Falling into debt and want to deal with it now

H

Herbmad

Guest
Hi There,

This is my first post on askaboutmoney, but I have been visiting for ages. Basically, I need some advice on our spending and on preventing ourselves getting further into debt.

Both my husband and I are 36
My annual income is 35K and I am employed in the private sector.

My husband is self-employed and his business income has decreased substantially over the last 18 months - he probably takes approx. 20K out of the business.

The problem is that both of us took out loans when times were good and that we could afford to pay back then - now we can't as I have taken a 15% salary reduction as well as some unpaid leave.

I have 2K in the credit union, but otherwise we have no savings.
Our home is approx. valued at 300K. We owe 235K on our mortgage.

We have several loans between us totalling 2142, and we have 2 credit cards with a combined debt of 13,250.
I pay more than the minimum payment on the cards each month, but not the full balance.
Both of us have substantial overdrafts.
I have a pension scheme, however, my husband does not.

With other monthly bills, and the revenue and VAT man coming calling each month, we are struggling and are left with no income for general living expenses. My husband has recently applied to be de-registered for VAT, however, we have not had any response as yet. This would be a huge relief for us, as we are continally trying to pay VAT from previous periods as we just can't afford to save it each month.

I have used MABS recently to stave off two creditors, who were very close to a court case.

Sorry about the long post, but any advice would be hugely appreciated.

Many thanks
 
I'd suggest putting your situation in the format for this thread, with all details added e.g how much is a substantial overdraft? you'll get a better response from users.

For credit card I wouldn't go to credit union for credit card loans just yet.
Try swapping to another credit card with a 6 month 0% rate. Any payment you make made pays off your debt, not interest.

Tesco
0% for 6 month on balance & purchases. 14.9% thereafter.
[broken link removed]
0% for 6 months, 9.5% thereafter.

Swap credit card as each 6 month term runs out so you never pay interest and the debt reduces faster.

This will only work if you do not add any more debt. You need to stop using the cards.
 
Well, the substantial overdrafts are 2K on a joint account, 2K on my own current account and 5K on my husband's business account. Not Pretty.

Good idea on the credit card hopping - I will definitely try that. Thank you.
 
You need to keep business and personal accounts separate.

On the business side, can hubby negotiate a business loan to pay off overdraft over longer period of time? If business is reduced, there's still something coming in? If the bank will be paid something regularly, they should be flexible to accept any reasonable plan. In great scheme of things, its not a massive amount that is owed. Key thing is to keep in touch with bank.
 
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