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Money

Lovehandles

Full Member
S: 14st9lb C: 15st7lb G: 10st7lb BMI: 35 Loss: -0st12lb(-5.85%)
#1
This is completely off subjet but I was wondering if anyone here is suffering with a debt problem.
I currently have 6k of debt spread over 3 credit cards and an overdraft. I had it all under control until I lost my job in febuary and am now only working part time (14 hours) I am only making minimum payments and getting no where. Was thinking of consolidating my debt? Has anyone got any experience with this? I'd be gratful for any advice! X
 
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Tinytootz

Mini crazy cat lady
S: 12st5lb C: 12st5lb G: 10st0lb BMI: 31.6 Loss: 0st0lb(0%)
#2
Hi. I have an awful lot of debt, so much that I am too embarrassed to actually openly admit it. I've had it for about 5 years now, and decided about 5 years ago to take out an IVA - big mistake, I've ended up in more bother as the company I chose was awful. As it turns out, I'm going to have to go bankrupt. Gutted.

Prior to taking out an IVA, I was going to consolidate. However, I backed out at the last minute, as they wanted me to pay more than I could afford, and we're trying to convince me I could afford it when I clearly couldn't

Do you think your work situation will improve any time soon? If yes, then you may be as well carrying on as you are for the very short term. If not, then perhaps an IVA would be better for you? They last for 5 years, and whatever isn't paid off after the 5 years gets wiped out.

Or actually, there is a newish thing called Debt Relief Orders.

A debt relief order is an order you can apply for if you can't afford to pay off your debts. It's granted by the Insolvency Service and is a cheaper option than going bankrupt.
You must have debts of less than £15,000 and a low income.
A debt relief order usually lasts for a year and during that time, none of the people you owe money to (your creditors) will be able to take action aginst you to get their money back. At the end of the year, you'll be free of all the debts listed in the order.
You can't apply for a debt relief order if you:
own things of value or have savings of over £300
own a vehicle worth more than £1,000.
To apply for a DRO, you'll need to contact an authorised adviser who checks whether you meet the conditions and then applies for the order on your behalf. The order will cost you £90 but you can pay this in instalments over six months

- that info was ripped from the CAB website. I visited them, and they are great for advice.

Debt relief orders

Some may consider these options the easy way out when it comes to debt. But as someone who has had this looming over them for 5 years, it ain't an easy option!

Please be aware, I am not a financial advisor, just someone who is in a similar position. I strongly recommend you speak to Citizens Advice Bureau, they really are great.

And please be very aware of companies which look legit - they aren't always as helpful as you would hope. Some disguise themselves as debt helplines, but all they want to do is sell you their products.

Hope things improve for you soon x
 
S: 9st11lb C: 8st9lb G: 8st9lb BMI: 22.1 Loss: 1st2lb(11.68%)
#3
What do you mean by consolidating your debt. If you mean moving credit cards to a lower interest rate or loan which is less interest then yes.

If you are only paying the minimum & you see this as short term, then I'd think hard about an IVA or similar, this will affect your credit rating for a long time.

Google Martin's Money Tips, I get his weekly newsletter & it's full of useful financial advice.
 

Tinytootz

Mini crazy cat lady
S: 12st5lb C: 12st5lb G: 10st0lb BMI: 31.6 Loss: 0st0lb(0%)
#4
Yeah I forgot to say - IVA and similar will affect your credit rating massively for 5 or 6 years, I forget how long.
 

who_la_hoop

Silver Member
S: 16st9.5lb C: 10st8lb G: 8st7lb BMI: 25.4 Loss: 6st1.5lb(36.62%)
#5
I agree with TinyTootz - get yourself to your local Citizens Advice Bureau. They'll be able to talk you through all your options for free and help you to sort out whatever option you decide on.
 

Sarah-Jayne

Gold Member
S: 14st4lb C: 14st4lb G: 11st0lb BMI: 32.3 Loss: 0st0lb(0%)
#6
I used to have a lot of debt. In the end I got one large loan from tesco, paid off my credit card, store cards, other loans etc and just paid that one amount each month. That was 5 years ago though and I finish paying it December 2012. You have to be strict with yourself in the mean time though and not get any other credit cards or overdrafts. Im not saying it's something you 100% should do but it's something worth considering. make sure you shop around for good rates though. Even so, you might just be better of hanging tight and staying with your current situation as even of you get a consoladation loan you might end up paying more each month anyway xxxx
 

Shirleen

Gold Member
S: 21st12.5lb C: 21st4lb G: 12st0lb BMI: 45.3 Loss: 0st8.5lb(2.77%)
#7
Consolidating debts often means selling your debt to a company. You end up paying an awful lot! It's effectively a loan to pay off a loan!

I cannot recommend Christians against Poverty (CAP) enough, they are there simply to help, no preaching/invites to church. They will come to your home and go through your finances with you. They are recognised by companies and will write to companies on your behalf asking for the interest to be frozen etc.
 

joedenise

Target Member
S: 9st9lb C: 8st8lb G: 8st5lb BMI: 22.7 Loss: 1st1lb(11.11%)
#8
Don't consolidate - it's usually the worst thing you can do. As others have said get an appointment with the CAB, CCCS, PayPlan or one of the other free charities to see if they can help you. I think CCCS you can do a form online to see whether they can help you.

Do NOT go to any company that wants to charge you to help, they'll be adding to your debt or reducing it.

Visit the MoneySavingExpert site and have a look on the forums for help - you could always ask a question on there if you sign up (it's free!).

Denise
 

lolacola

Silver Member
S: 12st0lb C: 9st11lb G: 9st7lb BMI: 21.5 Loss: 2st3lb(18.45%)
#9
If you can, what about taking out one of those introductory 'no interest' credit cards, transferring the balance from one of your cards onto it, and then cancel the one you've just transferred the balance from? At least that would be one less interest payment you need to worry about for a while.

I owed about 2k on credit cards, but thankfully I've got it all paid off now. I was basically living beyond my means, and then when my salary was gone (usually by the middle of the month) I then started putting everything else on card to see me until the next payday.

To help me pay it off, and to resist temptation of running it up again, I distroyed both the cards. Unfortunately this did now work, as I had memorised the long number and security code of one off them, so I continued to use it to buy goods online, so then each month when I'd made a payment, I reduced the credit limit on the card (so I never had any money available to spend on it!) and continued doing that until I'd got the damn thing paid off.

Something I keep hearing about is claiming back bank charges - I wonder has anyone ever had any success with this?
 

Roziee

Gold Member
S: 22st10lb C: 17st4lb G: 12st0lb Loss: 5st6lb(23.9%)
#11
kingleds said:
I did this, and cancelled all the other cards, but cancelling them somehow affected my credit rating!!
How has it affected your credit score?
 
#12
Roziee said:
How has it affected your credit score?
It was a while ago, but adversely. The cancelled ones stay on your credit report for 5 years ago and are taken into account when you apply for more credit. And also applying for credit goes against your score as well

My advice would be to get your credit score & report and go to the CAB. You need to know what your currrent score is to make an informed decision i think.
 

Mrs.S.

Gold Member
S: 18st3lb C: 18st1lb G: 14st0lb BMI: 37.4 Loss: 0st2lb(0.78%)
#13
Just a word of warning - there's technically no such thing as a credit rating.

Each company that you apply for credit with can score you using their own scoring system.

The only thing that you can truly obtain is your credit history. This will be £2 from each of the credit reference agencies (equifax, experian and 1 other beginning with C) and not a penny more.

Please don't think you can get your. 'score' as nobody can give this as a true figure.

What things can effect is your chances of obtaining credit ( this can vary widely between companies), but not an overall score or rating as such.

Good luck with whatever route you take xx

Sent from Laura's iPhone using MiniMins
 

Roziee

Gold Member
S: 22st10lb C: 17st4lb G: 12st0lb Loss: 5st6lb(23.9%)
#14
kingleds said:
It was a while ago, but adversely. The cancelled ones stay on your credit report for 5 years ago and are taken into account when you apply for more credit. And also applying for credit goes against your score as well

My advice would be to get your credit score & report and go to the CAB. You need to know what your currrent score is to make an informed decision i think.
If you credit cards that YOU have closed and were fully paid off does not affect your credit score. If they have been closed by the company then it will.

The more settled accounts you have the better. It shows you are a resposible borrower.
 
#15
Sorry, should have made that a bit clearer. I had different 'scores' with Experian & Equifax when i checked so its an indictor, nothing more - though some credit providers do use them i believe. Anyway, best advice can be found at the CAB i reckon.
 

Shirleen

Gold Member
S: 21st12.5lb C: 21st4lb G: 12st0lb BMI: 45.3 Loss: 0st8.5lb(2.77%)
#16
Unused credit becomes a 'footprint' that can be used adversely, depending on how it's used, even applying for a mortgage and it falling through and having to apply for another can be looked on adversely.

Basically do not PAY anyone to help you out of debt.
 

Kankles

Silver Member
S: 11st12lb C: 10st3lb G: 9st7lb Loss: 1st9lb(13.86%)
#17
Do you have any payment protection insurance on your cards?
 

tpals

Full Member
S: 355lb C: 317.2lb G: 185lb BMI: 45.5 Loss: 37.8lb(10.65%)
#18
Sadly, I'm experienced with lots of debt. Loads more than you at the worst. The most important step for me was deciding no more debt. Cut up the credit cards, make a budget, and commit to sticking to that. If you have anything you can sell or do to make extra money to send to the debts, do so. (I sold exercise equipment I never used anyway.)

It's a personal choice how intense you want to be; I gave up getting my hair done and going out, my teenage son gave up new video games and satellite tv.

This is a good site to see how long it will take and how much faster depending on the extra money you send: Snowball debt calculator - Become debt free at WhatsTheCost.com
 

fillymum

synful soul
S: 107kg C: 85kg G: 79kg BMI: 33.2 Loss: 22kg(20.56%)
#19
Sadly, I'm experienced with lots of debt. Loads more than you at the worst. The most important step for me was deciding no more debt. Cut up the credit cards, make a budget, and commit to sticking to that. If you have anything you can sell or do to make extra money to send to the debts, do so. (I sold exercise equipment I never used anyway.)

It's a personal choice how intense you want to be; I gave up getting my hair done and going out, my teenage son gave up new video games and satellite tv.

This is a good site to see how long it will take and how much faster depending on the extra money you send: Snowball debt calculator - Become debt free at WhatsTheCost.com
In my opinion this is the best advice you have been given amongst a lot of excellent advice.

We cut up our credit cards a few years ago. No more sleepless nights close to the end of the month because if we cannot afford it, no matter what it is, we do not have it.

If you need to pay for anything on the Internet you can get a debit card.........not enough money in the account to cover your purchase, you can not buy it......easy !!!

There is nothing more worrying than money or rather the lack of it.
 

charlies_mummy

all for my little man x
S: 15st4lb C: 15st1lb G: 11st6lb BMI: 33 Loss: 0st3lb(1.4%)
#20
We managed to get ourselves into an awful situation a few years ago when I accidentally went over my overdraft and the interest spiralled, meant I could not keep up payments on store cards etc as well, and managed to inherit some lovely debt from my other half! We went to CAB and got a debt relief order in the end, the weight lifted off our shoulders was incredible. For a certain amount of time we were not allowed to earn over a certain amount, and I still have a basic bank account, and my credit rating is still not good, but to be honest I would not change it for the world. I now cannot get credit which is very good for me, as obviously am not good with it! We got our DRO when they had literally only been available for a couple of weeks, and they are a much better option than bankruptcy if you meet the criterea. Best of luck xx
 


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