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  • FIRST POST
    • nicholaspwright
    • By nicholaspwright 4th Dec 17, 7:47 PM
    • 14Posts
    • 7Thanks
    nicholaspwright
    Any suggestions will be greatly appreciated.
    • #1
    • 4th Dec 17, 7:47 PM
    Any suggestions will be greatly appreciated. 4th Dec 17 at 7:47 PM
    Hi,


    I currently have an overdraft of £3,600 with Barclays and another £250 of emergency borrowing. I am regularly over the £3,600 so I end up paying about £100 in charges. I also have a credit card with HSBC and I am up to the £5,500 limit. The minimum payment is about £150 a month and the interest is about £100. I have a loan with Sainsbury's bank of £8,500 which I took out in April 2016. I have 43 monthly payments of £163 remaining. I have about £90,000 remaining on a mortgage for a flat which has been valued at £170,000. I have calculated my income and expenditure and have recently changed my energy supplier. I am left with around £300 every month. I have thought about applying to re-mortgage my flat for £105,000 to pay off my debts. If I keep the length of the mortgage the same as my current one the monthly repayments will go up by £100 but I will no longer have to pay £410 in overdraft charges, credit card bills and loan repayments. However, I think I have a bad credit rating. I have missed a mortgage payment and a loan repayment although there are no arrears on the mortgage or the loan now. I have given my details to Experian and they have given me a credit score of 911 but I don't think that can be right. I know it will take a long time to get out of debt but I would appreciate any help and advice anyone can give me.


    Thanks,


    Nick.
Page 1
    • theoretica
    • By theoretica 4th Dec 17, 8:13 PM
    • 4,940 Posts
    • 6,172 Thanks
    theoretica
    • #2
    • 4th Dec 17, 8:13 PM
    • #2
    • 4th Dec 17, 8:13 PM
    Do you know exactly how and why you got into this debt? In many cases a plan for getting out of debt needs to start with changing what got you in to debt.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • datlex
    • By datlex 4th Dec 17, 9:41 PM
    • 1,449 Posts
    • 1,235 Thanks
    datlex
    • #3
    • 4th Dec 17, 9:41 PM
    • #3
    • 4th Dec 17, 9:41 PM
    Sounds to me like you need to budget and separate your income from your Barclays account to start off with.
    • venison
    • By venison 4th Dec 17, 10:38 PM
    • 1,354 Posts
    • 1,443 Thanks
    venison
    • #4
    • 4th Dec 17, 10:38 PM
    • #4
    • 4th Dec 17, 10:38 PM
    A re-mortgage in these circumstances might not be the worst idea in the world only PROVIDING that afterwards you seat out of debt,
    I am now a Board Guide on the Credit card board and the Loan board and Benefits board (But give me time to learn the ropes thanks).
  • National Debtline
    • #5
    • 5th Dec 17, 4:40 PM
    • #5
    • 5th Dec 17, 4:40 PM
    Hi Nick


    The score the credit reference agencies give you is not what a creditor will use. They each have their own credit scoring system, and your credit history is one factor they will take into account. Almost certainly the missed or late payments on the loan and mortgage will have been recorded on your credit file. It will depend on the creditor you try and borrow from as to how a big an issue it is.


    It's vitally important you seek independent financial advice before remortgaging. Once the debt becomes secured on your property, your home will be at risk if you cannot keep up the repayments. Unsecured debts do not put your directly home at risk. An independent financial adviser should also be able to help you consider which creditors are likely to be ok with one or two late payments.


    I'd recommend completing a statement of affairs (SOA), you'll find one in the sticky at the top of the board. This will help make sure you've considered all your outgoings, and confirm that remortgaging is something you could consider. If you find your existing debt repayments are not affordable that usually suggests you will be better to look at other debt options like a debt management plan. Good luck with it all.


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • Fireflyaway
    • By Fireflyaway 5th Dec 17, 5:50 PM
    • 1,355 Posts
    • 1,372 Thanks
    Fireflyaway
    • #6
    • 5th Dec 17, 5:50 PM
    • #6
    • 5th Dec 17, 5:50 PM
    I agree you need to see where your money is going so you don't go further in debt then make whatever savings you can then make a plan.
    A few years back I had 7 payday loans, 2 overdrafts and 2 credit cards. I was behind on the mortgage, car and every utility bill. I made the decision that I couldn't carry on. My whole salary was going on paying back payday loans. What I did was arrange repayment plans so I was back in control. Sure it dented my credit score but it was worth it to not constantly be worried that every noise outside was someone coming to tow the car!
    How important is your credit score to you? Are you planning on needing a mortgage soon? If not that important I'd suggest looking into what I did. Be firm though and don't let them make you ' agree' to more than you can afford if you do set up arrangements.
    I'm a big Dave Ramsey fan. Check out YouTube. He suggests paying the smallest debt first to stay motivated. There are videos of people paying off huge sums its really inspirational.
    The way I see it is something has to give. You might he able to adjust your budget enough to stay current on everything but if not accepting a dent to your credit file might be needed. My score was rubbish at one point but I managed just fine. These days I don't even check my score!
    I really wouldn't borrow against your home. If you lose your income or need to sell etc it could make your situation worse. Debt is one thingvbut homelessness is something else.
    Good luck you will get out of this.
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