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Drowning In Debt

When one panicked iVillager posted on the Money Matters message board, asking for advice on how to manage her debt problems, fellow members flocked to her aid with support and advice on how to regain financial control.

The Problem
I have a mortgage of £69K (£57K secured) and a personal loan of £11,500. I also have credit card debts amounting to a grand total of £16k and an overdraft of £750 (constantly maxed).

I am living off credit to survive and pay the bills, but the credit is running out. I don't want to miss any of my payments on the debts as I don't want to get any bad credit, then I could lose my job, what do I do?
twinkypie

Members' Top Ten Solutions

1. Do not panic, look at the situation in perspective and formulate a positive action plan.

2. Make a list of monthly income and outgoings. Get rid of non-essential outgoings, be brutal and stick to it.

3. Maintain a strict budget. If necessary, cut up all your cards so you have to visit the bank personally to get money out.

4. Arrange a meeting with your bank. Ask if they can divide up your current account so payments come out of a separate account, and the money you need for day-to-day is elsewhere.

5. Sell stuff you don't need or use, either to friends, at car boot sales or on e-bay.

6. Take a second job part time.

7. Read the small print on your credit card agreement and hunt around for a lower interest rate from another provider, you can easily transfer your balance from one to the other.

8. Switch you mortgage to `interest only' so as to reduce your monthly outgoings, but remember that you will need to make up the extra payments later.

9. Consider either selling your home, or renting out a room in your flat to help with the repayments.

10. Don't wallow in self-recrimination - get empowered and start doing something about it!

The Result
So much has happened over the last week or so, it's been such a whirlwind. I spoke to my bank and have arranged a loan with them to pay back all of the credit cards and overdraft, which is a great relief, as I have now destroyed the little blighters and sent closure letters to the providers. It feels such a relief to not have any plastic!

The craziest thing was that the day I sorted out all the paperwork, a friend of mine emailed me to say that a friend of hers was looking for a flat to rent and was I interested in renting my flat to her. To cut a long story short, she's moving in next week and, although she's a private tenant, I've been able to do everything above board, but saving an absolute fortune! Plus I know that she'll be a great tenant and the whole arrangement suits both of us perfectly.

So, finally, I am going to be in credit each month! It's going to take me until I'm 30 to pay what I owe back but, at least, the worry is now behind me, and I most definitely won't make the same mistakes again!

Thanks for all your help and advice - it's been a great support.
Twinkypie