Help - full and final settlements.

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  • fatbelly
    fatbelly Posts: 20,450 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
    So this is 'debt-free wannabee chat of the week'?!

    There is an important principle here that it is dangerous to convert unsecured debt to secured (Tixy has mentioned this).

    Not only does it increase your monthly payments to your priority creditors (those who can actually do something, rather than just make threats), it also means that, if you ever need help from the dwp's 'support for mortgage interest' they will not pay the full amount of the mortgage - just the amount you originally borrowed to buy the place.

    If the op posts a SoA then we can all have a better look at this situation...
  • There is a gret way to avoid all issues you are currently facing although it is a long term strategy- pay 1 or 2 of your most expensive in terms of interest cards off in full using a little money raised via re-mortgage but not overcommitting yourself. Then use the power of the compund interest in the credit cards to your advantage. Take the 2 min payments that you were paying to the now repaid cards and pay that amount plus the minimum to the next expensive card. In this way you will now find that for no or very little extra cash to you per month you will pay off the 3rd card in a fraction of the time that you were looking at, and if you keep applying the principle to each card at a time you will see massive improvements in your ability to get out of trouble and start pro-actively managing things to your own advantage. The other upside is the huge savings in terms of interest payments over X number of years in your favour by applying this method.

    This is a long term strategy not a quick fix, but shows how to see a light at the end of the tunnel if payments are robbing you of any spare cash each and every month and there seems no way out.

    For those in not such dire circumstances the same can be applied - using just an extra £50 per month to your min payment (approx (£100) on a £5000 debt pays it off in just over 6 years instead of 40+! Apply the £150 you then have per month to the next card owing £5000 and it will be paid off in another 3 years (again saving 36 years of interest ....!) - now take your £250 etc etc and so on an so forth. Powerful stuff indeed.
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