HELP - we're running out of options!

Munchkin_2

I'm hoping that someone can point us in the right direction.

I'm trying to help out my little brother (23) who has managed to get himself into £21k of debt - through 4 loans and a £5k credit card.

Most of the loans were taken out in the last 6-12 months, with either Black Horse or Halifax. The problem now is that he's got into a mess with the monthly repayments, which work out to £577 a month altogether (going with the minimum payment for the credit card) and only earns £880 a month and what he gets from selling the odd bit through ebay.

We applied for a loan a the weekend (Direct Line) - £21k over a 5 year period - reducing monthly repayments to £401. This was refused. We're waiting for the explaination to come through the post as to why, and think it may be because the repayments were going to be too much out of his monthly wage.

Does anyone have any suggestions of who or what to try now? The aim is to consolidate the loan,over a longer period if we have to. He's still living at home, so has no real outgoings to be stated on loan/credit applications - (£200/month rent and £25 car insurance). I'm just worried about the three strikes nad your out rule and no other loan company will touch him after that. (Post office refused him earlier in the year - so this could be his last chance?)

Please help

qwopmnxz

id say let him stick with paying them off taking the 577 a month from him, id guess he would get a consoladition loan.. then rack up even more on his CC since he feels he has some free cash since reducing payments by 177 a month

he was big enough to take the loans out, and whilst still living at home has no 'real' out goings.

Wonder_Girl

I don't think consolidation is the way just yet.

When you say he lives at home and has no expenses then why isn't he meeting the payments at the moment?

Could you maybe get him to post id SOA for us to have a look at and suggest the best way forward?

WG x

lynzpower

The reason why he has probably been rejected is that he has too much credit at his disposal

Could h come here and tell us what hes spending it all on? How much debt he has etc? What the APRs are?

Floss

He must have some outgoings, i.e. board money / lunches / travel to work ?

The helpful chaps & chapesses on here can't really help unless they get the full picture - ask him to put together a statement of affairs (SOA) and then post it on here.

Munchkin_2

He is paying £200 rent a month whilst living at home and £25/month car insurance, when I said 'no real outgoings' I meant that as he's living at home the loan companies don't necessarily need to know this, like they do with rent/mortgage's and refuse him as he'll have no money each month. For example, on the Direct line application only £100 rent/month was declared and still he ws refused.
Most of the debt has gone on buying a car, and then solving various problems with the said car over the past 2-3 years (last year the head gasket went for the 2nd time then he had problem the garages couldn't figure out) so that's racked up a huge bill which is where he's come unstuck in the first place. We can sort out where he's spending his money and budgeting himself - I've had to do it with my own spending so thats not the problem. Its getting the payments down so that they're more managable and he's not paying so much interest that's the issue. His credit card is 22.9%APR (HALIFAX) and the Black Horse loans are about 15%APR.

wigginsmum

Can he sell the car, get an old banger, and use the money to pay off some of the debt?

CLAPTON

its unlikely that any lender will give someone with £21,000 debts and an income of only 880 a month a new loan with a good APR.

he needs to sell the car and use the money to pay off debt....does he have any other high value things he could sell?

he needs to post an SoA and to reduce his spending to the absolute minimum and to increase his income....can he get a part time job, or do overtime.

Once he has a little spare money he needs to throw it at the debt with the highest APR.

Do any of his debts have PPI on then...if so i would suggest he cancels this.

Munchkin_2

Hi

I'm sorry but I didn't thank any of you properly for your responses above, so thought I'd come back and let you know that all the advice was gratefully received. It was a bit manic at the time, but my brother knuckled down and was able to carry on making his repayments as well as also successfully reducing his credit card bill to well under half of it was!!! :T

Unfortunately, now he has had a letter from his ex-employer regarding the reclaim of an overpayment of wages to him....but thats another story and I'm going to try to seek advice elsewhere on chat rooms before posting anything.

Thanks once again

Munchkin xxxx