In need of some advice!!!!

loulouloulou_2

Hi there,

Okay so i posted on here beofre, i owe £15000 on 2 credit cards... Virgin i owe £7000 at 19.9% and Halifax i owe £8250 (was at 22%, received a lovely letter yesterday informing me its going up to 24.9%!!!)

I did the snowball calculatoe and it'd take me five years to clear off my debts paying in about £10000 in interest!

Now i've never missed a payment or anything (i'm really funny about it, i'd rather not eat for a week than miss a payment) but the bank wont give me a loan to cover my debt and close my cards off as they say i have 'too much credit out already'!!!

So..... to cut a long story short, i spoke to my mum about it. Shes really good and hasnt judged me at all...i'm very lucky.... BUT (heres where i feel awful) shes offered to get a loan out at a much lower interest to pay off the debt and i make the payments to the loan.

Now i know i would pay the loan (she knows i'd never miss a payment) and it'd cut the debt down immensly, but the guilt i feel about it is huge.

Its soo tempting but is it a 'right' thing to do???

Please give me your advice.....i'm so torn on what to do!!!

thanks xx

skintchick

Well, it's not for us to judge if it's right. What you need to be sure of is that you will keep up your payments on the new loan, as otherwise your mum's credit rating will be affected.

If you honestly believe that you will keep them up, then I'd say go for it. And try and get one you can overpay as well so you can throw all available cash at it.

frugglewump

It's a very generous offer.

I think what you have to ask yourself is:

1. The standard consoldation question: Are you sure you could stop yourself running up further debt?

2. How will this affect the relationship with your mum?
You are very lucky she hasn't judged you & has made this offer, but do you think it could become a problem later?

loulouloulou_2

I dont think i will ever ever take out another credit card in my life!!!

The shock and embarrasement of what i've done is huge and im 25 now, i have to grow up! I have a mortgage that i pay and all my bills i pay on time.....

I dont know what to do. My mum's an accountant (shes not silly) and if she thought i wouldnt pay it then she wouldnt offer.. I think our relationship would be okay, we're very close, we work together (i do office work) and see each other evryday.

What do you think?

lynzpower

Let me tell you about my situation

my parents took on debt from me and I py them back at a much lower figure than I was paying, and for a shorter term. This all happened about 3 years ago, I owe them now about 3k. The thing is my health has deteriorated, Im not on half pay, about to go onto nil pay.

I couold have NEVER predicted this. If I have to go into a DMP, or a IVA or even go bankrupt, my parents wouldnt get thier money back .trhis is something we all have to bear out at this time and hope to god it doenst happen ., in the meanwhile they pick up the tab for my debt month in month out leaving them short.

Thats why Id never do it again.

CLAPTON

one key issue here is suppose you can't pay it off....i dont know your circumstances but say you lost your job/had a child/became ill or whatever...the debt would be your mothers...could she afford to pay it off.

also have you tried to get low Life of balance credit cards for yourself? what does your credit records look like ..have you checked them

loulouloulou_2

I signed up to credit expert and my credit ratings perfect!!!

But i cant get anymore credit!!

I did think i would put it all on my mortgage bu i dont think thats such a good idea.

Mum also said shes happy to joint sign a loan so i pay but shes a guarentor but i guess thats the same kind of thing - unless i got a loan insurance thing...??

Thanks for all your input, i do appreicate it, thanks lynzpower, didnt even think about if i fell ill!!!!

ZTD

The other thing would be for your parents to get a loan, and take all your debt away. Then you close all your credit cards etc, so you don't have credit available. Then you get a loan and take it all back from your parents.

You must not get a front-loaded loan to do this though.

freda

As well as what other people have said, you need to give us more information.

For example:

- what is the term and APR of the loan that your mum has offered to get out? Are oyu allowed to make overpayments/settle early with no penalty? A lower APR but longer term, with no flexibility, can see you paying way more interest.

- can you post your SOA? It may WELL be that you can pay off your debts in much less time than 5 years, and much less than £10k interest just by getting strict on your spending.

- can you increase your income so that you can overpay (either on your debts or the one your mum takes out?)

- how long have you been living within a budget? I'd not advise anyone who hadn't worked to a realistic budget for at least 6 months to consolidate, in any form. This is because it takes at least 6 months to learn how to live to a budget, get in the habit of SAVING for things, and to work out how to save money here and there by cutting bills.

loulouloulou_2

thanks ...whats a front loaded loan??

I've posted my SOA on an earlier thread and i am putting as much money onto my debts as i can!!

i can actually pay about £500 a month off my debts - this means i have to stick to a tight budget but i can do it!!

What a great idea about mum getting the loan then cancelling my credit then getting the loan into my name - had NEVER thought of that!!!!!!!!!!!!!!

I like that idea!.. then to start with mums helping me but in the end it will go in to my name and be my debt again!!

the loan mum was looking at is about 6% i think - much better then my credit card APRS!!

thanks

loulouloulou_2

Sorry... i forgeto

i am allowed to make overpayments on the loan offered :T