tried everything

KAYBELLE

My husband and I are in debt for 40k. This is on top of our 130k mortgage. We have never defaulted or had any ccj's. Our bank of twenty years has refused to help us and even though we have enough equity we cannot remortgage because my wages are less since we had a baby 15 months ago.

We have contacted a loan company advertised on T.V and we can reduce our outgoings by £500 per month. We don't intend to have the loan over the full term. We have a policy maturing in two years that would clear this debt completely. I know Martin and many people say not to get out of debt this way but because we know it is short term should we do it? Our bank keeps charges us for going over our overdraft. It was £70 this month and they will not extend it or help us even though the letters they send us says they will!

Any suggestions would be great. The pressure on us both is unbelievable.

southernscouser

Hey KAYBELLE and welcome to MSE!

Don't apply for anything without posting a full SOA (state of affairs) here first! Have a look at this thread for a guide and post back here with the required information!

These TV adverts should be banned! Firstly they will probably charge you silly interest rates and secondly they will secure it to your house so if you can't afford to pay it you could end up losing your home! :mad:

Also, although you are suggesting this loan will only be for 2 years do you know what the penalties are for terminating it early? It could be huge!

Make sure you include all balances, credit limits, and APR's on all your debts and we will advise you as best we can!

SS

scottishspendaholic

Hi Kaybelle,

Welcome to MSE - please do post your SOA before doing anything with this loan company - I am scared for you that they would have something in the small print that would not allow you to pay it off early or you'd have to pay huge early redemption penalties?

Ovbiously, I don't know your personal circumstances - but is there any way you can majorly cut back over the next couple of years/sell some stuff on eBay/Amazon/do some part time work/overtime and then pay off the debt as it stands now rather than consolidating?

Please post yout SOA including all your debts, current APRs, limits and end dates and all full list of your incomings and outgoings (inc. small things like tv licenense, food etc etc)

scottishspendaholic x

KAYBELLE

need to sort the aprs out before i can let you all know the gory details
bear with me please i will put them on as soon as.
thanks

Tabs_2

Hi Kaybelle,

Welcome to MSE and well done for taking the first step to sorting your finances out ... by coming on this forum/board!

There are lots of people on here who are fantastic in offering advice on where you can save money on your bills and outgoings - as soon as you post your SOA the help will be rolling in!

With regards to the charges being made for going over your overdraft limit, you can claim to have these refunded to you. Basically, the amount of the charge does not reflect the amount of work/costs incurred by the bank and they should not be making profit from those sorts of charges. Have a look at this website http://idigital.vm.bytemark.co.uk/bag/forum/ and also the post marked "Bank Charges - Are They Illegal?" under the Budgeting and Current account forum for more info.

Hope this helps.

:heart2:

jobbingmusician

Hi Kaybelle. The most important thing to tell you is that (as I understand it and I'm sure that someone will say so if I am wrong) that:

The companies that are advertising on TV are doing one of 2 things. They are either advertising one big loan with them to pay the others off (in which case they are doing it to make money and people on this site - especially the articles by Martin - will tell you how to do the same thing cheaper) OR they are advertising a cash crisis management service (which they will charge you lots of money for and maybe not do very well), which CCCS or PayPlan will do for you for free.

So DON'T do anything about signing up with them until you've got lots more information from here!

As far as I'm aware (and I've read an awful lot of posts!) NO-ONE on this site gains anything from the generous help and (mutual) support that's given - so you can trust the people on this board - we will all try to see you on the right path, and we're all working together to try to improve our financial situations!!!

Xbigman

I can see there is an argument for consolidating now to protect your credit rating for the two years until you hope your finances can be sorted, but you have to look at things as they are now and not rely on future events. No matter how good they look.

You say you have not missed any payments or defaulted. What do you call going over your overdraft limit? You have financial issues right now that are more serious than you realize. Consolidating over a much longer timescale is rarely the answer. It does not stop the basic overspending issue in 80% of cases. It makes the debt 'secured' and the penalties can be extortionate. It is also often the case that the initial quote you see for a consolidation loan gets bumped up by fee's and PPI, or you get offered a higher interest rate when you actually apply. If you want to go down this route, and it *can* work, you need to look at the numbers very carefully before deciding.

I would always advise anyone in your circumstances to try a DMP first. At least try it to see if you can stick to a budget for the next three months. The downside is that a DMP will trash your credit rating and you will find it harder to get credit, personally I don't see that as a disadvantage at all.

As a general comment; I notice you used two well know phrases.

'The bank won't help us...'.
Banks never help anyone. They only lend money to make a profit. If they won't lend any more it means they think they have bled you dry.

'...release equity...'. There is no such thing as borrowing to release equity, just borrowing to spend. The only way to release equity from your main home is to sell and downsize.
Regards



X

inmypocketnottheirs

Whilst your current bank may not be the most supportive at the moment, they are only looking at the immediate conduct of your account. Are they aware of the lump sum you have got coming in a couple of years, and if so are they not prepared to help you using this policy as security?

Also as Tabs says take a look at the links in my signature below on how to get bank charges back. These fees are unenforceable and when challenged your bank will refund them, I know I had over £1300 back last month from the Co-op for their charges over the last six years.

Hope this helps and all the best.

skint_smiler

Thanks so much, impnt! Really appreciate the info about claiming back bank charges, and I've just registered now with HMCS Money Claim Online so I can try and get something back from NatWestl, grrrr! they've fleeced me for hundreds!

Tabs_2

skint_smiler wrote:

Thanks so much, impnt! Really appreciate the info about claiming back bank charges, and I've just registered now with HMCS Money Claim Online so I can try and get something back from NatWestl, grrrr! they've fleeced me for hundreds!

Have you approached your bank first to request a refund of the charges? If not, do that first before making a claim to the Courts ...