What would be the best solution to clear my debt?

Hannah_10

Ned wrote: »

so the loan is a definite no-no. can i do a balance transfer to a credit card that is in my mums name?

No Ned, the point of what everyone's saying to you is don't replace a debt with another debt. Especially not to another person.

A credit card is another debt. And it's still to another person.

The consensus (and I agree with it) is to send letters to the companies you already owe to get the accounts frozen. Then work out a debt management plan, either through one of the big charities or of your own accord.

spursfan14

Don't get credit to pay credit!! It is such a downward spiral. Have you thought about Debt Management? There are free options like the CCCS who will have you contact your creditors and help you structure your DMP , or you could use a fee paying service like Debt Line who you pay a monthly fee and they talk to your creditors on your behalf. Both have pros and cons.

All the best.

FTW

Do NOT trust Royds TSB - I speak from vast experience!

mufc689908

Ned wrote: »

I accrued a 4k credit card while i was away travelling for two years. I had planned to do a balance transfer on my return, but due to having an 'untraceable history' due to being outside of the UK for so long, I am unable to get a credit card anywhere.

I'm also currently unemployed, and while i was away i missed the odd payment, both of which aren't helping my cause. I'm paying off about 90 a month while my interest is around 70 a month, so im spending lots and not really getting anywhere.

My mum was at the bank today (we're both with LloydsTSB) discussing savings options and also mentioned my situation in order to see what the best option would be. They suggested a 5k loan over 4 years, using 1k to be immediately paid off (the rates on a 5k loan are better than a 4k loan). My mum would take out the loan, and i'd be paying her back each month.

I've suggested that if my mum would like to help, then she could get a credit card (she has a good history) with 18 months free on balance transfers, then i could transfer my debt to her card, therefore paying no interest for 18 months compared to the loan. She isn't too keen on getting another credit card though and would rather go through with a loan.

What would be the best option in this situation? Or is there another way?

Thanks

Request a signed CCA, hopefully they cant produce one and you can walk away from the debt without paying a penny.

fatbelly

mufc689908 wrote: »

Request a signed CCA, hopefully they cant produce one and you can walk away from the debt without paying a penny.

If only life were that simple...

And if the agreement is post-april 2007? Or if Lloyds have kept the paperwork?

dancingfairy

So they are suggesting that as you are struggling you:
a) refinance - over a longer period of time
and
b) borrow money off of a family member to repay the debt without any mention of what the implications are for their credit rating?

Isn't that irresponsible and against OFT guidelines?
I'd be looking to report them for that to be honest.
df

andrea1968_2

The money that you're saving so that you're able to find a new place would be better thrown at the debt at this moment in time. It sounds like your mum is willing to help on a massive scale so perhaps staying with her for a while longer is the best option until you get this sorted.

sueeve

If If If your mum has enough money to help you without having to take a loan, and would like to do so, then you could draw up a payment agreement with her, without bringing a financial institution into it. If she is prepared to take that risk with money she already has that's up to her. But not to take out a loan..

Actually, after doing so much for 2 years perhaps you have done well to keep the debt to 4K

katsu

spursfan14 wrote: »

Don't get credit to pay credit!! It is such a downward spiral. Have you thought about Debt Management? There are free options like the CCCS who will have you contact your creditors and help you structure your DMP , or you could use a fee paying service like Debt Line who you pay a monthly fee and they talk to your creditors on your behalf. Both have pros and cons.

All the best.

Fee paying DMP providers are not better than free ones - their service is no better - they take their cut of your payments so it takes you longer to clear the debt. If you decide you want a DMP then use a free provider - CCCS, CAB, or Payplan are recommended here, as are Christians Against Poverty (they definitely give advice, not sure they do DMPs?).

fatbelly

katsu wrote: »

Fee paying DMP providers are not better than free ones - their service is no better - they take their cut of your payments so it takes you longer to clear the debt. If you decide you want a DMP then use a free provider - CCCS, CAB, or Payplan are recommended here, as are Christians Against Poverty (they definitely give advice, not sure they do DMPs?).

Good point, Katsu - I missed that comment earlier. Debtline are particularly to be avoided as they are the same company as FLM loans and their suggested solution is often a FLM guarantor loan! The fact that they have chosen a name similar to National Debtline ought to set alarm bells ringing.

CAP do do debt management plans and will recommend insolvency where appropriate.