Loan from Credit Union

CHR15

Reduced settlement figures are generally only accepted once you are in serious arrears and your credit rating is already trashed.

If you have no concern about trashing your credit file (and subsequently removing yourself from the customer pool of decent lenders) for the next 6yrs, then go for the reduced F&F settlements.

Be aware that some companies may tell you over the phone it is a F&F figure, but continue chasing for the money (after conveniently having no record of the agreement you made).

Ensure any F&F Settlement is agreed IN WRITING before sending any money off to them.


Remember also, that borrowing money does not remove the burden of debt, you still end up owing money, but to someone else.
A lot of people consider owing Family money, less threatening than owing some faceless company money, which is why there is a sticky warning (over 20 pages!!) about the dangers of lending money to Family and friends

RobertoMoir

I'm just amazed that people still think the solution to debt problems is more debt.

Perhaps the government should have a drugs program based on similar logic? It would go something like this:
"Addicted to Heroin? Sign up at your GP for crack cocaine on the NHS and you'll no longer want the heroin".

No, no problems with the logic there.

Cash_Flow

RobertoMoir wrote: »

I'm just amazed that people still think the solution to debt problems is more debt.

Perhaps the government should have a drugs program based on similar logic? It would go something like this:
"Addicted to Heroin? Sign up at your GP for crack cocaine on the NHS and you'll no longer want the heroin".

No, no problems with the logic there.

I don't see the problem with it:p

So if you had a Mortgage @ 7% and then two years later you are offered a remortage @ 4% is that not:money:?

In my opinion it's the same principal just a different scenario.

RobertoMoir

Cash_Flow wrote: »

I don't see the problem with it:p

So if you had a Mortgage @ 7% and then two years later you are offered a remortage @ 4% is that not:money:?

In my opinion it's the same principal just a different scenario.

Note where I said "Debt problems", not "carefully managed financial affairs". If you still can't see the problem then I really can't think what else to say to be honest. But I'll try...

The problems with consolidation type loans are well documented here and the reasoning behind wanting the loan is based on very flimsy foundations imho:

• The assumption that all creditors will accept F&F settlements, and are less experienced at collecting debt than the OP is at owing it, and won't suss that the OP's offer of a F&F means there is money there to be had after all and push for the full payment.
• Or that the OP won't !!!! things up, with all due respect to them, and think they have made F&F payment on some of the debts but still end up getting chased for them.
• Or, again, that circumstances won't change and they end up in more debt overall.

Absolutely no examples of any of the above scenarios in the forums here. Oh no, not at all. Oh and on that mortgage, you'd still want to check the fees for making the change rather than leaping blindly into it, wouldn't you? There's nothing "MSE" about making serious financial decisions without properly considering the downside.

creditcontroller

exharris wrote: »

Thanks for all these reponses.

Firstly, I am trying to take control of my finances here. I have gotten into trouble in the past, but the CCCS option is not working. They said the creditors would suspend interest yet most have not. They tell me the debts will be repaid in 5 years, but this is based on the assumption that the interest will not be charged, and it is. Also, they are regularly missing payments even though I am making monthly payments to them, causing fuss with my creditors.

There IS interest on the loan applied for from the credit union, however, I also Save each month with them. They won't let you lend without also Saving. With the interest, it will take 3 years and 9 months to repay the 10,000. However, staying with the CCCS, it will take nearly six years.

Also, I would like to remind people that I am not getting into more debt. I am in effect reconsolidating the existing debts with various creditors, lending the SAME amount that I'm in debt for. If my creditors accept full and final resettlement at less than the balances, then the difference (if any) will be used for a car.

Also, as the repayments come from salary directly, it's far easier to actually manage repayment (well you don't have to actually do anything at all), and I'll be saving at the same time (£50/month). At any point of the loan, I can offset the savings made against the balance, clearing it quicker.

This plan would get me out of debt much qucker, and in a much easier way than the existing plan. Also, I can overpay on the loan at any point without being penalised.

I am a bit dissapointed at the response from people on here. I don't know on what basis they think this loan would be 'irresponsible'. How am I an irresponsilble borrower? On what basis would it be irresponsible for them to lend to me?

I don't understand what a 'trolling' post is, but I asked this question on the (obviously) misguided assumtion that perhaps someone who had any experience of credit unions, or maybe who had worked for one, etc, may have responded (maybe someone who knows what they are talking about).

I have sent proof of my salary for last three months, and bank statements. I've proved all my bills, etc. They know exactly what I have coming in and what's coming out, and my understanding is that most lendors don't do this, but in any case, if I'm successful my disposable income (after I stop paying CCCS) will be £640, and I've proposed payments of £250 against the debt.

In any case, we'll see. Yes, I was under the impressions that credit unions were there to help people also.

Thanks to the few people who haven't attacked me.

Not a particularly welcoming response to my first post on this forum.

Isn't the maximum time to repay a loan only 3 yrs?

exharris

creditcontroller wrote: »

Isn't the maximum time to repay a loan only 3 yrs?

No, 5 years, though it may vary from CU to CU. Actually, looked again and it's 3.9 years, not 3 years 9 months. Not much in it though.

exharris

RobertoMoir wrote: »

I'm just amazed that people still think the solution to debt problems is more debt.

Perhaps the government should have a drugs program based on similar logic? It would go something like this:
"Addicted to Heroin? Sign up at your GP for crack cocaine on the NHS and you'll no longer want the heroin".

No, no problems with the logic there.

I think what you're referring to is Methodone? ;O)

Also, you might want to check out MSE's Problem Debt Plan "Debt Problems : What to do.."

"Get a cheap personal loan. Standard personal loans can give you a consistent cheap debt, though not usually as cheap as the cheapest credit cards. Though as you must make fixed repayments each month, it has the benefit of providing structure.
Unfortunately, those with poor credit scores won't usually get decent rates yet an alternative is to look at joining a Credit Union. For many they’re a welcome alternative to payday loans or doorstep lending.
Credit Unions are indpendently-run local co-operative organisations that aim to assist people who may not have access to financial products and services elsewhere. There are 500 in the UK providing loans, savings and current accounts, each deciding its own services and rules on who can join."

exharris

RobertoMoir wrote: »

• The assumption that all creditors will accept F&F settlements, and are less experienced at collecting debt than the OP is at owing it, and won't suss that the OP's offer of a F&F means there is money there to be had after all and push for the full payment.
• Or that the OP won't !!!! things up, with all due respect to them, and think they have made F&F payment on some of the debts but still end up getting chased for them.
• Or, again, that circumstances won't change and they end up in more debt overall.

I agree with the second bullet, I will get it in writing before handing over any cash.

RobertoMoir

exharris wrote: »

I think what you're referring to is Methodone? ;O)

Yes and that's working real well isn't it. Now that "I'm a drug addict" is now accepted as mitigating circumstances in court instead of the confession to other crimes it should be.

Also, you might want to check out MSE's Problem Debt Plan "Debt Problems : What to do.."

Oh I know what it says, I just disagree with it. Don't get me wrong, I wish you every bit of luck going sorting yourself out, I just think that solving debt problems by getting more debt is like trying to put out a fire by pouring petrol on it.

I met a lot of people when I was a bailiff who started out by trying to do what you're talking about and I wasn't there to present them with a special award from the courts for getting out of debt, if you see what I mean.

nu_nu

While not wishing to join this thread, I feel obliged to point out that NOT ONCE in a very long time during which the CCCS have managed my DMP have they failed to pay my creditors. Their service to me has been impeccable and has saved my sanity!!

exharris wrote: »

Thanks for the explanation about trolling. Regards your first point, "this loan should be used to clear all your debts", are you saying you would think it OK if I just paid 100% of the balances, and used the whole 10k loan to clear it? Whist this would deliver the consolidation, and facilitate easy repayment via salary, my view is that if the creditors are prepared to accept a full and final settlement offcer, why should I pay more? There must be a reason why they accept !!!!!! offers - I thought the idea of !!!!!! is that the creditor gets the debt cleared off quickly, so we both benefit.

Consdider that I had a wealthy parents who had some money but not enough to give me full 10k, would a !!!!!! sitaution in those circs be unacceptable to you ("throwing breakcrumbs again")?

I don't think that one should "simply ignore creditors" Far from it, I rang them all last weekend, and it was then over the phone that one offered to settle at 50%. This is what gave me the idea of applying for the loan.

My query was more about the decsion making process that the CU would go through. I suppose it varies from one to the other, but we'll see. If it's not accepted, then nothing ventured, nothing gained, and I'll carry on with the CCCS (and do another budget, which is due, which will mean increased payments as my income has increased since the first). And before you 'flame' me (is that the right term?), I know I need to tell the CCCS about this, but it only happened a few months back (Dec), and I've not gotten round to it.

I am considering also in the future managing the whole debt thing myself. CCCS seem incapable of distributing the payments evenly each month.