First step taken, but don't feel any better

teebowbusablaster

Finally plucked up the courage to speak to my bank today, who were keen for me to increase my mortgage to pay off my unsecured borrowing. Unfortunately, they couldn;t help as my credit score wasn't good enough, despite having never missed a payment, ccj or anything like that. We talked through the options, for repaying around £70,000 of card and another £10,000 of loans, and I have contacted payplan today, to talk about a debt management programme.
Awaiting their in depth call which is on Friday, where they want all the details of what I owe to whom.
I am on a great wage ( basic over £50,000) but with bonusses last year pulled in £95,500 and my wife works too. I have just been unbeleivably stupid in borrowing on credit cards.

Should feel better, but don't, have never felt SO down in my life !

Advice welcomed !

In_my_dreams

Welcome to my world - hopefully I can make you feel a little bit better as you are not alone!

First of all, have you done a budget, proper list of income and outgoings. I owe a similar amount, earn less and can make the payments by cutting back - have you done a huge overhaul?

You have made the first step by facing up to the cost and knowing you need to do something about it. You will still probably feel sick about the extent of it but once you have some control over it all you really will start to feel better about it, I promise.

Can you do a Statement of Affairs and list everything you have coming in, going out and what you owe and maybe we can help?

teebowbusablaster

Ok, need some advice please. I have a company looking at a debt management plan, on Friday. Lloyds TSB discussed remortgaging, and decided they couldn;t help me as the application was declined, for no apparent reason, BUT they passed my details onto a specialist company who negotiate secured loans.
Went through the figures with them, and they are prepared to lend me around 70,000 of the 80,000 I owe on unsecured borrowing.
Figures quoted were £840/ month over the remaining 14 years of my existing mortgage, which SOUNDS a lot, but is a LOT less than I am paying out now, probably a third if truth be know, and making no inroads into the figure outstanding.
So, the question is, do I go against a the usual advice, and borrow to get out of debt, beaing in mind I am not borroing any MORE than I owe now, and chip pay off £850 / month for 14 years or do I try a debt management plan ?

Advice please ?

teebowbusablaster

Oh, I should add that I got back my PPI from a loan today, which has cleared the loan, and left me with around £800 in cash to put towards reducing a small portion of the debt. This has reduced my debt figure by £750 and my monthly outgoings by £212 !

I have also cancelled (well reduced) my Sky TV and saved a further £30/ month.

So thats another £242 a month nearer a "break even figure".

DEBTFREEWANNABEE_2

I would wait to see what the DMP suggests. I owed £38k and I earn £37,000 I pay £930 a month and it will be for the next 3 years- so maybe you might be better off as the DMP tries to stop charges, interest rates etc. I am doing mine with Christians Against Poverty CAP - they are excellent and already I have paid off £4000 I owed to a family member. 14 years is a long time to be paying things off!
On CCCS website there is a finacial remedy proforma- I intiially completed that and it gave me a rough figurs of how many years a DMP with them would take. You can/could do it online without giveing your name or contact details.
Hope nthis has helped.

In_my_dreams

My personal opinion would be not to make unsecured debt secured - once you do that, should you lose your job, fall ill and can't keep the payments up or fall into the debt trap again and cannot pay the loan then you will lose your house. As long as it's unsecured you can't - personally I don't think it's a risk worth taking.

Did you do a statement of affairs to see how you could cut back - maybe we could help make suggestions if we knew more about your finances?

3Dogs

Hi there - I agree that you should not switch your unsecured debts into secured debts as you do not know what the future holds - also, the interest you will be paying on this would be massive

Please do a SOA (Statement of Affairs) and post it on here so that people get a full picture of your situation and are then able to offer suitable advice. You can do it on http://makesenseofcards.com/soacalc.html and you can do the online Debt Remedy mentioned in a previous reply at https://debtremedy.cccs.co.uk

teebowbusablaster

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget SummaryAmount(£)Total monthly income3,850Monthly expenses (incl. HP & secured loans)2,947Available for debt repayments903UNsecured debt repayments2,500Amount short for making debt repayments-1,597

Personal Balance Sheet SummaryAmount(£)Total Assets (things you own)270,000Total Secured & HP Debt-146,000Total Unsecured Debt-70,000Net Assets54,000
Household Information

Number of adults in household4Number of children in household0Number of cars owned3
Income, Expense, Debt & Asset Details

IncomeAmount(£)Monthly income after tax3050Partners monthly income800Benefits0Other income0Total monthly income3850

ExpensesAmount(£)Mortgage950Secured/HP loan payments132Rent0Management charge (leasehold property)0Council tax140Electricity45Gas0Oil40Water Rates40Telephone (land line)15Mobile phone30TV Licence15Satellite/Cable TV50Internet services0Groceries etc.500Clothing30Petrol/diesel75Road tax35Car Insurance180Car maintenance (including MOT)150Car Parking0Other travel0Childcare/nursery0Other child related expenses0Medical (prescriptions, dentists, opticians etc.)30Pet Insurance/Vet bills0Buildings Insurance40Contents Insurance30Life Assurance150Other Insurance0Presents (birthday, christmas etc.)0Haircuts30Entertainment200Holiday0Emergency Fund40Total monthly expenses2947

Secured & HP Debt DescriptionDebt(£)Monthly(£)APR(%)Mortgage140000(950) 2.6Hire Purchase (HP) Debt6000(132)0Secured & HP Debt totals146000- -

Unsecured Debt DescriptionDebt(£)Monthly(£)APR(%)Card totaL70000250022Unsecured Debt totals700002500-

Asset DescriptionValue (£)Cash0House Value (Gross)260000Shares and bonds0Car(s)10000Other assets (e.g. endowments, jewellery etc) 0Total Assets270000

teebowbusablaster

Ok, had a long series of talks with Payplan, my mortgage adviser etc.

Basically, Payplan have offered a repayment of £741 over around 7 years, which is significantly better than a secured loan of £850 (VARIABLE) over 14 years. Ok, I can't have any more credit, nor would I want any, and I am going to be potless for the foreseeable future.

I am or at least was fortunate to get a big quarterly bonus last year, (almost £40,000 over the year) and if that were to happen again, it would either allow me to pay things off quicker, or enjoy a few little luxuries.

I have gone from despondent to hopeful, that I can actually survive, even this week I was harbouring some VERY dark thoughts, not a place I want to even think about, but debt does that to some people.

I could do with a few hugs / feedbacks though, please ??

natsplatnat

teebowbusablaster wrote: »

Ok, need some advice please. I have a company looking at a debt management plan, on Friday. Lloyds TSB discussed remortgaging, and decided they couldn;t help me as the application was declined, for no apparent reason, BUT they passed my details onto a specialist company who negotiate secured loans.

Hi! Just thought I would jot down my thoughts on the above. Consolidation loans very rarely work - have been there and done it myself and ended up with the loan and more credit card debt. The best of intentions do not seem to stick it would appear. The loan above obviously has an interest rate and the 'dedicated loan negotiators' must be getting a cut of your repayments.

I personally think the Payplan option is a much better solution than the unsecured loan, and as they are free, you know your money is going straight to the people you need to pay. And, as with Payplan you won't be able to access any additional credit, your spending habits will change for the future!

Wishing you all the very best, and glad you have realised that there is indeed always hope!

Nats

DEBTFREEWANNABEE_2

I am glad Payplan have offered you a soltuion. Told you it would be better to wait and see what they say. The feeling of hopefulness if amazing. That's how I felt wehn I found out the situation wasn't hopeless.

Good loucka nd I hope it all goes through. WELL DONE FIRST AND SECOND STEP DONE.
yOU CAN HAVE A HUG FROM ME