How can I clear debts, save and pay rent??

Hey guys....

Ill try to make this short as possible....

I have a loan of approx €25K (inc interest) with a bank and a CU loan of approx €10K. My partner has a loan of about €5k and €5k on credit cards. I missed some payments on my CU loan as I did a switch and they didnt transfer the Standing Order so I now have a bad rating on my ICB I can't believe it as I have never missed a payment on anything...

Im being made redundant in the summer and am expecting my first baby. We are renting which isnt ideal but as you can imagine we havent a hope of getting a mortgage and because we're together I don't think I can apply for a council house.

I know there isnt a quick fix for this and am more than aware that we got ourselves into this situation but Im just wondering if there are any cost cutting solutions??

Also considering that my ICB is already wrecked....(this sounds crazy I know) would it be seriously stupid to default on my loans altogether to try and get some money together for the baby? Im at my wits end trying to think of ways to get out of this hole so any advice will be appreciated!

Sorry for the length of this xxx

Your ICB is not wrecked, if it was a case of a bank switch not passing on the SO details correctly then you can apply to have the missed payment removed from it perhaps? (think you work for a bank so you might know this?) At the very least 1 missed payment due to a bank switch issue can be easily explained by you. However if you decide to default on all your loans (35k) that would certainly wreck the ICB rating and what explanation would you give?? Maybe do the Money Makeover section to seek advice on cost cutting and repayment options. Like you said there is no quick fix but don't worry it will get sorted for you even if it's a 5 year (or longer) solution.

We are a young family and have been renting for nearly 5 years due to job moves, not being able to afford a house we like etc.

Renting is absolutely fine, yes there are a few drawbacks, and it gives you options and time to make up your mind about things. I guess the only thing is you sometimes can't paint the walls or dig up the garden as much as in your own house.
Just make sure the house you rent is not For Sale as well.
I have found that renting also stops us buying stuff we don't need like new flat screen TVs and Sofas.

My other advice - just cut up your Credit Cards and don't use them anymore. Keep the number somewhere in case you need to get a flight or something but cut the actual card up so you don't use it for impulse buys.

You can pick up a lot of baby stuff on parenting websites or the websites that give stuff away free.
Also the St. V. Paul in most areas have very good quality stuff (cots, prams, car seats) that they sell for a small fee.
You should enquire, you'd probably get better quality stuff secondhand than you'd be willing to pay for new, if you know what I mean.

There were 3 payments missed before I realised what had happened (clearly more money in the account than was supposed to be there ) I got my icb report the other day and it shows the missed payments, thats the only reason I was thinking of defaulting in order to have some money for the little ones arrival ..

Thanks for your advice Sadie, I know there are plenty of people in the same situation as us and some Im sure are probably worse. And you're right about buying things, I never bother buying much for rented accomodation...

If you plan on staying together you need to get your OH to concentrate on getting his CC paid off as soon as possible. You should then clear the CU. Defaulting is not an issue and to be honest you have no way of getting a deposit let alone a mortgage at the moment. Forget about buying, its not the be all and end all. As stated you also need to get rid of the CC. You can put yourself on the council list straight away. You just need to state your circumstances. It wont do any harm to do it as you may strike lucky. I would not default for the very reasons that you will be hounded for a few years which can be more stressful than actually facing the payments. Have you tried approaching the bank and CU to try to come to a better arrangement ? Dont mention and redundancy payment to them though.

Ive decided to clear the CU loan and one of the CCs with redundancy... after that I suppose we'll just have to manage best we can.
I will put my name down for a house as soon as the baby is born or earlier if I can.... I suppose when I look at it once owning our own place right now isnt really a big deal, better to try and sort finances first.

I dont mean to be a figure of doom here but in the interest of your own safety I think you should let your OH pay off the CC debt by getting a CU loan. In fact I think you should ask him to do this straight away. If he cant get the loan then I guess you may be left with no option.