Debt consolidation, any advice?

JamesY_2

Hi, I have bad credit with 5 defaults which happened when I lost a job 11 months back or so. I started paying them all, juggling jobseekers to cover the minimum payments at around 110% of my income paying the payments (sold my stuff to cover the extra).

The current situation is that I am about to start a new job next week which pays about £600 after tax per month. My minimum payments + my new rent cost me £300 per month.

I need about £700 for a moped for work travel asap and getting credit is tough but I could wing it on the train for two months and buy outright.

The total debts amount to about £4400 and if I consolidate them into a loan then I would have a £1,600 graduate overdraft free to act as a buffer to cover difficult costs and get the moped.

Paying outright via consolidation would allow me to accept a few offers on my debts of about 60% balance or so. Without these offers I owe around £5500

Any advice? I don't have 3 previous months payslips obviously and my defaults make getting credit tough.

What should I do about consolidation?

Should I keep the debts individual, snowball them off and try and get bike finance?

Thanks

mostlycheerful

Wing? Er, I think you should delete that pronto asap, mate.

Re consolidation the problem is that unless you change your spending habits you just run up the debt all over again and then you’re in a worse pickle. There are quite a few mentions of this on this forum so perhaps have a read through of what other people say about it. However, if you could make a sea change in your spending habits and attitude then for about 10% of people who have a lot of self restraint and really hate being in debt it’s doable. Alternatively if you do what most people do you’ll just get deeper and deeper into debt and then eventually you’ll have to do a DMP Debt Management Plan, either yourself or via the free services CCCS or Payplan – and not a pay service as they cost more and often rip you off and mess you about – or an IVA or bankruptcy. Which is all ok if you don’t care and if you don’t want to ever get much or any credit again. Loads of people do these, as you can see on this site. But is that really what you want to do, be a debtor with no credit? Yeah, some people don’t care and it’s legal to do it in UK so it’s your decision. Anyway, good luck with what you decide and I hope this is of some use.

JamesY_2

mostlycheerful wrote: »

Wing? Er, I think you should delete that pronto asap, mate.

Re consolidation the problem is that unless you change your spending habits you just run up the debt all over again and then you’re in a worse pickle. There are quite a few mentions of this on this forum so perhaps have a read through of what other people say about it. However, if you could make a sea change in your spending habits and attitude then for about 10% of people who have a lot of self restraint and really hate being in debt it’s doable. Alternatively if you do what most people do you’ll just get deeper and deeper into debt and then eventually you’ll have to do a DMP Debt Management Plan, either yourself or via the free services CCCS or Payplan – and not a pay service as they cost more and often rip you off and mess you about – or an IVA or bankruptcy. Which is all ok if you don’t care and if you don’t want to ever get much or any credit again. Loads of people do these, as you can see on this site. But is that really what you want to do, be a debtor with no credit? Yeah, some people don’t care and it’s legal to do it in UK so it’s your decision. Anyway, good luck with what you decide and I hope this is of some use.

By winging it, I didn't mean skipping fares (:A) rather just save up every spare penny I have for two months. By being realistic I'm guessing I'd be able to save £250 each month and maybe borrow £200 from my dad to get the bike before month 3.


I ran up my debts as a foolish 16 year old, things like store cards to buy stupidly overpriced clothes, financed musical instruments, a defaulted mobile phone plan, a student overdraft which I maxed out in 2 days and same for a student credit card.

If I consolidate, then the only credit I would keep would be the interest free overdraft and only for the purpose of security. Nothing else, I also plan to save up as much as I can in my new ISA and keep it for life.

The last year has been spent surviving with maybe £3 money to myself each week for cheap soft drinks, so I'm very comfortable scrimping for the next few years. I'm far more mature these days too and the lure of false happiness has faded.

I'm seriously happy with just going a run in the morning and playing the piano in the evening. Those two alone have gave me more reward than all the fancy gadgets, computers and clothes.

Thanks for the advice on DMP's, future credit would be important to me as I plan to buy a house sometime before I hit 30 and balance some of the mortgage via renting.

Now I just need to find out how to get a 5k consolidation loan with all my past defaults.
If I could get it, everything else is well within my ability to repay

Cheers :beer:

JamesY_2

Well, it seems loans are out of the question.

I'll just knuckle down on the repayments after I get my bike.

Monkeyballs

Hi James,

As mentioned by Cheerful, when you consolidate without changing your habits it just means you have more spare cash to convince people to lend you some more money!

Trust me on this... Best thing to do is to do is to just save up. If you can't afford it now but you can get by until you can then take that option everytime.

IF you run out of options DO NOT approach the likes of Provident, payday loan companies and the like (if you haven't already) try to find a credit union local to you.

They will assess your case and may be able to help, some ask you have some savings but others don't... It's based upon your current situation in many cases it seems...

How far do you need to travel? Could you do it on a push bike? You could get a second hand one for next to nothing if you look around...

Good luck!

Hannah_10

For the record, the only people that call those things bikes are the people that own one. Proper bikers will laugh at you for that, which could be humilliating if you weren't expecting it. They are best described as either scooters or mopeds. Thought you might like to know that, for the sake of your pride.

Ames

What exactly did you take out when you were 16? As you can't be held liable for debts you signed up for under the age of 18.

Consolidation really isn't a good idea. I did it, and ended up running the cards and overdraft back up, which left me with twice as much debt as before. Many, many people on here did the same.

If you ran it up when you were young and silly did you spend it on things that you could ebay to raise some cash? Or sell to places like music magpie, or on Amazon? Depending on what course you did you might be able to sell some old textbooks for a fair bit, it might even be worth sticking some notices up on the uni boards if you can get in.

JamesY_2

Monkeyballs wrote: »

IF you run out of options DO NOT approach the likes of Provident, payday loan companies and the like (if you haven't already) try to find a credit union local to you.

They will assess your case and may be able to help, some ask you have some savings but others don't... It's based upon your current situation in many cases it seems...

How far do you need to travel? Could you do it on a push bike? You could get a second hand one for next to nothing if you look around...

Good luck!

I applied to 2 places today for consolidation but luckily refused.
There's a credit union nearby so I'll take a trip up tomorrow.

My work however, is a good 9 miles away though

Hannah_10 wrote: »

For the record, the only people that call those things bikes are the people that own one. Proper bikers will laugh at you for that, which could be humilliating if you weren't expecting it. They are best described as either scooters or mopeds. Thought you might like to know that, for the sake of your pride.

To be honest, it's just transport to me but I doubt I'd get embarrassed in that situation.
Maybe a few years back yeah but these day, my self image comes from how I judge myself

Actually, I'd probably try and say bike more often near them just to be a bigger jerk than they were

Ames wrote: »

What exactly did you take out when you were 16? As you can't be held liable for debts you signed up for under the age of 18.

Just some credit and store cards. Things were ok when I was that young.

I kept the cards around however and around 18 I blew a lot of credit on frivolous things and even more on an ex girlfriend

If you ran it up when you were young and silly did you spend it on things that you could ebay to raise some cash? Or sell to places like music magpie, or on Amazon? Depending on what course you did you might be able to sell some old textbooks for a fair bit, it might even be worth sticking some notices up on the uni boards if you can get in.

I sold most of the things I bought to pay the minimum payments over the last year.

All I have is 1 guitar, 1 piano and a very fast computer I built after cashing £900 from a poker bankroll.

Before the alarm bells ring, I have very good bank roll management in poker, started with £10 and haven't put any more in. I'm just crushing my limit