Advice needed... we're finished :-(

syfodyas · 3 December 2005 at 6:06PM

I dont know what to do anymore.

My partner and I have accumilated the following debts

£1300 arrears on council tax
£550 arrears on electricity bill
£500 Capital One Mastercard
£400 Capital One Visa
£700 Natwest Mastercard
£200 Capital One Visa
£500 Egg Card
£55 Additions Storecard
£980 Natwest Overdraft (mine)
£250 Natwest Overdraft (Partners)
£730 Natwest Overdraft (joint)
around £300 arrears on childcare costs

I earn £1153 every four weeks after tax, and my partner £900
We own a flat on a shared onwership scheme and pay £330 mortgage per month and £449 rent and service charge.

Because of the high interest from bank overdraft and credit cards,I tried today to obtain a personal loan fron Nationwide and Sainsburys Bank in order to consolidate the debts... both rejected me.

My partners credit record is fairly normal, however mine has two SATISIFIED defaults which both drop off in 2007.

I simply dont know what to do, I feel without a loan we are forever trapped in a cycle only paying interest on the cards/overdraft and will never actually pay off the native balances.

Im getting rejected left right and centre..I feel we will never be free of this noose around our necks.

Any advice?

tomstickland · 3 December 2005 at 6:16PM

This thread would be better in debt free wannabees.

OK, your debts are around £5K + £1.3K council tax and £500 electricity. You bring in £2K per month. Your rent + mortgage is around £780 per month.

Your debt situation is no where near as bad as lot of the posts on here. I'm not saying that it won't feel bad to you now, but there are others here who have pulled themselves out of worse situations.

You need to start with a complete statement of affairs. This lists what comes in and what you spend every month. From that you can identify how much you can allocate to debt repayment per month. Essentially, you have to come up with a workable plan, and once this is done you can contact your creditors and explain your situation and how you can pay them.

I'll stop now because I've only worked this out from what I've read on here, so let someone else who knows more about it post.

tomstickland · 3 December 2005 at 6:16PM

If your partner has a clean credit rating then get them to apply for some 0% cards so you can move your debt there.

seanparkin · 3 December 2005 at 6:47PM

I suggest you go and see your bank. I was in a similar position to you just 9 months ago, and one visit to the bank cleared it up. Both yours and your partners income is the same as ours, and infact I had slightly more debt (total 9k)

They are the easiest to get a personal loan from, because obviously they know you. they know you have a reasonable income and know you wont disappear overnight.

When you go to see them, unless they ask don't go out of your way to explain that the loan is to take on other peoples debts - if a decision has to be made this goes against you.

Don't take out loan protection, but I'm sure you've heard this enough from elsewhere by now

go to a third party provider.

that should have you sorted out in no time.

Oh, and don't put the council tax on the loan, councils are quite flexible and as they wont put interest on you can sort out payments just above the regular payments and pay it off over time. You may be able to do this with the electric bill as well, but don't count on it.

syfodyas · 3 December 2005 at 6:55PM

seanparkin wrote:

I suggest you go and see your bank. I was in a similar position to you just 9 months ago, and one visit to the bank cleared it up. Both yours and your partners income is the same as ours, and infact I had slightly more debt (total 9k)

They are the easiest to get a personal loan from, because obviously they know you. they know you have a reasonable income and know you wont disappear overnight.

When you go to see them, unless they ask don't go out of your way to explain that the loan is to take on other peoples debts - if a decision has to be made this goes against you.

Don't take out loan protection, but I'm sure you've heard this enough from elsewhere by now go to a third party provider.

that should have you sorted out in no time.

Oh, and don't put the council tax on the loan, councils are quite flexible and as they wont put interest on you can sort out payments just above the regular payments and pay it off over time. You may be able to do this with the electric bill as well, but don't count on it.

I think I have blown it though because I now have added two searches against my name after my failed attempts with nationwide and natwest.

seanparkin · 3 December 2005 at 7:18PM

Not necessarily. I thought you said you tried sainsburys and nationwide? not natwest?

I'd done about 5 failed loan applications, before giving up and walking into my branch.

They outright offered me a loan for just about as much as I asked for (£8500 instead of £9000). Obviously it wouldn't be at an industry leading rate, but better than going to one of the commercial 'Bad credit history? we'll sort it!' loans. It was at a decent rate anyway.

I offered to hand them back their cc card for the rest of it, and they accepted this. This was with HSBC.

syfodyas · 3 December 2005 at 7:20PM

Sorry,I did mean sainsburys and nationwide

seanparkin · 3 December 2005 at 7:30PM

OK, well definately head into your branch and see what they can offer you first. You'll probably be pleasantly surprised!

loubie_lou · 3 December 2005 at 8:14PM

If I were you (as mentioned by someone already), I'd post this thread on the 'debt free wannabe' board.

The readers there will give you good advice on clearing this debt. Its not really a good idea to take out more debt in order to clear old debt. Beleive me I know!

LL

Quasar · 3 December 2005 at 9:25PM

I was in debt only for a couple of years and for only £6,000 and I was paying it off with relative ease, so I have never had to address the problem.

However I have read somewhere that tax and utility bills should be considered first for payment. Credit cards last - but get them to freeze the interest if possible. I do not remember the exact details of this advice, so perhaps someone more au fait with debt management will be along to offer help.

In any case, I agree with tomstickland that you have a much smaller mountain to climb that some of our other members here!

Best wishes.
Q

homersimpson_3 · 3 December 2005 at 9:30PM

i don't the issue here. your situation is better than most and can easily be solved - you have 2053 each money and rent/mortgage/service charge is 779 leaving 1274 which is tonnes of money. surely your other 'living expenses' don't amount to 1274! if so why? why do you have such large debts particularly arrears of council tax and electricity? why just not use 'spare' income to target them a few or one at a time- target ones with highest apr. they'll be paid off in no time and interest you save from paying first can be targeted towards the second and so on.

Advice needed... we're finished :-(

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