Help for a 36yr old male still living at home?

miamoo

Hi, I'm looking for some advice for a friend.

He split from his ex girlfriend 10 years ago and was in £35,000 debt on credit cards and a bank loan.

The only way he could afford to pay this was to move back in with his parents, which he has done since and has got the debt down to £22,000.

He has recently met someone and wants to move in with her, the problem being that he has no income left each month after he has paid his credit card and bank loans.

She isn't working as she is a full time student, has 2 children and would lose all her current entitlements due to his wage.

He has never missed a payment, but the credit card companys wont help by freezing the interest or reducing the payments.
He has tried to get a loan to pay the credit cards but was refused.

What can he do?
Thanks for reading x

baxgttdi

It might not be what he or you want to hear but I would say he can't/shouldn't do it. From waht you said in your post he's cleared £13,000 of debt in 10 years which is roughly £100 a month. If that is the amount he's paying off (obviously there's interest on top as well) then it sounds like he's only able to pay minimum payments anyways so the last thing to advise in that situation would be to try and buy a house. I don't mean that nastily but it just doesn't make financial sense at all as there's no way that £100 a month is the difference between buying a house with all the bills etc and not.

As for a consolidation loan, I'd imagine he was refused as it wasn't affordable to him (in the eyes of the lenders) if he's strugglnig to pay the debt he already has. Getting more debt to pay debt is never a good answer anyway though so they've done him a favour in that sense. It's probably advisable not to apply for more loans and credit etc as it will start ot hurt his credit rating.

I think essentially he needs to get the debt down before he's able to make a move for a house. Sorry if that's not what you wanted to hear but it really sounds like he couldn't afford it from what you're saying

worried_jim

the reason the companies wont help him is becuse that he has never missed a payment so he has demonstrated affordabilty, he's there best customer , always pays minimum so they earn top interest. If he were to start missing payments they would treat him differently but it would be at the expense of his credit file, maybe the iva route would be best. I would recommend him contacting Payplan for free advice.

miamoo

Hi thanks for the reply, during the 10yrs he was at his parents he would pay his cards, but also spend on them. Sorry if I didnt make that clear.

I'm not going to lie, at first he spent on things he didnt really need after the split, holidays, clothes etc.
It was a few years ago that he seriously started trying to pay off the debt, working extra hours etc

But then he lost his job, and was unemployed for a few months during this time he used the cards to pay his loan and his other cards so the cards ran back up again. Now on his basic wage £1700 he pays £1200 off the debt and has £500 a month to pay board, car, insurance etc.


He doesn't want to buy a house, she is already renting so he would like to move in with her there.
I see what you are saying though, I think it would take him 20years to repay the debt though at his current rate:(

I

miamoo

worried_jim wrote: »

the reason the companies wont help him is becuse that he has never missed a payment so he has demonstrated affordabilty, he's there best customer , always pays minimum so they earn top interest. If he were to start missing payments they would treat him differently but it would be at the expense of his credit file, maybe the iva route would be best. I would recommend him contacting Payplan for free advice.

Yes I was worried that this would be his only option, he has spoken to them a few times and told them that he can only afford his current payments because he lives with his parents, and that he is going to want to move out at some point in the future, and he needs abit of help, lower payments or a freeze of interest rates.
But they said no we cant help:( I will get him to ring payplan thanks

saxysarah

The snowball calc might help him pay his debts off quicker - worth having a look!

basically you're friend could do with getting on here and doing the full SOA etc so people can give him support and advice as to how to et the debt down a lot quicker than 20 years. and then he would be free to make a fresh start - that would show a huge commitment to his current g/friend if he concentrated on getting his finances in order as quickly as possible so they can have a life together before they both reach retirement. The support on here is invaluable and well worth having.

miamoo

Thanks I'm not sure of the full details of his debt, but Paying the minimum payments take 3/4 off his monthly wage leaving him with £500 a month he pays his cars running costs, insurances (dental,life) and board and thats his money gone.
At the moment he isn't actually paying the debt off on the money he earns he is just making minimum payments and keeping his head above water.

(Thats one car, and he needs it for work)

iamana1ias

miamoo wrote: »

Thanks I'm not sure of the full details of his debt, but Paying the minimum payments take 3/4 off his monthly wage leaving him with £500 a month he pays his cars running costs, insurances (dental,life) and board and thats his money gone.
At the moment he isn't actually paying the debt off on the money he earns he is just making minimum payments and keeping his head above water.

(Thats one car, and he needs it for work)

Why does he need dental/life insurance?

He needs to get an SOA on here.

GeorgeUK

And if he is barely making a dent in the debt at the current rate, can he get a 0% card and reduce the rate?

I agree, we need to know more details before we can give informed advice.

The basics are that he needs to cut his expenditure, which it seems he already has;
Increase his income, possible a 2nd job;
Reduce his interest:
If he has already been turned down for loans, i wouldn't try requesting any more. You can have about 3 credit checks in a 6 month period before your credit score is affected. He should probably take a look at his credit file to make sure there is nothing on there that shouldn't be and that everything is correct (free at experian if you cancel within 30 days). He should also make sure that he is on the electoral roll at that address - this has a big impact on your credit rating. If he can't get any loans, he may be able to get 0% or Low interest for life of balance cards. It may also be possible to get offers on his existing cards so he should check that he doesn't have any old accounts that haven't been closed.

A statement of affairs would be helpful though.

DVardysShadow

miamoo wrote: »

... The only way he could afford to pay this was to move back in with his parents, which he has done since and has got the debt down to £22,000.

miamoo wrote: »

Now on his basic wage £1700 he pays £1200 off the debt and has £500 a month to pay board, car, insurance etc.
I

miamoo wrote: »

At the moment he isn't actually paying the debt off on the money he earns he is just making minimum payments and keeping his head above water.

This does not hang together.

He owes £22000 now. He is paying £14400/year and he is only keeping his head above water? He should have it all paid off in 2 years.

I suggest a SoA is needed to understand this. And not so much for his living expenses but for a schedule of his debts [amount, min payment, actual payment, APR and for loans, the number of payments remaining].

miamoo

DVardysShadow wrote: »

This does not hang together.

He owes £22000 now. He is paying £14400/year and he is only keeping his head above water? He should have it all paid off in 2 years.

I suggest a SoA is needed to understand this. And not so much for his living expenses but for a schedule of his debts [amount, min payment, actual payment, APR and for loans, the number of payments remaining].

Thanks, yes I will get some more details of his actual debts and get back to you.