over a fixed time?

@chardonayforme

'Total all together I'm looking at about 1006 maybe a bit more
Between 4
Cc and finance agreement / pay monthly for items you buy
And I have about 280'

plus 100 overdraft

If I was you, I'd pay the overdraft asap, then the next smallest debt if approx 100 or under. If none are 100 or under, tackle the one with the highest interest rate.

With 280 extra a month, chucking what you can at the debts while staying away from additional purchases will chip away faster than you think!

I'm loosing sleep over it all. I pay it then spend it again but this time I really really want to make a change. It's not even worth the stress so once I've done this that's it.
Does a 0% card pay the amount and then you pay them?

Contact Citizens Advice they will go through it all with you and help you find the best solution

I've just tried to do the card but it's saying it's a credit card. So I'll never get accepted for a 0% balance to do that.
I will ring them on Monday if they open

We have completely transformed our finances and paid off over half of our debt. I found the MoneySavingExpert site really helpful. In particular the debt free forum. They can give you all the advice you need. Like PP have said they will need a SOA (statement of affairs). I actually found Dave Ramsey's method worked better for us. We have our £1000 emergency fund and have paid off over £6500. Most importantly, we have not added to our debt in 2 years. It feels amazing to be in control. You're not thay deep into the debt hole. You can turn this around.

Cut up the cards!

Cut up all your credit cards except one for dire emergencies. Keep that one in a box on top of your wardrobe.

What are you spending on and what are your triggers?

What do you mean 'you only get 415 per month'? Is that your income? Is someone else covering your living costs? What have you spent your this money on - basic living or shopping and socialising? If your credit is bad, it's unlikely that borrowing more money will solve your problem as the interest rate will be very high.

If your debts are at the stage where you can't afford them after you have paid your essential living costs then you need formal help from someone who has far more information about your finances than what you have posted here.

Have a look at the moneysavingexpert money makeover for advice on setting a budget, increasing income, cutting costs, correctly prioritising where your money goes and signposting to the help you need.

www.moneysavingexpert.com/family/money-help/

You let the CC company know which loans you are paying off, the CC company pays them and leaves you with X number of months to pay them back at 0%

However they usually set the bar low (mine I was paying minimum £50 a month but they were asking £25 - so make sure you up the payment)
If you spend on the card the interest rates spiral (0% is only on the balance transferred)
And you pay off spent debt first

So do not use the card!!

Lots of comparison sites and suggested % of you getting approved

Is estimated interest/ interest what u will be charged IF u only make minimum payment ?

Hi OP, I was where you are a year ago and I have managed to get out of the debt cycle this way:

1. Have 2 accounts, one with no card (cut it up if you have to)

2. Consolidate debts into an interest free balance transfer credit card, I got one 2 years interest free through Experian even with poor credit

3. Cancel the rest of your cards so you can't use them once transfer is complete.

4. Divide the total debt by the number of months interest free.. this is your debt payment. Set up a direct debit to pay this off.

5. Go through your regular spends on your statement (my online banking has a "regular" filter to make that easier)... can any of these be cheaper if you shop around/ switch?

6. Set a budget for food shopping, online shopping and meal planning makes it WAY easier to keep to this (as long as your budget is > the minimum), Morrisons do a year pass for delivery at £35 but ive probably saved that in 3 shops of not picking random bits up! Also factor in "easy meals" i.e. tortellini so you're less tempted to pay ££ for a takeaway etc if you cba cooking

7. Now you have your essentials and food and debt budget... move this into your 2nd (no card) account at the beginning of every month, then set up standing orders to move payments across to your main acct on the days theyll come out of your main acct... that way whatever is left in your main acct at any one time (be careful with DDs not coming out on weekends though!) is your "spends", even if you empty this your essentials are covered so no reason to dip back into cards/ overdraft

8. If you have enough spare after realistic spending money (I have learnt there is NO point restricting too much and dipping back in) ringfence a bit aside for saving each month, put this in as soon as you get paid. If you have spends + saves then some use the extra to pay off your debt faster!

Hope this helps... remember you are totally in control and can do this!!

Hi OP, I was where you are a year ago and I have managed to get out of the debt cycle this way:

1. Have 2 accounts, one with no card (cut it up if you have to)

2. Consolidate debts into an interest free balance transfer credit card, I got one 2 years interest free through Experian even with poor credit

3. Cancel the rest of your cards so you can't use them once transfer is complete.

4. Divide the total debt by the number of months interest free.. this is your debt payment. Set up a direct debit to pay this off.

5. Go through your regular spends on your statement (my online banking has a "regular" filter to make that easier)... can any of these be cheaper if you shop around/ switch?

6. Set a budget for food shopping, online shopping and meal planning makes it WAY easier to keep to this (as long as your budget is > the minimum), Morrisons do a year pass for delivery at £35 but ive probably saved that in 3 shops of not picking random bits up! Also factor in "easy meals" i.e. tortellini so you're less tempted to pay ££ for a takeaway etc if you cba cooking

7. Now you have your essentials and food and debt budget... move this into your 2nd (no card) account at the beginning of every month, then set up standing orders to move payments across to your main acct on the days theyll come out of your main acct... that way whatever is left in your main acct at any one time (be careful with DDs not coming out on weekends though!) is your "spends", even if you empty this your essentials are covered so no reason to dip back into cards/ overdraft

8. If you have enough spare after realistic spending money (I have learnt there is NO point restricting too much and dipping back in) ringfence a bit aside for saving each month, put this in as soon as you get paid. If you have spends + saves then some use the extra to pay off your debt faster!

Hope this helps... remember you are totally in control and can do this!!

Are you on benefits or entitled to all you can claim? Any chance of getting extra income - shop work or care work (some companies train you)?

@Endogal thank you for that. I really want to fix this.
What card did Experian give you? My credit is like at rock bottom in the poor section.
I didn't even realise how badly using cards effected it.
Can my score ever go up??

I am just on benefits yes as my daughter needs care everyday for a mild disability x

could you fill this in? May get more ideas to help you..

www.lemonfool.co.uk/financecalculators/soa.php

Call Stepchange. They open at 9.