Please give me info on my situation! Help!

mrScarf

Hi there, I am in need of some help and advice.

I am 22 and now have a steady job, but at university i was stupid with money and ran up some big debts and i feel i cant cope, and want to know the implications of my foolish behaviour !

basically, i have 11 accounts on my credit report, some are good, some are not..

I have 6 which are classed "up to date" or "settled", 3 which are "defaulted" and one which is "Arrangement to pay" the final one is "inactive"

I have struggled to meet my payments of my debts in the past which total at just over £11,000 in overdrafts and a loan.

Is my credit rating likely to be, well obliterated? and where should i go from here? I have agreed to repay £100 a month with my biggest creditor and £80 with another, however I want to do anything I possibly can to improve my credit rating, what can i do and where should I turn?!

Also.. with Lloyds, i had a balance of £1500 (student overdraft) which i paid off in full in cash 3 years ago, and the cashier told me everything was paid and my balance was £0, however a few months after I had a statement saying my overdraft had been removed and a charge of £30 had been applied to my account for previous fines, as I had no overdraft facility (they had removed it without letting me know) i soon ran up £1500 of charges without my knowledge, now i owe them over the original sum of £1500 in ALL charges! What advice would you give me??

I appreciate any help as I sometimes feel its all too much to cope with!

thankyou

ru20205

Speaking from personal experience, i totally understand your worry anxiety and distress. It is only natural and i can imagine there are many many people on here who have been/are in the same situation.

Mine was very similar in that i lost control over my ability to spend money wisely. I ran up almost £15k worth of debts with several financial institutions, racked up CC's, O/D's, loans, mobile phones.....you name it i had it, i was stupid, but once i realised what i had done was silly, i acted on it, albeit with help from my family (for which i am always grateful to them for).

My best advise i can give you, and it worked for me, is to talk with your banks, credit card companies and any one you owe money too. Go and speak to Lloyds, they will understand, explain everything too them, but remember to put it in writing also (believe me i learnt the hard way ) If you talk to them, they will be far more understanding and will assist you. I was able to amalgamate all my debts with one financial instituion, i took out a 5 year loan and finished paying it off almost 3 years ago.

What you have to remember, is the solution to this is action now, the results will take time to come. If you are patient you will get there, trust me, what ever you do do not default on any agreements you have with any financial institution as they will take a very dim view of this if you ask for their sympthy.

The problem you have with Lloyds needs attention fast, reason with them, explain the problem, WRITE TO THEM (not shouting ), make sure you 'dot i's' and 'cross t's'. They may give you some of the money back, they may refuse, unfortunately, it can depend on who you deal with and also how persuasive you are. Be honest with them though. Tell them what you can afford. I managed to get nearly £1000 worth of bank charges from Natwest and Lloyds refunded because i talked to them and was honest.

Banks can be a pain in the a$$, but they are not the demons everyone makes them out to be. It took me a while to realise this, and i can say this because i have been in a situation like many others on here in the past, but it is generally not their fault but ours, but we have to appeal to their better nature, rather than blaming them, that will only get their backs up and make it more unlikely they will want to help you.

With regards to improving your credit rating, my advise, put it to the back of your mind for the time being. It will improve, but will take years, not a life time but a number of years. Each line of credit stays on your file for 6 years after being settled, so say you settle something now, in 6 years time, if will clear off you credit report, however, if you have defaulted on that agreement at any point it will bring your credit report down for the entire 6 year period after it is settled, then once the 6 years is up, its gone for good. This is why i recommend to try and amalgamate all your debts under one loan, all the old, bad accounts will be settled and in 6 years will disappear from your credit file, then providing you keep the repayments up and do not miss a payment on the new loan, in 6 years you will have a great credit report.

mrScarf

I would first like to say thanks for all your advice, really comforting reading to know someone has been through it and come out the other side!!

I have worked out a budget plan and can after all my expenses (not including debt repayments) I have £620 spare! I do want to however start saving money too and get myself all sorted and organised. I think ill go to citizens advice as well..

as for lloyds, they have now passed my debt over to Moorcroft debt recovery, so if i wrote to lloyds or went and spoke to them, would they still be able to help me or has it gone beyond that stage ?

Thanks once again!

ru20205

I wondered when the name 'Moorcroft debt recovery' would appear. I remember that company well.

I would still speak to Lloyds, they do have the power to recall the debt from Moorcroft, especially if you dispute it. If you only deal with Moorcroft, it will only be about repaying it and not a complaint/resolution to a dispute regarding fees. You could as a after thought, write and make a claim for excess bank charges. There is an article and assistance on how to do this on this website. That may stop proceedings with Moorcroft, so long as the money owed is solely down to bank charges levied.

With all due respect, now is not the time to be saving, it is the time to be clearing your debts, as i would hazard a guess the average APR you are paying on all your debts with various financial institutions is probably about 14%, maybe more. Saving at less than 2% is not worth it. Put a bit of money to one side for emergencies, car break down etc, and pile as much as you can into paying off the debts, saving is the last thing you want to do when you owe over £10k. I understand what you mean, and by saying you want to save, shows me you genuinely do want to change you life and get debt free. It will happen but in time. Your sole purpose for the next 3-5 years, is to clear your debts.

If you really really want to save some money then i would suggest put £50 a month to one side for a rainy day, then this time next year, pay an additional £1000 off your debt. The rest of the money you get, any spare pay off your debts with.

Do you smoke/drink/socialise more than once a week? If so, stop/stop/cut down to once a week. Unfortunately there is no easy fix and it will take time, but with a bit of determination and faith you will get there. You only concern at the moment should clearing your debts and damage limitation, to prevent further damage to your credit.

AnonymousForObviousReason

listen to ru20205 they are talking sense. Also you are really doing the right thing dealing with it now

My mate (also when at uni) managed to rack up 3k worth of debt and because he ignored it snowballed to just over 10k. Speak to the people you owe money to, it's in their interest to let you pay them back rather than let it default. It took my friend 10 years to finish paying his debt off: First 3 ignoring it (hence the increase in debt), next 3 trying to play the system, 4 actually clearing it up at a manageable rate (low paying job, reduced drinking and stopped smoking).

He learned from it, is doing well and is very happy with where he ended up now - He's always said the stress he went through avoiding it was no way as bad as actually dealing with it.