My next move?

frankie4fingers

Hello,

I have finally decided to take my head of the sand and face up to my financial situation.

I currently owe just over £40k on loans, overdrafts and credit cards, as well as currently paying back my family £300 per month from my last bail-out. The debt occurred due to excessive gambling and subsequent interest charges and the like on the borrowing, so no assets to speak of.

I have gone through debt remedy on the CCCS website, and it advised me that my payments would be c£700pm, and it would take about 4yrs 10m to clear myself. However, it also says as a result of a DMP, it would be difficult to obtain credit after this time for a while, mentioning it remaining on my record for 6 years. I am not getting younger and need to be thinking about moving out of home soon (im approaching 30), but if any sort of mortgage is out of the question for a while AFTER nearly 5 years of DPM, I can never see me securing one!

My question is would BR be a better route, as it would be over and done with sooner (3 years instead of nearly 5), and would remain on my credit file just as long? I really don’t want to use the BR route to be honest, I’d rather work my way out and pay back what I owe.

I am hoping my family may secure me a £40k loan over 10yrs to pay off what I owe, hence saving my credit record and getting back on the straight and narrow sooner, but with that being a huge ask, I need to be thinking of alternatives.

Any opinions offered would be gratefully received. My partner doesn’t know about my debts, but im planning to tell her over the weekend, and feel I need to know all the information to try and explain to her the options. I feel I have totally let her down, and I want to make things right, and so would appreciate any feedback.

Many thank for your time.

dancingfairy

Hi Frankie. I really wouldn't recommend asking your family for a secured loan to be honest - you say they have already bailed you out once. Also if for whatever reason you can't make the payments they could loose their house and that's not really fair.
Have you sought help with the gambling as you have highlighted this as being an issue? There is a exgamblers support thread on here which may help you keep on the straight and narrow.
The CCCS website may say 4 years but that is not so long really to rebuild your finances - things change - you may be able to make even bigger cutbacks or you may get a pay rise who knows.
I would post your SOA up on here and see if people can suggest any cutbacks to be honest.
Best of Luck
df

dancingfairy

Found it - the link to the ex gamblers thread is here:
http://forums.moneysavingexpert.com/showthread.html?t=1090463&highlight=gamblers
Hope that may help you a little.
df

frankie4fingers

Hi, thanks for your comment and link.

I have stopped gambling, in the end I hated doing it, but was the only way i could see of getting out of debt.

I dont hold out much hope of the loan, so am just trying to figure out best way to go.

I'm not looking forward to this weekend....but kinda am, keeping it to myself is killing me!

dancingfairy

Think you need to be prepared for her to hit the roof - at least initially it may be a huge shock and disappointment to her. Hopefully after a few days she can calm down but obviously the fact you have approached CCCS for help is a great start and if you can go through the whole DMP thing with her and that you are going to deal with it yourself then hopefully she will support you.
If not already done so I would get yourself barred from all online gambling and the local shops - just in case the urge returns.
There is a bankruptcy board on here too if you want to talk about that option to see what effect it would have on your credit rating etc.
Both a dmp and bankruptcy will affect your credit rating for a good while and also bankruptcy will prohibit you from certain jobs - in accoutancy, law ,that kind of thing so you need to consider that.
You can do it - it might be tough in places but you can do it.
Best of Luck
df

Tixy

People have managed to get mortgages during a DMP or after a DMP but within 6years. Although you may not get the best rates available.

If you go on a DMP and start making reduced payments then what usually happens is after 3 to 6months you get defaults registered on your credit file. These defaults will appear on your credit file for 6years and then disappear (in the meantime you will hopefully have paid them if the expected DMP term is 4yrs10m). Therefore sometimes people end a DMP with not actually that bad a credit report, they then usually spend a year or 2 actively trying to improve it.

This would be the best scenario, it could be worse for example some companies could register CCJs against you after a year or 2 and they would stay on from 6years from the date they go on your credit report.

Plus hopefully if your starting target debt free date (DFD) is 4years 10months then hopefully with some help and ideas from the people on here you can reduce the date down - you may be able to reduce outgoings, or you may get a payrise or a new job or a second job. There are lots of ways to make small changes.

If you have £700 per month spare to repay your debts then a DMP sounds like a good option. If you talk to CCCS (before actually signing up) they will run through these issues/concerns with you.

In the meantime you could post your income & expenditure on here using this link http://www.makesenseofcards.com/soacalc.html and we may already be able to suggest areas you could switch / save.

frankie4fingers

I am expecting her to hit the roof, we currently live apart, but she has had her heart set on moving out next April. Cant believe it's got this far, it's gonna kill her, which in turn will kill me, I hate the feeling of letting others down. I have to tell her though, as the stress is making me ill, and i cant sleep. People are asking me whats wrong, and i can't hide it forever!!

Thanks again for the advice, if there is any more out there, i would be eternally gratefully. I hope to arrange my SOA soon.

dancingfairy

You're doing the right thing though - she needs to know but hopefully you will feel better once it's out in the open.
df

dancingfairy

To be honest you can still rent - and live together and save for a mortgage. Obviously you would not want to get any joint accounts or anything linked financially but it's still a possibility. April is 6 months away yet which will give you plenty of time to start making a dent and show her you are serious about sorting it out.
df

frankie4fingers

Thanks df, your feedback and advice has been most helpful. :beer:

I'm coming clean tonight, can't wait to do it in a way, but dread losing my other half over this. It was my pride that stopped me admitting it before, but i am kicking myself i have let it get this far.

Will be talking to the parents too, see what they advise, just feeling a bit of a failure at the mo. Has been somewhat of a comfort reading these forums to realise i'm far from alone, and it has inspired me to sort my life out. :j

Shoe_Gal

Good luck with everything. Am sure your girlfriend will stand by you, once she gets over the shock and realises you are serious about sorting it out