Options

The_Drowner

Hiyah,

I suppose I am one of the good news stories from this forum. Two years ago I registered on here when I had unmanageable and frightening unsecured debts of just over £60k. I have diligently paid off what I can and today I have cleared off £20k of that. One or two of the debts have cleared altogether, another 2 or 3 will be gone by next spring and then, assuming I'm still in gainful employment, I will have more cash available to put towards clearing the others. It's been tough going and some months we are still very tight for money but the debt mountain is getting smaller, bit by bit. And although three yers seems like a long time, it is getting closer all the time.

So first of all I wanted to post that little story on here as an encouragement to anyone who is in a similar situation to the one I was in back then.

The second thing is a question that I would like to put out to those with more knowlege than me on these things. In addition to the £40K I have in unsecured debt, I also have a mortgage (£75k) and a secured loan (£58k). And in total I pay out about £2,225 per month to meet those various demands. I have attempted twice in the last 15 months or so to get all of those consolidated into one single payment - but the only route I have looked at for doing that is to speak to mortgage lenders to see if they would be happy to consolidate into a larger mortgage with a single monthly payment (which would nonetheless, hopefully, be a lot less than the £2,225 per month I am paying at the moment.

I know the generally sensible thing to do would be to continue to pay off by £40k unsecured debt because in about 3 years that will ALL be gone so putting it onto a mortgage for, say, 15 years, would increase that debt burden considerably over time. However, and here is the really difficult bit for me personally, this September, all being well, 2 of my kids will be at university and in another 2 the third one will be as well. I have one there currently and frankly, it's costs me so much money now that I don't think I can sustain having the other two there as well without reducing the amount of money I pay towards clearing my debt in some way.

The other thing to add is that the reason my two ealier discussions with mortgage advisors never progressed beyond initial dsicussions is that my credit history is not great because of the missed payments etc. that were mounting up before I went into my current arrangements with my crditors (although my payment history has been clean as a whistle over the last two yers though).

Any advise? Leave things as they are? Explore other ways of financing the debt? Something else altogether? Suggesstions welcome.

dancingfairy

Hmmm - putting unsecured debt onto a mortgage is generally not a good plan - as you've identified it will stretch the time to pay it to 15 years and add a considerable amount of interest during that time, also you are putting your home more at risk should you lose your job or become ill/unwell.
Have you tried shuffling the debt - ie calling up the cards you have cleared (presuming you haven't completely cancelled them) and seeing if they have any decent life of balance transfer deal available? if so then you can try and move debt at a higher rate of interest to these lower rate offers.
I'm not sure whether you have offered reuced payments to the creditors? if so and you can't meet what you are paying them, then you will just have to offer them less - although quite whether they would be happy with this given that you will be using the money to support your children through university I don't know - I'm guessing the banks would say - well it's tough on the children - you owe us so you pay it back before helping them out (not that I don't understand where you are coming from).
Could you perhaps offer your children a little less help? Would your bills go down at all? I don't know how much they cost you right now but presumably you buy some food, pay the electric for them etc?
df

Blahah

Out of interest, why does it cost you money for your kids to go to university? It makes far more sense for them to take out student loans for tuition and maintenance, and open overdrafts and claim their maintenance grant, than it does for you to extend your borrowing to fund them. Their borrowing will be interest free.

I'm at uni and although I only get the lowest loan and grant available I still live very comfortably. Part time jobs are always an option.

The_Drowner

Thanks for that - and yes, that nicely sums it up - unfortunately the debts I have cleared so far have been loans rather than credit cards so shifting the debt isn't an option (I have applied for zero % interest balance transfer creditr cards but, again, my prior bad credit history counts against me and no one will offer me one - not unexpected but it always feels like a kick in the nuts when you get knocked back and your reasons are genuine).

The uni costs are exactly the kind that you listed - the room and board stuff (of which we get some paid back but nowhere near enough to cover the costs) and the day to day expenses of his accommodation - rates, utilities etc.

Even though there is a definite date at which this will all stop, it still feels at times like a horrible never ending circle.

The_Drowner

Blahah wrote: »

Out of interest, why does it cost you money for your kids to go to university? It makes far more sense for them to take out student loans for tuition and maintenance, and open overdrafts and claim their maintenance grant, than it does for you to extend your borrowing to fund them. Their borrowing will be interest free.

I'm at uni and although I only get the lowest loan and grant available I still live very comfortably. Part time jobs are always an option.

The rate at which my son gets his loan released to him doesn't keep pace with the dates when payments need to be made e.g. his rent is paid from July to June, single payment each month, his loan patyments to cover that come through in three payments - September, January and April - so we are always haveing to play catch up on that - the initial payments always have to come out of our pockets.

On top of that because all of his loan money gets spent on accommodation we are having to give him a small amount of money for food etc.

His student loan account allows him to borrow so much but there is an overdraft limit on it and that is below the amount he needs to cover his living expenses. He doens't live an extravagant student lifestyle - he has a poorly paying part time job and only only goes out once or twice a week - but the student loan is nowhere near paying what he needs and, as mentioned above, when money needs to be paid, the money from the loan is often not available anway because of the release dates of the money to his account.