# How to deal with this level of debt efficiently.



## bubbles61999 (10 May 2008)

*Thanks for everyones help, i edited this to remove the information.*


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## selfbuildkk (10 May 2008)

*Re: How to deal with this level of debt effiiently.*

Firstly I would say to you contact mabs.secondly well done on realising you need to sell your 40k car!i would also look into an interest freee credit car on balance transfers etc.I would speak to your partner about the situation he will do all he can to help you, also could you be more specific about exactly what you owe as individual and what joint debts ye have??


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## bubbles61999 (10 May 2008)

thanks for your reply.

i have detailed what i owe as an individual and what my partner owes under "other borrowings", its fair to say that my partner is very disiplined when it comes to money, he thinks credit cards are instruments of evil!! the long and short of it, he has a relatively acceptable amount of debt, i don't! 

also having looked at the MABS website, i am not sure how this will help, as i am currently able to finance the debt with no problems (other than the speed, its just not quick enough), its more a want to clear it than a need to clear it at present. i currently have a monthly spreadsheet which comprehensively covers expenditure, so i am under no illusion as to where it all goes.


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## jhegarty (10 May 2008)

*Re: How to deal with this level of debt effiiently.*

First thing I would do is pay off the credit card with the savings...


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## D8Lady (10 May 2008)

There are varioius techniques you could try. One is the snowball method of debt reduction. 
Play around with the numbers using this calculator:


1. Decide on how much you can assign to debt payments per month.

2. Use 2K of savings to pay off over draft.  

3. I'll differ from other advice here and suggest that you keep 1k as an emergency fund. This will prevent you from reaching for the credit card in case of emergency. 

4. Pay off 1600 from savings to credit card.  Leaves C.card balance of 5900.

5. Move your credit cards to a 0% rate intoductory offer.
 Ulster bank do 9 months interest free, 13.4% apr after that.
 Tesco do 6 months at 0%, 14.9% Apr.
  By switching cards when 0% rate is up, you can have 15 months interest free. So all payments made will go to reducing balance. This will only work if you stop using the card.

6. Assuming you sell the car in July, use all proceeds to eliminate the other debts. 

7. Have a look at other threads here on how to reduce day to day living expenses.


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## mercman (10 May 2008)

Some good replies have been posted. I don't see your situation as a complete disaster. The main problem is your helping out the family member . Is there any chance of getting this back ??? As if this loan was gone, the pressure would ease considerably. Move the Credit Cards to the zero rate option. Regarding the Car, hold off a bit - you are entitled to some luxuries especially with a little one. Add the overdraft to the Bank loan if you can. With the CCs  in order  it presents some light. Finally, your partner, if he is earning 80 k per year, why are his savings so small allowing for the fact that he hates CCs and has a relatively small car loan.


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## cancan (10 May 2008)

Sorry to disagree, but the car has to go. You'll take a hit, but it's a valuable lesson learned. You should not be driving a car that is worth more than your entire income for 1 year. (Look up Bangernonics for a frugal way to have daily transport). You can still drive a nice car, but don't care about the number on the reg, which seems to be a sad and expensive fashion item these days! With irish car taxation and depreciation the ways it is, it would probably take longer to burn the money than loose it through the ownership experience.

Agree, pay off CC with savings - get it cleared and cut em up, followed closely by the overdraft.

Get your ship in order with those steps, and proceed from there. Sort your problem out in steps, with the underlying goal to be minimal debt.


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## gearoid (10 May 2008)

mercman said:


> The main problem is your helping out the family member ... Regarding the Car, hold off a bit - you are entitled to some luxuries especially with a little one.



Paying 39.5k for a car on a 31k salary is to me fairly excessive. I think you need to be brutally honest with yourself and analyse your spending habits. While providing a loan to a family member was laudable, the other borrowings would seem to indicate a fairly reckless attitude to money in the past. Your current approach is sensible but you need to learn some pretty serious financial lessons from how you got in this mess in the first place. Sell the car and try to get some of your loan back. Good luck.


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## Purple (10 May 2008)

All of your combined debts are less than three times your combined income. With only one child this should not be a problem to service. So basically the problem is the type of debt, not the amount of debt. There is some good advice above, I suggest you take it.


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## bubbles61999 (11 May 2008)

Again edited to remove information.


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## mercman (11 May 2008)

In comparison to others' debts you are not in to bad a condition - not great but not really awful either. As you are responsible for your child you really are not in a position to be crossing all your limbs.  I really think your case is about putting some manners on your spending rather  than a major cost cutting exercise. Think about the car - i have already given my thoughts. As long as your job is relatively secure, put your CC plan into action. The best of luck..


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