Need help getting out of debt

guyindebt

Firstly, sorry if this is in the wrong forum!

Over the last few years I've managed to get myself into debt. I'm always living off my overdraft and credit card.

At the moment I owe 4k on my credit card, 1.5k on my overdraft, and 1.5k to my mother. So... roughly about 7k.

I think my solution is (obviously) to cut back on spending, and get a personal loan to clear away the debt and make it manageable.

I earn about 23k a year, and have only been in my current job for about 5 months.

Am I in big trouble? Will I be able to get a personal loan for this? Any advice??

I'm pretty stressed...

Thanks.

ShriekingSheet

you'll be grand!

work hard at scrimping and saving

by the time you've cleared the debt you'll be way less likely to fall back into the read after being more cautious for the length of time

Funky

Rob a bank.

Originally posted by guyindebt

I earn about 23k a year, and have only been in my current job for about 5 months.

Am I in big trouble? Will I be able to get a personal loan for this? Any advice??

I'm pretty stressed...

Thanks.

I'm sure this can be moved.
Firstly tear up your credit cards and make purchases from now on with money, it makes you think before you spend.

Apply for a balance transfer on your card to something like the tesco visa card, afaik it's the cheapest around at the moment at 1.9%-application forms are in most tesco stores.
If they transfer the balance for you, then you need only pay the min balance for the next 6 months with only a tiny interest charge added.

This will give you a breather.

Your Mum might be good enough to wait untill you have the overdraft paid off.

Now relax, do that and stop spending, you are not gone too far yet , though it is essential, that you do tear up the card and act now.

dod

Don't be too proud to talk to these guys: MABS - they've dealt with the problem you currently find yourself with on a much larger scale.

If nothing else, you are getting advice tailored to your specific situation from people who have dealt with others who have found themself in your difficulty and have successfully emerged from their problem debts.

And (as far as I know) their advice is free.

Cake Fiend

That's a pretty serious debt for your yearly income - I can't understand myself how someone could rack up a 4k bill on a credit card in the first place.

You can't save money if you're constantly spending too much, so you need to take a good look at your weekly expenditure and find out what you can cut down on. Food, for example, is one thing that is very easy to save money on - most people spend far too much money on groceries. You need to get into the mindset of always looking for ways to save money - go that little bit further to Tesco or whatever rather than getting dinner in the local Spar or petrol station, that kind of thing. Instead of getting a takeaway, cook at home. I went from spending about €100 a week on groceries to about €50 just from changing my shopping habits. This is a saving of about two and a half grand per year already.

If you drive a car, see how you can save money by walking whenever you can (it's healthy too!) to save on petrol. (although if you have a car and you're in debt by 7 grand, you should consider selling the car unless you really can't do without it).

I don't like the idea of getting loans to pay off loans, but in your situation it could be a good idea to talk to someone about some sort of loan consolidation. If you're paying a lot of interest on these debts, maybe see if your parents can bail you out a bit. But your main problem must surely be your spending habits (4K on a cc?!?). I earn the same as you, and I have no debts (I'm awful poor mind!).

guyindebt

Thanks for the advice so far!

It's kind of a long story of how I got in debt - it's not just a case of me being reckless with my spending.

I do spend way too much on alcohol/food so I will be able to cut back dramatically on that.

I think I need to get the personal loan for "peace of mind" and to allow me to get my finances in order.

Do you think my bank will give me a personal loan for this considering my finances are screwed? I'm quite worried they won't give me the loan.

Emboss

Originally posted by guyindebt
Firstly, sorry if this is in the wrong forum!

Over the last few years I've managed to get myself into debt. I'm always living off my overdraft and credit card.

At the moment I owe 4k on my credit card, 1.5k on my overdraft, and 1.5k to my mother. So... roughly about 7k.

I think my solution is (obviously) to cut back on spending, and get a personal loan to clear away the debt and make it manageable.

I earn about 23k a year, and have only been in my current job for about 5 months.

Am I in big trouble? Will I be able to get a personal loan for this? Any advice??

I'm pretty stressed...

Thanks.

The majority of people are in debt till the day they die....

don't worry about it!

get a few loans go out enjoy yourself!

MrPinK

Originally posted by guyindebt
Do you think my bank will give me a personal loan for this considering my finances are screwed? I'm quite worried they won't give me the loan.

As already suggested, go talk to someone in MABS. There are companies that specialise in debt consolidation, these may be a better option than your bank. MABS will be able to point you in the right direction.

get a few loans go out enjoy yourself!

When you're not in debt you can spend everything you earn enjoying yourself instead of wasting it on loan repayments and interest.

Victor

Restructure the debt with one loan and then cut up the credit card.

Beruthiel

Originally posted by Funky
Rob a bank.

funky
if you have nothing appropriate to add to the topic please refrain from posting at all
B

Imposter

Originally posted by Victor
Restructure the debt with one loan and then cut up the credit card.

This is the best idea. Firstly cancel and cut up your CC. Get one loan to cover the CC and the overdraft. If your mother is ok with waiting for the money then you can leave her debt out of the loan. Otherwise add that to the amount you need to borrow as well.

The bank you have the CC with (assuming it's a normal bank and not someone like tesco etc) should have no problem giving you the loan especially if the overdraft is with them too. Explain to them that you just want to lump all debts together as a single loan. The interest on this loan will be less than your CC and possibly your overdraft. Also get the overdraft cancelled as it will stop you from reverting to your old ways. Basically you need to try living on your normal earnings for a few years and try and get the debts clear. After you get clear of your debts you can use the experience to your advantage and perhaps even get an overdraft or CC again with the knowledge that it's expensive money you are spending.

Hope that helps.

leeroybrown

Exactly what I was going to suggest ...

If you look at how much you're paying servicing the debts at the moment (particularly the CC), you'd probably be 25% the way to paying it off just be consolidating and reducing the payments.

If you don't think you can control your CC spending get rid of it. Otherwise, ask the CC company to reduce your limit.

As for banks giving you a loan. You'd be surprised how accomodating banks can be if you explain things to them properly. They generally prefer if customers come to them early and sort out issues before they become serious problems. Since you're earning 23k per year a bank should be able to see that you have the income to repay the loan.

Try keeping a notebook with all your spending recorded in it for a few months. It'll help you see when you're overstretching a bit. It's also amazing how fast you'll make a dent in your debts if you cut down on the alcohol too

Sleepy

I was in a very similar situation when I left college. Bank of Ireland will certainly give you a debt consolidation loan. I know they gave me one. As is usual with Irish Banks, AIB and Ulster Bank no doubt follow the same line.

Transferring the credit card debt to another card company can be a handy trick when you've a grand or so on the card but in your situation you really need to look at something more comprehensive. If you take out a loan from the bank to pay for this, it'll cost you around €200 a month to pay it back over the next 3 years. This may seem like a long time, but you'll no doubt get a couple of raises in that time which can allow you to make bulk payments into the loan or increase the amount you're paying on a monthly basis.

Cutting up the credit card is a good suggestion, but if you feel that you need it (for things like internet purchases) ring your issuing company and ask them to dramatically decrease the limit on the card (no more than €500 ).

Are you in a position to ask for a raise after 6 months in work? Have you any skills you can sell as a nixer (web-design is a lucrative enough one for me)? Maybe you could give grinds to schoolkids/college students?

In relation to shopping go in this order: Aldi/Lidl, Dunnes, Tesco, Super Valu, Superquinn, Local Shop (that's generally the order of cheapest to most expensive on a shopping basket). Take your time shopping, examine prices: a bag of "Gem" sugar in Dunnes is half the price of Siucra which is right beside it on the shelf! Try to only buy things that are the cheapest of their type (e.g. Dunnes Pizzas instead of Goodfellas). Look out for special offers that genuinely offer you a saving on something you'll eat/use. There is no point in buying something on special purely because it's good value. Only buy it if you'll eat it.

Other good ways to cut down your expenses:
* bring a packed lunch to work instead of buying a roll/meal
* quit smoking
* when you're going out for the night, drink at home with your mates before going to the nightclub instead of going to a bar.
* if you're living with people arrange a cooking rota where you cook on alternate nights: this will stop you throwing out food and generally leads to a higher standard of food too!
* use the vouchers from www.pigsback.com but only if it's something you buy already that there isn't a cheaper version of in your local supermarket.

Debt of this size can be massively depressing, I've been in the exact same situation and am only coming out of it in the last few months. I'm still a few grand in debt, but it's in a manageable form: my loan repayments come out of my salary the day it hits my bank account so I don't have to think about it. Don't be scared of the bank, most bank staff will be thrilled to give you a loan - the more lending they do, the better they luck. And the way the banks are structured, an individual branch will be looked on favourably for giving you a debt consolidation loan despite the fact the Bank itself would be making a lot more interest on you by leaving your debt on your card.

Finally, good luck with it! Don't let it get you down, that'll just lead to you hitting the bottle harder when you go out and you'll just spend more money!

Falkorre

i was severly in debt last year.
I tried MABS but found them extremely unrealistic.
I discovered a company called Home Payments Ltd. (ph:4975795), basically, what they do is go through all your bills with you and come up with a set amount which you pay to them by direct debit each week, they then split it up and pay your bills on time for you, you also pay a few quid (literally) extra which is saved and you get a cheque at xmas.

I swear, I was in 8,000 worth of debt this time last year, now its allmost clear, and all I pay is €120 a week, and if u cant pay a week, in an emergency, they sort that out for you. Their fee is tiny, and is included in your weekly payment (u dont even notice it), but they garentee u will be paying out less on bills than you are at the moment.

I would highly recommend them to anyone, its like having your own accountant without the big fees!!

B

Bicky

Start living like a student for a while until you pay off the credit card.
Get a bar job at the weekends. Save money cos you wont be going out as much.
As said before start shopping in aldi/lidl. At first it may be to save money but eventually you will get to really appreciate the quality of their products. Personally I know that i dont buy half the expensive crap i would if i were shopping in tesco.

empirix

I think Embass hit the nail on the head.

Go out and enjoy yourself.

I'll show you a real debt if you want!

Emmo

I think all the major points have been hit on but just to emphasise that your debt while big enough isnt too big.

A mate of mine from England was up to 20,000 Sterling in debt when he moved over here. In 2 years he has paid of 4000 Sterling from this amount. All because of credit cards.

1
Cut up your cards so you cant use them again

2
Re-Finance your debt - via a personal loan or through credit cards offering 0% Finance whichever you feel you can stick to more.
See if the local credit union can help you

3
Save money on bills
Bill pay mobile becomes prepay mobile
Turn of lights when leaving your house
Paying rent? get rent allowance on your tax
Moving home an option? if your paying 400 quid a month rent thats nearly 5000 Euro that could be put into the debt in just 1 year.
Buy your shopping via own brand
Work hard, look for a raise / promotion / new job
Nixers are good if you can get them for small cash injections.

Have a "get out of debt" account with the local credit union. All spare cash goes into it.

Save for one month extra than you need to and then when your finished saving spend that extra month purely on yourself.

Emmo

Mighty_Mouse

Im in a similar position but with about €11,000 debt. (Debt from college)
Consolidated the debt into one loan account which is paid in monthly installments.
I pay about €215 per month back.

No need to kill yourself paying debt. I wouldt be afraid of debt as long as its manageable.

At the end of the day............5 years from now you should be earning plenty enough to clear this little bit of debt hand enough!! Your 20's are for enjoying yourself IMO

LoneGunM@n

I was in the same of situation not that long ago! I owed over €20,000 to my credit union, but with a lot of scrimping & saving I managed to clear it this week. The best bit about the credit union is that you don't get penalised for paying off debts early [thank jebus]!

halkar

Go to bank and talk to them. For that amount I don't think they will have any problems, especially if all your cards and loans are from same bank.
I did the same last year, altough I had depts of about 6-7 times what you have don't ask, me better boy now