Help me please someone!!

Bickers

Been reading this forum for a while now and need to ask people for some advice.

I have got my self in debt to the tune of 48K (by being a mug)

I have phoned the CCCS and had an interview set yesterday. Things went well and feel positive that done something about it but really confused and worried about the future.

I have got 3 bank loans, plan was to conolidate them with the last one and make one payment but things got out of hand.

1) HSBC 28K o/s ( paying £510 a month over 5 yrs made 5 payments)
2) Liv vic 18K o/s (paying 404.43 q month over 5 yrs made 14 payments)
3) cahoot 2K o/s (paying £70 a month)

Up to date with all over bills such as rent etc and pay £500 a month into joint acc with my Mrs which pays for all the bills.

Earn about £1200 a month.

good thing is that I have still got 10k left in my HSBC current acc left over from the consolidation loan. meaning my acc is in credit to the tune of about 10.5K

Spoke to the cccs and they have advised me to set up a DMP with them for £370 a month to pay off these debts.
This is fine and now I have things in control can make these payments, however bad news is: it is going to take 11 years to pay off all my debt.

I am really confused as the lady on the phone advised me to move money from HSBC acc and put it into a high interest account!!. SHe said what will happen is that the interest will be frozen on the o/s loans and that the 10k I have, I need to tie up and earn the interest from it whilst paying £370 a month to pay off my o/s debt.

I am really confused as to this as, surely it would make more sense to pay the 10k back to the banks and reduce the length of term that i have to pay back the DMP.

Really concerned as to what happens in the future, once this happens, do I receive nasty letters from the banks for the money back, do I get a switch card, do I get phone calls constantly demanding money back, What happens in the future with my credit rating, How would I be able to apply for a mortgage in the future, does the blackmark against my credit rating disappear after a certain time. I am so confused.

Also, once a DMP is set up, can I actually make overpayments to pay things off quicker. For example, I have got share scheme at work, where the shares will matre in 3 years. this will give me about another 8k that I haven't got at the moment. Can I make a one off payment through the CCCS that will reduce the length of term of the MDP. Not sure if I can make one off payments.

I am so determined to sort this out, My Mrs has been an absolute rock for me, but still scared about what actually happens.

It sounds ok but Please can someone advise me what happens.

Thanks

jobbingmusician

I'm surprised as well.

However, I can see the lady on the phone's point, and it seems from what she is saying that you are in a GOOD position. What she is saying is that your interest will be frozen on your o/s loans. So there is no point in making extra payments (and no real point in bringing the repayment date forward) as you are not accumulating interest on these debts. I am surprised that the people you owe money to are happy to just freeze the interest whilst you have such a substantial nest egg, but this is all good for you.

However, you are rightly concerned to make the payback period as short as possible. I'm afraid I don't know when the black mark on your credit rating will disappear, but I'm sure someone else will be along soon with an answer.

The most MSE thing to do, which will make sure you repay the money in the minimum period you can, is to

- hold on to this £10k and put it into a high interest account, as advised

- keep up your payments to/through CCCS

- economise in every way possible and add to your £10k + interest savings, if you can

- KEEP AN EYE ON THE OUTSTANDING DEBT. The time will come when your savings equal the outstanding debt. At this point you can pay off the debt and walk away happy. :T

If you do it this way, the date when your savings = o/s debt will be earlier than if you throw the £10k at the debt now, because your savings will include the interest from the £10k.

THe only other thing you need to watch is the fact that if you lose your job at any time and go on to benefits, you will be better off throwing the £10k at the debt now - because the benefits people would reduce your benefits because you have £10k, and don't care how much your debts are!

Hope this helps!

Thefunkygibbons

Another cunning plan might be to go for a full and final settlement using the nestegg as this will clear the debt sooner.

There are various threads on the board about the success posters have had with this

Bickers

thanks for your help.

I am still a bit confused as to what to do with my joint account.

AS this is with HSBC (As well as my loan I intend to default on) I assume I need to move this quickly, as any money I pay into this (which I do monthly to meet all my bills with my mrs) HSBC Will take out and put towards the o/s debt.

Really confused as to what happens with setting up a new bank acc. Say I set up one with alliance and leicester, will this get cancelled once I default on my loans with HSBC and liverpool vic?

klare_2

I would definately go for some sneaky full and final settlements as already posted .... you wont get into trouble with the cccs and you could clear a massive chunk of that debt! ( im with the CCCS too)
As for the fact that all your creditors will freeze your interest.. not so... some of them take AGES to do that and as for Lloyds well im not even gonna go there ive only just got my blood pressure down .... however since we started our plan with CCCS lloyds have taken so long to actually agree to doing anything to support us that they have actually wiped out ALL payments we made to them with their extra charges!!! B######s ! They wouldnt know responsible banking if it slapped them on the face!!

.... and breatheeeeeeeeeeeeeeeeeeeeeeeeee


hope i got my point across :-)